SAP and Digital Twins

Digital twins are a fascinating concept in SAP services, offering SAP consultants a potent tool for optimizing client processes. These intricate digital models of physical systems (including products, processes, and even entire supply chains), are designed to essentially replicate the real-world entities they represent, capturing their current status, operational functionality, and interaction dynamics.

For SAP consultants, digital twins open up avenues for analysis and simulation, allowing them to model, test and enhance system performance under a variety of conditions.

For those in the SAP manufacturing sector, the Digital Twin is an essential concept. The virtual model draws continuous input from its physical counterpart, ensuring a real-time reflection of the component's status and interaction with other elements in the system. The complexity and application of digital twins can vary widely, from single products or components to whole production lines.

This gives SAP professionals valuable opportunities to advise clients on real-time adjustments and improvements: directly impacting efficiency and productivity.

Understanding the versatility and application scope of digital twins is becoming a central part of professional practice in SAP services for manufacturing, and it is important to note that the concept of digital twins is being applied to other areas of SAP outside of manufacturing.

The value of the worldwide digital twin market was approximately $11.51 billion in 2023, with an expectation to expand to around $137.67 billion by the year 2030. This projected acceleration indicates a need for organizations to invest in this technology along with cloud ERP to maintain a competitive edge.

In this post I'll be focusing on how SAP's strategy incorporates digital twins in the manufacturing sector. We will explore the current state of their development and adoption, how SAP services use them in manufacturing settings (and elsewhere), and provide insights into evolving market trends and future directions. Knowledge of the increasing importance of this technology is vital for SAP consultants to stay ahead in a rapidly evolving technological landscape.

Digital Twins for Manufacturing Processes

Digital twins are optimizing layouts, minimizing downtime, and offering deep insights into physical assets. They simulate asset behavior to optimize production schedules, understand new product impacts, or help to model complex systems.

This translates to cost savings, improved designs, and boosted efficiency. And as digital twins become more accessible, their adoption is spreading across other industries. Eventually, they'll form interconnected networks, entirely changing the production lifecycle.

Digital Twin Technology In SAP’s Portfolio

Digital twins provide a sandbox where innovations can be tested and refined before they’re launched into the real world. They afford businesses a cost- and time-efficient way to design smarter products and assets while obtaining more information about them.

SAP now uses digital twins as a core technology, transforming asset management. Their simulations allow businesses to address issues, optimize maintenance, and unlock cost savings and efficiency gains, without the expense of R&D in the physical world.

Integrated with solutions like SAP Predictive Engineering Insights and SAP Predictive Maintenance and Service, and also SAP 3D Visual Enterprise, this technology provides a platform for manufacturing analytics and data-driven decision-making. The SAP Asset Intelligence Network connects systems and their digital twins, to create a collaborative ecosystem in which data from one area can be used to inform processes in another.

Over time, digital twins will form their own networks, which experts call a “digital thread”. This continuous, connected stream of information provided by an intelligent asset throughout its life cycle, from design to decommission, is likely to entirely change manufacturing operations.

SAP has formed strategic partnerships and collaborations to advance the development and application of digital twins into other areas. For instance, SAP joined forces with Boston Consulting Group (BCG) to apply the concept of digital twins to the finance world. Together, they explored the concept of a digital financial twin, defined as a digital representation of financial and selected non-financial metrics, including those measuring relationships, structures, and processes across the entire product lifetime and value chain.

Digital Twins In the Real World

Unilever began its transition to digital twinning its production with the goal of connecting 300 plants around the world that manufacture soap and other consumer staples. Implementing a digital replica of operations at one factory in Brazil to monitor performance and test process improvements increased productivity while using less energy, saving the company US$2.8 million.

Capgemini recently worked alongside an organization to design an S/4HANA-enabled operating model. The digital twin was set up to address the full scope of finance and accounting, supply chain, procurement, master data, and HR.

In another case, a pharmaceutical company implemented a digital twin for its supply chain. The technology used was based on simulators, solvers, and data analytic tools that allowed these functions to be connected in an integrated interface for the company.

Adoption Trends in Manufacturing

The manufacturing industry is the largest market for digital twin technology. A McKinsey report highlights that companies are increasingly adopting digital twins to improve their digital product development capabilities, seeing these technologies as a way to speed up design and engineering cycles while cutting costs through R&D process optimization. Another survey found that 44% of respondents across industries have already implemented a digital twin.

While the adoption of digital twins is widespread across the manufacturing sector, certain industries are leading the way. The automotive industry is one of the sectors seeing remarkable results from digital twins. The industry uses digital twins to improve R&D efficiency and innovate vehicle performance. McKinsey also notes that players in the automotive, aerospace, and defense industries appear to be more advanced in their use of digital twins.

Barriers to Adoption

There are challenges to the use of digital twins in manufacturing. One of the main challenges is that adopting a digital twin can initially be quite a disruptive change that affects many areas of an organization. Cambridge Industrial Innovation Policy also highlights that digital manufacturing technologies can have a disruptive effect across manufacturing sectors.

As the cost and complexity of digital twins have fallen, their adoption has spread beyond manufacturing to many different types of businesses. While there are challenges to adoption, companies like SAP are addressing these, and also using digital twins to drive business transformation and efficiency.

Operational Impacts of Digital Twins

By providing a comprehensive, real-time model of the factory floor, these virtual replicas equip manufacturers with powerful capabilities. "What-if" analyses across production scenarios, including process or layout changes, are facilitated, enabling identification of potential bottlenecks and optimized decision-making: improving agility, efficiency, quality and compliance.

Strategically, digital twins are rapidly becoming a priority for manufacturers and others due to their measurable benefits across the entire product lifecycle.

Financially, digital twins bring about substantial savings and increased revenue. McKinsey estimates a 10% rise in revenue, a 50% faster time to market, and a 25% improvement in product quality. Continuous monitoring and optimization of production processes enabled by digital twins allows companies to minimize material waste and reduce downtime.

Long-term Benefits

By being able to simulate the physical world, digital twins can help organizations make better and more sustainable use of resources, reduce carbon emissions, optimize supply and transportation networks, and increase employee safety.

Interest in digital twins has picked up over the last year, with digital twin tools growing in capability, performance, and ease of use.

Generative AI techniques used for text and images may also help create 3D shapes and models. These advances will allow enterprises to mix and match modeling capabilities in new ways and for new tasks.

SAP’s Digital Twin Strategy

SAP has ambitions to become a leader in the digital twin technology space. Their digital twin solutions are becoming more useful and more cost-effective. Their uses for digital twins are expanding to further improve factory processes and to offer predictive maintenance applications.

The creation of networks of continuous, connected “digital threads” provided by an intelligent assets throughout their life cycle, from design to decommission, is a key part of SAP’s digital twin strategy.

As we have seen, SAP is also focusing on the integration of digital twins into its S/4HANA platform, enabling businesses to remove bottlenecks from current processes, simulate the impact of organizational change, and establish a common design towards a digital future: so the technology is likely to have substantial future impact on best practices and methodologies for SAP implementations.

Digital Doppelg?ngers

Digital twins are transforming the operational, strategic, and financial landscapes of manufacturing organizations. The adoption of digital twins is on the rise, with certain industries like automotive leading the way.

As we move into an increasingly digital future, the ability to simulate, optimize, and innovate effectively using digital twins, will be a key differentiator for manufacturing organizations, but will become increasingly relevant to other areas of SAP as well, to the extent of modeling SAP system integrations as well.

For SAP consultants aiming to enhance their expertise in digital twin technology, engaging in professional development through courses and certifications specifically tailored to digital twin technology is crucial. Internal training sessions within SAP service organizations also present opportunities for knowledge sharing and learning from peers.

Participating in industry webinars and conferences provides invaluable insights. Find out which large manufacturers are using digital twins and how they use them. Industry conferences provide a platform for demonstrations of innovative applications of digital twins, offering a broad perspective on the technology's capabilities and benefits.

SAP consultants can benefit significantly from networking and collaborating with industry experts, and other SAP consultants working in the area already. Such interactions can lead to mentorship and collaborative opportunities, providing a deeper understanding of digital twin implementations.

Staying updated with the latest research, case studies, and success stories in digital twin technology is another vital aspect, as it offers practical insights and innovative applications in various SAP service areas.

As IT systems for manufacturing are developing at pace, connections to the real-world manufacturing processes like IoT and digital twins are becoming far more highly valued, and those SAP consultants looking for career opportunities in manufacturing, should familiarize themselves with this exciting technological evolution. Digital twins will not be limited to manufacturing. In time can expect this extended modeling technology to change the way that SAP implementations are planned and deployed, eventually to affect all areas of the SAP service industry.

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