Supply Chains building a Digital Twin of the customer

28 September, 2023

One of Gartner’s latests Survey highlights the raising trend that the Digital Twin of the Customer (DToC) is gaining over Chief Supply Chain Officer’s (CSCO) interests’ and digital strategies’. This rather new all-encompassing technology has come to enlighten the customer experience by unveiling a dynamic, virtual mirror representation of a customer, understood as profile characterizations or “persona”, group of customers, markets, etc. This solution will simulate and predict how a customer will react, given a specific set of supply chain and market parameters, conditions, and control or input signals.

Main focus is set for enhanced disruption decision-making, better detect changing demands, comprehensive understanding of customer preferences, and even increase the likelihood of successful product and service innovations to be developed; thus improving customer experience, cutting costs and enabling business growth. Indeed, this topics have been identified as top business priorities for the digital supply chain strategy, which with the advent of new technologies and digitalisation transformation, technological backbone of this solution, harness full potential of customer’s insights within the supply chain.

Nevertheless, and mainly due to the fact that this tool is a brand new innovative solution, roadblocks stand in the way. Primarily, given by a lack of digitalisation skills and mindset; the key role of data granularity, both from internal and external sources; the needed trust for data capturing and cybersecurity awareness; and yet customer data privacy mechanisms.

“This technology has the potentiallytransformative impact to enable supply chain’sability to sense and respond to changing customer needs in real time.”

The main inputs and contributions are:

• Digital Supply Chain Twins (DSCT) and DToCs are gaining momemtum, powered by digital transformation developments, and only surpassed by Artificial Intelligence and Machine Learning. 40% of surveyed CSCOs view DSCT as important and disruptive, while only 27% view DToC as such.
• Improving customer experience (63%), reducing costs (61%) and innovating supply chain services to drive growth (51%) set the bar for digital supply chain strategy among launching e-commerce (10%), relying on new business models (8%) or moving to adjacent/new industries (4%).
• 60% of surveyed CSCOs are currently piloting or planning to implement DSCT. Conversely, 27% are currently piloting or planning to implement DToC. This fact could limit the potential under customer’s behaviour insights since the supply chain would fall to include retailers and customers as part of the holistic end-to-end supply chain.
• DSCT and DToC should be integrated for a more comprehensive scheme and a complete decision-making awareness, therefore, connecting customer expectations and own supply capabilities.
• Anticipated benefits would include an improved demand forecast accuracy, improved supply chain agility and responsiveness and an improved customer experience and expectations.
• DToCs have potential to transform demand planning and improve demand forecast accuracy, by delivering a more proactive and strategic approach rather than a mere current reactive’ s posture coming from demand sensing tools currently in use.
• Poor customer data quality (22%) and insufficient sources of customer insights (20%) stand out as the top-down barriers to solve arousing that data availability is covered, which with technological alignment and the identified value creation opportunities shift the focus to other roadblocks.
• For instance, such as the digital capabilities to build the needed algorithms of the model, interpret the given outputs and use correctly the given outputs in an expanded new framework; customer collaboration to fill the requirements of both historical and real-time data coming from internal sources across the organization and external sources, as market or geopolitical parameters; and customer data privacy regulations and laws, which secured and explained can result in better customer engagement, satisfaction and loyalty.
• CSCOs should collaborate with their supply chain counterparts on customer side through initial small-scale projects to exchange information, understand each other’s processes, and establish mutual working methods. Requiring time and resources investment, but primarily demonstrating tangible benefits (cost savings, inventory optimization, faster product availability, quicker decision-making) that could enable and speed up customer partnerships and new involvements.

“A DToC will accelerate the “test and learn” phase of creating solutions to satisfy personalized customer needs, which will reduce the time to value of customer-driven innovation”