Following the digital thread How a suite of technologies could transform manufacturing—and beyond

14 June 2018

The digital thread integrates the virtual and real worlds in a way that could spark a revolution in how we make and deliver products. Tanya Ott spoke with Paul Michelman and Mark Cotteleer about how organizations can capitalize on this emergent technology.

As a consumer, we’re so used to getting exactly what we want, when we want it. There’s a human expectation that we’re now applying in business: If I can have that on the consumer side, why can’t that be applied in my business setting, in my manufacturing setting? Why does it have to be so constrained?
It’s about getting organizations to that next level of performance whether they measure that performance in terms of asset efficiency or quality or cost or sustainability of products.

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TANYA OTT: I’m Tanya Ott, and this the Press Room from Deloitte Insights. There’s an old aphorism: An airplane is millions of parts flying together in close proximity. Kind of terrifying, if you think about it. But there’s a technological revolution underway that’s changing aviation and a whole lot more. To understand it, Paul Michelman and Mark Coteleer took a trip to Albuquerque, New Mexico.

PAUL MICHELMAN: Like 3D printing and lean manufacturing, digital thread is an innovation born of a very particular manufacturing context, but one that has ramifications that will cross industry, organizational function, and even individual roles within organizations.

TANYA OTT: That’s Paul’s voice you’re hearing on a video series collaboration between MIT and Deloitte Insights. Paul is editor-in-chief of MIT Sloan Management Review. Mark is executive director of Deloitte’s Center for Integrated Research. I called them up to talk about what digital thread is, how organizations are using it, and where it may lead in the future.

Okay, so you guys started this journey in Albuquerque to tell the story. Why Albuquerque?

MARK COTTELEER: Well, Albuquerque is the home of the company that we used as the use case for our digital thread effort. That's a company called ONE Aviation. They make a product called Eclipse 550, which is a very fun, very light jet that is used primarily by individual pilots to fly from point to point around the United States. And it just provided a fantastic use case example of how the digital thread can work all the way from the design process through to the actual deployment of whatever component it is we're talking about in the field.

TANYA OTT: And you were looking specifically at one piece of equipment—the bell crank, which is kind of a pivot point that's used in the nose of the airplane, landing gear, that sort of thing.

MARK COTTELEER: Yes. So we became very good friends with the bell crank! There are actually two bell cranks in every Eclipse 550, and that is a component that helps open the landing gear doors on the front of the aircraft. It's not a complicated-looking part, but when you're trying to land, you like those doors open and closed properly, so that's what it does.

TANYA OTT: Yeah, it's a really basic-looking part. It's sort of a triangular shape with a couple of holes on different ends. But it's really crucial, and you use it as a way to look at the digital thread through the entire process. Break this down for us: What do you mean by digital thread? What is that?

MARK COTTELEER: Our definition of digital thread is that seamless strand of data and computing power that stretches across the, in this case, product life cycle, and we break that into four major components: scan, design, and analyze; build and monitor; test and validate; and then deploy and manage. That metaphor of the thread is intended to represent that idea of stitching together a whole bunch of constituent technologies that help the organization, in this case ONE Aviation, get the job done. In this case, that job is to produce a better, higher-performing, more efficient aircraft for their customers.

TANYA OTT: Because it's important in that industry to be faster and more efficient and lighter—all of those things contribute to the value chain. Give us a sense of how this process might have occurred two decades ago versus today, when we're looking at things being so digitized and so much technology.

MARK COTTELEER: That's a great question. If you go back 20 years, and you'll hear Ryan (director of Structural Systems Engineering) from ONE Aviation talk about this on the video series itself in the first couple episodes ...

RYAN JENNINGS: When I jumped in it, we were kind of in a transition phase between working in a more paper-based [environment] or on the board and moving into the digital era.

MARK COTTELEER: Okay. So literally you guys were drawing this stuff?

RYAN JENNINGS: Right. Mylar, prints, ink, French curves. We were kind of at the tail end of slide rules. Storing them in a drafting room. A check-in, checkout system that was very manual. It wasn't configuration control in the way we think of today. There may be only one copy of that print. Now, in the digital age, with PDMs [product data management], with a data manager that we have, we can have multiple people reviewing the same thing at the same time.

MARK COTTELEER: So the system's got to control it. The PLM [product lifecycle management], this digital thread, is going to have control over configuration management so that no one gets the wrong print right. So it's not just about getting a design out the door quicker. It's about evolving that design over time in a way that lets you constantly deliver an improving product to the market.

MARK COTTELEER: And so what you had back 20 or 30 years ago is very siloed groups of people all working around trying to make a component, trying to make a system function. And what the digital thread is doing is stitching all those together. That's why the metaphor works so well; it's stitching all these different stages of production together so that things flow more efficiently. So not only are you pushing information forward so everybody knows what just happened but you're also creating a situation where you get feedback. The people who are upstream, who are earlier in the stage, maybe doing design, have an opportunity to know what happens at later stages, maybe in actual product use, and to pull that information back, to feed that information back in a way that lets them get better, faster for the next generation [of] the part.

You really see that happen in the case of the bell crank, because we have a situation where we have a classically designed bell crank, and that's the triangular piece with few holes in it that you described. That's where we start. But by the end of our journey, you see what we call a topology-optimized component, and that's a very organic kind of space-age-looking part that provides the same function, but it's actually stronger and lighter and cheaper to make.

TANYA OTT: So it's not just a technology or a whole bunch of technologies working in silos. This is a true ecosystem.

MARK COTTELEER: Yeah. It is about bringing together an ecosystem of technologies from perhaps a variety of different partners. And the idea is to pick and choose those ecosystem partners, those collaborative partners, those technology partners that are going to serve the purpose for your application. In this particular case, we're building aircraft parts, we're designing aircraft parts so that we can get that airplane to fly as efficiently and as cost-effectively as we possibly can. There might be other applications where we need to pick different partners. But you're essentially looking for that core platform and then what technologies you need to hang off [of it] in order to make the things [for] your purpose.

TANYA OTT: Paul, this isn't just about airplanes. There are plenty of other industries that are either using the digital thread and leveraging its power or are considering it. I've spent some time talking with folks in the power industry who are running digital twins of wind and electrical plants, and they say it's a really powerful tool because they get to run a lot of simulations—all these what-if scenarios that help them predict the future and how they could respond to things like equipment failures or unusual weather. More broadly, how does digital thread save companies time and money?

PAUL MICHELMAN: I think that's a great question, Tanya. And I don't think we really understand yet the full scope of what digital thread can do for an organization, whether it's in a specific manufacturing context or an industrial context or outside of it. And that's one of the things that's so exciting about this.

When Mark first approached us with an idea to produce this documentary around the digital thread, my first reaction was, well, we don't really cover specific technologies at MIT Sloan Management Review. We're a general management publication. But as Mark introduced me to the technology and I spent some time digging into it, I saw where there were potential implications that were much more profound for the organization than just reinventing the life cycle of a part or even reconceiving the manufacturing value chain. Not to diminish the importance of those things—they're actually profoundly important in and of themselves. But digital thread, I think, has the promise (and I think at this point it's still just the promise) to force organizations to rethink the way they do lots of things. We've seen some precedents with other technologies that have preceded it.

TANYA OTT: Such as?

PAUL MICHELMAN: I think there are two that come to mind. One is the lean movement. Students of manufacturing and management know what has become this huge movement in how to introduce new products and even to bring a more agile approach to running organizations began in a very specific manufacturing context, where they were looking to solve a problem on the line and create new efficiencies on the production line. Over time, some very smart people recognized that taking what looked to be very complex processes one at a time and simplifying them could be applied to any range of other contexts. And that became, over decades, mind you, a management phenomenon.

I think a more recent example, and one that's related to digital thread, is 3D printing. 3D printing began as a way to quickly manufacture replacement parts. But as organizations saw what 3D printing could do, it's forcing organizations to completely reimagine manufacturing.

TANYA OTT: So we've been talking about this idea of a digital thread for a long time. Why has it taken so long? Why is now the right time for organizations to really be leveraging it?

MARK COTTELEER: You know, Tanya, I think that's a great question too. Washington DC: It's where my journey along the digital thread begins, because it's where I find my colleagues Kelly Marchese and Mark Vitale. Kelly and Mark have been leading the charge for Deloitte on this notion of the digital thread.

MARK VITALE: You're talking about terabytes of data that can flow through a digital thread. So the computing power and the capacity to process information is significantly advanced (from) where it was five, 10 years ago. Competitive pressures continue to ratchet, so you're always looking for new ways to either innovate and/or take cost out of your business.

KELLY MARCHASE: You know, as a consumer, we're so used to getting exactly what we want, when we want it. There's a human expectation that we're now applying in business: If I can have that on the consumer side, why can't that be applied in my business setting, in my manufacturing setting? Why does it have to be so constrained?

MARK COTTELEER: If I'm the leader of a large organization, why do I need digital thread?

MARK VITALE: It compresses the supply chain from days, weeks, months, in some cases years, to zero.

MARK COTTELEER: There's that 10, 20, 30 percent productivity bump in front of us if we can get this notion of digital thread right, because what we're going to learn?

MARK VITALE: I think so. I mean, you take time and latency out of the supply chain.

KELLY MARCHASE: It's no longer linear. It really feeds into this idea that it's a digital supply network. Things are feeding back much more quickly, and the organizations that do that well are going to win.

MARK COTTELEER: So what we see in the digital thread—and we can go back to this idea of the definition, this single seamless strand of data and computing power—particularly in a manufacturing context, when we look at the amount of data that we can collect, and the opportunity that creates for us to analyze and make better choices perhaps in real time, you need the ability to quickly process and store and retrieve data and turn that into intelligence and into reaction perhaps very quickly, and perhaps to distribute that across extended geographic distances.

What we're seeing here is the ability to bring those things together, both the physical technologies (that's the 3D printing or the robots or the drones) and the digital technologies (that's the artificial intelligence or the analytics or the data storage or simply the raw computing) to create a system that allows you to sense and respond very quickly, and to bring together that entire network of users within the plant or across the distributed supply network to make a better product, and then deliver that to your customers.

TANYA OTT: So what we're talking about is having the computing power, power in the cloud, so that decisions can be made across time and space in a way that is often, most often probably, not manual. We're not talking about people sitting in front of computer screens looking at data and then making decisions. We're talking about automated systems that create these what-if scenarios and respond to that.

MARK COTTELEER: I think yes and no. “Human in the loop” is a decision that every organization has to make for itself based on the circumstances that it faces. Certainly, we have entered an era where machines have the ability to sense and respond. There's a notion out there that we and many others refer to as Industry 4.0 that talks about cyberphysical systems, the integration of the digital and the physical, or of the information technology and the operations technology. Through things like analytics, artificial intelligence, and digital technology, you have situations where products and the machines that produce them can almost communicate with one another to talk about, what should I be, what do I need in order to be produced with quality and distributed where I need to go.

In some cases, we're very comfortable with that conversation taking place in real time, faster than a human mind could process. An example of that might be, I've got a piece of equipment on a CNC [computer numerically controlled] machine, and I've got sensors that are monitoring things like tool wear, and I want that monitoring to influence adjustments on the fly so that whatever component I'm making is created properly. On the other hand, you might have a situation in a power plant where you've got sensors and equipment that are interacting with one another, and you'd like to keep a human in the loop. You'd like to keep someone watching the decision that the computer is making to adjust physical equipment in the real world because maybe you want that element of judgment still there.

There's a spectrum of opportunities, and those choices need to be made carefully. But your base hypothesis that you can have equipment talking to other equipment and making choices that can happen today, [is right].

TANYA OTT: From an organizational perspective, what's the biggest challenge to uptake?

PAUL MICHELMAN: I think the challenge begins with the fundamental issue that organizations were not built to exploit this type of technology. One of the things that's so exciting about the digital thread is that it's kind of a case study for how new technologies will demand organizations to adapt, sometimes to radically new approaches to management, in order to fully exploit them. And that really is what gets us, from our perspective at MIT Sloan Management Review, so excited about this. We simply don't know where the technology will take us as an organization. We simply know that we have to be willing to experiment and adapt and adopt new procedures in order to take advantage of it. And what we're really hoping is that this video series will attract nontechnology executives who will look at this through that lens.

TANYA OTT: Paul, when you say organizations were not built to think this way or to process this way or to work this way, what do you mean?

PAUL MICHELMAN: I think that there are organizations, and we actually feature those organizations in the video, who have very nimbly adapted their processes for digital thread. But what I mean in that broader statement is that organizations are optimized for the present, rarely for the future. We find ourselves in an environment with the kind of fast-crashing wave of digital technologies, where organizations are needing to adapt in order to take advantage of new technologies much more quickly than they've ever had to in the past. And they don't always have the muscles to do that—which is why this is such an important example. Without fundamentally rethinking the way parts of organizations collaborate and the way humans and technologies collaborate, we wouldn't be able to take advantage of the digital thread. Nor would we be able to take advantage of any range of other new digital technologies.

TANYA OTT: So what's the first step in that cultural change, in the way of thinking about how organizations work?

MARK COTTELEER: I'll take a crack at that. When I think about organizational change, I think about four things: awareness, choice, talent, and trust. Awareness is simply the ability to know what is out there, what is the opportunity. And that's one of the things that excites us most about the opportunity to have collaborated with MIT Sloan Management Review on this video series, to simply help people to be aware of where this technology is going and, in the instance of this one use case, to give them an example of what that can look like.

Then you've got choice, which is hard because there are lots of choices you can make. In the video series, [ONE Aviation] made a set of choices about how to design, build, test, and deploy a bell crank, and what are the technologies that you need for those kinds of components. There are lots of other choices that managers have to make every day. And there are trade-offs that need to be made, and we want to help them think through, what are our values, what's our strategy, and so how do we properly make those choices.

Then we've got to think about talent. Talent is the people that we have to actually execute the choices that we've made. And in some cases, as you've aptly pointed out, we've got technologies that are new. We're bringing them together in new ways. That requires new ways of thinking. Do we have the people, have we equipped them to execute on those choices?

And then you've got trust. We're bringing technology together in new configurations. We need to believe for ourselves, sometimes in situations where we've got mission-critical components, we want that bell crank to work when we're landing with real people in the airplane. So, do we have trust in the process that we've built? Do we have trust in the supply chain partners that we are now integrating into this thread? So we're sharing information, so that we know that that information is protected, so that we know that people are compensated properly. Trust is kind of a multidimensional element as well. But awareness, choice, talent, and trust are all issues that need to be confronted if we are going to move into this next generation of technology deployment.

PAUL MICHELMAN: I would add one more component to the four that Mark listed, all of which I agree with wholeheartedly, and that's acceptance of change. Organizations and the individuals within them have to get to a point where they accept that the world they have known is not the world of the future, and that the world of the future could look very, very different from how it's looked in the past. And that's on the leaders of the organization to paint a compelling vision of the future for the organization, and to not just do it at a very high level but to work with people throughout the organization to really drive that home. To help people understand how their world is changing and how their role within the organization is changing, and then to challenge them to accept that change is coming. I mean, you can either accept change or become victimized by it, and we’re at a critical point for organizations in that respect.

MARK COTTELEER: Paul invoked earlier the concept of lean [manufacturing], and I think that is a helpful way to think about what we're trying to accomplish here, because if you go back to the early days of lean, what you realize is that that whole approach is about information flow. So I think it's possible to look at what we are talking about with digital thread almost in terms of next-gen lean. That is, we're using the ability to integrate physical and digital technologies in service of the flow and processing of information through and across the organization and across the supply network. And that [helps] the overall efficiency, quality, cost, and sustainability of the organization because when we know more, we make better choices. So that's number one.

Number two is when we created the digital thread video series with MIT's Sloan Management Review, we did so because we believed that the digital thread is something that organizations ought to be aware of. And we chose the use case of the bell crank because it's such a powerful illustration in such a critical industry. But I think we would be disappointed if what people took away from this is that the digital thread is something that applies only to aerospace and defense. 3D printing plays a big role in our digital thread story because it's such a great exemplar of physical and digital technologies coming together. But I think we'd be disappointed if people concluded that the digital trend is about 3D printing. The digital thread is about enabling, in this case, digitally distributed manufacturing. It’s about getting organizations to that next level of performance whether they measure that performance in terms of asset efficiency or quality or cost or sustainability of products.

It's about all of those things, and we need to think broadly about what is the challenge that we face in our organization that we can solve with better integration of digital and physical technology, with better information flow. And I think, importantly with the ability to create that learning loop, that ability to feed back what we've learned into the upstream processes in order to generate that next generation of improvement.

TANYA OTT: Well, thank you both very much for helping us better understand what the digital thread is and what the potential for it is. Really appreciate it.

PAUL MICHELMAN: Great! Watch the video series!

TANYA OTT: Had to get in that final plug there! Thanks, Mark. Thanks, Paul.

TANYA OTT: Mark Cotteleer runs Deloitte’s Center for Integrated Research. Paul Michelman is editor-in-chief of MIT Sloan Management Review. You can dive deeper into the digital thread in their video series.

VIDEO CLIP: I think the digital twin along with the digital thread, those things together, are going to revolutionize the way we not only develop products but the way we service products. The ability to service something in the field, for example, think about it, with your phone and taking a picture of a device and being able to 3D-print that component right there, on the spot, is going to make the servicing equipment so much faster. Right? It's going to change the way that we manufacture products. So it's going to be exciting.

VIDEO CLIP 2: It’s not about just that first iteration, it's about the second time you go to make this, and every other subsequent iteration that you go and make this, compressing that time further and further. So we're able to take down the steps that are required because I already have a model I can use from an out-design perspective. I already have machine instructions I can use. I know how I'm going to certify it. I have all of this data that I can reuse to make it better and better.

TANYA OTT: The full video series is available on the MIT Sloan Management Review website and at

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