The Smarter Way to Model Supply Chains

Felipe Molino, Sr. Director of Engineering, NFI

Felipe Molino, Sr. Director of Engineering at NFI, who leads the consulting division and serves as the product owner for digital twin technology, now also overseeing AI capabilities. His role involves collaborating with teams on consulting engagements, refining models, and solving challenges. He focuses on designing models, understanding customer needs, and adjusting strategies as needed. On the digital twin front, Felipe plays a key role in implementing new accounts and optimizing existing ones. Balancing multiple priorities, he ensures projects run smoothly and deliver results, driving innovation and operational success.

Across the supply chain industry, there’s no shortage of conversations about improving efficiency, cutting costs, and optimizing networks. As companies look for smarter ways to navigate today’s challenges, many are exploring new tools, and AI is quickly becoming a top contender. But while AI holds real promise, it’s not the only piece of the puzzle, and it may not even be the first tool you need.

Digital Twins and AI

If you are asking yourself, “What does it take to unleash the full power of AI in my business,” more often than not, the answer is a digital twin.

A digital twin gives you the power to simulate your supply chain in a dynamic, living model, one that evolves with real-time data. It enables you to test assumptions, explore “what-if ” scenarios, and understand the downstream impact of decisions before they happen. AI can enhance this process by identifying patterns, forecasting outcomes, and accelerating decision-making. But without the digital twin as the foundation, those insights remain disconnected from your actual operations. To truly unlock the value of AI, you need the sandbox the digital twin provides: the environment where strategy meets simulation.

Digital Twin: Mitigating risk with a long-term supply chain strategy

Creating a digital twin isn’t the only way to navigate today’s market challenges, but for our customers, it’s the most flexible and scalable solution.

Faced with growing demand for supply chain analysis, we knew the traditional approach of hiring engineers and stacking software licenses to manually conduct ad hoc studies wasn’t sustainable. Instead, we invested in top-tier technology and talent to build an automated digital twin solution that could scale alongside our customers’ needs and set a new industry standard.

“If you are asking yourself, what does it take to unleash the full power of AI in my business, more often than not, the answer is a digital twin”

But it didn’t happen overnight, and it won’t for most companies. Building a digital twin is a long-term commitment, not a plug-and-play tool. For many, it could take up to five years to fully develop an actionable model, requiring significant investment in infrastructure, talent, and systems. At NFI, we’ve dedicated years to research and development to do this, enabling us to onboard customers in weeks rather than years. Our expertise and advanced technology allow clients to quickly leverage digital twin capabilities, achieving faster insights and a more agile supply chain.

An example scenario with big impact

When we onboard accounts on the digital twin, we provide a series of standard scenarios to our customers that we know to be the most common areas of opportunity. In my experience, one of those opportunities is the oversight of assignment and prioritization of LTL carriers, especially in larger companies where freight spend can exceed $10 million. These types of companies often move a significant portion of their volume through truckload, and as a result, the LTL side gets less attention.

By reevaluating our approach to assigning route guides and preferred carriers for LTL shipments, we identified opportunities for significant cost savings. Adjusting this single parameter led to over $2 million in potential savings for our customers last year. When combined with other modeling parameters and scenarios offered by NFI, the cumulative ROI impact is even higher, demonstrating the transformative power of digital twin technology.

Challenges with supply chain modeling: The relationship between people and technology

One of the most significant challenges in supply chain modeling is attracting professionals with the specialized expertise required for effective analytics and engineering. The demand for individuals with both skill sets is high, making them difficult to recruit and retain. Once onboard, integrating them into existing processes involves comprehensive training, which can be time-consuming.

Technological hurdles also pose substantial difficulties. While a number of software solutions are available, they often come with high costs and require specialized training to utilize effectively. Companies often make large investments in these tools but struggle to fully utilize them and achieve the anticipated returns. Selecting appropriate partners and technologies amid a vast array of options further complicates the decision-making process. Addressing these challenges in talent acquisition and technology implementation is crucial for organizations striving to enhance their supply chain operations.

In-House or Outsource? Making the right supply chain call

To make the right decision today, it’s crucial to have a clear understanding of your team’s core competencies. Anything outside of that, you should consider outsourcing to a trusted partner. Many companies work with third-party consulting firms, IT companies, and other partners who have better resources and expertise in certain areas. The key is knowing which tasks to keep in-house and which to outsource to those who are experts. This approach helps you focus on what matters most while getting the most value from your partners.

In the end, whether you choose to keep supply chain operations in-house or look to outsource, both paths require careful investment—both in time and resources. The real value lies in ensuring that the solutions you build or buy are strong enough to drive meaningful outcomes. And if you’re unsure where to begin, there’s a wealth of expertise out there that can help you get started on the right foot. By leaning on the right resources and embracing the evolving tools available, you’ll be well-positioned to navigate the complexities of the supply chain landscape well into the future.