Published On: November 23, 2022Categories: articleTags:

In the words of internet pioneer Marc Andreesen, software will inevitably eat the world. “The world” in this case is the world of physical products, and “software” is any kind of digital representation that can emulate or replace this product.

A very prominent example of this prediction is the replacement of analog speedometers, dashboards, buttons, dials, and switches in high-end cars by increasingly sophisticated monitors and touchscreens.

Another example is replacing optical mirror-and-viewfinder systems in high-end cameras with tiny monitors: electric viewfinders.

Once an electronic system reaches the quality level of a mechanical system, it offers far more flexibility and usability, can be frequently updated and upgraded, and is typically cheaper to produce at scale than its mechanical competitor.

The intriguing part for us is that any “software” functionality still runs on a physical system. That system: smartphone, camera, on-board computer, or dashboard, might be multi-purpose and cheaper to produce, but we cannot just think it away. No better testimonial for this than the world’s most valuable company: Apple.

Those who did, or those who simply underestimated the importance of the hardware components of what’s known as a “cyber-physical system” were in for a rude awakening over the last two years when they found it harder and harder to source microchips for their increasingly software-driven products. Car makers were hit especially hard.

A digital system and its physical twin

Instead of talking about “digital twins”: the idea that every physical product has a digital counterpart, let’s switch the idea around and talk about digital originals and their physical counterparts. Because this is increasingly the order of things in which we will perceive this boundary.

The reason for this is simple.

Thinking in terms of digital twins means there has to be a physical object first, and twinning it with the various digital artifacts attached to it means they exist because the physical object exists: a digital prototype, a bill of materials, a repository of access rights, a lifecycle documentation.

But most future objects will exist in the digital world first, and often they will exist in the digital world only. And we’re not talking about the “metaverse” here.

The simple reason for that development is that creating and tracking variation in the physical world is hard, cumbersome, time- and resource-consuming, and expensive. The more parts, the more ways to combine them.

But consumers increasingly demand custom-built products, and marketing departments love the margins that come with selling limited editions and price-discriminating between different feature combinations.

So the product diversification that puts so much stress on production, logistics, and spare part inventories, will not stop but continue on its current path of combinatorial explosion.

Reigning in the combinatorial explosion

Anyone with a pocket calculator has likely enjoyed at one time or another playing with the key that triggers the factorial function x!. It’s one of those functions that tends to blow up very quickly as x gets bigger. In the real world it’s often used in formulas for the number of distinct arrangements or variations of a system with x components.

This is the fundamental problem product designers have to contend with, especially facing pressure from cost-conscious controllers unhappy with adding another part number to an already overflowing inventory.

The answer to this quandary is to go increasingly digital in the product life cycle. This includes, even for industrial companies whose entire history has been about producing physical products, to produce things that only exist in the digital world.

The motivation, to square the designer’s goals with those of the controller, is ultimately economic. The point of the exercise of thinking digital-first is to identify those products that should make the transition from digital to physical only if it is clear that such a product should exist. Everything else should remain digital-only.

In most industries this might come across as a very peculiar proposition. But even five years ago pure digital fashion houses were considered peculiar, and now producers of physical fashion are lining up to work with them.

Not only to reap the creative spark but also to reduce the cost (and often massive environmental waste) of producing clothes nobody wants.

So instead of thinking about digital twins even industrial technology leaders should think about how their value chains will increasingly be digital-first. And some of them are even digital-only.