Schneider Electric: How Digitalisation Drives Sustainability

Barbara Frei, EVP at Schneider Electric, is a strong believer in the digitisation of jobs in heavy industries to drive sustainability. 

Manufacturing Digital sat down with Barbara to discover more about this, as well as her career in the manufacturing industry.

Give us a brief overview of Schneider Electric

Schneider Electric is a global company that is listed in Paris with about €36bn (£30bn) in revenues and 150,000 employees. We have two main businesses: our core business is energy management, which is energy distribution from the network to the outlet in your living room, and then we have industrial automation, which covers solutions for discrete manufacturing, hybrid manufacturing and process industries.

We really are global with equal revenues coming from North America, Europe and Asia, where of course China is the dominant market. That said, India has become our third largest market after the US and China.

Companies we work with include Danone, Shell, Henkel and Nexans.

Schneider Electric is a global company that is listed in Paris with about €36bn (£30bn) in revenues and 150,000 employees. We have two main businesses: our core business is energy management, which is energy distribution from the network to the outlet in your living room, and then we have industrial automation, which covers solutions for discrete manufacturing, hybrid manufacturing and process industries.

We really are global with equal revenues coming from North America, Europe and Asia, where of course China is the dominant market. That said, India has become our third largest market after the US and China.

Companies we work with include Danone, Shell, Henkel and Nexans.

Tell us about your career and what excites you about your current role?

I’m a mechanical engineer and I did a doctorate in electrical engineering. I have been with Schneider for eight years now. 

What really drives me is this belief that energy efficiency is crucial to be really sustainable. When I look back now, over the last seven years, the time has never been better to really go for energy efficient solutions.

As you may know, there is a demand side and there is a supply side. And when you look at the CO2 emission problem overall, only 45% is in the energy supply; 55% is really how you use that energy. And that's a big potential. And this is, for me, very exciting that I had the luxury in the last 30 years to always work in industries which are concerned about energy efficiency, making customers more productive and more resilient.

How would you define industrial automation? Why is it crucial for most industries?

 Industrial automation is what optimises industry processes. So whatever perhaps has been done manually to control something, industrial automation makes it digital. 

Schneider Electric has a long history in this space. Back in 1969, Schneider was the first company to launch an automation controller into the market. Over the years, we have been highly successful in penetrating more and more industrial applications. 

When you look at the market today in heavy industry, the level of optimisation is relatively high. For light industry, there is still a lot of room to get even further and optimise more production processes. 

And this, by the way, is not about eliminating workers, it’s really more to augment the workforce. Many countries face a shortage of workforce for many processes, specifically quality inspection, and optimisation or digitalisation provides you with the means to be more efficient and also to augment your workforce. 

Sustainability is embedded into everything Schneider Electric does. How do you share that knowledge with your customers?

We have a consulting practice, which is called Industrial Digital Transformation Services, where we help specifically mid-sized companies on their journey to digitise to become more sustainable and efficient. Here, we very much base it on our own experience as a manufacturer with more than one hundred manufacturing sites, a large part of which are digitised nowadays. 

Next, we also have a team who help and consult on electrification. So, if you have a fossil process today, how are you going to electrify it in the future? What are the preconditions, how do you need to do the design?

Finally, we also have a practice for sustainability business. So, they are the ones who can go to customers and tell them, okay, if you want to make a pledge, how do you get there? Everybody can make out the pledge and say by 2030, by 2050, or whatever, but how to get there?

What would Schneider say to customers prioritising profitability and growth over the net-zero transition?

We have proven at Schneider Electric over the last 22 years that, if you set a clear goal and work towards that goal, profitability will come by itself. It’s not always about having the cheapest labour costs.

Let me give you an example of India. Eight or nine years ago, India clearly had the lowest-cost labour force. Yet they weren’t able to export because they didn’t have the high-enough quality and the right domain expertise to serve customers outside of India. Today, we see a big emphasis in India for a more highly-skilled workforce and also for more digitisation and automation. And again, these investments are sustainable from my point of view, because in the end, they give you more profit and always pay off. 

Another example might be relying on marketplace energy prices to save money. If you have an energy efficient project that can save you between 5-10% by being sustainable, then you won’t get caught out if there’s an energy price hike. When we saw the last energy crisis in Europe, a lot of customers who did this investment pre-crisis benefited from having done these steps before. 

The most dangerous thing that you can do as an entrepreneur is rely on volatile energy prices, which are at the moment low, but which can, as we know now, change anytime.

What does Schneider's phrase ‘a new emerging industrial identity’ mean?

Industry has a legacy image. We need to make manufacturing more attractive for young talents. And there is a lot of space to grow in how you optimise manufacturing, how you lead it. That’s very attractive for young people who want to be part of this storyline.

Young people love to work with digitisation because they like to program. And that of course helps the industries to attract young talent to come into manufacturing. Not only that but virtual reality can provide digital training solutions for these young people, so you don’t need to send them into those harsh environments, you can let them train on simulators to get up to speed for the job. The digital experience is a big lever to get people better trained.

What would you say to other women in engineering who want to ascend to the C-suite?

Knowing your domain is the foundation for every good leader in our industry. I started as an R&D engineer. Yes, I have done project management, I have done supply chain management, but my backbone comes from research and development. This is important. Your technical foundation gives you the licence to lead later on. 

Then there comes a time when you have to work on your leadership skills, your soft skills, how you collaborate in a team. That leadership aspect becomes more and more important over time as you get more responsibility and grow into it. 

What would you say to any CEOs reading this who want to digitise their manufacturing business and make it more sustainable?

Any progress in digitisation efficiency starts with the leader. So, if you as an entrepreneur want to implement these kinds of steps, don’t delegate it to a consultant, don’t delegate it to one of the team members. It’s really you yourself who needs to drive it. 

Many projects fail in this space because people don't work together. You really have to pull different departments together to make digitalisation or automation projects successful. It's a lot of change management. As an entrepreneur, really make it your personal mission to make this happen.

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