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  <front>
    <journal-meta />
    <article-meta>
      <title-group>
        <article-title>Supply chain management information system project with the use of digital twins⋆</article-title>
      </title-group>
      <contrib-group>
        <contrib contrib-type="author">
          <string-name>Nataliia Kunanets</string-name>
          <xref ref-type="aff" rid="aff1">1</xref>
        </contrib>
        <contrib contrib-type="author">
          <string-name>Kateryna Semenchuk</string-name>
          <xref ref-type="aff" rid="aff2">2</xref>
        </contrib>
        <contrib contrib-type="author">
          <string-name>Liubava Chernova</string-name>
          <xref ref-type="aff" rid="aff0">0</xref>
        </contrib>
        <aff id="aff0">
          <label>0</label>
          <institution>Admiral Makarov National University of Shipbuilding, Heroes of Stalingrad</institution>
          ,
          <addr-line>9, Mykolaiv, 54025</addr-line>
          ,
          <country country="UA">Ukraine</country>
        </aff>
        <aff id="aff1">
          <label>1</label>
          <institution>Lviv Polytechnic National University</institution>
          ,
          <addr-line>Bandery, 12, Lviv, 79013</addr-line>
          ,
          <country country="UA">Ukraine</country>
        </aff>
        <aff id="aff2">
          <label>2</label>
          <institution>State University of Intelligent Technologies and Communication</institution>
          ,
          <addr-line>Kuznechna, 1, Odesa, 65023</addr-line>
          ,
          <country country="UA">Ukraine</country>
        </aff>
      </contrib-group>
      <abstract>
        <p>The article focuses on the project to develop a supply chain management information system using a digital twin for the maritime transport chain. Digital twins reflect real objects and processes in a virtual environment, which enables analysis, modelling and optimisation of supply chain operations. The author describes the main stages of the project, including requirements definition, system architecture development, implementation and testing. Particular attention is paid to the benefits of using digital twins in supply chain management, such as increased efficiency, reduced risk and improved forecasting. The results of the study show the potential of digital twins to optimise supply chain management and increase the competitiveness of companies. The article presents an approach to building a new model of interaction and systematic optimisation of business processes based on digital technologies at all stages of supply chain formation, which ensures the creation of a digital twin for the maritime transport chain. In order to improve supply chains, a digital twin has been proposed, which opens up great prospects for the management of logistics processes and the exchange of information between supply chain participants. This paper presents a framework for an integral Digital Supply Chain Twin (DSCT) capable of covering the entire transport chain. The proposed information system based on the use of the DSCT provides a number of improvements throughout the supply chain, as well as the ability to model and evaluate different scenarios for the supply chain. This creates opportunities to reduce the cost of organising and coordinating transport, improve the quality of transport and logistics services and make them more reliable by identifying potential problems at an early stage. The article analyses the main information technologies that facilitate the use of DSCT as a useful and reliable tool.</p>
      </abstract>
      <kwd-group>
        <kwd>eol&gt;digital twin</kwd>
        <kwd>supply chain</kwd>
        <kwd>maritime transport</kwd>
        <kwd>digital technology</kwd>
        <kwd>project management1</kwd>
      </kwd-group>
    </article-meta>
  </front>
  <body>
    <sec id="sec-1">
      <title>1. Introduction</title>
      <p>Supply chain management is a critical component of any organisation's success in today's
competitive marketplace. The increasing size and complexity of supply chains requires</p>
      <p>© 2023 Copyright for this paper by its authors. Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
organisations to constantly search for effective tools to manage and optimise them. In this
context, the use of digital technologies, especially digital twins, is becoming increasingly
important, especially in the maritime industry. Supply chain management is an important
aspect of modern business, as its efficiency determines a company's competitiveness in the
market. However, as data volumes, process complexity and the need for accuracy and
responsiveness continue to grow, there is a need for new tools and technologies to optimise
supply chain management. The development and implementation of information systems
that facilitate the use of digital twins in supply chain management is becoming increasingly
important. These information systems can provide companies with access to virtual models
of their supply chains, allowing them to analyse, model and optimise various aspects of
these chains, taking into account the actual state of resources and processes.</p>
      <p>Such information systems can greatly facilitate decision-making, ensure greater
accuracy and efficiency in supply chain management, and help to increase the
competitiveness of companies in the marketplace. Therefore, the development of such
systems is relevant and important for further business development in today's global
market.</p>
    </sec>
    <sec id="sec-2">
      <title>2. State of the problem research</title>
      <p>
        The idea of using digital twins first appeared in the work of E. Glasgren and D. Stargel [
        <xref ref-type="bibr" rid="ref1">1</xref>
        ],
where scientists explore the actual and predictive fusion of data using digital twins for
vehicle certification and fleet management. The main task of the proposed digital twin of a
vehicle is to "continuously predict the state of vehicles or systems, which ensures the rate
of useful use and the probability of successful completion of tasks". Solving this problem is
part of the overall development of the digital transformation of society. In the work of
scientists E. Glasgow and D. Stargel, a digital twin is described as follows: "A digital twin is
an integrated multi-physical, multi-scale, theoretically plausible model of a vehicle or
system that uses the best available physical models, sensor details, and fleet history to
simulate the state of the original operating under real field conditions." According to a study
by international consultancy McKinsey &amp; Company [
        <xref ref-type="bibr" rid="ref2">2</xref>
        ], product developers using digital
twins in companies have reduced overall development time by 20-50%, thereby reducing
costs - companies have reduced the number of prototypes needed to develop a new product.
      </p>
      <p>
        In 2021, Google announced Supply Chain Twin, a new Google Cloud solution that allows
companies to create a digital twin - a representation of their physical Supply Chain (SC).
With Supply Chain Twin, businesses can combine data from multiple sources, enabling them
to share information with suppliers and their partners. The solution supports enterprise
business systems that contain data about a company's geographic location, products, orders
and warehouse operations, as well as data from suppliers and partners, such as inventory
levels and product transport status [
        <xref ref-type="bibr" rid="ref3">3</xref>
        ].
      </p>
      <p>Supply Chain Pulse provides real-time event management, optimisation and simulation
of project management processes using artificial intelligence (AI). It allows project teams to
drill down into operational metrics with performance dashboards that make it easy to see
the status of the supply chain. They can also set alerts that go off when metrics reach
userdefined thresholds and create workflows that allow users to collaborate to resolve issues.
Supply Chain Pulse's AI-driven algorithm provides responses to events, identifies more
complex issues and simulates the impact of hypothetical situations.</p>
      <p>
        Gartner, the world's leading research and advisory company, predicts that 13% of
organisations are implementing an Internet of Things (IoT) project using digital twins, and
62% are in the process of implementing digital twins[
        <xref ref-type="bibr" rid="ref4">4</xref>
        ]. With increasing competition in the
industrial and information technology sectors, the digital twin market is expected to
continue to grow at a CAGR (Compound Annual Growth Rate) of over 30%, eventually
reaching $26 billion by 2025. Although their use is new and requires a high level of planning
and integration, digital twins have the potential to transform SC operations at all levels.
      </p>
      <p>
        The authors in [
        <xref ref-type="bibr" rid="ref5">5</xref>
        ] propose modelling capabilities at the level of the maritime supply
chain using a digital twin, which are essential for assessing likely future scenarios.
      </p>
      <p>After reviewing the scientific literature on the implementation of the digital supply chain
in the field of maritime transport, the issue of building a digital twin in the LP remains
unresolved, given the project management methodology in terms of project planning,
execution, monitoring, and control.</p>
      <p>The aim of this paper is to analyse the possibilities of developing maritime supply chain
management information systems based on the use of digital twin technology.</p>
      <p>In order to achieve this goal, the following tasks were solved:
1. To study the concept of a Digital Supply Chain Twin (DSCT).
2. To consider the vertical integration strategy for the supply chain, which is more
appropriate as it can combine different participants: maritime and land activities,
port processes, transport, cargo handling and IT services.
3. To present DSCT using the example of the maritime transport chain, which is an
important element of international supply chains enabled by the use of new
technologies, and to show how the digital twin can help overcome existing
shortcomings in transport networks and supply chains.
4. To define the requirements for the maritime supply chain management information
system based on the use of digital twin technology.</p>
    </sec>
    <sec id="sec-3">
      <title>3. The Digital Twin Supply Chain concept</title>
      <p>Digital twins, as virtual models of real objects and processes, offer great opportunities to
improve supply chain management. They allow you to analyse, model and optimise various
aspects of the supply chain, taking into account the actual state of resources, production
processes and logistics operations. The concept of digital twins has become widespread in
many areas of production and should also be used in project activities. In the formation of a
maritime supply chain, the digital twin is studied in the spatial and temporal dynamics and
information links between different actors in this chain.</p>
      <p>Supply chain management plays a key role in business transformation and market share
growth. The development of supply chains (SC) is significantly influenced by the
improvement of processes such as the automation and standardisation of warehouse and
transport operations, the introduction of electronic document management, the growth of
e-commerce and the creation of digital twins of business processes.</p>
      <p>
        The modern interpretation of the digital twin concept was introduced by Michael
Greaves (University of Michigan, 2011) [
        <xref ref-type="bibr" rid="ref6">6</xref>
        ]. The idea itself was formulated by Greaves in
2002, but at that time it was called the "mirrored spaces model". According to M. Greaves,
the concept of a digital twin consists of real and virtual spaces. The virtual space contains
both all the information collected from the real space and a detailed (usually numerical)
description of a physical device or process from the microscopic level to the geometric
macroscopic level. The description provided by a digital twin must be "virtually
indistinguishable from its physical counterpart".
      </p>
      <p>
        Thus, a digital twin is a term used to describe a computerised (or digital) version of a
physical asset or process. The concept of a digital twin combines the ideas of modelling and
the Internet of Things (IoT). The ability to use a digital twin has arisen due to the massive
transition of companies to digital technologies, which simplifies the process of obtaining
information and allows you to create a scenario that fits the entire SC [
        <xref ref-type="bibr" rid="ref7">7</xref>
        ]. Recent pandemic
and military situations have led to an imbalance in the supply and demand of goods,
affecting supply chain technology around the world. However, these situations have also
increased the need for companies to use technological solutions to manage their supply
chain to meet these challenges, as the possibility of supply disruptions or global conflicts
cannot be ignored.
      </p>
      <p>
        Artificial intelligence is becoming essential for innovative supply chain transformation.
46% of supply chain executives expect artificial intelligence, digital twins, cognitive
computing and cloud applications to be their biggest areas of investment in digital
operations over the next three years [
        <xref ref-type="bibr" rid="ref1">1</xref>
        ].
      </p>
      <p>The digital twin of the supply chain is a virtual model of the physical supply chain that
includes a digital counterpart of each part of the process. But unlike other graphical
visualisations, this model is dynamic, as data streams from devices connected to the IoT and
then to artificial intelligence for continuous monitoring and updates, effectively reflecting
the current state of each moving part.</p>
      <p>A digital twin is a semantically related set of models, information and data that fully
describes a potential or actual physical system, and as such forms a representation of all
aspects of the relevant physical system (e.g. properties, state and behaviour) that may be
relevant to the current or subsequent phases of the project lifecycle.</p>
      <p>The digital twin of the supply chain is developed together with the relevant logistics
system and remains its virtual analogue throughout its life cycle, where it can be used to
monitor, analyze, model, and predict the operation of that system, leading to appropriate
actions in the physical world.</p>
      <p>There are several types of digital twins:
1. A digital twin prototype (DTP) is a prototype used to create an instance of a digital
twin. Typically, such a prototype contains a detailed, high-precision model.
However, the prototype does not contain measurement results and reports from a
specific physical device.
2. Digital Twin Instance (DTI) is a digital twin that contains information about model
settings, control parameters, sensor data and chronological information for a
specific product, device or process.</p>
      <p>A key requirement of the digital twin concept is dynamism and the ability to be
constantly updated in line with the real physical product. Today, the integration of digital
technologies into the business processes of any activity, including the supply chain, is a
global trend and an evolving innovation.</p>
      <p>
        Research conducted in 2023 showed that DSCT entered the Gartner Hype Cycle [
        <xref ref-type="bibr" rid="ref8">8</xref>
        ] as
one of the most disruptive technologies in the supply chain.
      </p>
      <p>But in the next two years, none of the digital innovations will be mature enough to
significantly change the economy. On average, it takes 5 to 10 years for a technology to come
to life, or 'mature'. At the same time, some innovations are studied before they have gone
through all the stages of development, and new technologies replace them.</p>
      <p>
        For example, the overall impact of the digitalisation of processes in material handling
systems [
        <xref ref-type="bibr" rid="ref9">9</xref>
        ] is to:
•
•
•
•
      </p>
      <p>Increase production output by 10-15%;
Speed up the design, production and delivery of products to consumers by 100-150
%;
Reduce the cost of pre-launch testing of digital twins and visual modelling tools by
50-70 %;
Reduce delays throughout the supply chain management cycle by 20-30% through
increased visibility of operations.</p>
      <sec id="sec-3-1">
        <title>3.1. Vertical integration strategy in supply chains</title>
        <p>
          Let's consider the strategy of vertical integration, since it is more appropriate to use such a
strategy in the supply chain [
          <xref ref-type="bibr" rid="ref10">10</xref>
          ]. Vertical integration usually involves the acquisition of a
partner company that supplies the company with raw materials or is a buyer of its products
and services. Vertical integration involves the creation of a supply chain that may include
the following blocks: shipbuilding, terminal, inland transport, warehousing, distribution, IT
services, etc. In the case of vertical integration, a key question is how to organise the vertical
chain most effectively. Companies are usually faced with a choice between production and
purchasing, which is the solution to the "make or buy" problem [
          <xref ref-type="bibr" rid="ref11">11</xref>
          ]. One of the clear
examples of vertical integration is the Maersk company, as it includes shore and land
activities and everything related to port processes, transport, cargo handling and IT
services. It is necessary to note the importance of IT solutions in shipping companies that
specialise especially in linear services, because with the help of IT technologies such
companies solve the tasks of internal logistics and management of container flows. The
consolidation of services with the creation of a supply chain has led to the emergence of
socalled 3PL operators, which have integrated logistics services within the company. Their
competitive advantage lies in the value-added aspect of the supply chain, which is
prioritised by customers.
        </p>
        <p>Despite the significant need for coordination and cooperation, information transparency
between supply chain participants is currently low, so that none of the subjects can track
the overall progress of the transport in detail (Fig. 1).
1. Transparency of the flow of information throughout the SC in real time, including
delays en route or in ports, on the progress of the delivery of the material flow to the
customer.
2. Forecasting future states (alternative scenarios), which makes it possible to increase
the reliability and sustainability of the supply chain.
3. Optimise SC processes by providing decision support both at the transport planning
stage and during execution and control.</p>
      </sec>
      <sec id="sec-3-2">
        <title>3.2. Building a digital twin of the supply chain</title>
        <p>The digital supply chain twin (DSCT) of freight delivery in the space-time dimension is a
powerful tool for increasing efficiency and optimising costs in general, reducing risks and
improving communication and decision making among the participants in the transport
process, ensuring a synergistic effect for each participant. Information flows are
bidirectional, generating information about the behaviour of the SC that can be used for
further action (Fig. 2).
into a structure suitable for use in the SC Models block. The Simulation block, powered by
the computing power provided by cloud computing, can determine potential future states
of the real SC by applying alternative parameters to the DSCT model. This allows the
decision making process in the SC to be improved as the results and impact of one or more
possible decisions can be determined without actually affecting the real SC.
temporal direction of the flows in the chain, i.e. the input and output flows at a separate
section of the SC for a certain period of time are the input flow in relation to another section
of the SC.</p>
        <p>The Optimisation block uses both the SC Model block and the Simulation block to
optimise the SC represented by the DSCT. AI methods are the most advanced tools for
implementing this model. This module potentially allows significant improvements in the
SC, such as more efficient route planning, synchronisation and coordination of the work of
the carriers, gaining flexibility in order planning, optimising the level of insurance stocks or
reducing the order fulfilment time, etc. Finally, the "Reporting" block prepares the results
of the "Optimisation" and " SC Model" blocks individually for each interested party and
provides them with a structured presentation of all the information and recommendations
available through DSCT.</p>
        <p>Designing and optimising supply chain operations involves testing different scenarios
(route changes, weather conditions, port delays) to determine the most efficient routes,
resource allocation and contingency plans.</p>
        <p>The benefits to stakeholders of using DSCT should be highlighted:
1. Reducing delays, port disruptions and costs: by optimising routes taking into account
fuel consumption, weather conditions, port congestion and regulations; identifying and
avoiding 'bottlenecks' in cargo delivery, contributing to smoother operations and cost
savings. For example, container carrier Maersk uses DSCT to optimise container placement
and reduce fuel consumption.</p>
        <p>2. Risk management: Forecasting potential risks in cargo delivery, such as weather
conditions, equipment failure or delays, and taking preventive measures to mitigate or
eliminate them.</p>
        <p>3. Improved collaboration, thanks to DSCT, communication with transport process
partners for transparent communication, better decision making and faster response to
changes. Communicating with chain participants to track cargo in transit and at the port,
and to predict the timing of cargo operations, contributes to faster cargo clearance and
eliminates delivery failures. For example, container carrier CMA CGM uses DSCT to optimise
port calls, reduce downtime and improve overall supply chain efficiency.</p>
        <p>4. Supply chain visibility provides insight into the impact of shipping activities on the
entire supply chain, optimising supply chain inventory management and resource
allocation. Hapag-Lloyd is also using DSCT to monitor the condition of containers, predict
potential losses and improve risk management.</p>
        <p>Implementing a DSCT digital twin of the shipping supply chain can be a game changer,
delivering significant efficiencies, cost savings and risk reduction. By carefully considering
the challenges and adapting the DSCT model to specific needs, a competitive advantage can
be gained in modern shipping.</p>
        <p>The greatest efficiency is achieved by creating a virtual model of the object in question.
Digital doubles solve the following tasks:
1. Carry out a test run of a process or production chain quickly and without significant
investment.
2. Identify a problem or weakness before production or commissioning.
3. Increase the efficiency of processes or systems by tracking all failures before the
project starts.
4. Reduce risk, including financial risk and risk to the life and health of personnel.
5. Increase the competitiveness and profitability of the company's business.
6. To make long-term forecasts and plan the development of the company or product
for years to come.
7. Increase customer loyalty by accurately forecasting demand and product
consumption.</p>
        <p>Supply chain digitalization tools use different approaches to solve their tasks. In addition
to the simplest and most common way of modelling and planning supply chains
spreadsheets - there are more effective methods such as analytical optimisation and
dynamic modelling.</p>
        <p>The digital double should be used to simulate the supply chain in order to simulate all
possible crisis situations along the entire length of the supply chain and, based on the
obtained result, prepare certain strategies to counteract such cases. Thanks to the
information collected, it is also possible to clearly assess the risks of the introduction of new
links in the supply chain, their profitability, and costs at the same time, without wasting
time and resources on calculations. The digital replica also makes it possible to track
problems in the SC on the basis of up-to-date information and, accordingly, to obtain
information on the effectiveness of countermeasures for these problems. Creating a full
digital replica of the supply chain allows you to demonstrate the efficiency of the company
that owns the supply chain, and also, based on the replica of the full chain, smaller replicas
can be created to demonstrate information on a specific part of the chain that consumers
are interested in.</p>
      </sec>
    </sec>
    <sec id="sec-4">
      <title>4. Requirements for the information system of supply chain management using digital duplicates in maritime transport</title>
      <p>A supply chain management information system using digital duplicates in maritime
transport must meet a number of requirements to ensure efficient and uninterrupted
operation. Let's look at the main requirements for the information system:</p>
      <p>Integration with maritime systems. The system must be able to integrate with various
systems used in maritime transport, such as vessel monitoring systems, control systems
and security systems.</p>
      <p>Implementation of digital duplication technology. The system must be able to create
realtime digital models of marine objects such as ships, piers, and terminals, allowing an
accurate representation of their condition and operating parameters.</p>
      <p>Data monitoring and analysis. The system should provide continuous monitoring and
analysis of data from marine objects to identify possible anomalies, optimise routes and
plan cargo operations.</p>
      <p>Data security. Ensuring a high level of protection of data confidentiality, integrity and
availability is critical to the system, especially in the marine environment where there is a
significant risk of exposure to external factors.</p>
      <p>Scalability and Reliability. The system must be scalable to support large volumes of data
and operations, and reliable to always ensure uninterrupted operation.</p>
      <p>Intelligent management. The system should be able to use artificial intelligence and
machine learning algorithms to automate decision-making and optimise supply chain
management.</p>
      <p>Ensuring the fulfilment of these requirements will make it possible to build an
information system that will effectively contribute to the management of maritime supply
chains with the help of digital duplicates.</p>
      <p>The algorithm of the information system using algorithms of artificial intelligence and
machine learning to automate decision-making processes and optimise the management of
supply chains using the technology of digital duplicates can be presented as follows (Fig. 4).</p>
      <p>Automated inventory management. The system automatically monitors stock levels in
warehouses and forecasts the amount of goods needed based on historical demand and
delivery time data. It uses machine learning algorithms to maintain optimal inventory
levels, minimising inventory carrying costs and out-of-stock risks.</p>
      <p>Cost and risk forecasting. The system analyses market trends, geopolitical factors and
other external factors that affect the value of goods and services and uses this information
to predict future values and risks. Machine learning algorithms help determine optimal
pricing and risk management strategies.</p>
      <p>Automatic response to changes. The system automatically responds to changes in market
conditions, weather, transportation issues and other factors that can affect the supply chain.
It uses artificial intelligence algorithms to quickly identify changes and make appropriate
decisions to resolve them.</p>
      <p>The algorithm demonstrates how the use of artificial intelligence and machine learning
algorithms can contribute to the automation of supply chain management processes using
digital twin technology in maritime transport.</p>
    </sec>
    <sec id="sec-5">
      <title>5. Conclusions</title>
      <p>The concept of a digital supply chain twin (DSCT) has been explored. From a project
management methodology perspective, DSCT modelling allows you to create a virtual
project model that includes all of its components, such as tasks, resources, schedules and
budget. This model can be used to visualise the project, estimate its cost, shorten project
schedules, reduce costs and project risks, and determine the critical path.</p>
      <p>The DSCT is presented using a maritime transport chain as an example. The proposed
DSCT framework can be used to optimise the project, e.g. by reducing task time, reducing
costs or improving quality. This can be achieved by modelling different scenarios and
selecting the best option. A digital double can be used to predict various aspects of a project,
such as its transport duration, its cost, risks during the project, etc. DSCT allows you to make
more informed decisions and reduce project risks.</p>
      <p>Given the increasing complexity of modern supply chains, the use of an information
system based on the use of digital twin technology becomes extremely important.
Forecasting accuracy, inventory optimisation through constant monitoring of stock levels
in warehouses allow you to avoid overstocking, reduce costs and manage risks. Analysing
risks and identifying potential problems in the supply chain in advance can help to avoid
delays or disruptions in the production process.</p>
      <p>It is important to note the specific benefits and opportunities that can be obtained by
implementing an information system:</p>
      <p>Time and cost reduction. The use of digital duplicates makes it possible to reduce the
time required for planning and production along with the costs of managing supply chains.</p>
      <p>Increase in efficiency. The results of the study confirm the increase in productivity and
efficiency of supply chain management thanks to the use of digital doubles.</p>
      <p>Minimise errors. Digital duplicates allow you to avoid errors and misunderstandings by
automating and standardising processes.</p>
      <p>Increase competitiveness. The use of digital doubles can make a company more
competitive in the marketplace by reducing response time to change and improving the
quality of customer service.</p>
    </sec>
  </body>
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