Technologies have advanced significantly since the First Industrial Revolution, and digital twins, which have existed for several decades, have only become widely implementable across various manufacturing industries with the adoption of the Internet of Things (IoT). As Industry 4.0 continues to evolve, digital twins have had a major impact on organizations, compelling them to remain competitive, resilient, and sustainable to succeed. Each manufacturing industry has its own challenges and opportunities implementing digital twins due to specific associated technologies, creating new skillsets and professions. In the broader context of business and technology, the rapid increase in data complexity and volatility has resulted in knowledge production at an unprecedented speed. However, this knowledge often remains scattered, fragmented, and interdisciplinary, making it difficult to keep up with state-of-the-art research and assess collective evidence in specific areas. In response to these challenges, the European Commission is encouraging organizations to transition to Industry 5.0 as a global competitive strategy aimed at making Europe resilient, socially responsible, and ecological. This study is a Systematic Literature Review using PRISMA guidelines and research in Web of Science database to assess the influence, benefits, and challenges of digital twins in European Union manufacturing Industries. The complexity of the concept, technology used, and range of application raised several challenges. The systematic review of the selected literature culminated in a framework to organize literature context in five themes, adoption, implementation, productivity, efficiency and sustainability. Utilizing full potential of digital twins, European manufacturing can leverage productivity, efficiency and competitiveness, involving both theoretical and practical approaches.