In my role as a research analyst, OEMs often ask me an important question, “where should we invest to future-proof our enterprise?” As a rule of thumb, I suggest investing in areas where the return is quick, scalable, high-value, and impacts the very core of the enterprise. To these OEMs, my answer is to invest in digital transformation and digital thread. In this two-part blog series, I explain why.
We continuously hear stories from companies about their initiatives to eliminate or remove functional silos within their organizations. Silos present obstacles to operational efficiency, business productivity, and customer satisfaction. One of the ways companies attempt to break down these silos is by deploying information technology to integrate disparate processes and systems within and between business functions.
Companies often attempt to achieve this outcome through digital transformation (DX) initiatives. Although these initiatives have immense potential, without suitable technology and support from the enterprise, they are susceptible to failure. Despite billions of dollars a year in DX investments, 83% of these initiatives fail, according to ZD Net. At issue, while DX can lead to integration between processes and systems within a specific business function, they often fail to achieve a broader level of integration required between functions within their company or between the company and their business partners, suppliers, or distribution channel.
By implementing a systems design principle known as the digital thread, either on a standalone basis or part of a DX initiative, companies can effectively achieve the level of integration needed to eliminate silos and achieve higher levels of productivity, efficiency, and quality. The digital thread applies an asset-centric view to capturing and sharing critical data across traditionally siloed functions throughout the product’s lifecycle.
In other words, the digital thread considers data dependencies involved in the product lifecycle from design and engineering to manufacturing through maintenance, repair, and service. It is a framework for ensuring the availability and accuracy of systems of record and engagement exchange data required to improve various aspects of the product and facilitate improved asset uptime, service readiness over the asset’s lifecycle, and maximize customer satisfaction, brand loyalty, and repeat purchase. Through this framework, companies can ensure they make the correct information available and accessible, to the right place, to the right people, and at the right time. This outcome is also critical to supporting new business models, improving revenue streams, and enhancing customer relationships.
Consider a company that has not followed the digital thread principles in setting up its product lifecycle systems infrastructure. There are likely to be data or information silos that exist between critical business functions like engineering, manufacturing, and aftermarket service. While product design documents or CAD drawings may exist within the engineering department, they may not be easily accessible by the aftermarket service division. As a result, the service organization may face challenges supporting the product.
For example, they may lack specifications about a spare part design or information required to maintain and repair a piece of equipment. These gaps could lead to delays or costs in servicing the product or finding or replicating the missing data/parts or result in less than optimal service decisions based on incomplete or partial information. All these examples lead to extended downtime, are costly, negatively impact customer satisfaction, and damage brand loyalty and repeat purchase.
At first glance, we might assume that this data gap is not a big deal. The engineering models are not readily available. So what? The service organization can wait for the drawings to arrive, create a workaround, or solve the service issue through brute force reasoning. These actions may suffice if this situation occurs one time. What happens if the engineering department continuously designs enhancements or revisions to the original product? Imagine how frequently the service organization will run into situations where they can’t complete a repair accurately or promptly if these updates are not available. The negative impact on service performance, customer satisfaction, and associated costs could be significant if the data gap exists.
The digital thread resolves this issue by first recognizing that while manufacturing, engineering, and service create and collect data/information through different processes and systems, each function must rely on the same data but for different reasons. Second, the digital thread provides answers to several critical questions:
The answers form the basis for automating new cross-functional processes integrated through data lakes, data layers, or APIs within enterprise systems.
The benefits of a strengthened digital thread reach across the enterprise (and beyond the enterprise into the partner and supplier eco-system) to include engineering, manufacturing, and service. The service lifecycle is a particularly strong contributor since the service lifecycle is about 10 times larger than the engineering and manufacturing lifecycles combined. You design the car once and service it for the rest of its useful life. Engineering changes occur and must cascade throughout the enterprise to capitalize on the promise of aftermarket revenue/profitability.
An OEM can more efficiently and effectively support a product over its lifecycle once it adopts the digital thread methodology. Here are a few brief examples of use cases that are possible by applying digital thread principles to enterprise system architecture:
As these use cases demonstrate, applying digital thread principles to enterprise systems facilitates a closed-loop product lifecycle planning process. More importantly, it enables engineering, manufacturing, and service teams to extract the data they need to gain better insights and make better-informed decisions concerning product and service lifecycle management. The net impact is improved performance on critical success metrics such as productivity, efficiency, quality, and profitability.
Let’s explore the benefits further in part two - click here to read.
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