Aerospace and defense companies’ adoption of digital threads in their manufacturing operations is widespread, but their scaling is limited, according to joint research released June 3 by the Aerospace Industries Association and Ernst & Young.
EY surveyed 57 leaders of AIA member organizations across commercial and military aviation, space systems, unmanned platforms, and components and subsystems, to understand how digital threads are being implemented and used. Digital thread, not to be confused with digital twins, is data across the end-to-end lifecycle, connecting design, manufacturing and operational information.
Respondents were primarily U.S.-based companies with annual revenues exceeding $100 million and at least three years of investment in digital thread initiatives. Participants also held manager, director or C-suite-level roles with backgrounds in executive leadership, engineering and quality assurance.
While the AIA shares the quality and safety priorities with its aerospace and defense industry members, the trade group also recognizes the “need for speed,” Tim White, AIA’s VP for engineering and technology, said during a June 4 webinar.
“In this environment, where we’ve got so many mandates, the question at hand is: How do we deliver?” White said.
Given the large amount of data across ecosystems and industries, AIA and EY wanted to see how digital thread is playing out in aerospace and defense organizations. The goal was to understand where the adoption of the technology stands, why scaling stalls and what leaders who succeed do differently.
“Understanding how that data is related together and how we can better utilize and leverage that data to increase velocity while maintaining our shared priorities would be an interesting topic to explore in our industry,” White said.
EY also conducted eight interviews with leaders in AIA member companies that represent original equipment manufacturers, primes and suppliers, providing hands-on context and examples.
Why digital thread is more important now than ever
Digital thread could speed up and improve operational efficiency for companies. About 87% surveyed said they’re familiar with digital thread, revealing that leaders in aerospace and defense believe “in that promise,” said Colleen Reiche, technology consulting senior manager at EY.
The aerospace and defense industries have seen an uptick in demand recently, with years of multibillion-dollar backlogs on the commercial side and in munitions on the defense side. As a result, execution and speed are where the focus needs to be, and where digital thread can add value, said Raman Ram, aerospace, defense and mobility leader at EY Americas.
“We can no longer rely on the legacy silo data if we want to scale and drive end-to-end performance that the industry expects to capitalize on the demand,” Ram said. “[Artificial intelligence] without digital thread is just a high-powered engine without any fuel to unlock true value from AI and machine intelligence. We must establish the seamless and trusted flow of data across design, production, operations all the way to sustain it.”
Scaling where the gap begins
About 72% of respondents said digital thread implementation is underway at their organization and 61% surveyed said they’re already seeing better data-driven decisions.
But despite these results, many organizations are “realizing hard outcomes,” which is where the “gap” begins, Reiche said. For example, fewer than half of the companies surveyed are seeing measurable cost savings and identifying real-time product and supply chain insights, according to the report.
While the survey results show strong early adoption of digital threads, only one in seven companies reported a true enterprise-wide implementation, Reiche said. About 56% said they are still operating in pilots or limited deployments, regardless of years of investment. Less than 40% described their digital thread maturity as early or developing.
“One leader we spoke with described having six to 10 parallel efforts across engineering, supply chain and manufacturing, but limited integration between them, which capped enterprise impact,” Reiche said. “So their challenge wasn’t capability, it was connecting these efforts into a single value stream.”
The issue wasn’t starting, but scaling, Reiche added.
One company that succeeded in this effort connected core systems, including product lifecycle management, enterprise resource planning, manufacturing execution systems, and supply chain platforms. Stitching the core systems together made data flow continuously across engineering, manufacturing and sustainment. Moreover, they created shared ownership of the digital thread across the business.
The root cause: ownership
The survey results suggest that digital thread has “broad conceptual support but often lacks the enterprise‑wide ownership, governance and operating‑model integration required to scale,” according to the report.
“The most consistent theme from the interviews was this: Ownership, not technology, is the constraint,” Reiche said.
One leader told EY that when the company’s IT department led the digital thread initiative, employees struggled to track the direct link to business outcomes, she added.
“When digital thread efforts originate solely within IT, they are often treated as cost‑center projects and struggle to connect workflows across engineering, manufacturing and sustainment,” according to the report.
Companies that succeeded in their digital thread efforts did so by treating the technology as a “business-led agenda, with accountability anchored to enterprise performance rather than distributed across disconnected technology efforts,” Reiche said. Company leaders also used it as an enabler rather than a driver.
“So this isn't a tools problem, it’s an operating model problem,” Reiche said. “Leaders who scaled successfully reframed the question. They stopped measuring tool adoption and instead tracked cycle time, quality, and decision speed. They aligned incentives to value streams, not systems.”
In one example, a cross-functional structure was introduced, with technical leads in each function aligned through a central team to ensure coordination across the value chain, creating discipline and, eventually, scale.
“But even with the right ownership model, scaling requires something organizations often underestimate,” Reiche said.
The next steps for aerospace and defense entities
The first step aerospace and defense companies should take is to fully understand the problem, then collaborate on a solution.
“Let’s understand what’s going to drive value,” Reiche said. “Even if we have a hammer, we don't want to just be a hammer in search of a nail.”
The issue does not represent a technology problem, but a people problem, White said.
“This is a mandate,” White said. “We do need to go faster. We do need to do better and now is the time to go and grab it, grab the right people, put them in the right rooms, [and] examine why things are not working.”
