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I was fortunate enough to sit in on a meeting with the packaging lead at a leading luxury brand manufacturing company. We talked extensively about how they tracked product specifications: specifications for the size of box, what packaging materials are used and so much more. Their current systems were manual and disconnected, which ultimately resulted in a couple of million dollars of wrong or broken shipments each year.
Mistakes happen. For the company I’m referencing, millions of dollars a year was a “drop in the bucket.” They could chalk it up to an acceptable loss. For many companies, mistakes like that can have a devastating impact, both financially and in reputation.
It turns out this was a problem worth solving, even for this large company.
The cost of this type of inefficiency turns out to be much higher than the expense of sending out new parts. The long-term effects on customer loyalty cost this specific business 10% of its sales. What would it cost your business?
In today’s customer experience-driven economy, where buyers have lots of choices, you can’t afford to accept the status quo. It’s time to start creating a digital thread that can reduce errors and elevate customer satisfaction.
Most companies don’t yet have fully integrated digital threads, but the answer is surprisingly simple.
It’s not because the technology doesn’t exist. It’s not because there isn’t enough or even too much data. And it’s not because there is no vision.
The simple truth is most companies haven’t yet had the will to change their process. Organizations need to take control of their own data, and that requires big cultural changes.
Who’s holding your data hostage?
Before you can consider the technology implications, you have to overcome the cultural barriers inherent to making a change. The few people in the organization who hold onto years of knowledge perceive their value as being the keeper of the data. Keeping that knowledge as their superpower becomes an act of self-preservation. Even though their value extends beyond this role, the perception often holds back progress.
Add to that the incentive for suppliers to hold dear to spec information to maintain the competitive advantage they have been harvesting and nurturing, often for years. Even the best of intentions make change slow to progress.
You can overcome inertia when you design solutions and not simply introduce products.
The key is to create a digital thread between systems.
Gartner defines a digital thread as follows: “A digital thread eliminates silos of data and enables traceability across different data types throughout life cycles of products and assets. Product leaders who efficiently enable digital threads retain their customers and increase revenue as the value of those 'digital threads' grows over time.”
These six steps will get you on your way to building a digital thread.
1. Start by understanding the connections between processes and business goals. Go beyond the cost of a set of actions and consider the impact of specific measures on sustainability and sales.
2. Reorient the team to think proactively. Efficiency is about letting go of archeological digs, searching desperately through disorganized and unconnected data to find a single data point required for a decision.
3. Focus on your data model and make sure it is understood by all stakeholders.
4. Use intelligent document processing and standard APIs to ingest all of your data. You are doing this not as a one-time process, but you are connecting threads to be dynamically maintained over time.
5. Tap the experience of specifications experts to organize your data for maximum value.
6. Once information is in a central place, de-duplicate your specs data.
All of this may feel expensive and time-consuming, but it can take less time and money than you think.
The idea of integrated systems isn’t new, but the time to realize your vision of a digital thread is now.
The key difference now is the advanced methods available for creating a specifications-first approach. This approach leverages APIs to overcome cultural barriers that slow down progress and overly complicate data integration.
In most manufacturing environments, sensors read everything from vibration to temperature to productivity levels. But, they are not useful predictors of proactive actions unless they understand specifications. Using sensors combined with specification threads powers the largest and most complex organizations. It’s often very costly and time-consuming to manage, racking up millions of dollars a year of expense to optimize.
The cost and complexity have scared a lot of organizations who aren’t ready to take on that large of a burden. But it no longer has to be that way. Specification management systems make affordable threads when combined with expertise and cultural change. In fact, a spec management project can be just the catalyst you need.
One team we worked with understood this well. With over 100 brands, their many acquisitions over the years resulted in a wide breadth of products to manage, along with the integration of various legacy systems. This left many business units working in silos using disparate data sets. Without standardized data, it was difficult to manage specification information and understand data availability, which wasted time, created errors and delayed product launches. A major business shift created the urgency to make a change. Two of their suppliers left them needing to re-source 68 SKUs in just three months.
To improve quality management, they’re now using a spec-first approach to product inspections, acceptance testing, corrective actions and supplier assessments and scoring. They’re seeing major time savings with seamless data management and reporting. For example, inspection reporting used to take four to six hours and is now available instantly. Furthermore, if they need to make an ingredient or formula change, their digital thread-aware system simultaneously updates all linked products and specification records.
Achieving this kind of success took a catalyst for change, a willingness to rethink their approach and the introduction of new technology that formed the foundation of their digital thread. This formula is attainable for any organization ready to elevate its success.
