Performance-based contracts using the power of a Digital Twin?

Is it possible for a material or consumable supplier to move to a performance-based contract using the power of a Digital Twin?

Typically, a supply contract is set up on a Work Order / Purchase Order basis via an ERP system, once a part fails or is scheduled to be replaced, this order is sent to the manufacturer to supply. Simple and makes sense, but is this the most effective and sustainable approach?

Is there an opportunity to use the power of data and technology (Digital Engineering) to encourage the manufacturer to reduce cost for the Asset Owner in the long term, even down to a consumable level (Liners, Piping, Replaceable items). Can this be achieved by introducing an OEM style data acquisition and analytics service (Like a Saas style contract)? There by incentivizing the manufacturer to optimise their products and create a more sustainable asset in the long term reducing the overall cost to the Asset Owner. Would this reduce the market competitiveness by sole-sourcing material though?

We see this in the Mobile Mining Equipment industry with OEM companies constantly acquiring data based on the various aspects (performance, conditional and physical / environmental) through different IoT and sensors fitted to the asset. How could we translate this theory across to the fixed plant environment? Could we introduce commercial incentives in the same way?

The key difference between Mobile Mining Equipment and the Fixed Plant is risk. If a Haul Truck breaks down, the truck is replaced by another and the truck is shipped off to the OEM for repair. If the Process Plant breaks down, production stops. The risk associated to the process plant is far greater than the risk to a single haul truck. So why don't we manage the fixed plant asset in the same way and in turn the supplier contracts who provide the key equipment and consumables?

This comes back to the question; what is the business value and the main driver behind a Digital Twin? How can we clearly articulate the financial value to Asset Owners that they can relate to? And is production risk a more appropriate value driver than production optimization?

Inevitably, there are always going to be numerous use cases for a Digital Twin, however we need to break each use case down to a metric that is understandable at a management level. Say for example, we can introduce a Digital Twin for a Compressor, Crusher or Balanced Machine and in turn visualise this high capital asset as part of a system. Once we have created a system of assets or relatable objects, we can then understand what constraints or bottlenecks there might be for that equipment. This is greater than data analytics or predictive maintenance, as it may not specifically be the equipment itself that is causing the reduced throughput or performance issues (Or breakdown risks). 

If we break down the business value to a system level, and introduce performance based commercial incentives to manufactures and suppliers, the measurable value of that technology will increase. By commercializing the ecosystem that is of a Digital Twin, we can realise the value that it can bring.

It would be great to hear any feedback or thoughts around this potential business model and if it would be a feasible option? Does it make sense to utilize data in the form of a Digital Twin to then make suppliers more accountable for their own product development.