The Digital Thread in Modern Supply Chain Management

Fast-changing regulations, complex product portfolios, and growing sustainability pressures force companies to rethink how they operate their supply chains.

This challenge is especially acute in highly regulated industries such as food and beverage and high-tech, where every product decision must meet strict quality and safety standards while also considering environmental, social, and governance (ESG) factors. A single oversight can quickly escalate into recalls, regulatory fines, and reputational damage.

Traditional supply chain approaches run on disconnected systems with siloed teams and can no longer meet today’s demands due to increased complexity for compliance, collaboration and other critical functions. The solution lies in the digital thread supply chain framework: a connected, end-to-end system that links product and operational data across the entire product lifecycle. This approach enables manufacturers to gain real-time insights and respond faster to changes.

In a recent Aras webinar, How Digital Thread Strategies are Reinventing Supply Chains in Highly Regulated Industries, industry experts explored how organizations can use digital threads to stay compliant while accelerating innovation and growth.

Moderated by Josh Epstein, chief marketing officer (CMO) at Aras, the discussion brought together Rhys Bennett, product lifecycle management (PLM) specialist at Fulvisol; Satu Hulkkonen, program manager at GS1; Steven Streitberg, director at Philip Morris International; and Patrick Willemsen, director of technical community at Aras, to share practical, proven insights for building modern supply chains. These included strategies for breaking down data silos, embedding compliance early, and leveraging standardized data.

Shifting to a connected ecosystem

A common challenge within highly regulated industries is how fragmented and inaccessible most supply chain data is. Compliance records, product specifications, and supplier information are often stored in separate databases managed by different departments that struggle to share information effectively. This disconnect slows decision-making and increases the risk of compliance gaps.

For example, many food and beverage companies still store critical product data in documents and email threads, making it difficult to access when needed.

The panel agreed that by breaking down these silos, the digital thread creates an interconnected ecosystem where every stakeholder, from engineers to compliance officers to logistics partners, works from the same up-to-date information. With everyone aligned around a single source of truth, compliance reviews happen earlier, product specifications stay consistent across teams, and supply issues can be addressed before they escalate. The result is a supply chain that is more resilient and responsive to change.

“If you want a true digital thread, you need to get data out of files and put it into a good data model with good relationships.” — Patrick Willemsen, Aras

By uniting data in a connected ecosystem, companies create the foundation for more advanced capabilities.

Real-time traceability for risk reduction

Traceability refers to tracking the origin and movement of every product and component across the supply chain. In food and beverage, that means knowing exactly where ingredients came from, when and where they were processed, and how they’ve moved through distribution.

Regulatory checklists exist to ensure this level of recordkeeping. However, as Streitberg pointed out, the value of traceability goes beyond compliance. When something goes wrong, such as a contamination event, speed and precision in locating the problem can make the difference between a small, controlled recall and a costly, brand-damaging crisis.

By leveraging the digital thread supply chain approach, companies can capture real-time traceability data, creating a transparent record of every transaction. This simplifies compliance and enables rapid recalls that protect brand reputation, if needed.

This ability to pinpoint and act on issues within minutes or hours (rather than days or weeks) strengthens partner relationships for highly regulated industries. It shows customers that safety and quality are non-negotiable.

Embedding compliance early in the product lifecycle

Another recurring theme in the discussion was timing and why treating compliance as a final checkpoint is a costly mistake. In many companies, regulatory reviews happen late in development, forcing teams to redo packaging, change formulations, or delay launches when issues are found.

Success comes from companies that build regulatory requirements into product development from the outset. This reduces the risk of late-stage disruptions, shortens time to market, and allows products to be adapted for multiple markets without costly rework.

This proactive approach is also critical for meeting today’s sustainability demands, where visibility must extend well beyond immediate suppliers.

Driving sustainability with data standards

Historically, compliance checks in the food and beverage industry have required companies to know only “one step backwards and one step forward” in their supply chain, as Hulkkonen explained. But this limited view is no longer sufficient. Emerging regulations now require deeper visibility into suppliers, sourcing methods, and production practices.

The digital thread plays a central role in meeting these demands. It ensures that information flows seamlessly, not just within internal systems, but also to partners, suppliers, and other stakeholders.

“Companies have to think about how they manage their internal data, and how they gather and share data with other supply chain members.” — Satu Hulkkonen, GS1

In the food and beverage sector, raw material transparency is essential. Raw materials (e.g., grains, oils, or packaging inputs) form the foundation of a finished product. Without accurate, standardized data on these inputs, companies can’t reliably meet ESG requirements.

Common data standards ensure that information is captured in a consistent format and make the digital thread fully actionable. With this structure in place, companies and stakeholders can confidently calculate key sustainability metrics like carbon footprint, water usage, and supply chain impact.

Smarter insights through AI and governance

With cleaner and more standardized data in place than ever before, AI can better analyze lifecycle impacts and automate repetitive tasks. Bennett highlighted AI’s role in interpreting lifecycle data for metrics such as carbon footprint and water usage, while Streitberg emphasized that one of AI’s most valuable applications is improving data quality itself:

“Data’s the new oil. You definitely need to have structures in place, but using AI to improve your data quality can be twice as powerful as some of AI’s other use cases.” — Steven Streitberg, Philip Morris International

Strong governance ensures these tools deliver value without risk. Companies must control how AI models interact with datasets and maintain flexibility to evolve with data standards.

“Organizations that are starting this journey should get every granular level of their data into PLM platforms as soon as possible. Once that data is there, you have the power at your fingertips to leverage AI or even work with it manually.” — Rhys Bennett, Fulvisol

When supported by a flexible, connected PLM platform with an integrated digital thread, all of these capabilities, from data integration to AI-powered insights, are possible together.

How PLM powers modern supply chains

When data flows seamlessly across departments and supply chain partners, meeting compliance and sustainability requirements is easier without slowing the business down. A connected digital thread helps companies adapt to market changes faster and innovate new products with fewer setbacks.

Aras Innovator®, an open and flexible PLM platform, is built to support precisely this kind of connected ecosystem. By enabling a dynamic digital thread supply chain strategy, Aras Innovator helps manufacturers:

• Unify siloed systems without replacing existing tools
• Embed compliance checks directly into product development workflows
• Maintain real-time traceability from concept to consumer
• Provide a single source of truth accessible across departments and supply chain

In regulated industries, where every decision includes compliance, ESG, and reputational implications, Aras simplifies complexity so teams can focus on delivering high-quality products and keeping customers satisfied.

To learn more about transforming your supply chain strategy into an engine for innovation and growth, hear directly from the experts.