Why Companies Must Prioritize Digital Thread

For decades now, many organizations have chased the potential of digital transformation. In that time, manufacturers have seen their products grow more complex, their average expected time to market become shorter, increased turnover of skilled workers, intensifying pressure toward sustainability, and a growing need for versatility and agility—among other challenges.

All these elements have forced companies to adapt and change the way they operate in order to streamline operations, enhance customer experiences, and stay competitive. Yet, despite substantial investments, not every company is seeing the full benefits of digital transformation.

Key challenges remain, including ever-expanding data volume, product complexity, and disconnected data and systems that impede collaboration and decision-making—all of which have a negative impact.

Unaddressed, these issues not only create delays in product development, but also significantly impact quality and customer satisfaction and hinder transformation.

Increasingly, organizations are investing in new and established digital technologies to overcome these challenges. The digital thread has emerged as a critical strategy to establish a more integrated approach across disciplines. From faster new product introduction and managing complex customizations to creating new business models that expand and monetize service offerings, a digital thread provides fundamentally new opportunities to reduce costs, mitigate risk, and increase revenue. With it, companies that make products—particularly products with long lifecycles—can leverage their product data to drive meaningful business impact.

The macrotrends impacting manufacturing are beyond the control of any one business, yet every organization is racing against the clock to respond as effectively as possible—and this response is not as simple as installing a new device or ensuring all hardware operates on the newest software patch. Manufacturers are being forced to change the way they operate to make their business more resilient—and the digital thread is the transformative force for overcoming the specific challenges plaguing product companies.

A digital thread is an interconnected flow of relevant data that defines a product throughout its life cycle, from design through manufacturing, service, and retirement. For manufacturers of complex, long-lifecycle products, pursuing a digital thread allows for a comprehensive, interconnected, data-driven approach to managing products and processes across the lifecycle.

By implementing a digital thread, organizations can achieve seamless flow and visibility of information ensuring that accurate, up-to-date data is accessible, reliable, timely, and actionable, and delivered to the right people, at the right time and in the right context across the value chain.

Although a variety of technologies support the digital thread, product lifecycle management (PLM) plays a critical role, providing centralized data management, integration with other systems, visibility into the product lifecycle, robust change management, collaboration and communication tools, analytics and insights, traceability, and compliance management capabilities.

Other technologies that power the digital thread include computer-aided design (CAD), application lifecycle management (ALM), and service lifecycle management (SLM).

A digital thread provides fundamentally new ways to design, build, and service quality products—faster, better, and cheaper. It does this by transforming product data from a static resource into a valuable living asset—one that empowers stakeholders to make informed decisions at every stage of the product lifecycle.

See if any of these scenarios sound familiar:

• A service technician may know a product has been updated several times, but that does them little good if all they have at their disposal is an out-of-date product launch manual.
• Engineers are often aware of supply chain disruptions but might not have access to manufacturer data concerning the products they are creating.
• Manufacturers, by contrast, would then need to alter the product design—sending it back to engineering in the form of a costly delay.

A digital thread enables organizations to overcome challenges like these and more.

• Improve collaboration across the enterprise and enable timely, informed decision-making by democratizing data and providing a continuous, connected, secure, and intuitive flow of information.
• Control product information to speed new product introductions and manage complex customer configurations in a manner that is repeatable and scalable.
• Gain visibility into the effects of design changes early in the development process, reducing cost and waste associated with late-stage change.
• Optimize digital product data to streamline the creation of derivative works, increasing efficiency and productivity while significantly compressing timelines.
• Reduce risk and cost by allowing stakeholders across the enterprise to understand if and when the data changes, and how the changes impact them.
• Remove friction between previously disparate teams and systems.

Given what is at stake—and the potential we have outlined—it is perplexing that many organizations currently are not further along in implementing digital thread. In our survey, these three barriers rose to the top:

1. Competing priorities

While digital transformation priority decisions can be influenced by internal politics, most decisions are based on which investment is likely to provide the best return on investment. Budget is limited and departments across the organization each have their own priorities for investment. The implementation of digital thread requires executive buy-in and cross-functional collaboration. Communicating the full benefits of a digital thread investment is a starting point to making it a priority.

2. Migrating siloed data

Accessing and connecting data, particularly for long-established organizations, is a critical, but sometimes daunting task. Legacy systems and home-grown systems typically have closed architectures that limit access and integration.

Modernizing legacy systems to make data more accessible is not always easy or quick, but the potential that comes from turning unusable information into actionable, useful data is worth the investment.

In a recent PTC survey, only 7% of respondents felt their data was at least nearly completely accessible across their organizational system. Siloes existed for the remaining 93%, with 45% stating most of their data was siloed within specific systems, and only certain subsets had organization-wide access.

3. Time and resource constraints

Pushback and internal reluctance are often driven by lack of time and too few resources. Teams that already have more on their plates than they can handle may not be open to taking on new methods of working which require them to change the way they are comfortable doing things. Cutbacks and layoffs have exacerbated this problem, along with workforce issues and the lack of skilled workers. Executive leadership is critical for making employees feel like an active participant in the changes and demonstrating the value it will provide.

There’s also a fourth reason—many executives and business leaders are still learning about digital thread and may not fully understand its value.

Our survey responses indicated there were different interpretations of the definition of digital thread. Further, only 5% of respondents stated digital thread was widely understood at a company level. To put it in greater context, respondents were more than three times more likely (18%) to say their organization had no real understanding of digital thread at all. For the majority (57%), digital thread was understood by relevant teams only.

From faster product introduction and managing complex customizations to creating new business models that expand and monetize service offerings, a digital thread provides fundamentally new opportunities to reduce costs, mitigate risk, and increase revenue.

Now is the right time for the digital thread because:

• Manufacturers are swimming in data, and the digital thread helps them manage and make sense of it.
• Things are getting more complicated, but the digital thread gives companies visibility into the big picture helping organizations manage operations better.
• Globalization and complex supply chains mean organizations need better ways to keep track of everything, and the digital thread makes that possible.
• Companies are focusing more on being customer-centric, and the digital thread helps them understand and respond to their customers’ needs better.

Another factor that plays an important role in the value the digital thread can now deliver is the enabling technology. Digital thread technologies have evolved significantly—driven by advancements in areas such as data analytics, connectivity, interoperability, user experience, and artificial intelligence (AI).

Here are a few examples of how digital thread technologies have progressed:

• Digital thread technologies now come with improved tools for analyzing data, like advanced analytics and simulation, which offer deeper insights faster
• Efforts to standardize data formats and protocols make it easier for different software and systems to work together along the digital thread.
• AI technology is increasingly used in digital thread solutions, automating workflows and analysis across the product lifecycle.
• Interfaces have become more user-friendly and customizable. This makes it easier for people in different roles within organizations to use them effectively

All these things contribute to making today’s digital threads more powerful, pervasive, and essential for organizations looking to thrive in the digital age.

By embracing the digital thread, manufacturers can unlock the full potential of their data to transform how their businesses operate, innovate, and grow.

Companies that leverage digital thread to connect complex data, processes, systems, and people across their value chain are more likely to achieve better cost reductions, productivity and efficiency gains, and increased revenue.

Our survey respondents named the top three drivers for digital thread as efficiency and productivity boosts (63%), innovation and agility improvements (48%), and customer experience enhancement (46%). However, the fact that only two potential answers received response rates of less than 30% indicates that respondents have a wide array of expectations and desired outcomes surrounding digital thread benefits.

The lifeblood of any manufacturing company is the products they design, make, and maintain. In the digital age, the digital data that supports those products is incredibly valuable, but largely inaccessible without a digital thread.

The digital thread structures this information from multiple sources throughout the product lifecycle. Suddenly, generating data at every stage of the product journey becomes a vital part of business operations, as this influx of information transforms static readouts into up-to-date resources that executives can use to make decisions, and employees can use to ensure they are working with the latest and greatest.

A decision is only as good as the data behind it. By embracing the digital thread, manufacturers can unlock the full potential of their data to transform how their businesses operate, innovate, and grow.

With our comprehensive suite of digital technologies and solutions, PTC is uniquely positioned to support and enable a digital thread strategy.

To anchor this document’s findings and conclusions, PTC conducted a survey in March 2024 with 152 respondents using a third-party vendor. See below for demographic details of the survey respondents.