A new 2026 report from EY and the Aerospace Industries Association finds that most aerospace and defense manufacturers are struggling to implement full digital thread capabilities. While companies recognize the value of connected engineering, production, and sustainment data, only a small share have mature systems in place, slowing efficiency gains, supply-chain visibility, and lifecycle management.
Why Digital Threads Matter for Aerospace and Defense
A “digital thread” connects engineering, manufacturing, supply chain, and maintenance data into a single, traceable ecosystem. In aerospace and defense, where products are complex, regulated, and built over decades, digital threads enable:
- Real-time design-to-production integration
- Faster certification and compliance
- Predictive maintenance and sustainment
- Improved supplier coordination
- Reduced rework and lifecycle cost
The EY–AIA report makes clear: digital threads are no longer optional. They are foundational to competitiveness, readiness, and national security.
What the EY–AIA 2026 Report Reveals
The study surveyed aerospace and defense executives across OEMs, Tier-1 suppliers, and advanced manufacturers. Key findings include:
- Digital Thread Adoption Is Far Behind Expectations
Most companies have partial or fragmented digital thread systems. Only a small minority have:
- End-to-end data integration
- Unified engineering and manufacturing platforms
- Connected supplier ecosystems
The majority rely on siloed systems that limit visibility and slow decision-making.
- Supply Chain Complexity Is a Major Barrier
A&D supply chains involve thousands of suppliers, each with different systems, standards, and data maturity levels. Executives cited:
- Inconsistent data formats
- Limited supplier digital readiness
- Cybersecurity concerns
- High integration costs
These challenges make full digital thread implementation difficult but also more necessary.
- Workforce Skills Are Not Keeping Pace
Companies report shortages in:
- Digital engineering talent
- Model-based systems engineering (MBSE) skills
- Data analytics and AI expertise
- Cyber-secure manufacturing capabilities
Without workforce modernization, digital thread adoption stalls.
- Legacy Systems Are Slowing Progress
Many A&D manufacturers still rely on:
- Decades-old ERP systems
- Paper-based processes
- Manual configuration management
- Non-interoperable engineering tools
Replacing or integrating these systems is costly and time-consuming.
How Digital Threads Could Transform A&D Manufacturing
Despite slow adoption, the report highlights enormous potential benefits:
- Faster Production and Lower Costs
Digital threads reduce:
- Rework
- Engineering changes
- Certification delays
- Scrap and waste
This is critical as OEMs ramp up production to meet record aircraft backlogs.
- Stronger Supply Chain Resilience
Connected data improves:
- Supplier performance visibility
- Risk detection
- Quality control
- Compliance tracking
This is essential in a sector where a single supplier issue can halt production.
- Enhanced Sustainment and Readiness
Digital threads enable:
- Predictive maintenance
- Real-time fleet health monitoring
- Faster repair cycles
- Lower lifecycle cost
For defense programs, this directly impacts mission readiness.
- Better Cybersecurity and Data Integrity
A unified digital ecosystem reduces vulnerabilities created by disconnected systems.
What A&D Manufacturers Must Do Next
The EY–AIA report outlines several priorities:
Invest in Model-Based Engineering (MBE)
MBE is the foundation of digital threads, enabling shared models across design, production, and sustainment.
Modernize Legacy Systems
Companies must replace or integrate outdated platforms to enable data flow.
Strengthen Supplier Integration
OEMs need to help suppliers adopt digital tools and meet data standards.
Develop a Digital-Ready Workforce
Training, upskilling, and new talent pipelines are essential.
Adopt Common Standards Across the Industry
Interoperability is critical for multi-tier supply chains.
Key Takeaways
- EY and AIA report that digital thread adoption in aerospace and defense remains limited.
- Most companies have fragmented systems rather than end-to-end digital integration.
- Supply chain complexity, legacy systems, and workforce gaps are major barriers.
- Digital threads can dramatically improve production, sustainment, and readiness.
- Industry-wide standards, modernization, and workforce development are essential next steps.
FAQ
What is a digital thread in aerospace and defense?
A connected data ecosystem linking engineering, manufacturing, supply chain, and sustainment information across the entire product lifecycle.
Why is adoption so slow?
Legacy systems, supplier fragmentation, cybersecurity concerns, and workforce skill gaps make implementation difficult.
What benefits do digital threads offer?
Faster production, reduced rework, better supply chain visibility, improved sustainment, and stronger cybersecurity.
What must manufacturers do next?
Invest in model-based engineering, modernize systems, integrate with suppliers, and build a digitally ready workforce.
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