The digital thread: Digitally connected value chains

By Julia Duwe, Daniel Rohrhirsch and Patrick Ruthardt

In an increasingly volatile, changing, and complex business world, companies require full transparency over their data more than ever to stay nimble and take advantage of new opportunities quickly. However, despite already defined end-to-end processes, companies are often still struggling with silos that lead to an interruption in the communication chain both upstream and downstream, throughout the value chain. As a result, companies are at risk up of working inefficiently, using outdated data, and ultimately making suboptimal decisions.

By connecting people, products, and processes across each stage of the product lifecycle, a digital thread facilitates bidirectional communication upstream and downstream in the value chain while utilizing the most current and correct data across an organization. This data-driven approach allows for quicker reaction to changes, more informed decisions, and ultimately an optimized product lifecycle.

Connecting people, products, and processes across the value chain

A digital thread connects products, systems, people, and processes across an organization. It follows the product lifecycle from design inception to engineering and product lifecycle management (PLM), from field performance to manufacturing instructions and supply chain management, and from service histories to customer events.

This enables companies to anticipate and communicate bidirectionally upstream and downstream across the value chain. It ensures that all participants utilize the most current and correct data (single source of truth - SSOT) across an organization for better decision making, and it enables faster reactions and decision making in the face of changes or new insights.

Our digital thread framework

At Roland Berger, we have developed a successful digital thread strategy framework that contains five key elements, translating the aspiration of a digital business into a suitable architecture, processes, and organizational adaptations:

These five tightly interwoven elements help to establish your organization's very own digital thread concept, leading to an acceleration of decision-making processes and the identification of new growth opportunities:

A. Digital thread vision & strategy: Definition of the future business model

The digital thread strategy is complemented by a vision and mission, guard rails, and a roadmap. Existing initiatives form the basis for this. The vision and strategy need to be defined with ongoing involvement of the technical divisions and with an eye towards long-term sustainability and the ability to scale. The vision and strategy are based on a business case outlining the expected value and ROI of the digital thread use cases.

B. Process design: Design and harmonization of business processes

Despite already defined end-to-end (E2E) processes, we often find that companies are still struggling with silos. Already designed E2E processes are used as a basis for the implementation of the digital thread. Cross-functional workflows dismantling silos foster transparency and process ownership and improve data quality.

C. Architecture & data: Establishment of the future architecture

Developing a reference architecture is the basis for a common understanding of cross-functional relationships. It brings together the enterprise perspective and the customer perspective. The target architecture must enable standardization and automation (e.g., to design process time and enhance productivity), and information systems need to be connected.

Data needs to be consistent across locations/systems and accessible in local entities. Legacy systems can complicate the use case rollout and thus drive the need for phase-by-phase execution. Data must be used to generate tangible insights (e.g., analytics for serviceable units in the field).

D. Organization, governance & partnerships: Adaptation of the organization, establishment of a lean governance structure, and evaluation of partnerships

To anchor E2E processes, an assessment of the current organization serves as a basis for establishing overarching governance and for adapting structures. A suitable governance, lean demand processes, and an appropriate mix of stable and agile teams serve as levers to enable the introduction of the digital thread.

E. Communication & change: Integration and alignment of stakeholders

We can leverage our very own RB transformation approach, where we focus on hands-on methods and tools to drive change and ensure lasting impact in the organization. A mix of organization-centered and people-centered tools, supported by insights from neuro and behavioral science, ensures effective communication and lasting change.

+ Roland Berger AI capabilities: In-house AI expertise and tech partner ecosystem

Roland Berger closely collaborates with leading AI ecosystem partners along the entire value chain for the technical implementation of digital thread strategies. We act as facilitator of our clients' first steps, starting with an AI strategy and use case definition and progressing on to a holistic AI transformation program, combining our deep manufacturing, R&D, and operations experience with our own in-house AI expertise and leading technology and implementation partners.

Unlock the potential of a digital thread

Success will be manifested in direct P&L impact as well as improvements in operations, quality, and customer experience.

Are you ready to move ​beyond data silos?​ Let's connect today to start your ​digital journey​!

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