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No longer “alone”: this electrical giant drives carbon reduction in the entire supply chain

No longer “alone”: this electrical giant drives carbon reduction in the entire supply chain

Most people who have experienced the middle and late last century have common memories of tripping and replacing fuses. When the light suddenly goes out, the electric fan above the head slows down immediately, people will skillfully take out the flashlight, step on a dry wooden bench in front of the power box, and reach out to take off the fuse that has been broken in two and connect it. A new cut. Then the lights came back on, and the fan made a whirring sound.

It was not until 1987 that Schneider Electric officially entered China and completely changed the method of safe electricity use. It brought miniature circuit breakers to the market, allowing people to gradually bid farewell to the “fuse era”. The miniature circuit breaker automatically trips when the current is overloaded, and after a few minutes it can be manually closed to resume normal operation. In the field of miniature circuit breakers, Schneider Electric has always maintained a leading position in the global market.

As early as 1979, the French electric company established business contacts with some domestic enterprises. Eight years later, Schneider Electric established its first factory in Tianjin, thus announcing the company’s official entry into the Chinese market. The first factory has been successful after several years of operation, and the product is gradually in short supply. Miniature circuit breakers are one of its products. Today, Schneider Electric has developed into a global electrical company with a business map covering hundreds of countries.

Schneider Electric was one of the first companies to focus on sustainable development. In 2002, Schneider Electric incorporated sustainable development into its core strategy. Three years later, the company formulated the “Sustainable Development Impact Index Plan” based on the SDG goals of the United Nations to measure its performance in sustainable development, and announced the progress results of related work every quarter. Three-party audit control.

Through early carbon reduction practices, Schneider Electric found that the company has suppliers upstream and customers and partners downstream, and the emissions generated by its own production and operation account for less than 10%. As a result, the company proposes a “green supply chain strategy” to drive upstream and downstream while promoting its own carbon reduction process, and incorporate green and sustainable measures into the entire supply chain. In actual implementation, the “green supply chain strategy” is divided into five specific measures – green design, green procurement, green production, green delivery, and green operation and maintenance.

For Schneider Electric, achieving this strategy will not be easy. This is a systematic project, and it is also an ESG issue that large manufacturing companies need to face up to and take long-term action. Zhang Kaipeng, Senior Vice President of Schneider Electric and Head of Global Supply Chain China, believes that the biggest challenge for enterprises to establish a green supply chain is the overall coordination of the entire chain. “Because the development level of each supplier is completely different, from cognition to practical ability, there are certain difficulties in several aspects. Therefore, we need to guide and demonstrate, and guide them through the evaluation of suppliers, so that they can would like to do the job.”

In terms of procurement, in 2021, Schneider Electric will launch a supplier “zero carbon plan” around the world, covering the world’s top 1,000 major suppliers, and set a goal for them to reduce carbon emissions from operations by 50% by the end of 2025. Up to now, 1,015 companies around the world have signed agreements, of which more than 200 are suppliers in China.

Together with sustainable development, there is also digital technology, which Schneider Electric believes is “the best weapon to achieve the goal of carbon neutrality” and permeates all aspects of the green supply chain strategy. Zhang Kaipeng said that the company has been digitizing for many years. “It doesn’t mean that if you want to do something today, you can have the ability tomorrow. The ability needs to be cultivated and accumulated.” While the reserves of digital technology are promoting production and emission reduction, in the recent endless crisis It also plays a protective role in production and operation.

“In the past three years, not only the epidemic, but also many different situations have occurred, the Suez Canal blocking accident and the extreme cold weather in the United States, and the shortage of materials or components caused by earthquakes, fires, etc., and demand The huge fluctuations in the supply chain, etc., will lead to a supply chain crisis.” Zhang Kaipeng said.

For Schneider Electric, in the past, it only needed to know the information of the first-tier suppliers, but in a crisis, the company also needs to grasp the capacity, inventory, and response speed of the upstream second-tier or third-tier suppliers, which requires deeper and more accurate information. , but also to achieve end-to-end consistency, the supply chain, the company’s own manufacturing capabilities, and customer demand changes, as a whole. Digitization is considered the key to solving this problem.

At a time when various new technological terms are frequently emerging, “digitization” seems to have become the development theme of the previous generation of completion. But in Zhang Kaipeng’s view, digitization is more like a tool that is constantly evolving in the process of trapping traditional technologies. “Scenarios and pain points can be used as entry points to see if there are difficulties in that place, the operation is not smooth, and the efficiency is relatively low. If traditional technology cannot solve it, use digital technology to solve it. Then slowly connect from point to surface, and then do platformization. , standardize, and then do intelligence.”

Schneider Electric has built a digital platform to connect with suppliers, allowing information to be delivered more accurately and faster. “Orders, material delivery, and payment can all be implemented on the platform, so that the speed of information transmission and response will be faster. The resilience of the entire supply chain depends largely on our partners.” Zhang Kaipeng said. Downstream customers are also part of the ecosystem. Through digitalization, we can better analyze and grasp market and customer needs, and effectively allocate and optimize resources. Even when the supply chain is strained, limited resources can be allocated to the users who need it most.

In addition, “preventive maintenance” realized through digitalization also solves the pain points of equipment in daily operation. Zhang Kaipeng introduced that in the past, equipment maintenance and replacement can only be judged by experience. Most of them will only be paid attention to when there is a real failure, and then repairs will be arranged. In this way, when a failure occurs, the equipment becomes unusable and production is delayed. Schneider Electric can now monitor the parameters of the equipment in a digital way. If there is a parameter abnormality, it will be alerted before the actual failure, and advance maintenance will be carried out. This function has played an important role when the movement of labor is blocked during the epidemic.

“The Wuxi factory uses this method to monitor the condition of the entire electronic components. Once an early warning or defective product occurs, it uses digital methods to analyze possible problems. This reduces the failure rate of electronic components by 22%.” Zhang Kaipeng said .

At present, Schneider Electric itself has set up 64 “zero-carbon factories” around the world, of which 15 are located in China. These factories achieve zero carbon emissions by promoting digital energy saving and using clean energy. In the interview, Zhang Kaipeng could not hide his preference and pride for the Wuxi factory. “The reason why I always mention the Wuxi factory is because it won the title of ‘end-to-end lighthouse factory’ by the World Economic Forum last year. There are 103 ‘lighthouse factories’ in the world, of which Schneider Electric accounts for 5. The one in China is the Wuxi factory. , we tried a lot with it.”

Some of them are bold attempts. For large companies such as Schneider Electric, each factory will produce thousands of products, which means that tens of thousands of materials need to be coordinated, and it may be wasteful to build a production line for some products that require a small output. In order to deal with this problem, Schneider Electric tried to “block” the production modules and assemble them according to the production needs of different products. This allows the supply chain to respond to market changes more quickly and reduce unnecessary losses and waiting. Schneider Electric calls it a “flexible production line,” and the Wuxi factory is the first to test the waters.

“This line can be reassembled and assembled like Lego blocks. We make the equipment modular and make different combinations according to different products. Including water and electricity, it can be quickly spliced, and it is very convenient to rearrange and switch products. .” Zhang Kaipeng said. As far as the current application effect is concerned, the flexible production line has achieved the desired effect of the company. Especially for new products, this innovative model can help save a quarter of the time to market. A flexible production line can cover a variety of products, and the investment in the production line can be improved by 50%.

At present, this model has been extended to many Schneider Electric factories. Depending on the product they produce, factories will combine them to be more reliable or more economical.

In the tenth year of its sustainable strategy, Schneider Electric independently designed and developed the eco-label Green Premium in the design process. Schneider Electric believes that in order to achieve sustainable development, it is necessary to consider the impact on the environment from the perspective of the entire product life cycle in the product conception stage.

Products with this eco-label must use renewable and recycled materials and use renewable energy during the production phase. During the end-of-life phase of a product, the Green Premium eco-label provides sufficient information on the recycling of product components, informing customers which parts are removable, which materials are recyclable, and the availability of the product. As of now, Green Premium product revenue accounts for more than 70% of the company’s total revenue, and Schneider Electric aims to reach 80% of this figure by 2025.

Park Jin, head of global supply chain security and sustainable development at Schneider Electric, said that the company has been looking for innovative breakthroughs from the research and development side. In the equipment produced in the past, the addition of sulfur hexafluoride is required as an insulating medium. However, sulfur hexafluoride is one of the greenhouse gases that needs to be controlled in the Kyoto Protocol. The greenhouse effect caused by the same amount of sulfur hexafluoride is 24,000 times that of carbon dioxide, and it is regarded as the most terrible greenhouse gas. After long-term research, Schneider Electric has developed a new generation of medium-voltage switchgear with SF6-free technology, successfully replacing sulfur hexafluoride with dry air.

No longer “alone”: this electrical giant drives carbon reduction in the entire supply chain

Schneider Electric’s first SF6-free green intelligent medium-voltage switchgear AirSeT series in China

In the green delivery segment, Schneider Electric is also exploring new materials to replace plastic, and the company has made a commitment to be 100% single-use plastic-free in primary and secondary packaging by 2025. At this stage, Schneider Electric has begun to partially replace paper packaging. Park Jin explained that the transportation and storage of products in the Industrial field have higher requirements on the hardness, shock resistance, and airtightness of the packaging. In this regard, plastics are widely used and the technology is mature. Since paper packaging cannot be compared with plastics in these aspects, it cannot be completely replaced for the time being.

Park Jin said that the company is still looking for new materials that can be good substitutes from a technical point of view. As for the company’s goals, she said the biggest challenge is balancing innovative technology with continued availability. The new material cannot be an overly innovative thing, and it must be able to ensure a continuous supply of large quantities. But she believes that technology is often evolving faster than expected, especially in the area of ​​ESG, so new technologies can be expected to follow.

Bill Gates mentioned “Green Premium” in his book on climate change. Here, it can be literally translated as “green premium”, meaning the difference in cost between the original product that produces carbon emissions and the alternative product that does not emit carbon. Bill Gates believes that the key to achieving carbon neutrality is to reduce the green premium.

Even though Schneider Electric stated that the naming of its Green Premium eco-label is not directly related to the “green premium”, this cost difference is also a topic that companies have to face when they devote themselves to ESG and make overall adjustments to their own production and operations. In the interview, Park Jin shared her views on the relationship between the green premium and the promotion of carbon neutrality: no matter what the green premium is, sustainable development is not an optional question for companies, but a must-answer question.

“Before, we were more of raising our arms and shouting that climate change is a major issue. Now, leaders, politicians, news media, there is a trend to become experts in sustainable development, and everyone is starting to continue. Pay attention to this issue.” Park Jin said, “This is what happens in reality, and the survival and development of enterprises must be compliant. The ‘compliance’ mentioned before is more about the legal framework, but now we look at the world and reduce carbon emissions. Relevant targets will also be gradually taken into account.”

In addition to following the trend, Park Jin provides another perspective for companies to invest in sustainable development: “When you take out money, you can say it is a cost, but if it can bring benefits, whether it is economic or social benefits , then it is actually an investment.”

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