Unraveling the Digital Thread: 4 Trends for 2025

The digital thread constantly evolves to weave together new connections and capabilities that redefine how products are designed, built, and maintained. Once a niche concept, it has become a dynamic force in manufacturing and engineering, driven by advancements in AI, personalization, supply chain resilience, and more.

We turned to Rob McAveney, CTO, and Sr. Director of Product Marketing Jason Kasper to explore how organizations can fully leverage the digital thread in 2025. Their insights highlight how trends in digital threads have evolved to integrate multiple essential technologies that address today’s top business challenges and prepare for tomorrow’s opportunities.

Let’s explore these technologies and concepts and why they will be so valuable for businesses in 2025 and beyond.

1. Real-world applications of AI and ML

As companies embrace a digital thread approach, artificial intelligence (AI) and machine learning (ML) tools will play an increasingly vital role in synchronizing product data and unlocking its full value. The US Bureau of Economic Analysis reported that investments in AI and ML technologies for manufacturing processes, including product lifecycle management, grew by 23% last year and will continue to ramp up for years to come.

Many companies leverage AI to organize data and maintain its context, enhancing visibility and ensuring compliance. For example, AI can establish traceability across multiple domains and create in-context relationship connections between a product’s digital assets. This is critical for meeting evolving compliance requirements such as the Digital Product Passport (DPP), a digital record containing detailed info about a product’s entire lifecycle.

Using technologies like AI to improve compliance is essential in 2025. If companies don’t start equipping themselves for the regulatory environment of the future, they’re probably not going to succeed. – Rob McAveney, Aras CTO

Agentic AI is poised to enhance product lifecycle management by enabling companies to make faster, smarter decisions. With agentic AI, autonomous “agents” analyze vast streams of data in real-time and offer tailored suggestions to designers, engineers, and managers on how to optimize processes for speed and cost.

2. Driving innovation with mass personalization and customization

While product personalization is widespread in many spaces like fashion and consumer packaged goods, mass personalization and customization are quickly becoming available across all corners of the manufacturing industry. That’s why a growing number of manufacturers are looking to transform by moving from engineer-to-order (ETO) to configure-to-order (CTO) models to help customers select products that are tailored to their specific needs and preferences.

Moving to CTO models requires capturing and modeling a vast number of product variations. Companies need strong variant management solutions and related business processes to effectively manage increased design complexity and potential supply chain challenges. Best-of-breed tools allow teams to quickly incorporate customer requests into the earliest stages of product development (i.e., design) and maximize the reuse of common elements across all phases as part of the digital thread.

3. Rising demand for adaptability and agility throughout the supply chain

The third digital thread trend we are seeing has to do with creating resilience in manufacturing. The vast majority of manufacturers today experience operational challenges and supply chain issues along with rapidly changing market and business dynamics. To build up the adaptability and agility required to navigate these choppy waters, companies must rethink their approach to PLM and embrace new ways of connecting and collaborating when building products.

Deploying non-resilient technology — a jumble of legacy tools — to manage the product lifecycle leaves companies stuck in the past. This approach limits scalability and amplifies existing challenges by creating information silos, reducing process visibility, and slowing decision-making.

The critical differentiator in successful enterprises is the effective use of product data. If you want your ecosystem to be resilient and adapt to changing market and business dynamics, you need a way to integrate and act on this information. – Jason Kasper, senior director, Aras Product Marketing

Manufacturers need to lean back into supply chain resilience investment in 2025 (compared to the drop-off seen in 2024). This involves extending the supply chain beyond traditional boundaries to include supply chain integration — granular connectivity that enables the configuration and control of data flow across all enterprise systems. Connecting suppliers is essential for seamless collaboration, real-time access to accurate information, and alignment across the supply chain. As a result, a unified digital thread is no longer a nice-to-have but a must-have for maintaining resilience and agility across the extended enterprise ecosystem.

4. The convergence of Industry 5.0 and Engineering 5.0

The above digital thread trends are all part of a larger shift: the convergence of Industry 5.0 and Engineering 5.0. Where Industry 5.0 focuses on human-centric collaboration with advanced technologies, Engineering 5.0 applies this concept more specifically to engineering and product development processes. Tools like digital twins, AI-infused engineering, and predictive analytics help teams surface critical insights faster and spend more time solving problems that require human creativity and ingenuity.

Sustainability is another key aspect of Industry 5.0 and Engineering 5.0 to consider in 2025. Companies must adopt more sustainable materials, energy-efficient processes, and circular economy principles to meet new regulatory demands and satisfy eco-conscious consumers. To that end, the modern digital thread integrates supplier information to enhance product lifecycle visibility and track the origin and composition of components. It can also provide AI-assisted engineering workflows recommending design optimizations to improve product sustainability.

Prepare your future-ready digital thread

The future belongs to those who are aware of the future trends of the digital thread and harness its full potential. With the right tools, organizations can use this technology’s transformative power to drive innovation, resilience, and sustainability. Fortunately, reaching an ideal state is easier than ever before: working with a trusted partner like Aras is the fastest way to gain the digital thread capabilities required to thrive and outpace the competition in 2025 and beyond.

Eager to learn more about these topics and our vision for the future? Join us at ACE 2025 to discover the latest advancements in PLM, AI, and digital thread!