Written by Scott McNutt
This is the first of two posts recapping sessions from the Fall 2024 Supply Chain Forum, held November 12-14 in Knoxville, Tennessee. Attendees may watch full recordings of all of the Main Sessions at the forum in the Resources tile in the GSCI app.
The opening session at the forum featured Jennifer “Jen” Kelly, vice president of planning for Schneider Electric (SE) in North America. A global powerhouse in electrification, digitization and automation, SE is at the forefront of innovating the planning process to improve supply chain performance. It was ranked in 2023 and 2024 as the world’s leading supply chain organization.
Kelly kicked off the session with an overview of SE’s organization, operations and initiatives and how SE is applying its capabilities in electrification, digitization and automation to capitalize on five global megatrends. She then sat for a Q&A with Ted Stank, co-executive director of the Global Supply Chain Institute.
Schneider Electric: Who It Is, What It Does and Where It’s Going
Kelly first announced that Time magazine ranked the large, multinational company with around 150,000 employees worldwide as the world’s No. 1 most sustainable company.
“Over 50 percent of our employees work in our supply chain,” she said. “That’s very telling to the focus of our organization, the commitment it has, and the value we place on our global supply chain.”
Capitalizing on Global Megatrends
The five megatrends Kelly cited include climate change, the new global equilibrium, digital and artificial intelligence, energy transition and the evolution of wealth. She noted that SE can capitalize on each while benefiting other companies and consumers and contributing to overall sustainability. For example, regarding climate change, she said that companies looking to decarbonize and reduce dependency on fossil fuels are turning to electrification, of which SE is a leader.
And on artificial intelligence, Kelly observed that, “For one ChatGPT query, it takes 10 times more energy than a simple Google search,” exemplifying how the rapid growth of digital and artificial intelligence creates an enormous need for more energy. SE’s response is to rapidly scale up to support the massive demand for its data center business that powers AI.
Kelly then expanded on ways SE could capitalize on these trends, grow its business and create a more sustainable planet, calling SE’s supply chain “the land of opportunity or for continuous improvement.” In essence, SE is creating a tailored supply chain with its 20,000 unique suppliers worldwide, 153 manufacturing facilities and 79 distribution centers in 38 countries to meet the needs of its customers and end users. To achieve this, SE is driving end-to-end connectivity and visibility for customers, suppliers and vendors using structured data (i.e., data that is analyzed, organized and searchable).
Key Initiatives
Kelly’s next subject was SE’s two major initiatives: automation and anticipation and standardization and adoption.
“If we think about automation, we’re not on this journey of autonomous planning to say we’re looking to cut heads,” she explained, saying SE needs its people to meet the growth opportunities ahead linked to the megatrends.
Instead, SE wants autonomous planning for ease of use and scalability using automatic allocation, prioritization, and redistribution of orders with self-healing planning parameters.
“Some of the things we’re doing have to do with our safety stock targets,” Kelly said. “We now have a machine that will tell us a safety stock target that should give us 95 percent on-time delivery.”
She noted that SE has what it calls “human on the loop”: a team of supply planners looking at the machine’s output. They check if what the machine is delivering makes sense, and if not, recode it and feed that back to it with the intent that, in each cycle, they are teaching the machine so it gets smarter and provides a better result on the next cycle.
Kelly then turned to personnel.
“Lastly, when I think about how to bring this to life, we need people, and that’s by driving standardization and adoption,” she said, noting that SE seeks people who are strong in data analytics, critical thinking and communication and possess a hunger for continuous improvement.
“It’s super, super important that we can take this complex data, simplify it, remove supply chain jargon, and have strong, educated discussions with our key stakeholders to truly make the right decisions for the business,” she said.
She added that SE is also investing heavily in internal resources with the launch of its Planning Golden Rules, which will also drive standardization and adoption.
“It is a set of five very simple pillars focused on vendor management and accuracy, our production plan attainment, planning parameters, inventory management, and most importantly, how we’re servicing our customer,” Kelly said. “What we’ve done is tried to keep it, again, very simple. So, anyone coming to our plants can connect with the planning teams there and really try to understand their goal, purpose, and what they’re trying to drive.”
Further, SE has rolled out a detailed playbook to help teams understand the critical activities needed to drive standardization and adoption of the best practices and tools SE is deploying and transforming.
“We’ve also put in place a supply chain expert for each plant, so that those plant members have someone that they can call … they can ask them questions, help them really make it part of their culture, so every day it becomes habitual,” she explained.
All of this has led to a 15 percent improvement in SE’s customer service level with on-time delivery, a 15 percent increase in its suppliers’ on-time delivery and a reduction of about 25 percent in open purchase orders.
“Not only are we servicing our customers better, but we’re becoming a much better customer to our suppliers, which is equally important when you think about that end-to-end planning because our suppliers are truly an extension of us,” she said.
Q&A with Ted Stank
The Q&A session with GSCI’s co-executive director, who moderated the session, covered multiple areas of SE’s operations and supply chain in general.
Stank: To what do you attribute Gartner’s No. 1 Supply Chain Company Ranking?
Kelly: “I think a lot of it is the vision and the drive for autonomous planning, what we’re doing to truly connect our systems end-to-end and the digital transformation we’re on.”
She added that SE is visionary in the change it drives by shifting its products and portfolio to digital to have innovative solutions for homes and businesses.
What is the challenge of getting structured data?
“That is an area where we continue to ensure that we have the right checks and balances in place with our master data. Schneider Electric’s benefit is that they see these opportunities and invest quickly in themselves to support it.”
She further stated that SE has a Department of Master Data Governance, each team has a master data analyst, and each plant has one as well to ensure they have the right data.
“Because if we don’t have our master data right, obviously, all the outputs we’re going to get are incorrect, too,” she concluded.
Is SE’s planning capability improving its cash flow? And how does that improve sustainability?
“Our third-quarter results were recently released, so I can share that in North America, we’ve grown 15 percent in top-line versus the prior year,” she said, adding that, in the region, SE delivered about $12 billion in sales.
SE is committed to investing in innovation and expansion, capitalizing on opportunities to reach net zero by 2050. Kelly noted that SE offers an incentive bonus program for employees based on a sustainability score.
How is SE protecting itself from risks, including potential future tariffs?
Kelly said SE is working on what it calls the “power of two” to build redundancies in its supply chain so it is not dependent on Europe or Asia for components.
“Schneider Electric, historically, was a very lean organization,” she explained. “When you think about the globalization of supply chains, they did a fantastic job of being super lean, super effective. But in this day and age, being super lean globally is not the best position, which is why we’ve transitioned to supply reliability, local production and that power of two.”
Save the date
The Spring Supply Chain Forum will be held April 10-12, 2025, at the Marriott Knoxville Downtown, and you won’t want to miss it. The event is exclusive to over 80 organizations, like Schneider Electric, that partner with UT to learn, network, and recruit the best supply chain talent.
If your company is not an SCF partner, contact us to speak with a team member about either of our two corporate partnership options.
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