Case Study on World class manufacturing : Schneider Electric

About the Company:

Schneider Electric is recognized as a world leader in the manufacture of electrical

distribution and high-tech automation and control products. They provide comprehensive
customer solutions including software, networking and a full suite of services. They offer
over 100 years of manufacturing experience and infrastructure to deliver customized
manufacturing services for low and medium volume products.
As the Global Specialist in Energy Management and market leader in industrial
automation and software. Schneider Electric enables people to experience and transform
efficiency where they live and work; from home to enterprise, across the grid and the city.
Focused on making energy safe, reliable, efficient, productive and green, the Group brings
a world where innovative individuals use collaborative solutions to make the most of their
energy, while using less of the common planet. Our market leading software and services
enable our customers to monitor, control and automate their products and processes.
Schneider Electric delivers efficient solutions that optimise energy performance while
conserving resources; across the global energy chain, enabling people to experience and
transform efficiency at home, at work, across the grid and the city.
From smart devices through to big data, Schneider Electric provides its customers with
services, systems and technology to:
Reduce energy consumed
Reduce cost per kWh
Reduce CO2 footprints
Reduce operating expenditures
Realise measurable efficiency
Produce energy locally across the grid
Beyond business solutions, they cover all the aspects of sustainable
development: society, governance and environment.

SE strategy:

Capturing the megatrends.

Leverage the worlds new energy challenges.
Build two complementary business models: Products and Solutions.
Leverage the opportunity from new economies.
Invest in profitable and responsible growth while driving efficiency.
Systems and Tools in Schneider Electric

SAP ERP system

Electronic manufacturing process documentation system
Problem-solving knowledge base
Bar code material tracking system
All processes and procedures revision controlled
ISO 14001 and 9001 certifications , Climate/humidity control

Group-wide innovation programs:

Next -Gen control systems.
Cyber-security.
Large scale real time analytics.
Sensor Technologies

SE competitive strengths:
Technological leadership in energy management.
A global and balanced presence with a strong ability to adapt to local needs.
Multiple channels of access to a broad and diffuse user base.
MANUFACTURING EXCELLENCE in Schneider Electric:

Schneider Electric manufactures industrial electrical panel boards for commercial

applications, and it is the largest employer in Peru, Indiana, a manufacturing town that has
witnessed the recent closings of five companies. While a few of Schneiders 570 employees
are the third and fourth generation to work in this plant, every single employee understands
that the livelihoods of many people in Peru now depend on Schneider. This driven
workforce, a testament to positive lean thinking and lean principles, is committed to the
continuing success of both Schneider Electric and Peru, success sustained by Lean
operations and manufacturing excellence. Schneider Electrics panel boards are big metal
boxes that house many breakers; 60% of these panel boards are made-to-order, with the
remaining 40% of production going to a warehouse. Contractors call their orders in for
specific numbers and types of breakers to be shipped directly to their job sites, be it a
grocery store, hospital, department store, or other large venue. Over 1,800 panel boards are
manufactured per day in two side-by-side facilities. When the company started to lose
market share in the early 2000s, operations went into crisis mode. Schneider experienced a
reduction in salaried workforce, suffered with low morale, and struggled to maintain
productivity levels. Schneider, a union facility, had not always enjoyed a cordial relationship
with its workforce.

Schneider Electric MES Solutions scale to bring visibility and operations performance enhancements to the
enterprise.

The movement to manufacturing excellence began in 2003 with an edict issued by the new
vice president of operations, and the subsequent replacement of the manufacturing manager,
the plant manager, and the engineering manager - all at the same time. Today, Schneider has
a manufacturing process in place that is so robust that any of these top managers could be

pulled out and Lean would not miss a beat. The company culture is now one of change with
all employees are on one or more change teams.
The company has learned how important communication,
education, and training are in order to effect change, and to further ownership and
involvement. Engineers, material analysts, and supervisors sit together so that they are
working together as a team as ideas and issues come in, to discuss potential barriers to
hitting their goals. Schneider has Lean and Six Sigma teams. Ideas from the shop floor are
encouraged no one knows the task better than the person who has done it for 30 years;
solving a problem is an important and valuable contribution, but involvement in the process
is just as important. Learn to say we and our instead of I and my. The Peru facility
stumbled in a few places early on in its Lean journey. It was a small group that formed the
original team in 2002 they were the only ones who had the books and the training from a
consulting firm. The team had a vision, but no real plan for implementation. While
management was supportive, they were not educated in Lean. And the shop floor was wary
of the unknown. Lean has many terms, acronyms, and tools and the original team
encountered resistance not only from the shop floor, but from supervisors and engineers too.
Change was not part of the culture. Then the new management team arrived, with a fresh
focus on 5S, ownership, involvement, and common goals: a team working together with not
always conflicting initiatives. Education, benchmarking and training were tools that helped
convince the union that Lean was the future. Placement of hourly associates on all teams let
the union know that they and their ideas would be part of the solution. Standardization and
visual management are key elements of Schneiders success. 5S is acknowledged as a
discipline, as a behavior to drive Lean, to keep plant areas organized and clean. The entire
plant continues to be audited monthly by measurements that show care and commitment.
Identifying waste is another component what do you see? Overcoming the hurdles of eyes
blinded by the repetitive nature of a task requires education and training.
Schneider employees have reached the point now where their lines will never
not have enough parts nor will they have too many. Water spiders deliver parts every day, all
day.
Value stream maps current and future states - can be powerful tools once they have
been made meaningful to the organization. Schneiders value stream map boards are located

in communication aisles and provide additional opportunities for education and training. If
an employee does not understand a process, they ask. Information flows continuously by
having the maps posted with Schneiders key metrics (safety, service, quality, productivity).
Every associate knows the plants goal, and their individual target to help meet that goal.
$2M in productivity may not mean very much to a metal worker, but 85 units per hour does.
LED boards and dry erase boards keep track of prior and current goals, whether hit or
missed, and why. A repetitive miss means a barrier of some sort that needs to be analyzed
and solved. Material replenishment is a hard lesson to learn, to identify what is push and
what is pull. Schneider works with a late differentiation model since there is great variation
in its mixed model product line. Results have all been positive growth in volume with no
corresponding growth in work force, tremendous improvement in safety numbers, on-time
shipments and labor productivity. As Schneider moves forward, it will focus on Six Sigma
and aligning projects to goals and celebrating its wins. Six Sigma reduces the variability of
all processes.
TECHNIQUES FOR IMPROVING OPERATIONAL PERFORMANCE

Service and Quality Meeting and exceeding customer expectations around quality,
customer service and responsiveness. Producing with minimal defects.

Scalability / Grow without Growing Providing the operational foundation to effectively

scale and support top-line growth without large increases in headcount and cost.

Cost Effectiveness Managing total costs to enhance customer and shareholder value, as
well as drive competitive advantage in the marketplace.

Flexibility / Responsiveness Adapting and responding in a timely manner to changing

customer requirements and market conditions with ease and effectiveness.

Reliability Maintaining predictable, repeatable and consistent operational performance.

Successful operational improvements are achieved by:

Building a culture around operational excellence.

Equipping and training personnel on process improvement tools and techniques.

Deploying process management technology for real-time visibility.

Establishing appropriate measures and controls to truly understand performance and

focus improvement efforts in the right areas.
WCM MODEL :
The WCM system is made up of ten technical- and ten managerial pillars, illustrated as a temple (see
below). The ten technical pillars are as follows:
1) Safety (Occupational safety)
2) Cost Deployment (Distribution of Costs)
3) Focused Improvement
4a) Autonomous Maintenance
4b) Workplace Organization
5) Professional maintenance
6) Quality Control
7) Logistics & Customer Service
8) Early equipment Management
9) People Development
10) Environment (and Energy)
And the ten managerial pillars are:
1) Management Commitment
2) Clarity of Objectives
3) Route map to WCM
4) Allocation of Highly Qualified People to Model Areas
5) Commitment of the Organization
6) Competence of Organization towards Improvement
7) Time and Budget
8) Level of Detail
9) Level of Expansion
10) Motivation of Operators

Characteristics of the World Class Manufacturing concept:

Cost Deployment is a seven-step accounting technique for assigning actual costs to each loss and
waste that happens in a factory. This way, the prioritization of which loss to attack first can be made
with economical reasoning. An additional advantage of Cost Deployment is that all improvement
work in the organization is assigned an equivalent saving potential. This motivates further
improvements, and is the best argument for convincing remaining skeptics and cynics. To do proper
Cost Deployment you need to team up persons from accounting, finance and operations.
Another key characteristic of the WCM concept, is that change always starts with a model
area. The model areas are pilots for the implementation of the principles. For example, the plant
typically chooses the worst performing machine as a model machine for the Autonomous
Maintenance pillar. Through a dedicated project, using WCM tools and techniques, this model
machine is brought back to basic condition and made the best performing machine in the plant.. A
third interesting notion in WCM, is the concept of zero. A manager in Brazil explained me:
You cant discuss with zero; once you suggest another target, youll get into all kinds of unfruitful
discussions. The target of WCM is zero waste, zero defects, zero breakdowns and zero
inventory. The model areas should prove achievement of zero for several weeks before solutions
are spread.