TCS: AI, Digital Twins and the New Supply Chain Model
As climate pressure builds and sustainability becomes a board-level issue, enterprises look to technology to meet demands for efficiency and environmental responsibility.
Tata Consultancy Services (TCS) puts digital twins and AI at the heart of this shift.
In its 2025 Digital Twindex, TCS shows how these tools reshape not just how companies manage operations, but how they manage supply chains in real time, balancing performance with purpose.
A smarter way to manage supply chains
Supply chains remain one of the most complex and vulnerable parts of any business.
Global networks stretch across continents, relying on accurate forecasts, real-time coordination and efficient resource use. TCS argues that emerging technologies like digital twins and AI are key to modernising these networks.
Digital twins – dynamic, real-time virtual models of physical systems – allow companies to simulate entire supply chains. This means identifying weak links, adjusting to real-time disruptions and testing scenarios before committing resources.
Instead of reacting to breakdowns, companies use these virtual models to forecast and prevent them.
"Digital twins are a powerful tool for sustainability, acting as a predictive brain that uses real time sensor data to optimise operations," says Zeeshan Rashid, Global Head Advisory for Sustainability at TCS.
The addition of AI strengthens this system further. Algorithms digest data from across the value chain – energy meters, transport logs, supplier databases – and turn it into actionable insight. AI-powered digital twins give businesses a full view of their supply chains, helping them make decisions that cut waste, limit emissions and avoid bottlenecks.
TCS outlines how these intelligent systems shift businesses away from rigid, reactive supply chain models and into flexible, circular operations. This means designing supply networks that reuse resources, anticipate shortages and reroute goods more efficiently.
It becomes possible to optimise for both profit and sustainability at once.
Why AI must be managed as well as deployed
While AI helps reduce environmental impact across supply chains, it also raises its own sustainability concerns.
The computing power needed to run large AI models, particularly those involving simulations across global operations, consumes large amounts of energy and water. That brings emissions of its own.
AI’s dual nature – both a solution and a source of environmental pressure – raises a tough question. Can companies truly rely on AI for sustainability if AI itself strains resources?
Amanda Gardiner, Executive Director at UN Global Compact Network USA, believes the answer lies in how AI is used: “What excites me about Gen AI is turning data into action.
"AI lets you go beyond reporting to truly equip teams with the ability to use data strategically, magnifying the impact their choices can have on sustainability practices.”
This is where Responsible AI frameworks come in. By setting clear guidelines around model development, energy use and data transparency, businesses aim to make AI a net positive. The frameworks help ensure AI systems do not introduce new risks while solving others.
These safeguards also encourage wider adoption of AI tools across supply chain functions, including ESG reporting, emissions forecasting and energy management.
The operating system for sustainable supply chains
The Digital Twindex makes it clear: sustainability is no longer a sideline consideration. It is built into operations and measured by its influence on core business outcomes.
For Hemakiran Gupta, Head of Global Sustainability Services at TCS, the connection is direct: “The beauty of accepting climate risk as business risk means companies will take more steps to reduce the risk.”
In supply chain terms, this means fewer material losses, smarter transport systems and less downtime. Businesses become more resilient and responsive by embedding AI and digital twins directly into supply chain operations.
TCS points to a broader shift away from isolated sustainability projects and toward tech-integrated ecosystems.
“If we can bring the technologies that are available today and stitch them together with digital twins, AI, and sensors... organisations will build purpose-led, resilient businesses,” adds Hemakiran.
TCS highlights how the combination of cloud platforms, AI, sensors and digital twins creates a live system for monitoring and managing environmental impact. These platforms continuously adjust operations based on current conditions, enabling companies to reduce emissions while maintaining performance.
Ravi Prasad Nimmalapudi, Senior Director of Sustainability at The Coca-Cola Company, reflects this operational shift: “We believe true leadership is measured by the impact we create. By making sustainability part of every decision, we can drive progress today while safeguarding the world for tomorrow.”
By 2035, TCS predicts this kind of tech ecosystem will become the standard. Enterprises will invest in digital twins to monitor every link in their supply chain, using AI to recommend changes in real time.
The report frames this as part of the transition to Industry 4.5 – an era defined by human-machine collaboration, modular systems and adaptive operations. Supply chains built on these foundations will not only meet climate goals but also outperform those still using linear, outdated methods.
Enterprises no longer treat sustainability as a compliance burden. Instead, it becomes a competitive edge, embedded in the very core of how products are made, moved and delivered.
TCS' Digital Twindex shows that with the right mix of tools and data, supply chains themselves can become engines of sustainable growth.
