Why simulation, digital twins are no longer optional for supply chain survival

Handre Dreyer: Director Operational Technologies, 4Sight.

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If the last few years have taught us anything, it’s that supply chains are living, breathing entities, prone to sudden shocks and unpredictable changes. One unexpected event – a factory shutdown, a shipping delay or a sudden surge in customer demand – can send shockwaves across the entire network. For businesses that rely on smooth operations, the question isn’t just how do we react quickly, but also how do we prepare ahead of time?

Frankly, relying on static forecasts and spreadsheets is a recipe for disaster. The world has moved on, and so must our supply chain strategies. Simulation technologies and digital twins are no longer futuristic buzzwords – they are the new standard for any business serious about resilience and agility. These tools allow companies to “test drive” their supply chains in a virtual world before making decisions in the real one. It’s not magic; it’s data-driven foresight. In my view, it’s like having a crystal ball, but one powered by advanced modelling and real-time analytics instead of guesswork.

Let’s be clear: simulation isn’t a luxury – it is a necessity. Here’s why more companies are turning to simulation to keep their supply chains running smoothly:

• Clearer visibility. A digital twin provides a bird’s-eye view of your supply chain. You can spot bottlenecks, track inventory and see supplier performance – all in real-time.
• Better risk planning. Instead of being caught off guard, you can play out different scenarios and build contingency plans that actually work.
• Smarter decisions. With data-backed simulations, leaders can make confident calls – whether it’s rerouting shipments, adjusting production schedules or resizing inventory buffers.
• Cost savings. By testing strategies virtually, companies can reduce waste, optimise resources and find that sweet spot between lean operations and reliable service.
• Perfect fit with DDMRP. Demand-driven MRP (DDMRP) addresses the challenges posed by conventional MRP systems. By adopting a flow-based operating model instead of the traditional cost-focused approach, DDMRP optimises supply chain operations. Simulation pairs naturally with DDMRP, and the powerful combination then empowers organisations to achieve operational excellence in complex and dynamic supply chain environments. Together, they help businesses buffer variability, respond faster to changes and manage supply chains with greater flexibility.

The beauty of simulation is that it’s not limited to one industry, it is versatile. Manufacturers can optimise production schedules and minimise downtime. Retailers and e-commerce brands can balance inventory and meet customer expectations even during peak demand. Pharmaceutical and healthcare providers can make sure critical medicines and supplies are always in the right place at the right time. Automotive companies can manage complex global supplier networks. Food and beverage businesses can keep up with shifting consumer preferences while reducing spoilage. Energy providers can ensure steady supply despite market volatility. In short: if your business depends on a supply chain (and most do), simulation can make it stronger, smarter and more resilient.

Traditional supply chain planning often relies on forecasts and spreadsheets. The problem is that both are static and limited – they don’t capture the unpredictable, fast-changing nature of real-world events. Simulation, on the other hand, lets you model your supply chain as a living, breathing digital twin. This virtual replica reacts in real-time, showing you exactly how disruptions or changes ripple through the system. It gives you the chance to try out “what if?” scenarios without risking costly mistakes. What if a key supplier goes offline? What if demand doubles overnight? With a digital twin, you can run the scenarios, see the outcomes and prepare the right response in advance.

I believe simulation is a game-changer. It’s not just about surviving disruptions but rather thriving in the face of them. Companies that embrace these technologies will outpace competitors who cling to outdated methods.

The future of supply chain management is no longer about relying on forecasts alone. By combining digital twins, simulation and approaches like DDMRP, companies can transform how they plan and operate. Instead of reacting to disruptions, they can anticipate and outpace them.

In my opinion, simulation and digital twins are not just tools – they are the backbone of modern supply chain management. Future-proof your own supply chain! The sooner businesses embrace this reality, the better prepared they’ll be for whatever comes next.