Conceptual foundations and extension of digital twin-based virtual factory to virtual enterprise

Manufacturing organisations must compete with each other while adapting to the ever-changing conditions by building and strengthening their chains of competencies to survive. Therefore, companies are challenged to reform and reconstruct their product, process, and system models as well as to define new goals conforming to evolving complex and dynamic environments. Recent advancements in technologies such as modelling and simulation (M&S), digital twin (DT) and virtual reality (VR) promise new ways for remodelling organisations’ resources, processes, and architectures. Moreover, comprehensive concepts like DT-based virtual factory (VF) exploit the potential for utilising such technological concepts in the application domain by enabling the integration of various tools, methods, and processes. There are a variety of empirical studies focusing either on the distinct use of technologies, methods and processes or very generic concepts and approaches. However, studies focusing on both conceptual and practical aspects for such comprehensive and integrated solutions to handle co-evolution in the complex manufacturing domain are limited for defining, designing and utilising novel technologies. In this paper, therefore, we attempt to close this gap by (1) framing and discussing the conceptual and theoretical foundations of DT-based VF, (2) introducing and discussing the extension of the DT-based VF to virtual enterprise and (3) generalising and interpreting the prescriptive knowledge discovered during the previous VF demonstrations performed at Vestas Wind Systems A/S. Systems and complexity theories, concepts of business cycles and competence-based strategic management are discussed to frame descriptive knowledge as a language for depicting the internal and external nature of complex manufacturing enterprise operations. Furthermore, design principles of the DT-based VF concept are examined based on framed concepts and theories as well as its potential implications and deviations into different application contexts to provide managerial guidelines for utilising such a concept.