An artificial intelligence tool is helping retailers and manufacturers weather the holidays by simulating supply chain issues before they happen

By Morgan Keith

As supply chain disruptions pummel industries across the globe ahead of the holiday season, a simulation tool powered by artificial intelligence (AI) has the power to help businesses predict disruptions to their supply chains and minimize their effects, according to MIT Technology Review.

Digital twins are virtual representations of real-world objects or systems, such as global supply chains, that are used to run simulations and identify issues before they occur. MIT Data Science Lab Director David Simchi-Levi told  Technology Review that an increasing number of companies are using this tool to stress-test their supply chains.

"What if there's a drought in Taiwan and the water shortage shuts down microchip manufacturing? A digital twin could predict the risk of this happening, trace the impact it would have on your supply chain, and — using reinforcement learning — suggest what actions to take to minimize the harm," Technology Review reported.

From consumer behavior to geopolitical implications and social media trends, digital twins use vast amounts of data on a variety of factors to run simulations, which trains their AIs to analyze the data and make predictions, according to Technology Review.

For example, British consumer goods manufacturer Unilever PLC owns over 400 brands and offers its products in more than 190 countries. The company teamed up with Microsoft in 2019 to create digital twins of its 300 global plants to optimize their operation, The Wall Street Journal reported.

A pilot digital twin was created for a Unilever facility in Valinhos, Brazil, that saved the company $2.8 million dollars by cutting down on energy use and driving productivity, the company told WSJ.

While it's mostly large companies currently utilizing the technology, Simchi-Levi told Technology Review that with a million dollars and 18 months, a company could enjoy "many of the benefits" of digital twins.