Integrating digital twin and blockchain for responsive working capital management in supply chains facing financial disruptions

Financial disruptions, such as extended trade credit periods and reduced down payments, pose significant challenges to effective working capital management in supply chains. While the benefits of blockchain and digital twin technologies have been studied independently in supply chain finance, their combined potential to optimise working capital performance during disruptions remains underexplored. Our study addresses this research gap by proposing an integrated blockchain and digital twin framework to enhance financial resilience in disrupted supply chains. Blockchain facilitates secure, decentralised data sharing, providing visibility into product, order, and cash flows across supply chain stages. The digital twin complements blockchain by offering predictive capabilities and enabling dynamic adjustments to working capital policies in response to disruptions. Within this framework, discrete-event simulation assesses the impact of financial disruptions on working capital performance, while machine learning models generate decision rules for adaptive working capital management. The study highlights the critical role of inventory adjustments in mitigating financial disruptions and reducing working capital variability relative to demand fluctuations. This research provides actionable insights for supply chain managers seeking to improve working capital stability amid disruptions and offers a data-driven approach to financial resilience in supply chains.