Digital Thread and the supply chain
Jeff Pike, Head of Strategy and Marketing for the IFS A&D Centre of Excellence, examines the impact of Digital Thread (DT) and explores the implications of seamlessly integrating information through the value chain.
Many would argue that the Digital Thread (DT) is the next major disruptive technology, just as Henry Ford changed the world with mass produced motor cars - in fact the vehicle was not in itself disruptive, it showed little signs of replacing horse-powered vehicles until Ford made it affordable with his assembly line.
However, at what point will the market recognise and acknowledge DT as a disruptive step change that goes beyond the production line?
First we need to consider what exactly is the Digital Thread? Digital Thread in the manufacturing world is now an integral part of the US ‘Advanced Manufacturing Enterprise’ championed by the Digital Manufacturing and Design Innovation Institute1. DT in the Aerospace and Defence (A&D) industry is the idea of seamlessly integrating information through the value chain, from initial capability planning and analysis, through design, manufacturing, testing, and on to final sustainment and disposal phases. All of these functions are able to share contextualised, digital information, and the DT allows dynamic, contemporaneous assessment of the system's current and future capabilities. This means that specialists throughout the process can work on the item simultaneously to inform decisions throughout the life of a system or product.
In 2013 Christine Furstoss, Global Technology Director for manufacturing giant GE’s Global Research division suggested that it was the next great step change for manufacturing after Henry Ford’s perfected assembly line and Toyota’s Lean Processes. DT forms an integral part of their ‘Brilliant Factory’ concept , where GE envision “a self-improving factory that can continuously improve products and processes in the plant. With a seamless digital thread that can gather, analyse and transmit data real-time to different parts of the supply chain”.
The quick wins of DT
The benefits of DT in the design, manufacturing and maintenance arena, across many sectors including aerospace and defence, are clear to see. CAD designs can be digitally transmitted to manufacturing engineers who can test them to ensure they can be produced using virtual models. Designs can be optimised for production ability, usability and maintainability by exploiting a common database and physics-based models. Manufacturers can reduce the cost of ‘hard tooling’ because the tolerances that can be incorporated during this ‘collaborative design’ process mean that less external tooling is needed to position components during assembly.
Manufacturing competitiveness will rely progressively more on DT to interpret data gathered by increasingly connected sensors, machines and networks with intelligent feedback loops to adapt and incorporate manufacturing and maintenance needs right back into the initial design stage.
Can DT manage supply chain risk?
yet what of the wider supply chain process? Can DT help to manage supply chain risk? One of the greatest internal supply chain risks comes from misalignment across the chain – which in turn is becoming less linear and more of a network. Internally, supply chains comprise three elements: physical, informational and financial. Within the supply chain functional stovepipe, DT has a clear role to play in bringing these elements together, but it also offers the opportunity to integrate it into the wider business or, in the case of defence, organisational enterprise.
Normally, successful internal supply chains are driven from above by a supply chain strategy that aligns with the overall enterprise business or organisational strategy. While it must serve the higher strategy, it must also be reactive to feedback from the subordinate supply chain network, comprising infrastructure, human resources, technology development and procurement structures. Even at this high level, it can be seen that the volume and complexity of data is liable to swamp even the most dynamic supply chain director!
Fixing the internal supply chain
Alignment doesn’t stop there though. The supply chain network must drive and be responsive to feedback from the processes of inbound logistics, operations, outbound logistics, marketing & sales, and service. These in turn drive resource requirements - hard infrastructure and people – a key factor in the bottom line. Network, processes and even human resources each has their own driving factors and risks. To manage these risks, there is a surfeit of stove-piped performance measuring metrics such as sales performance, inventory availability, OTIF, but an enterprise-wide picture that allows good decision making at all levels cannot be built unless the base structure and connectivity is right, and this is where DT comes to the fore.
Big bang or iterative change?
As with core design and manufacturing processes, it can be seen that misalignment of the supply chain and poor feedback can lead to a lack of coordination, predictability, resilience and consistency. Internal supply chains are often intermittent and disconnected processes with a mix of manual, automated and virtual elements. They need to be replaced with a continuous, interactive, holistic and integrated process, but this is not always possible with a ‘big bang’ approach because no burning platforms such as profit warnings or major disruptive technology lead to revolutionary change. Iterative, evolutionary change is often required, and the challenges this brings often leads to inertia.
Iterative change is, however, possible for those who are unwilling to take the radical and major steps that GE appear to be considering.
Innovative Boards of Directors can drive forward change in a more progressively measured manner by first of all aligning strategic goals with supply chain plans and operations. Subsequent steps include ensuring full visibility of the physical, financial and information supply chains and identifying and allocating costs throughout them. This may be challenging, but they must ensure that a financial viewpoint is embedded in the planning and execution processes of such change. This will enable them to quickly examine alternative scenarios and evaluate the financial impact of their proposed actions. The end result will deliver a 360-degree insight that will allow the business or organisation to make informed decisions.
Evolution not revolution
This sounds easy to say, and difficult to do; however, it is the first step on the road to bringing a Digital Thread to the supply chain. A bespoke whole-enterprise solution is probably what the major system vendors would suggest as the only way ahead, but this is more revolution than evolution and such large programmes bring their own risks of failure. Introducing a ‘wall of capability bricks’ as each step of the iterative change is undertaken may offer a less risky alternative, and will work. This option may be more comfortable for all concerned, from top to bottom, in such a fundamental change programme.
Once these internal supply chain processes are right, not only will the enterprise be well on the way to engaging with and implementing DT, but it will be much more resilient and agile, enabling it to address the myriad of external supply chain risks that are likely to arise in an increasingly volatile, complex and digitally connected world. Are you ready to join the Digital Thread revolution?