Colin McMahon is a senior market research analyst working with PTC’s Corporate Marketing team, helping to provide actionable insights, challenging perspectives, and thought leadership on trends, technologies, and markets. Colin has been working professionally as a research analyst for many years, and he enjoys examining and evaluating just how large the overall impact of digital transformation technologies will be. He has a passion for augmented reality and virtual reality initiatives and believes that understanding the connected ecosystem of people and technology is key to a company fully realizing its potential in the 21st century.
Manufacturers today are constantly investing for competitive advantage. Decision-makers want to know which initiatives will best address their business challenges and objectives, like improved product quality, operational efficiency, and overall revenue growth. Regardless of which initiatives are prioritized, leaders should first understand the benefits and choose investments that best fit their needs and goals.
For those curious as to how technological leaders are behaving differently, however, a new fact has emerged: tech leaders are more likely to be investing in a digital thread strategy and leveraging Agile product development.
A recent study by PTC looked to understand the state of digital thread comprehension and adoption, as well as organizational behavior for competitive differentiation. One of our first questions asked respondents to self-identify whether their organizations were technology leaders—quick to adopt and use innovative tools—or technology laggards, waiting to see how certain developments played out before committing. Findings showed that leaders were far more likely to use Agile product development in their hardware development than traditional Waterfall strategies.
Agile product development is an application of software methodology to a physical manufacturing process. In a sense, building a product using Agile or—to be blunt—making hardware like making software. We’ll get into it further in the blog, but right now we first need to understand digital thread.
What is digital thread?
The digital thread is an essential enabler of digital transformation. As products progress through the lifecycle, various organizations need data to perform their functions efficiently—and for most companies, product data is not readily available or actionable. The digital thread enables the integration and sharing of product data across the product life cycle, from design to manufacturing, service, and retirement.
A digital thread empowers manufacturers of complex, long-lifecycle products to overcome common obstacles that hinder cost reductions, productivity and efficiency gains, meeting sustainability goals, and increasing revenue. It’s an interconnected flow of relevant data that defines a product throughout its lifecycle. It allows organizations to leverage product data to unlock business value.
If this is news to you, you’re not alone. Our research found that the average manufacturer does not have a developed understanding of the digital thread concept. Most were quick to say it was understood by relevant teams and no one else. Leaders, by contrast, were well ahead of the pack. About one-third of leaders said the concept of digital thread was understood by many of the teams within their organization. Contrast this to only 9% of laggards. Laggards were also three times as likely to say the concept was not widely understood at all.
Given the departmental range of digital thread initiatives, the leader answer makes more sense. Digital thread involves all teams essential to bringing a product to market (and maintaining it): engineering, manufacturing, and service personnel.
The similar priorities of Agile product development and digital thread
OK, we’ve established that leaders are using Agile and we’ve explained the fundamentals of digital thread…so, what’s the relationship between the two? In this case, both digital thread and Agile reflect a strategy that aligns with most companies’ goals regarding digital transformation. Digital thread is about laying a single source of product data truth that follows throughout much of the average lifecycle. It’s about connecting employees with the right information at the right time. In other words, it’s about collaboration across traditionally segmented organizational structure. Agile product development has many of the same priorities.
The first thing to know about Agile: it’s flexible. There are no Agile police who will arrest a manufacturer if they only adopt five of the 12 principles of Agile outlined in its manifesto. Organizations are encouraged to use what makes sense for their teams and business objectives and disregard anything that doesn’t.
The flexibility of Agile and the shared goals of cross-departmental collaboration and optimization—create a perfect potential partnership. For instance, the second principle of Agile involves change—stating that positive change should be welcome, even late in development. Having up-to-date access to product data through a digital thread allows manufacturers to make that change with confidence, knowing it— rather than guessing—will lead to improvement in product quality.
Leaders are prioritizing access to product data
Both digital thread and Agile require access to product data. In different ways, both strategies work to break down traditional barriers so that every team can better interact with the data they need to create the best solution. Digital thread is an enterprise-wide initiative that aims to connect product data with its relevant stakeholders throughout every major phase of its lifecycle.
Here again, however, we see leaders having a definite advantage. Over half of leaders stated their product data accessibility crossed departmental lines, whereas fewer than 40% of laggards said the same.
Accessing the right data enables a digital thread, it enables teams to work together in Agile in more productive ways. Leaders see the value in accessing needed product data, and their abilities to better leverage digital thread and Agile product development reflect the reward for their efforts.
Leaders understand and prioritize digital thread
Digital thread is not a new term, but many factors make it a priority for manufacturers today. Expected time to market continues to shrink, integrated software is making physical products more complex, and users increasingly want customization options tailored to their needs without sacrificing either speed or quality in development.
The digital thread meets these needs, and leaders seem to be more aware of this than laggards. We found 62% of leaders stating the digital thread was important, vs. 45% of laggards. About one-quarter of leaders felt digital thread was a top priority, against only 9% of laggards.
Investment should never be made before fully understanding the expectations of what you’re trying to accomplish. Leaders are clearly more familiar with digital thread at an organizational level, and they are moving faster toward implementation. Given the numerous advantages of a successful digital thread strategy, this will likely yield a significant competitive advantage over the laggards still struggling to prioritize it.
Get started: Lay a digital foundation
Digital transformation requires acceptance of entirely new ways of working and delivering value to customers. It would not be a surprise to see initiatives like digital thread and Agile advancing together—because often the goals of each align.
Investing in digital technologies requires first understanding the business problem(s) you hope to solve and how the technology in question will help. Those serious about digital thread tend to pursue product lifecycle management (PLM) solutions, as it enables centralized data management while enhancing visibility across the lifespan of physical products.
That said, there are numerous other technologies that are being invested in, as well. In our survey, leaders were far more likely than laggards to identify investments in AI, IoT, ALM, SLM, and edge computing. These solutions are all very different—but each supports a shared goal: Make product data more immediate, more up-to-date, and easier to access by the authorized employee.
Both digital thread and Agile help to increase collaboration and improve access to up-to-date product data. It is easy to see how both can work separately or together to deliver a competitive advantage and propel your company forward.
Why Companies Must Prioritize Digital Thread
Learn why the concept of the digital thread is emerging as a transformative force for overcoming critical challenges and unlocking business value.
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