Digital Factory: Nexans’ Experience
Digital factories are true innovation cells, growth vectors, and value generators for businesses. As part of our content on digital factories, we are happy to share the testimony of Thibault Goulin, Digital Factory & IOT Manager at Nexans.
Nexans, formerly known as “Câbles de Lyon,” was founded 120 years ago and is now the world’s second-largest cable manufacturer. This leading industrial group has a wide geographic presence in Lyon and is involved in all aspects of cable use, particularly in energy generation and transportation. Nexans’ current goal is to make low-carbon energy available to everyone.
Thibault Goulin joined Nexans Innovation in 2017, and at the end of 2020, he was put in charge of the digital factory. He shares his thoughts on creating and running this innovation-focused entity.
When Was the Nexans Digital Factory Created?
The Nexans digital factory was created in 2020, initially to deliver services to our clients and develop Internet of Things (IoT)-based services. We have developed solutions that are starting to gain recognition. These solutions centered around connected cable drums, connected cables, and connected street cabinets. The digital factory now has around fifteen employees, including cloud architects, developers, and product owners (POs). Nexans is now a software publisher thanks to the digital factory, which has been up and running for less than two years. The digital factory continues to focus on developing solutions for Nexans’ customers.
What Strategy Did You Implement to Make the Digital Factory a Reality?
Five years ago, I joined Nexans to help build the foundations of this digital factory with my expertise in the Internet of Things and digital. We started small in a Nexans Services department. We began with proof-of-concept (POC) projects, such as a connected drums pilot installing GPS beacons in cable drums for a large French electricity company.
After testing and validating use cases with our customers, we realized that this connected drum would create value for them, so we decided to industrialize it and develop our first solution, externally at first. For our initial connected drum solution, we worked closely with Microsoft and Microsoft partners, like Cellenza, to design it using outside developers but still within a Microsoft/Nexans Cloud environment. By the end of 2018, we had invested in and purchased 10,000 beacons as more and more clients expressed an interest in this solution. This allowed us to enter the European market and perform more and more consumer testing. We began recruiting as a result of the increased interest and value.
From 2019, development of the Nexans digital factory began to move faster. We hired product owners (POs) internally and created new solutions. The Digital Factory really came together in 2020, when a “core” team called the Foundations was put together. This is a group of Azure experts, including teams from Cellenza, an architect, SecOps, and Cloud DevOps. We have also recruited a dedicated development team. We now have four full-stack and mobile developers working on our solutions.
To recap, our strategy involved starting small with POCs, testing, and close collaboration with our partners. Once our customers confirmed the value of what we were doing, we scaled up, hired more people, and set up these three teams. This gives us the freedom to develop customer software on our own.
Is There a System of Governance in Place to Support This Approach?
First, the digital factory had to find its place. Right from the start, we decided to segregate it from Nexans’ regular IT teams. So, we created this new “software publisher” team within the Innovation division. There was complete independence from Nexans’ IT. The latter continued to focus on the core IT, in other words, mainstream IT based on an ERP and Industry 4.0 logic. We established links with IT to help with governance. Nexans has a system for managing IT projects and monitoring budgets: This meant that the digital factory had to connect to the processes for managing demand. The goal is not to be innovative just for innovation’s sake. No project will be started without a return on investment (ROI) that can be shown and proven.
The digital factory also had to learn about the company’s stakeholders. We did a lot of work with Nexans’ marketing and sales teams, who are now our internal customers. Staying focused on the customer is also key. The success of our solutions is largely determined by the relationships we forge with them.
Regarding project governance, we always have a pair of people: a business representative (from sales or marketing) and a Product Owner, who must take ownership of the product. The Foundation teams perform preliminary studies to see if all the required components are in place before the project begins. The development teams work in agile mode once the landing zones have been set up. The Product Owner manages the entire project and provides the developers with what they need. Business representatives are involved wherever possible to check the deliveries. Above that, we have steering committees that monitor our project portfolio and budgets.
Finally, knowing when to call it quits on a project is a critical part of innovation. The digital factory has a governance structure in place to help guide the process of generating ideas, selecting those for development, and industrializing our solutions.
Which Methodology Do You Use in the Digital Factory?
We’re working on innovations that must bring value to our customers, so it’s important to be able to test them quickly and set up POCs and Minimum Viable Products (MVPs). Everything is developed in agile mode. All our product owners have the Certified Scrum Product Owners (CSPO) certification, and it is important to us that they use these methods. Agile methods are applied systematically and we use Azure and Azure DevOps tools based on the Scrum framework. The POs show the developers the features ahead of time so they can get an idea of how the solution will work. Once we decide to start a sprint, we spend one or two days planning it. During this time, the Product Owner and the developers work on defining the next sprint. Our Product Owners are involved in all the routines, especially the Daily ones. This is why it is so important to have our development teams in-house, in our offices, and close to our POs! It goes without saying that we include the customer in the demos at the end of each sprint.
The Nexans global innovation center in Lyon is home to the digital factory. This means that business representatives can attend demos there. Lastly, we have review processes to improve from one sprint to the next.
We work project by project in agile mode using the Scrum framework. The Foundations, Developers, and PO teams all use the same agile methods. Even the Foundation team commits to delivering new Azure components, making changes to our Azure base in terms of security, or improving the policies on our Azure base in 2-to-3-week sprints.
How Is the Project Portfolio Managed?
Despite recruiting internal teams, our developer pool remains limited. So we have to prioritize, which is why we have set up routines with the POs. They meet every three weeks to discuss the global backlog for all our solutions and decide what will be released in the upcoming sprints. There is a crucial logic to the way things are prioritized. We have also established alternation between the solutions because the POs need time to write the backlogs and features and discuss them with the business representatives. So, a PO works with a development team on one solution while another PO plans the next sprint for another solution.
Another important point is that our current team cannot meet some specific needs. When this happens, we call upon service providers. For example, Cellenza Sud-Est has helped us with development. In this scenario, we set up a hybrid organization, with an internal Nexans PO leading an external development team.
What About a Tool Cycle?
The most important thing for us is having digital solutions that run on our infrastructures. That is why we developed them using Cloud solutions from the outset. This is crucial because we need to have the software and data available afterward. For that reason, we have been using Azure components from the start of the project. We wanted to use PaaS to progress quickly. To become a software publisher and move forward rapidly, we used PaaS components and implemented a microservices logic, with developments that different solutions can use. We had to set up an Azure foundation to achieve this. In the project’s early days, our knowledge of Azure was limited, which is why we enlisted the help of partners like Cellenza. We rely on Cellenza’s expertise to set up a base and the Azure bricks that all our solutions use. For example, we set up an IoT Hub component to connect our drums and then used the same component to connect street cabinets for our customers. In our component base logic, the Foundation team, which is made up of Cellenza experts, steps in before the projects start to set up landing zones for the development teams to work in. We also have common services for security, networks, and authentication. For example, having a Single Sign On (SSO) logic between our various solutions so that customers do not have to use different logins for different platforms was important.
How Are Budgets Managed in the Digital Factory?
Nexans is a major industrial group that has to be driven by costs. As a result, its budgeting processes include the digital factory. We make plans for next year’s budget in the summer. We plan budget envelopes, which means we know what projects we will be working on ahead of time.
We have a base budget that covers the Foundation team’s recurring costs and a project budget that requires us to talk to the business contacts to find out what they need. The latter is determined on a project-by-project basis. No project is started without a clear and known ROI. We use a demand management process for each project. This involves the business project manager completing a file with a number of indicators that the project committee must approve So, we have a global, company-wide macro process and a project-by-project micro process.
Finally, once the project is complete, we review how much it cost and how much revenue it generated.
What Problems Did You Face, and How Did You Solve Them?
First of all, there was a change management logic: think cloud technologies, architecture, DevOps, Product Owners, etc. All these skills were relatively new. Nexans had an older IT system and the idea was to bring their internal expertise on board. Some people needed help with these new subjects and this change. Everyone on the team got Microsoft AZ 900 certifications so we could understand these new technologies. We realized there was a genuine desire for change, even if it does not always go smoothly for everyone.
Additionally, the digital factory’s positioning outside the IT department may have looked like we were creating another IT team, which could have been problematic. So, it was critical to find the right routines and levels of communication between IT and the digital factory.
Lastly, in terms of budget, it is not always easy to see an immediate ROI on innovation. When we launched the connected drums, we had to explain why a cable company was getting into IoT and convince the salespeople to sell these IoT solutions. But the results speak for themselves since a major French client is now using our solution on a national scale. There have been some problems, and some projects haven’t made it past the proof-of-concept stage, but overall, we have had a lot of success. We are in niche markets, but I think that any large industrial company can start its own digital factory to develop new products for its customers, find new growth vectors, and generate new sources of revenue using digital solutions.
How Do You See the Digital Factory’s Future?
We know that our factories have millions of connected objects that need to be monitored, so there is much to do for Industry 4.0. Nexans’ digital factory will continue to grow in the areas of Industry 4.0 and data. We recently signed a partnership with Schneider Electric, and we have a lot of work to do with them in this area.
Nexans’ internal financial reporting and data solutions also have a large ROI. Through Azure bricks, Microsoft can also help us move forward faster, and we will have our work cut out in the future to improve our internal data and finance solutions and processes.
Interested in learning everything there is to know about Digital Factories? Read the series of posts written by our subject-matter experts now!
- Why and How to Create a Digital Factory
- What is the Best Strategy and Approach for Your Digital Factory?
- How Do I Organize Teams in a Digital Factory?
- Digital Factory: Which Technical Foundation?
- Financing and Budgeting for a Digital Factory
- Digital Factory: Feedback From Saint-Gobain – Aari