Leah Archibald: Stephanie, you just got off the stage giving your main keynote about where companies are going now on their transformation journey with the digital thread. What is the main message that you wanna give to manufacturing companies?
Stephanie Feraday: Well, there’s a lot going on in the world today: Geopolitical risk, supply chain issues, shortage of labor, these are all big challenges that companies are facing. And over the past few years, companies have taken small steps, incremental steps, to optimize their businesses, but as we saw during COVID and coming out of that, it’s not enough, it didn’t enable them to respond fast enough or flexibly enough. So what we’re really seeing is that digital transformation, to really make that happen, it’s not just about the digital twin, but it’s about bringing that digital twin to market. So it’s the digital twin with the digital processes and the digital factory. And by doing that, companies can achieve amazing things, accelerate time-to-market, reduce costs, reduce carbon impact.
Leah Archibald: Our analyst, who’s our special guest at this conference, Peter Zeihan, earlier today was saying, “Small incremental changes are not enough,” this is what you’re just saying. Small incremental changes that manufacturers have been making over the past decade are not really gonna get us over the hump of the risks that manufacturers are facing right now with global instability, with reduced labor, are companies aware of the bigger changes they have to make? And what is holding them back?
Stephanie Feraday: Well, it was interesting sitting at back of the room today, I heard a number of gasps. So it was clear not everybody is as cognizant of the magnitude of the issues. We saw some pretty dramatic statistics about the labor in China and the cost going up in China. People didn’t realize the magnitude of that, so I think what we’re seeing is companies are really… Some companies are a little bit further ahead on that in their acknowledgement and their internalization of some of that data, and what they’re doing is they’re deploying strategies to help them take advantage of doing things in a different way. So reshoring, moving things from China to Mexico, or at least regional reshoring. So companies are taking actions, but in advance of doing that they really need to deploy digital technologies to help them understand, “Where do I go? What capabilities do I need? How am I going to make it cost-effective?” We saw one customer, it was a few years ago when the Trump tariffs came in, they had done an analysis, and they’d moved their manufacturing facilities from China to Mexico, and they thought it was going to be cheaper, and they got up and running, and in fact, it was more expensive.
Stephanie Feraday: And so they’d done all that move and it increased the cost, so they were rapidly jumping and they became a customer right around that time to use digital factories to give them a better multi-factored analysis of what the impact of those changes would be on cost, changing plants, changing materials, changing labor, changing machines, so that was a pretty thorough analysis.
Leah Archibald: And what did that look like for their business when they got on board with leveraging the digital thread throughout product design, sourcing, decision-making? How did that transform their operations?
Stephanie Feraday: Well, the interesting thing about a digital thread is that it connects people. Starting with engineering, where there’s a lot of data coming out of the CAD model, moving it to the PLM system, that’s managing the digital twin itself, but you haven’t taken it through to how it’s going to be produced, which has a huge impact on everything from cost to carbon impact. And so by having the digital thread of the manufacturing processes and facilities, factories with the digital twin, you’re able to give people across the product development cycle, starting with engineering, going to sourcing manufacturing suppliers, a common view, a shared view. And that enables them to all act in concert and magnify the impact. So it increases the volume of cost savings, it accelerates their time-to-market, it just has tremendous benefits.
Leah Archibald: So that’s what we do with aPriori, that’s what customers are able to achieve, what is the hurdle that they have to get over? And I’m thinking specifically about capital considerations in an inflationary moment.
Stephanie Feraday: Yeah, so capital considerations are definitely a big deal, because… Like that company I mentioned that moved from China to Mexico, you need to think about the changes you’re going to make with your capital investments to not only get your products out the door, but to drive automation. Because it may not just be the machines you’re investing, it may be the kinds of machines to do things differently not the same. So capital investments are becoming more challenging, you’ve got to be much more considerate of it. And it’s not just capital investments from a machine perspective, but it’s also in things like tooling costs. As you’re making things, not only what’s the piece part cost, but what’s the tooling cost, and how is that going to impact your product profitability further down the line.
Leah Archibald: And if you don’t have an aPriori tool that is helping you calculate the tooling cost, it’s just a guess it could end up being a sunk cost.
Stephanie Feraday: Right. And I think there’s one thing, this is a little bit orthogonal to what we’re just talking about, but, technology is one aspect of it. The technology really needs to align with a corporate digital strategy and with the process change to support all of that. It’s really those three things that are working in tandem to achieve the outcomes that we’ve been hearing today. And they have huge impact, but you need those three things.
