APC 2015 Annual Report Download - page 37

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 35
OVERVIEW OF THE GROUP’S STRATEGY, MARKETS AND BUSINESSES
1
ORGANIZATIONAL SIMPLICITY ANDEFFICIENCY
Schneider Electric overhauled its Environmental Strategy, and
defi ned some ten priority areas for action for the period 2015-2020.
These attribute increasing importance, in particular, to eco-design
by making it systematic and exhaustive, to our CO2 reduction efforts
for both ourselves and our customers, to our circular economy
ambitions for our products and for the resources used, and to our
ever-increasing energy effi ciency objectives.
This strategy covers our entire value chain, from R&D to purchasing,
manufacturing and logistics, not to mention sales and marketing,
where we make specifi c efforts to always give our customers
more capacity to objectify the environmental added value which
our solutions offer them (energy effi ciency and CO2, lifetime and
reparability, etc.). We take into account customer expectations
concerning our products’ environmental profi le, the transparency of
access to information, and even end-of-life product management.
Schneider Electric has implemented a policy to systematically
identify and reduce its industrial risk in order to secure maximum
service to its customers and to minimize any impact of disaster,
whether it is internal in nature (fi re) or external (natural disasters).
This policy relies on local actions to remove the identifi ed risks
following audits led by an external fi rm recognized by insurers, as
well an action plan for the continuity of production. If, after corrective
actions, the risk remains too high, then the activity is repeated
at another Schneider Electric site. Since 2014, this process has
been extended to single-source suppliers in order to reduce the
risk level in fi ve areas (fi nancial, geopolitical, industrial, quality and
dependence on Schneider Electric activity), in addition to identifying
the action plan in the event of a supply disruption.
The segmented response to customer needs
In 2012, Schneider Electric launched the Tailored Supply Chain
program as part of the company program Connect, with the aim to
better align the supply chain set-up with the needs and behaviors
of each customer segment (distributors, partners, panel builders,
etc.).
Six initiatives were defi ned to support the transformation of the
supply chain:
• Purchasing: step up purchasing to drive proactive planning of
procurement;
• Optimization of the industrial operation: manage the operation
of critical components to improve lead-time to customers
(suppliers, factories, and logistics);
• Supply chain flow redesign: reduce lead-time through
optimization of plant and distribution center footprint and fl ow
design;
• Transportation rationalization: increase partnerships with
selected carriers to improve customer service;
• Industrial planning: build best-in-class planning process by
customer segment;
• IT capability: align information systems strategy with this
segmentation.
This approach has required the implementation of a more dynamic
industrial strategy to restructure customer service practices, and
the confi guration of products, equipment, delivery methods and
services offered to Group customers. In parallel, the Group has had
to simplify its working approaches and focus on creating value for
its customers by streamlining its decision-making processes and its
organizational structure.
This led to the announcement of a new Industrial Organization for
2013, structured around eight regions (Europe, CIS, China, India,
Pacifi c, Asia, North America, South America) which groups all of
Schneider Electric industrial activities together in these regions. In
addition, this also led to the verticalization of all Purchasing activities
to simplify and unify its contact with suppliers.
The digitization of the supply chain
In 2013, Schneider Electric put emphasis on digitization as a way to
accelerate and intensify its transformation.
For the supply chain, this approach aims to synchronize suppliers
and plants through distribution centers and carriers to improve
service to customers. Many programs have been launched in order
to offer new features and improve the responsiveness in relation to
market demand supported by new technologies.
Supply chain optimization will benefi t from the fl ow model,
combined with the integration of the IT systems of our logistics
partners with cloud technology. Similarly, a partnership with Kinaxis
will enable the «digitization» of industrial planning and extend the
scope. This technology facilitates interaction loops between the
different functions and improves our responsiveness to customers
as well as signifi cantly reducing the value of fi xed assets in inventory.
Finally, the development of new features tailored to each customer
segment on our targeted computer systems (of the supply chain) is
supported by a strengthened IT convergence plan.
This digitization of the supply chain fully meets the priorities of the
Group’s industrial strategy targeting fi rst customer satisfaction while
reducing costs for increasing responsiveness and reducing capital
employed.
A key competitive advantage for our
customers
All of these efforts to improve the supply chain have been recognized
well outside the company. In September 2015, Gartner, a leading
IT research and advisory fi rm, ranked Schneider Electric’s supply
chain 10th in Europe and 34th worldwide, an improvement of 12
and 33 places respectively in one year.
The Group’s aim for the next few years is to turn this into a
competitive advantage through customer recognition that we offer
the best logistics solutions. The new 2015-2020 company program
aims to drastically improve the capacity and response speed of the
supply chain while strengthening economic and ecological effi ciency
in order to even better serve our customers by providing them with
a customized logistics response that meets their expectations while
ensuring sustainability.
To achieve this, the Group intends to adapt its value chain to the
wide-ranging requirements of its customers by implementing nine
keys for transformation during the 2015 2017 period:
• reduce the release time to customers;
•b asic logistics offering, customized according to type of channel;
•i ndustrial planning customized according to customer segment
•d evelopment of the services offering, in line with our customers’
installed base;