Will supply chains enter the Metaverse?
Taking digital supply chain twins to the next level
The Metaverse is touted as being the next big thing to enter the Corporate IT environment. It’s interesting technology, but there are a few things to unpack here before we get too excited. In simple terms, the Metaverse is a shared virtual environment that people access via the Internet and engage in as an immersive experience. In his book, The Metaverse: And How it Will Revolutionize Everything, Matthew Ball offers a more comprehensive definition:
“A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”
Over the past few years, we have seen a number of new and disruptive technologies enter the market, some adding real value to business environments and others making big claims on how they will improve process efficiencies across the extended business ecosystem. Nearly five years ago, blockchain entered the market and CIOs were scrambling to understand the technology and how it could be used within their IT landscapes. But the technology has struggled to catch on, and ironically it is really within the supply chain that valid use cases have been developed: for example, monitoring the provenance of goods and raw materials as they move through the supply chain. So what about the Metaverse? Will this attract the same fate as blockchain? Well, let’s discuss further. We have two things to explore here, firstly the technology itself and secondly its relevance to the supply chain.
The technology of the Metaverse
From a technology point of view the Metaverse is not entirely new, in fact it started to enter the market in the late 1980s in another guise. Back then, Virtual Reality (VR) 3D environments projected through full helmet-based headsets were highly pixelated and cartoon-like, and many users struggled with motion sickness from wearing the headsets for long periods of time. The application of VR in the engineering sector in the early 1990s coincided with more manufacturers adopting 3D engineering software (Computer Aided Design and Manufacturing, CADCAM) to build 3D virtual models of cars, planes, and in fact any physical product or piece of equipment. Once these 3D models were built, companies needed ways to visualise and ‘walk through’ these 3D models to check for form, fit, and function. Advanced analysis software emerged that allowed companies to test the performance of their products in a 3D world. So the ability to visualize 3D models in a virtual world is nothing new, but to date we have seen limited use cases for leveraging 3D models in the context of an end-to-end supply chain.
Roll forward thirty years and VR may have found its long-term home, the Metaverse. Technology has moved on in leaps and bounds, the most important of which is display technology to provide a crisp representation of a 3D computer generated model. The Metaverse has been introduced with great fanfare and many companies, mainly consumer-facing organizations, have been exploring how the Metaverse can be used to improve the engagement with customers and ultimately improve the customer experience. The retail sector is naturally quite excited by this technology, but will the Metaverse catch on in other industry sectors? Key to this is finding viable use cases and ensure that the technology required to experience the Metaverse is easily accessible from a cost point of view.
There is a big debate going on at the moment as to whether full VR or Augmented Reality (AR) is the way to go forward. AR has its own benefits in that the technology is more accessible as you don’t require a full headset and you can actually overlay imagery of the real world with 3D models from the virtual world. You are also less likely to experience motion sickness compared to a full VR headset. The image below shows how a virtual 3D model of a supply chain could look in an AR-based environment, a combination of 3D graphics overlaying a real-world environment—in this case a boardroom table. But let’s continue the discussion around VR in relation to the supply chain.
The Metaverse and the supply chain
The COVID pandemic has brought about a mindset change in today’s CIOs, and nearly every company is trying to find ways to accelerate their digital transformation initiatives. To achieve this, they will need to find ways to migrate to cloud-based solutions. This IT upheaval has presented an opportunity to explore new digital technologies, and some companies are starting to use the opportunity to evaluate the Metaverse. Metaverse environments are starting to be built outside the retail sector, and the most recent area being explored is the Industrial Metaverse. The ability to replicate a smart factory, for example, within the Metaverse, recreating assembly robots and production lines in a 3D virtual world is allowing companies to visualise their production operations in an entirely new way. Viewing 3D models of production lines is not new and in fact has been around for many years, but the Metaverse allows companies to potentially connect their virtual production line to a virtual supply chain.
The COVID pandemic brought about many changes in how companies operate, and many supply chains were severely impacted by parts shortages. In fact, supply chains seem to continually face disruptions. Hence why supply chain managers have been crying out for new technologies to help improve visibility across their supply chain. The term ‘Control Tower’ has been used for many years and associated technology allows companies to get improved visibility across their supply chain. The Metaverse will allow companies to deploy next generation control towers.
Solutions like OpenText Business Network already allow companies to digitize and connect supply chain operations, leveraging multiple technologies including EDI-based communications that have been around for decades. EDI is in the DNA of nearly every supply chain operation around the world and is used to digitize all paper-based information flows associated with the movement of goods across a physical supply chain. EDI transactions can also be integrated to back-end systems such as ERP to ensure that external supplier information can seamlessly enter a customer’s backend system with ease. Integration technologies such as EDI allow companies to establish a digital backbone across their business ecosystem. Now what if you could take this digital backbone and represent it within a Metaverse?
- What if you could build a 3D model of your end-to-end supply chain and augment it with IoT sensor data from the physical world to allow you to know where your shipments are and in what condition they are in? Every container, pallet, and carton would be modelled in 3D and would then be ingested into the Metaverse and aligned with the logistics and B2B transaction flows. In essence you would be using the Metaverse to visualise a digital twin of your physical supply chain and the associated shipments moving across it.
- What if your supply chain gets impacted by a tornado in North America and you want to see how your logistics flows might be impacted? This disruption could potentially be modelled in the Metaverse by ingesting weather data feeds, and you could simulate alternative logistics flows to bypass the disrupted location and identify the safest route to ship goods.
- What if you could run ‘what if’ scenarios across your digital supply chain twin? For example, you may start a new project that requires adding 10 new suppliers in APAC. The Metaverse could be used to model and simulate the new APAC supplier shipment flows and how they impact your logistics and inventory management systems.
Metaverse vs AR-based technologies
There is certainly a place for the Metaverse in relation to visualizing, simulating, and managing supply chain operations, but the technology has to move on from being perceived as a gimmick. When large companies start to embrace the Metaverse for improving supply chain visibility (and they may leverage some of the scenarios highlighted above), perhaps the Metaverse stands a chance of being accepted within future IT environments. However, we may see more interest initially in AR-based technologies as it is slightly easier to deploy and manage, and users are less likely to experience motion sickness from being inside a VR headset for long periods of time. Like all technologies, the Metaverse will take time to gain acceptance, but companies are looking to build resilience around their business operations, and to achieve this they need to improve end-to-end visibility of their operations. So, there is certainly an end goal in sight, and eventually we may see companies building digital twins of their supply chains in the Metaverse, but it will be a journey. And as discussed earlier, constant disruptions will force companies to accelerate their digital transformation initiatives and given the backing and exposure that the Metaverse has had to date, it would be wrong to discount it from being part of supply chain operations in the near future.
To learn more about how OpenText can help digitize your supply chain operations in preparation for potentially exploring the Metaverse in the future, visit our website.