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At the first ARC Industry Leadership Forum Singapore on August 1, 2024, Schneider Electric participated as a Silver Sponsor. Andy Yu, Senior Vice President Global Supply Chain, International Operations, Schneider Electric, shared his insights on how to scale smart operations across multiple regional plants. In today's rapidly evolving manufacturing landscape, the push for digital transformation and operational efficiency is more critical than ever. Andy opened his session by reflecting on the changing dynamics of technology, hinting at a future where AI might take on human roles. He emphasized the importance of cherishing human-to-human interactions, especially as technology continues to evolve. This perspective set the tone for a discussion that values human insight alongside technological advancement. His entire presentation can be viewed here.
Schneider Electric: A Quick Overview
Andy began with a brief introduction to Schneider Electric, highlighting its commitment to sustainability and efficiency. The company focuses on two primary areas: energy management and industrial automation. By providing a comprehensive suite of solutions—from energy control to advanced data analytics—Schneider Electric aims to address pressing global challenges, such as climate change and energy transition.
The company’s mission is clear: to make the world more sustainable and efficient, aligning with its recognition as one of the world’s most sustainable companies by Time magazine in 2024.
A Network of Supply Chains
Moving into the core of his presentation, Andy described Schneider Electric's global supply chain as a "network of networks." This approach allows for a tailored supply chain model that caters to various customer behaviors across multiple market segments. With over 150 factories and close to 80 distribution centers worldwide, the company is well-positioned to respond to diverse customer needs.
Andy stressed the importance of a strong supply chain strategy, particularly in light of ongoing global trends such as digitization, climate change, and geopolitical shifts. He noted that Schneider Electric's supply chain could serve as a competitive advantage, contributing significantly to the company’s growth ambitions.
Smart Operations: A Focus on Sustainability
Andy then delved into Schneider Electric’s Smart Operation Program, which aims to enhance efficiency across its factories. He showcased the company’s recognition by the World Economic Forum, having established five Lighthouse Smart Factories in major regions. One standout example is the Hyderabad factory in India, which has achieved remarkable sustainability milestones, including a 66 percent reduction in CO2 emissions.
The journey towards smart operations began in 2017 and is characterized by a focus on digital transformation, which includes IoT-enabled systems and advanced data analytics. Andy emphasized that the goal is not just technological advancement but tangible benefits in energy efficiency and productivity.
Key Takeaways for Scaling Smart Operations
Agility and Standardization: Andy highlighted the importance of having a flexible yet standardized approach to scaling smart operations. By defining mandatory minimum requirements and allowing for tailored solutions, Schneider Electric ensures consistency while catering to specific needs.
Data Management: Effective data management is crucial for leveraging AI and analytics. Andy discussed the separation of operational technology (OT) data and transactional data, which allows for real-time decision-making and efficiency improvements.
Employee Engagement: People remain at the center of Schneider Electric’s transformation efforts. Hiring the right talent and fostering a growth mindset are essential for scaling smart operations.
Performance Metrics: The company employs a factory ranking system to motivate plant managers and track progress. This system allows for benchmarking across plants, ensuring continuous improvement.
Real-World Applications: Andy shared a practical example involving laser marking machines, where structured data management led to a 15-20 percent improvement in overall equipment effectiveness (OEE), showcasing the direct impact of smart operations on productivity.
As Andy Yu concluded his presentation, he reinforced the idea that the journey towards scaling smart operations is not just about technology; it’s about integrating human insight, sustainability, and efficient management practices. The path ahead may be filled with challenges, but with a robust strategy and a commitment to continuous improvement, Schneider Electric is well-equipped to navigate the complexities of the modern manufacturing landscape.
Panel Discussion on Best Practices for Smart Manufacturing
Andy Yu’s views during the panel discussion:
Impact of regulations on sustainability: In our industry, there are two main areas of focus. First, we aim to use energy more efficiently; with current technology, we've already cut CO2 emissions by 70 percent. Payback can be achieved within 1.5 – 3 years, creating a self-sustaining cycle without much government intervention.
Second, areas like green materials and eliminating single-use plastics still have high costs from a financial standpoint. Initial government regulations are important to boost adoption and achieve economies of scale, eventually leading to a self-sustaining system.
Supply chain optimization and volatility: In our latest transformation program, we focus on several key pillars, one of which is resilience. We’ve implemented a program called the Power of Two for our critical product lines that significantly impact company profits. This program has established a strong network to ensure that if one side encounters issues, we can still deliver through another channel. My region uniquely supports not only India and Southeast Asia but also has a global reach. Each of these support areas has the Power of Two framework to ensure we can adapt quickly if challenges arise, as we can’t predict the future.
Carbon footprint: About tracking CO2 emissions for each product, we have strong visibility within our own operations. Our factory utilizes a power monitoring system that provides real-time data on energy consumption and CO2 emissions for every line and machine, down to the minute. However, the challenge arises with our components. For instance, one factory may use around 30,000 different components, and we rely on our suppliers to provide emissions data for those parts. Only then can we accurately report the total CO2 emissions for a specific product. This is a significant undertaking, and currently, we can only focus on the most critical components. It's clear we still have a long way to go in this journey to fully understand and report our emissions.