To enhance competitiveness, manufacturers must integrate functional areas of their companies under a common set of digital models.
Today’s manufacturers face intense pressure to dramatically reduce product cost and development time, all while their products are becoming exponentially more complex. Meanwhile, disruptors are introducing significant innovation in industries that have seen minimal innovation over the past several decades, making it extremely difficult for incumbents to compete.
How can manufacturers respond to this pressure and level the playing field with their competitors? They can start by focusing on breaking down organizational silos and removing the large pockets of waste at the handoffs between their functions. In a model-based enterprise (MBE), organizations integrate their functions under a common set of digital models. Products are developed virtually and concurrently with requirements from all functions, collapsing organizational silos and dramatically improving collaboration, product cost, quality, and time to market.
Disruptors, who can be new entrants, already know the benefits of MBE capabilities. They’re unconstrained by legacy thinking, processes, and systems and have adopted a fully model-based approach. Consider emerging manufacturing segments like Advanced Air Mobility (AAM), where OEMs are bringing disruptive products to market using approaches like MBE. Meanwhile, incumbents are working to quickly transform their enterprises as well; our research indicates that more than 85% of enterprises across industries are undertaking initiatives in one or more of the following core MBE capabilities: model-based systems engineering, model-based definition, model-based (virtual) verification/validation, model-based manufacturing, model-based service (sustainment, aftermarket, etc).
“By taking a methodical approach, manufacturers can execute a realistic road map and realize the full business value of MBE.”
The challenge for legacy manufacturers is the integration of these individual initiatives at scale to achieve the full value of being model based. To do so, functional stakeholders must align their objectives and initiatives and shift away from disjointed “random acts of digital” and toward a cohesive vision for a full MBE transformation. While aligning the entire organization can be a daunting proposition for some, it is entirely achievable by leveraging experiences of others who have paved the way to transformation. By taking a methodical approach, organizations can define and execute a realistic road map and realize the full business value of MBE.
A Vision for the Model-based Enterprise
Today, leading organizations (and in some cases, specific teams within legacy organizations) have a clear vision for their future product delivery and maintenance. This vision calls for the enterprise to consume and rely on real-time data contained in live models, connected via integrated processes, and enabled by systems spanning the entire product life cycle. This is the digital thread that enables MBE.
Consider some of the future MBE capabilities. Cross-functional teams are engaged at the beginning of the development phase to assist in program scoping and develop holistic sets of requirements and plans. Program and product development plans shift toward an iterative and cross-functional design process, formalizing feedback from all business functions and digital simulations before a design is finalized to achieve “first time right.” Digital verification (e.g., simulation) allows designs and processes to be tested digitally, enabling rapid iteration. Organizational operating models are realigned around product platforms that focus on commonality and reuse across products and programs. Manufacturers collaborate seamlessly and focus on forming partnerships with strategic suppliers to leverage supplier best practices and their internally developed capabilities.
The manufacturing organization is engaged early in the design process to ensure all product manufacturing information (PMI) is fully captured in the design models, eliminating manually generated, static artifacts and enabling automated quality checks at the end of line. From product inception, aftermarket input is weighted to the impact it has on overall program life cycle costs and becomes a strategic differentiator to define ways to exceed customer expectations. Field performance information is provided in a real-time feedback loop enabling predictive maintenance, accelerated product improvement, and new feature development (e.g., identifying ways to provide “data as an asset” value to the customer and automated over-the-air delivery of customer-specific product upgrades).
“Research indicates that more than 85% of enterprises across industries are undertaking initiatives in core MBE capabilities.”
Realizing these capabilities requires models not only of the product as designed by engineering and produced by manufacturing but also models of customer intent, manufacturing process performance, and field performance. These various digital models are often referred to as digital twins. Together, these MBE outcomes have a significant impact on how products are designed manufactured, and serviced. When executed correctly, and data created by one step in the process is used directly by the next, teams focus less on traditional day-to-day tasks (e.g., data entry and validation) and more on future-facing innovations (e.g., data analysis and insights). Figure 1 shows the types of models included in a Model-based Enterprise.
This creates an environment of higher employee satisfaction, given that employees are working on innovation and value-added activities versus the rework and manual activities that they do today. This also creates an environment in which processes are executed using platform engineering, model-based systems engineering, and simulation-based analysis in an integrated fashion that further enhances the innovative design and reduces the unnecessary workarounds. The vision for the future is clear—what’s needed is a plan to get there.
Figure 1: What we mean by “model-based enterprise”
©2022 Deloitte Development LLC
An Approach to Bridge the Gap
Transforming a traditional organization into an MBE takes collaboration; no single function or discrete technology investment can deliver the digital thread and MBE objective. The path forward requires a plan to bridge the gap between today’s outdated processes and technologies and the value of tomorrow’s model-based capabilities. A multi-phased approach can be a pathway toward the fully model-based enterprise. Consider the following four aspects.
1. Start with a relentless focus on value
Define what success looks like and the associated business case value to your organization. Take real examples from real programs (even those that were executed to the best of your current capabilities) to paint the picture of why change is needed. Use objective, value-oriented data to govern the scope and execution of your transformation.
2. Define and prioritize business capabilities to achieve the vision
We’ve defined 42 capabilities (see Figure 2) of MBE that span organizational functions. Manufacturers can assess the maturity of these capabilities across their organization and align on which capabilities are most critical to accelerate and achieve their MBE vision and business case.
Figure 1: Key MBE Capabilities by Function
©2022 Deloitte Development LLC
3. Outline a plan for development and deployment of capabilities
While defining plans for capability deployment, focus on grouping capabilities to create phased deployment plans to create incremental value and deliver the capabilities needed first. This sets the foundation upon which the most far-reaching and visionary MBE capabilities may be built and allows value to be realized incrementally, self-funding the next stages.
“To be successful with MBE, functional stakeholders must align objectives and shift away from ‘random acts of digital.’”
4. Invest in differentiating capabilities and leverage standards for the rest
There is no need to start with a blank sheet when defining future-state capabilities, processes, and solutions. Over the years, experience has shown that nearly 80% of what an organization needs are not unique to them, and often predefined processes and preconfigured solutions can accelerate adoption of model-based capabilities.
5. Apply transformation best practices and lessons learned
The traditional principles of transformation initiatives remain important and are perhaps even more essential for achieving the intended outcomes.
Implementation lessons learned:
- Beware of “random acts of digital.”
- Transformation time, budget, and scope need to be objectively tied to (and governed by) realizing value.
- MBE is not an engineering function activity; it requires alignment across the functions (plus the customer and supply chain).
- Implementation should be business process based, not an IT implementation.
- Start small but broad by prioritizing the capabilities most valuable to your organization with a team of top talent representing the entire product life cycle.
- Include your design partners and supply base in your MBE journey.
- Beware of “boiling the ocean” (aka designing for all historical scenarios), which delays implementation and misses value. Instead, design for future programs and continued transformation. Understand the needs of legacy data, programs, and products, but be willing to leave them behind (or develop a transition plan to bring them along if/when the business case justifies it).
Moving Toward a Model-based Future
Many industry incumbents are leveling the playing field with disruptors by adopting a model-based future. The many challenges organizations face in bringing a product or service to market have solutions that are already in use by industry leaders. Bridging the gap from current challenges to future successes only depends on an enterprise’s ability and willingness to take transformational steps. Taking near-term, value-based steps today can self-fund future steps toward becoming a fully MBE, where you can design more strategically, manufacture more efficiently, and serve customers more effectively. M
About the authors:
Brian Meeker, Principal, Product Engineering & Development is Deloitte’s Product Engineering & Development market offering leader. He focuses on transforming complex engineering organizations across all industry sectors using model-based capabilities and integrating the digital thread.
Stavros Stefanis, Principal, Product Engineering & Development, is a leader in Deloitte’s Product Engineering & Development market offering. He focuses on hardware and software development transformation using digitally integrated model-based capabilities.
David Vanderpool, Principal, Product Engineering & Development, leads Deloitte’s Model-Based capabilities for Industrial Products and Aerospace and Defense.