Digital platforms for supply chains and logistics

Supply chains are complex systems that typically involve a multitude of actors and activities, and it can be extremely difficult to capture one entire chain, let alone the networks of criss-crossing and interlinked chains. A platform of some sort is needed to put suchlike chains together. The concept of platform economy as we understand it, involving digital platforms and advanced accessory technologies such as blockchain, offers in this context vast opportunities to more efficiently managed supply chains and logistics. Information over chains and networks can be gathered and processed in platforms, which not only helps steering and monitoring of entities but may facilitate optimisation of chains, produce reliable accounts, inspire new business innovations, etc.

In this signal post we explore possibilities with platforms for supply chains and logistics and take a look at examples from forerunner industries.

Information management in multi-actor supply chain networks

Digital platforms allow information management throughout the supply chain, enabling data to accumulate from each step of the chain. Simultaneously, access to data can be granted to any involved actor, including the end user. In essence, a product or service can be accompanied by a digital twin, i.e. a virtual counterpart for gathering data and information over the lifecycle from design and manufacturing to use and final disposal.

One practical example comes from diamond business, where platforms and blockchain technologies are used for the digital record for diamonds, especially to verify origins and authenticity. Similarly, Walmart among others is piloting tracking of food products to support food safety. Suchlike information platforms serve especially the end customer, who can be sure of, for example, the origins, fair production conditions or undisrupted cold chain of the product or service that they buy. But also supply side actors benefit, and one well established example of using backfeed information comes from elevator industry, where Kone has successfully deployed IoT-type solutions to make use of real-time information collected from their products to serve maintenance services as well as product development.

Research on this area is intensive, see for example a study from our project on platforms being used in service-driven manufacturing to orchestrate networks.

Platform innovations in freight and logistics

Logistics constitutes one specific chain of activities in supply chains. Platforms and blockchain have huge potential in this area; a fact acknowledged lately in the Transport Sector Growth Programme by the Finnish Government (full report in Finnish). Firstly, information stored on digital platforms can make the logistics chain faster and more efficient, for example by providing real-time information from one phase to the next or by replacing manual bureaucratic processes with digitalised and automated equivalents. Information of movements but also information of transport related emissions could be recorded reliably.

Secondly, platform economy enables new types of business models for logistics services, as information of material flows is available to construct centralised as well as decentralised delivery streams in new ways. For example, in urban freight novel app-based logistics services have emerged, especially as a response to growing e-commerce. Suchlike commercial and peer-to-peer services can connect demand and supply for instant deliveries via a digital platform in just a few hours. A more large-scale example is the free web-based freight brokerage platform Drive4Schenker that functions as a European-wide marketplace for deliveries and supports digital handling of documentation.

Selected articles and websites

CBINSIGHTS: How Blockchain Could Transform The Way You Buy Your Groceries
Dablanc Laetitia et al. (2017): The rise of on-demand ‘Instant Deliveries’ in European cities, Supply Chain Forum: An International Journal
DB Schenker: Drive4Schenker
Eloranta, Turunen (2016). Platforms in service-driven manufacturing: Leveraging complexity by connecting, sharing, and integrating, Industrial Marketing Management, Vol 55, pp. 178-186
Finnish Government: Transport Sector Growth Programme will give companies a boost in the international market
Forbes: IBM Forges Blockchain Collaboration With Nestlé & Walmart In Global Food Safety
Fortune: The Diamond Industry Is Obsessed With the Blockchain
Fortune: Walmart and IBM Are Partnering to Put Chinese Pork on a Blockchain
Kone: Taking elevator services to the next level
Ministry of Transport and Communications: Applying blockchain technology and its impacts on transport and communications
Techncrunch: Blockchain has the potential to revolutionize the supply chain
Työ- ja elinkeinoministeriö: Liikennealan kansallinen kasvuohjelma 2018 – 2022
World Economic Forum: The digital transformation of logistics: Threat and opportunity

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Platforms and forestry

Platform economy brings along new opportunities for forestry, ranging from more efficient management to new data-driven services and enhancing of industrial ecology. Increases in the amount and accessibility of forest data as well as data on the raw material cycles enable new solutions and collaborations and invites novel cross-sectoral innovations. Combined with advances in material technology, forests are set to become a key component in the emerging circular economy.

Why is this mportant?

There are three main areas of impact platforms can have in the forestry sector. The first is the gathering, analysis and use of forest data. Digital platforms provide an easy access to forest data. Globally this is linked especially to monitoring forest growth and identifying illegal logging. In Finland the use cases have more to do with increased efficiency of forest management, transparent sales and new services based on data.

The second area of impact is the control of the flow of materials, including wood, cellulose and further refined products. Recycling and end-of-life management also come into the picture. Wood and particularly cellulose, and their recycled fractions, can be the (raw) material for a wide range of products from packaging and clothes to fuels and energy. However, this requires good data on the characteristics of material flows and the efficient coordination of these flows. Here a platform-based system and operation model can be helpful.

The third area of impact is increased collaboration between different actors. A traditional approach is to center the activities around a specific place or plant, and there are signs of a new wave of such industrial ecology platforms, such as the Äänekoski bioproduct mill. What is especially interesting from the point of view of platform economy are the more data-driven and virtual collaborations.

Things to keep an eye on

Having good and reliable data on forests as well as the flow of wood-based materials is essential. Therefore it is worth following how the Finnish law concerning forest data proceeds, as well as what kind of players exist in the forest data business. For example, the US company Trimble acquired two Finnish companies, Silvadata and Savcor, in 2017. Furthermore, as an increasing number of new cellulose-based materials enter the market, it is good to look at the bigger picture of material flows and collaboration between actors.

Selected articles and websites

Bittejä ja biomassaa – Tiekartta digitalisaation vauhdittamaan biotalouteen
Design Driven Value Chains in the World of Cellulose dWoC
Trimble Connected Forest
Infinited Fiber brings radical change to the textile industry
Forest Solutions Platform
Global Forest Watch
The Äänekoski bioproduct mill – a new chapter in the Finnish forest industry
Trimble doubles down on Finnish companies
Finnish plastic replacement raises EUR 1 million
Metsätietolain muuttaminen

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Digital Twins (of products)

The concept of a ‘digital twin’ has been suggested as one of the top technology trends for 2017, but what is it all about? The digital twin is the virtual counterpart of a real physical product, and it captures the data and information related to a product’s lifecycle from design and manufacturing all the way to use and final disposal.

Why is this important?

The existing applications of digital twins include for example storing and accessing product information using RFID codes and computer-aided 3D design models. However, technology development under the megatrend of digitalisation holds promise for way more radical progress with digital twins: In-house manufacturing applications are about to step up towards solutions across entire supply chains and end-use. The lacking connection and integration between the virtual model and the physical product will be intensified towards dynamic use of data and information flow. And the advances in blockchain technologies, artificial intelligence (AI) and autonomous systems will level up the importance of digital twins, as decision-making, transactions and learning will growingly rely on interconnected products and systems, i.e. Industry 4.0 and the internet of things (IoT).

Things to keep an eye on

The role of the digital twin in the platform economy is central, as it can ideally be the universal access point for all product information as well as accumulated data along a product’s lifecycle. For design, modelling and manufacturing of products the use of digital twins is typically managed with dynamic software models. These will be in the near-future even more closely interconnected to production processes and equipment, and applications are expected to spread and evolve from manufacturing industries to many other contexts such as end-user interfaces, transport sector, service industries, etc. Platforms managing and making use of all these data, information and interconnections will evolve, and the business models to product and service industries are going to change too. Visionaries anticipate even more radical opportunities in the longer term as digital twins of products and services will be followed by digital representations of facilities, environments, people, businesses and processes.

The digital twin is much more an opportunity than a threat, as the involvement of the virtual dimension aims to improve the quality, efficiency and performance of products, services and processes rather than replacing or displacing the real physical counterpart. In fact, the digital twin has been claimed to support the human knowledge kit, boosting problem solving and innovation by enhancing our uniquely human capacity to conceptualise, compare and collaborate.

Selected articles and websites

Gartner’s Top 10 Strategic Technology Trends for 2017
How To Put Your Digital Twin On Steroids
Leveraging Digital Twins To Breathe New Life Into Your Products And Services
Digital Twin: Manufacturing Excellence through Virtual Factory Replication
About The Importance of Autonomy and Digital Twins for the Future of Manufacturing
Digital Twin Data Modeling with AutomationML and a Communication Methodology for Data Exchange
Digitalization in machine building: The digital twin
GE Digital Twin Game

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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