Smartly Sustainable

“We manage energy consumption & increase sustainability through EcoStruxure™ Power Deployment. We improve efficiency and security of logistics operations through automation control and IIoT solutions. As part of this program to have optimized supply chain, we have full visibility of our customer value chain, increased end-to-end throughput, and reduced logistics waste,” quips Javed Ahmad, Senior Vice President – Global Supply Chain, Schneider Electric India, during an exclusive interview…

What are the advantages of Schneider Electric’s Distribution Center? How is it going to impact the overall efficiency?

Distribution Centres (DC) are expected to accommodate a shorter, faster supply chain by supporting shortened product life cycles, and to move products as quickly as possible, so much so that DCs now are also known as “throughput centres.” They are increasingly expected to offer critical supply chain capabilities such as omni-channel capabilities, reverse logistics, return handling, and value-added services ranging from product assembly to product labelling, repacking, and repair.

The Smart DC Program, together with the Smart Factory Program, is central to Schneider Electric’s Tailored Sustainable Connected (TSC) 4.0 supply chain strategy. Schneider Electric Smart DCs deploy EcoStruxure solutions to drive end-to-end efficiency for industrial environment and sustainability in the logistics and warehousing environment.

By digitizing the Smart DC with EcoStruxure™ technologies, Schneider Electric aims to achieve increased efficiency across all layers of its operations, with the following key benefits:

a) Agile management & process efficiency – driving faster and better decisions from the teams to improve customer satisfaction and faster service. Deliver targeted outcomes by - Simplification of shop-floor management across 100+ sites by 2020. Deliver ROI in 2 years thanks to agility and efficiency.

b) Asset performance management – predictive analytics for reduced downtime and more efficient operations through real-time analytics, ML implementation, increased asset control, availability and reliability. Targeted outcomes – lower cost, higher productivity, ROI in 6 months on IIoT powered connected assets (IIoT Edge Box).

c) Empowered operators – access to real-time assets and process information, reduced time to repair, process efficiency and reliability.

d) Energy efficiency & reliability – reduced energy consumption and improved power monitoring through real-time insights delivered by EcoStruxure Resource Advisor and connected meters & Power Tag wireless energy sensors, which has shown potential energy savings of up to 30%.

What was the intent behind this launch?

Digital transformation is emerging as a driver of sweeping change in the world around us. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture. The digitization of the supply chain is perusing companies and organisations to address the new requirements of the customers, the challenges on the supply side as well as the remaining expectations in efficiency improvement. Digitization brings about a Supply Chain 4.0 which is faster, flexible, accurate and more efficient. This is what led to the launch of Schneider Electric’s first Smart DC in India. The Mumbai site demonstrates exactly how digital transformation can be successfully achieved when applied in the logistics environment. We are excited to open this facility as a showcase in the region.

Please share with us your green logistics strategy and how does this launch fit in the scheme of things?

From source to customer, we improve sustainability, efficiency and security of logistics management operations. Our green supply chain  management strategy includes:

• Reach its COP21 goal of carbon neutrality in its expanded ecosystem, by delivering more CO2 savings to its customers than its carbon footprint. Be carbon neutral in its operations by offsetting remaining emissions no later than 2025
• Achieve net-zero operational emissions and reduce scope 3 emissions by 35% by 2030 (vs 2017) as part of its validated 1.5°C SBT target
• Engage with suppliers towards a net-zero supply chain by 2050.

To that aim, Schneider will notably:

• Switch to 100% renewable electricity by 2030
• Double its energy productivity by 2030 against a 2005 baseline
• Deliver CO2 savings to the customers with EcoStruxureTM and quantify these CO2 emissions savings. The Group’s target is to enable its customers to save 120 million tons of CO2 from 2018 to 2020 (3-year cumulative).

Through this launch, we are leveraging Schneider Electric’s EcoStruxureTM solutions and showcasing these in our DCs. We manage energy consumption & increase sustainability through EcoStruxureTM Power Deployment. We improve sustainability, efficiency and security of logistics operations through automation control and IIoT solutions in our material handling systems. As part of this program to have optimized supply chain process we have full visibility to our customer value chain, increased end-to-end throughput, and reduced logistics waste.

What are your views on enhancing sustainability in supply chain?

Schneider Electric is the leader in digital transformation of energy management and automation, and has been recently given two significant environment & ethical indicator rankings at World Economic Forum, Davos. It includes a top place among the Global 100 Most Sustainable Corporations ranking of Clean Capitalism magazine Corporate Knights for the seventh year running, and a place on the Carbon Disclosure Project (CDP) “A-List” for the ninth consecutive year. The CDP’s disclosure and scoring process is seen as the gold standard of corporate environmental transparency, and the go-to source of sustainability information for customers and investors. Schneider Electric was recognized for its actions to cut emissions, mitigating climate risks and contributing to the development of a low-carbon economy.

Our supply chain management sustainable ambitions for 2020 includes:

• Clean & Safe – 100% applicable sites with ISO 14001 and ISO 50001 certifications. 100% roll out of EHS site assessments. Best available techniques for new products.
• Carbon Light & Digital – 80% electricity from Renewables. 100% sites save MWh, 10% CO2 efficiency in transportation.
• Resource Efficient & Digital – 95% waste recovery rate. 200 sites on way to zero waste to landfill. 100% cardboards and pallets for transport packing from recycled or certified sources.

In the words of our CEO, “When it comes to climate change, I’m neither an optimist nor a pessimist. I’m an Activist.”

What are the prerequisites based on which you select a 3PL?

Our partners are our strength. We have a strong process in engaging with our 3PLs. The first level of prerequisites for choosing the right partner are:

- Market position — Operational reputation and technology expertise

- Financial risk - Financial assessment

- Business – Contingency plan and Certifications

- Commercial – Pricing, SLAs and account management.

We have the same set of expectations and standards from our partners aligned to our standard global processes. In alignment with that the second level of prerequisites which are equally important to us is the 3PL approach, focus and engagement on-

- Safety

- Environment sustainability

- Quality

- Customer centricity

We believe that great people and partners make Schneider a great company.

What are the complexities that arise in managing supply chain? How do you manage that?

Some of the top Supply Chain management challenges for manufacturing companies are impacting both productivity and customer experience. They are:

GLOBALIZATION: Globalization presents several challenges to supply chains. Companies often have manufacturing operations in countries that offer lower taxes, labour costs, and transportation charges. They also have suppliers worldwide. As a result, SCM has become extremely complex. Supply chain professionals need real-time visibility into the supply chain operation to ensure manufacturing processes remain efficient. When companies sell their products globally, they must adapt to different cultures and preferences. Supply chains also need to change accordingly to ensure efficient order fulfilment.

LACK OF VISIBILITY: The lack of visibility across dependencies in the supply chain is also a challenge for managers in the current global environment. Managers often don't know where various parts for manufacturing of a product are coming from, which means they are unable to determine their true supply chain, undermining supply chain optimization.

TECHNOLOGICAL ADVANCEMENTS: As per the IDC FutureScape – Worldwide Manufacturing report, one-third of all manufacturing supply chains will use analytics-driven cognitive capabilities by 2020. It also states that by 2021, 20% of G2000 manufacturers will rely on embedded intelligence, using advanced technologies. This means coping with new cost structures, compliance measures, and supplier capabilities. At the same time, it also means re-orienting internal processes to manage faster turnarounds and drive in efficiencies.

Our Smart DC Program serves as a model for other logistics and warehousing players in India to build intelligent distribution networks and further pave the way for the region’s logistics industry to become more sustainable and efficient.

How do you foresee the logistical landscape of the country?

Over the last thirty years, logistics has undergone a tremendous change: from a purely operational function that reported to sales or manufacturing, to an independent supply chain management function. India’s aspiration to become a global manufacturing powerhouse and the government’s spotlight on ‘Make in India’ has also made a strong case for nationwide reform of supply chain, thereby prompting several federal and state-based schemes and investment incentives. In the last three years, India’s supply chain sector has seen an influx of capital, both foreign and domestic. Firms like Future Supply Solutions have raised almost US$2 billion (`130 billion) in investments from domestic and foreign channels.

Following GST implementation, the I&L sector became far more transparent and occupiers were able to reap the benefits of a single tax regime: Almost 70% of occupiers were optimistic about the impact of GST on supply chain / warehousing business and about 80% of our respondents felt that the taxation system has improved after the implementation of the GST.