Case study on Digital Twin Technology for CPG industry

1. Empowering Industry 4.0:
The Transformative Role
of Digital Twin
Technology

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CONTENTS 1Introduction
2 3
4 5 6
7 8 9
What is a
digital twin?
How a digital
twin works?
Real-world use
cases of digital
twins
CPG Industry
in 2023
Potential Applications
of digital twin
technology in CPG
Impact of digital
twin technology in
CPG industry
Early adopters of
digital twin technology
in CPG industry
Challenges in
implementing digital
twin technology

3. INTRODUCTION
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source: https://blogs.sw.siemens.com/simcenter/apollo-13-the-first-digital-twin/
1970 2021
Challenge:
SOLUTION
Located 200,000 miles
from Earth, an oxygen tank
explosion severely
damaged the main engine.
The crew's priority shifted
to safely returning the 3
astronauts home
Mission:
NASA’s third attempt at
crewed Lunar Landing
The backup crew at NASA's Mission
Control turned to the 15 simulators,
which were modified using transmitted
telemetry data to reflect the
spacecraft's unique configuration. The
simulators swiftly adjusted the
simulations to replicate conditions on
the actual damaged spacecraft. This
strategy proved successful as the crew
executed the free return burn.
Additionally, they determined that the
service module engine was irreparably
damaged, allowing them to refine the
necessary strategies for the astronauts'
safe return.
Trial Objective:
To optimize production
leading to improved
margins and reduced
waste, and empowering on-
site associates to make
real-time decisions
Mission:
To reduce instances of
over-filling packages at its
Illinois factory
The company tested a digital twin
to reduce instances of over-filling
packages. The twin fed sensor data
from manufacturing machinery
into a predictive analytics model,
which allowed factory line
operators to monitor events in
real-time and adjust the filling
process. After the successful test,
Mars introduced the solution
across the U.S. and developed
similar solutions for its pet care
business in Europe and China.
SOLUTION
source link
Despite the 50-year gap
between the two scenarios,
differing levels of urgency and
challenges, and varying
technical capabilities, the
common thread is the
utilization of real-time data to
address the respective
challenges effectively.
REAL-TIME

4. WHAT
IS
A
DIGITAL
TWIN?
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Component twins/Parts twins
Asset Twins
System or Unit twins
Process twins
A digital twin is a virtual model designed to accurately reflect
a physical object, process, service, or environment. The
object being studied is outfitted with various sensors related
to vital areas of functionality.
These sensors produce data about different aspects of the
physical object’s performance, such as energy output,
temperature, weather conditions and more. This data is then
relayed to a processing system and applied to the digital
copy.
Once informed with such data, the virtual model can be used
to run simulations, study performance issues and generate
possible improvements, all with the goal of generating
valuable insights—which can then be applied back to the
original physical object.
source: https://www.ibm.com/topics/what-is-a-digital-twin

5. HOW
A
DIGITAL
TWIN
WORKS
?
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Physical object
IoT devices
Digital twin
AI/ML Modeling
Actionable insights
IoT uses sensors to gather data
from real-world objects. This data
is then used to create a digital
replica of the physical object. The
digital version is analyzed,
manipulated, and optimized. IoT
continuously updates this data,
assisting Digital Twin applications
in generating a real-time virtual
representation of the physical
object.
IoT Devices
Cloud computing offers Digital
Twins both data processing and
storage capabilities. It enables
Digital Twins to store vast
amounts of data in virtual clouds,
facilitating easy access from any
location. Additionally, cloud
computing helps Digital Twins
streamline complex system
computations and manage large
data volumes efficiently.
AI can assist Digital Twins by
providing an advanced analytical
tool capable of automatically
analyzing obtained data and
providing valuable insights, making
predictions about outcomes, and
giving suggestions as to how to
avoid potential problems.
Virtual Reality (VR), Augmented
Reality (AR), and Mixed Reality (MR)
technologies merge the physical and
virtual worlds. XR produces digital
representations where virtual and
real-world objects coexist and
interact in real-time. Digital Twins
harness XR capabilities to digitally
replicate physical objects, enabling
user interaction with digital content.
Cloud Computing Artificial Intelligence Extended Reality (XR)
Cloud computing
Real-time data
streaming

6. Siemens (Manufacturing)
By integrating IoT sensors, data
analytics, and simulation models,
Siemens can optimize production
efficiency, reduce downtime, minimize
waste, and improve product quality.
Additionally, Siemens leverages digital
twins to simulate and validate new
product designs, processes, and
innovations before implementing them
in the physical environment.
REAL-WORLD
USE
CASES
OF
DIGITAL
TWINS
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General Electric (Aviation)
GE Aviation has implemented digital twin
technology to create virtual replicas of
aircraft engines, enabling real-time
monitoring, predictive maintenance, and
performance optimization. By analyzing
data collected from sensors embedded
in aircraft engines, GE Aviation can
identify potential issues, schedule
maintenance proactively, and enhance
fuel efficiency, reliability, and safety.
Schneider Electric (Energy)
The company has launched a scalable
digital twin software solution to manage
the entire machine lifecycle. The
solution’s open programming
environment allows for add-ons and
extensions, with a multitude of
advanced modules . The digital twin
helps OEMs to improve design
processes and quality and minimize
commissioning costs.
Bentley Systems
(Infrastructure)
Bentley Systems has utilized digital
twin technology in its infrastructure
solutions to create virtual replicas of
bridges, tunnels, roads, and other
critical infrastructure assets. The
company leverages digital twins to
simulate and validate infrastructure
designs, construction processes, and
maintenance strategies to enhance
safety, reliability, and sustainability.
ABB (Industrial Automation)
ABB had a goal to turn real-time supply
chain events and data into actions.By
identifying individual processes through
process mining and ensuring that all
systems and locations within the
organization are linked, ABB attained a
complete end-to-end view of the supply
chain process for every customer order,
which allowed visibility on errors and
deviations in real-time that can be
actioned to optimize these processes.
L’Oréal (CPG)
L’Oréal implemented a solution based
on the Google Cloud, Apigee API
Management, and Google BigQuery to
connect a variety of necessary tools
and systems to support scannable QR
codes that would enable consumers to
scan products and instantly have key
information and applications available
on their phone. This implementation
resulted in faster responses to B2C and
B2B consumer needs and greater
transparency around products.

7. Common challenges in CPG
Consumers looking for personalized
experiences and products
Gen Z is 40% of the entire global
consumer market
Consumers demand sustainability and
clear brand values
CPG
INDSUTRY
IN
2023
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2022
2023
source:
https://finance.yahoo.com/news/consumer-packaged-goods-cpg-market-171824915.html
2052 bn
2450 bn
CAGR
2.98%
Current Scenario
Low end-to-end
visibility
Difficult to maintain
inventory
Threat for supply-
chain disruption
Need for
sustainability
Omni-channel
marketing
To meet demands of today’s
consumers, real-time visibility in the
supply chain proves invaluable for
the companies to understand market
dynamics, enabling their businesses
to adjust operations promptly.
Additionally, it enhances various
aspects like packaging, shipping,
payment, and warehouse
management, contributing to overall
process improvement.
Predicting customer demand
presents significant challenges,
influenced by factors such as
economic trends, holidays, and local
events. Implementing a demand
forecasting system streamlines
inventory planning and optimization,
fostering improved collaboration
between businesses, clients, and
suppliers which enhances cost-
efficiency and product quality.
Supply chains remain vulnerable to
disruptions such as economic
volatility, weather anomalies, natural
disasters, forecast inaccuracies, and
geopolitical conflicts. These factors
amplify supply chain disturbances
stemming from demand and supply
fluctuations. External challenges like
labor strikes, port shutdowns, and
shipping disruptions due to blocked
routes further exacerbate these
issues.
To align with sustainability goals,
businesses must minimize waste,
produce superior-quality products, and
digitize their supply chains. Consumer
Packaged Goods (CPG) companies
must embrace circular economy
principles and adopt sustainable
practices. Additionally, consumer
purchasing decisions increasingly
favor products and services
recognized for their sustainability
efforts
The consumer journey for CPGs is
growing more intricate. Purchases
are made not just in physical stores
but also online, driven by factors like
social media, Google ads, websites,
affiliate links, and platforms like
Amazon. CPG marketers must
prioritize a multi-channel approach,
ensuring they cater to customers
across various touchpoints and
platforms.
Market
Size
Consumer
Behavior
Digitization
Investment
CPG companies have reported an 8
percent increase in technology
budgets over the past three years
However, many of these companies
are missing a cohesive data
management strategy

8. POTENTIAL
APPLICATIONS
OF
DIGITAL
TWIN
TECHNOLOGY
IN
CPG
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Risk-free product
development
environment, allowing
design and
engineering teams to
explore more design
options without the
cost associated with
the production and
testing of physical
prototypes
Improve testing
and validation by
allowing new
solutions to be
evaluated in a wide
range of lifelike
scenarios,
including unusual
and extreme
operating
conditions.
Engineers can use
digital-twin
models to monitor
the state of any
part of the system
at any time and to
trace complex
interactions
between product
elements.
Allow real-world
data to inform
product
improvements by
simulating the
impact of
proposed design
changes using
data collected
from products
operating the
field.
Visualize how a
consumer will
interact with your
product
Data-driven
rendering of virtual
and physical
products, as well
as more agile and
ecosystem-
focused execution
of complex
production
processes
Continued
improvements
by analysing
customisation
models and
ensure product
quality through
performance
testing in real
time.
Virtually test
and simulate
packaging for
manufacturing
success
Create the best
shipping
configurations for
eco-efficiency
Quickly create a
stunning
marketing kit for
your product
Model individual
equipment or
manufacturing
processes to
identify variances
that indicate the
need for preventive
repairs or
maintenance.
Prevent costly
failure before a
serious problem
occurs.

9. Reduces personal
data collection
Improved Supply Chain
Visibility and
Efficiency
Accelerated Product
Development and
Time-to-Market
Sustainability and
Environmental
Responsibility
IMPACT
OF
DIGITAL
TWIN
TECHNOLOGY
IN
CPG
INDUSTRY
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Reduces product
development costs
Improves customer
experience
Incentivises
investment into AI
Predictive
Maintenance and Asset
Utilization
The proliferation of online shopping
and the steps towards a fully
functioning metaverse, digital twins
provide the tools that companies
can use to provide a highly
personalized and authentic
experience across all digital
platforms.
The insights derived from digital twins
help improve the efficiency of
processes. This enables companies to
predict product success in advance
and leverage insights from different
countries and consumers to launch
relevant yet exciting products for
their target consumer.
Digital twins can achieve the same
level of specificity using synthetic
data as they can with real data,
then CPG companies do not need
to collect as much personal data as
they currently do. This could
reduce privacy violation sanctions.
CPG companies will have to quickly
upskill themselves in terms of their
AI capabilities in order to compete
and remain relevant in the years to
come. For many, they’ll need to turn
to professional partnerships with AI
firms that can offer this expertise
and experience immediately.
Digital twins enable CPG companies
to monitor and analyze equipment
performance, production processes,
and quality control in real-time. This
facilitates predictive maintenance,
minimizes downtime, reduces
operational costs, and enhances
overall efficiency.
Digital twins grant CPG companies
real-time oversight throughout their
supply chain. This technology aids in
fine-tuning inventory management,
minimizing lead times, advancing
demand forecasting accuracy, and
fostering closer collaboration with
both suppliers and distributors.
DCPG firms are empowered to
oversee equipment performance,
evaluate production methods, and
ensure quality control instantly. This
promotes proactive maintenance,
cuts downtime, lowers operational
expenses, and boosts overall
productivity.
By monitoring and optimizing energy
usage across production facilities,
warehouses, and transportation
networks, CPG companies can
identify consumption patterns and
inefficiencies. This approach helps
reduce their carbon footprint,
decrease greenhouse gas
emissions, and contribute to
addressing climate change.

10. EARLY
ADOPTERS
OF
DIGITAL
TWIN
TECHNOLOGY
IN
THE
CPG
INDUSTRY
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Unilever utilizes digital twins throughout its business to enhance safety,
sustainability, quality, productivity, consumer satisfaction, and cost-
efficiency. This includes pinpointing essential parameters for soap moisture
levels to create superior products and integrating them into its scenario planning.
This technology will continue to help us predict and de-risk our
decision-making, through enhanced knowledge of our business
operations and delivering key insights.
The Kraft Heinz Company collaborated
with Microsoft incorporating digital
twins across its nearly 30 North
American production sites. The
company aims to leverage this
technology to determine optimal
production capacity and proactively
tackle equipment issues, thereby
minimizing mechanical downtime.
Developing virtual replicas of plants producing various items will enhance
understanding of design flaws, boost efficiencies, and ultimately expedite the
time to market.
By enhancing efficiency and accuracy in time
management, the company reduced its yearly energy
consumption by 20% and water usage by 9%.
Coca-Cola İçecek (CCI), based in Istanbul adopted
digital twin technology to enhance asset
optimization, minimize downtime, and elevate
manufacturing insights. They innovated a solution for
daily production and sanitation processes, granting CCI
near-real-time process visibility.
The consumer healthcare firm is integrating
digital twins in its factories to evaluate
manufacturing processes for its products. This
technology aids the company in cutting
innovation expenses and accelerating
time to market.
[I]t’s faster for us, and we can get our innovation into
the hands of the consumer that much quicker,” said
Caroline Tillett, global head, R&D, Johnson & Johnson
Consumer Health.
Henkel is utilizing digital twins to
transform its factory operations. A
significant hurdle for the multinational
manufacturer was its global presence,
with employees and stakeholders
worldwide. Consequently, they sought
a scalable solution for remote
factory tours and access to critical
data points. While they have a physical
factory in Kruševac, another exists
virtually, replicating the entire facility,
including assembly lines and rooms.
A significant challenge in CPG warehouses is the limited
visibility into machine breakdowns or downtime causes,
leading to delivery delays. Given the mix of old and new
machinery, many lack data-sharing capabilities.
To address this, Datonis Edge suggested a solution that involved retrofitting hardware and creating custom dashboards for
comprehensive machine and line visualization. High-quality wireless sensors were installed on equipment like case sealers and box
printers to monitor operations in real-time. This data was then processed in Datonis IoT cloud to assess production efficiency, resulting
in tailored visualization and business intelligence reports. These insights, highlighting downtime reasons, productivity metrics, and
overall equipment effectiveness, empowered management with improved planning and issue resolution.

11. Companies should invest in advanced
data analytics tools and technologies to
integrate, analyze, and derive actionable
insights from vast amounts of data,
leverage predictive analytics, AI, and
machine learning to identify trends,
optimize pricing strategies, forecast
demand, and enhance supply chain
efficiency.
Develop a Digital Strategy:
Complex Supply Chain
Management:
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CHALLENGES
IN
IMPLEMENTING
DIGITAL
TWIN
TECHNOLOGY
Data Integration and
Management:
Digital twins rely heavily on real-time
data from various sources, including
IoT sensors, machinery, and other
systems. Integrating this data
seamlessly and ensuring its accuracy,
consistency, and relevance can be
complex, especially when dealing with
legacy systems or disparate data
sources.
Invest in Data Analytics and
Insights:
The CPG industry often has complex
supply chains involving multiple
stakeholders, including suppliers,
manufacturers, distributors, retailers,
and consumers. Integrating digital
technologies across these
interconnected networks can be
challenging.
CPG companies should develop a
comprehensive digital strategy
aligned with their business
objectives, market trends, and
consumer preferences. This strategy
should outline clear goals, priorities,
and timelines for implementing
digital technologies across various
functions and processes.
Legacy Systems and
Infrastructure:
Many CPG companies operate with
legacy systems and infrastructure that
may not be compatible with modern
digital technologies. Updating or
replacing these systems without
disrupting ongoing operations can be
challenging.
Crafting a thorough digital plan that
matches the business goals, current
market shifts, and customer choices
of the firm would be the right
approach to begin with. Embracing
cloud solutions, IoT, and unified ERP
platforms can streamline processes,
boost efficiency, and foster better
cooperation throughout the adoption
process.
Modernize Infrastructure and
Systems:
Change Management:
Adopting digital twin technology
often requires organizational
changes, including new
processes, skills, and mindsets.
Managing these changes,
ensuring stakeholder buy-in,
and addressing potential
resistance can be significant
challenges.
Build Internal Capabilities:
CPG firms should prioritize hiring
skilled talent, offering
comprehensive training, and
nurturing an innovative, learning-
focused culture. Partnering
closely with external experts,
including tech vendors and
consultants, can speed up digital
transformation and address
challenges effectively.
Consumer Engagement and
Personalization:
With changing consumer
preferences and increasing
demand for personalized
products and experiences, CPG
companies face challenges in
effectively engaging consumers
and delivering personalized
offerings at scale.
Improve Consumer Interaction
and Customization:
Implementing technologies
such as AI-powered chatbots,
personalized marketing
campaigns, and loyalty
programs can help companies
build stronger relationships with
consumers and drive sales
growth.

12. "Efficiency is doing things right; effectiveness is doing the right
things.”
THANK
YOU
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Shruti Chaurasia
Prepared by:
~Peter Drucker, Father of modern business management