What Is a Digital Thread?

Written by: Will Hastings

Read Time: 5 min

Digital technology is transforming our physical world at a blistering pace. Consider this: IDC predicts that between 2020 and 2023 $6.8 trillion dollars will be invested into digital transformation initiatives.  However, not all investments are made equal. 

In a global survey conducted jointly by PTC and Accenture, it was found that digital transformation initiatives that exceeded their return on investment expectations did so on average by 50 percent, with some by as much as 200-300 percent. For those less fortunate, the projects that failed to meet ROI expectations missed on average by 30 percent.  The disparity between the winners and losers of the digital arms race is stark.

Further inquiry suggested that the biggest factor leading to beating versus missing on digital transformation ROI was a company's level of cross-functional integration throughout its product and service lifecycle.  

This is why creating and maturing a digital thread should be a critical component of any DX initiative.

What is a digital thread?

A digital thread creates a closed loop between digital and physical worlds, transforming how products are engineered, manufactured, and serviced.  

Digital threads seek to create simple universal access to data. They follow a single set of related data as it weaves in and out of business processes and functions to enable continuity and accessibility.


Let’s go a little deeper. For manufacturers, the physical world is sprawling. There are physical products, their components, parts, equipment, and assets that companies create. There are the places where these things are created and live: cities, labs, worksites, factories, and homes. There are the sensors and infrastructure that surround these physical things, and there are the people who interact with all those things. In most cases, these things seem disparate – it’s difficult to determine where and how they intersect and relate to one another. That’s where digital – and digital thread – can help.

The digital world also has many layers. Manufacturers operate with a host of enterprise software solutions, which help manage various processes and functions, and produce an incredible amount of data. There’s product design data, manufacturing process data, asset health information, IoT data from products in the field, and all the digital processes that use this and other data to inform decision-making.

In the digital world, the complexity of the physical world can be distilled down to the pertinent information needed to make decisions. With technologies like CAD, PLM, IoT and augmented reality (AR) working together, digital processes are introduced to analyze, manage, and communicate information across departments and functions, allowing decisions to be made faster and more accurately. When the digital tools and processes that are utilized along the lifecycle of a product are connected, the knowledge gleaned from one activity can be shared upstream and downstream to inform others.

A digital thread can be created for many different entities and processes. Most commonly, a thread of a product follows the lifecycle from design inception through engineering and product lifecycle management (PLM), to manufacturing instructions, supply chain management, and through to service histories and customer events. This thread enables enterprises to anticipate and effectively communicate bi-directionally up and down stream of where the product is in its lifecycle, ensuring all participants utilize the most current data and can react quickly to changes or new insights.

Similar threads are emerging for entire operational environments and processes – and even worker tasks and workflows – due to the prevalence of digitization across the value chain driven by technologies like IIoT, AR, MES, and others.

Why do I need a digital thread?

Improving a company’s ability to leverage data across the enterprise would be effective or highly effective at addressing disruption, according to 74% of engineering, manufacturing, service, and IT department leaders surveyed in PTC’s recent State of Digital Thread.

And that’s what a digital thread does. It enables companies to leverage data within their ecosystem to operate faster and more efficiently, among other benefits.
However, despite understanding the transformative opportunity, businesses are struggling with democratizing their data. Only 34% reported that the data created within their department is widely available on their enterprise systems. And the numbers are more dismal from there: 16% for company data outside their department, and 9% for data from customer or products out in the field, 8% for data from suppliers.

In the age of digital transformation, new data challenges have emerged, and digital threads offer a solution to improve the speed and agility of enhanced decision-making promised by all of this data. They’re about removing bottlenecks and improving transparency and accuracy of critical business information across the value chain.

What are the benefits of a digital thread?

For the industrial enterprise, the benefits of digital thread fall into five main categories and can be realized across products, people, processes, and place:

Engineering Excellence:

  • Improve quality and first-time yield rates
  • Reduce rework, scrap, failures in the field, and warranty costs
  • Expedite new product development and time-to-market

Manufacturing Efficiency:

  • Improve overall equipment effectiveness and production efficiencies
  • Reduce asset downtime and changeover times
  • Increase overall throughput and worker productivity

Product and Service Innovation:

  • Increase customer engagement and satisfaction
  • Product-as-a-Service and outcome-based business models impact top-line revenue

Service Optimization:

  • Improve technician effectiveness and first-time-fix rates
  • Reduce asset downtime, truck rolls, and time-to-resolution

Sales & Marketing Experience:

  • Increase net promotor scores, upsell, and cross-sell opportunities
  • Improve customer product usage and education

For a deeper look at these benefits, read our whitepaper, Digital Thread: Building Continuity Across Products, Processes, and People.

How do digital threads enable digital twins?

While there are benefits to this continuity across related data sets and activities, the advanced versions incorporate physical world sensor data through IIoT capabilities or through the use of physics-based ‘virtual sensors’. Utilizing these physical world proxies of products, processes, and even people and their workflows, AI algorithms can test potential scenarios to find optimization opportunities for a variety of outcomes.

When a digital thread or ‘definition’ of a product or process is applied to a 2D or 3D graphical proxy and real-world data is modeled against it, this is referred to as a digital twin. Digital twin use cases include predictive maintenance and service for products and operational intelligence across an industrial environment.

To achieve a digital twin, a digital thread must first be established. Digital thread is predominantly used to unify and orchestrate data across the lifecycle of a product, from original design, to engineering, manufacturing, operation, and service. This enables product manufacturers to analyze a holistic data set and ensures that functions across the organization are always working with the most up-to-date information.

With the widespread adoption of IIoT technology, connected worker technology like augmented reality, and increasingly sophisticated MES and supply chain networks, digital threads are quickly expanding beyond products to be the connective tissue enabling operational insights. Woven together into a holistic view of an enterprise across many interrelated processes and functions, the relationship between multiple digital threads is referred to as a digital fabric or mesh. Even today, digital mesh is forming all around us and will be the foundation upon which we architect and orchestrate digital experiences in the physical world in the future.

The State of Digital Thread

Learn how companies are closing the loop between digital and physical. Read Now
Tags: Augmented Reality Industrial Internet of Things Product Lifecycle Management (PLM) Digital Transformation Digital Twin

About the Author

Will Hastings

Will Hastings is a research analyst manager on PTC’s Corporate Marketing team providing thought leadership on technologies, trends, markets, and other topics. Previously Will was a senior analyst for ARC Advisory Group, where he conducted PLM and additive manufacturing research. Prior to ARC Advisory Group, Will was a lead mechanical design engineer for product development programs at Sensata Technologies.