The term ‘digital twin’ has emerged as a buzzword that is becoming more common in business circles, yet it lacks a clear definition. That’s according to a new interview series by McKinsey & Company focused on digital twins.
The traditional notion of digital twins focuses mainly on the digital representation of complex physical systems. “There is a production plant twin, which could be a representation of the entire manufacturing facility; there is a procurement and supply chain twin, often called a network twin; and, finally, there can also be an infrastructure twin,” explains Kimberly Borden, partner at McKinsey and a member of the global management consultancy’s operations practice. “One of the biggest areas of value is reducing time to market, development time. It allows for rapid iterations and optimizations of product designs far faster than physically testing every single prototype.”
But the value of digital twins extends beyond just complex systems.
The experts say a better, more modern notion of digital twins should also consider products and how they interact with the world around them once they are out in market and in the hands of customers.
“What’s important is that you link the digital twin with real data sources from the environment and are able to update the twin in real time … meaning that as the product is functioning in service, you are getting live, real-time data on it,” explains Anna Herlt, also a partner at McKinsey.
A real-world example might involve a digital twin capturing the moment a product is scanned at a recycling sortation facility, allowing the product’s manufacturer to gain unprecedented insights into the recycling rates of different products. Such intelligence might seed new strategies for consumer education on recyclability or even influence future package design considerations. It’s the collection and reflection of data across the full product lifecycle that really represents the true promise of digital twins.
What is holding companies back from realizing this promise?
The McKinsey team says two of the biggest barriers are the well-discussed global digital-skills shortage and identifying the most relevant use case with which to start. “It’s very important to consider the digital twin with respect to your broader digital strategy—considering where it fits in, how you can best use this capability for a competitive advantage in the marketplace,” Borden says. For some companies that focus might be streamlining the production process to get products out to market faster. For others, it may be about amassing consumer engagement data to drive meaningful marketing strategies that build brand loyalty.
The bottom line, according to McKinsey, is digital twins can help with a myriad of use cases that underpin a company’s digital transformation journey.
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