Schneider Electric Girds For Infrastructure, Sustainability Pushes

U.S. Country President Aamir Paul oversees strategic thrusts ranging from green-energy systems to IoT expansion.

Schneider Electric is poised to gain big from at least three developments that seem inexorable: more attention in the United States to rebuilding infrastructure with $1.2 trillion in new federal expenditures; more focus on environmental sustainability in their operations by American companies; and Schneider’s own plans for substantial new investments in three new manufacturing plants in North America.

These factors seem destined to add momentum to recent news from the company that third-quarter earnings were up by 9%, a record across all geographic regions for the provider of processing and energy systems and technologies that is based in Rueil-Malmaison, France.

“By leveraging digitization and focusing on resiliency efforts, we’ve been able to enhance the capabilities of our advanced technologies, hardware and software,” said Annette Clayton, CEO and president of Boston-based Schneider North America, at a recent company summit for its customers and partners.

Aamir Paul is presiding over how the company addresses these opportunities in the United States as country president of Schneider Electric. He told Chief Executive that the nation’s long-delayed push to improve its infrastructure includes a number of elements that play into his company’s capabilities and growth plans.

“How can we make sure this time that we get it right?” Paul said. “First is the use of digital. Think about how we build things today, even buildings, with digital twins and technology—it’s a much bigger part of design and construction now. So before you start doing things, you can design and test and validate them, when major capex is involved. That didn’t exist two decades ago. You can bring in information from the existing infrastructure before the shovel hits the ground.

“Second,” Paul said, “with a [40-year] high in inflation, you can’t spend without plan. It has to be documented and codified in digital technologies.”

“Third, think about some of the things we are working on to fix our basic infrastructure: airports, ports with the Los Angeles congestion. Issues we saw in Flint [Michigan] with water distribution. Clean water shouldn’t have to be the topic of conversation in the United States.”

Paul said that infrastructure revitalization also must occur without over-stressing existing infrastructure that has demonstrated frailty, including power grids in California and Texas and in the Eastern U.S. And he’s intrigued by the possibilities in the new infrastructure spending for the Internet of Things and the sensors it will deploy.

“When you can connect 500 billion things, you can fundamentally change industries,” he said. “And it had better have that impact, because sustainability questions can’t be solved without it.”

For Schneider Electric and other huge companies, sustainability and mitigating climate change has become part of “a realization that this is part of a corporate responsibility and that markets and capital institutions will reward companies that get this right,” Paul said. “It’s not just a moral issue but a financial and operating issue. Think of the asset classes with the highest input of new net capital: Now there is a race to say what is truly sustainable. Who’s actually doing the work? Show me the proof of your work. How are you going to get to carbon neutral?

“There will be a separation of [companies] that are really committed to this, and smart capital will support it,” he said, adding, “The generation coming out of college today is picking where they want to work. They want companies that are sustainable.”

Besides working with its customers to advance true sustainability systems and metrics, Schneider Electric is focusing on helping them become more resilient. The power-grid freezeout in Texas last year helped make its case that green-energy solutions are the way for manufacturers and other operators to go.

“Every company in Texas now is saying, ‘How can we be better? Do we burn more fossil fuels and have backup generators?’ That’s expensive and goes against the idea of sustainability. The better options are solar solutions and battery storage and a combination of lower-intensity backup-power solutions.

“Reactions to weather environments are forcing [companies] to be more thoughtful about these things. Meanwhile, the debate about the intensity and progression of climate change isn’t any longer a debate but rather, how fast can we deploy modern technologies?”

Customers such as Walmart are coming to Schneider Electric for help with how to push carbon-cutting initiatives and solutions down into their supply chains so that the giant retailer could accomplish its goals for its environmental footprint. “There’s no vaccine for climate change,” Paul said. “It requires system participation from all actors.”

Schneider Electric recently announced that is going to build three new manufacturing plants in North America and hire more than 1,000 new employees to boost output and speed the delivery of electrical products to customers across the continent. Company officials are evaluating locations in New Mexico and Texas for the U.S. manufacturing site. The company also is focusing on shortening its regional supply chain through more than one hundred alternate suppliers and secured strategic buys of industry-constrained raw materials.

Overall, Paul said, the company is building more resilience into its own supply chain with such moves as well as more automation and use of software. “Globalization has created too much risk in terms of how far away things are,” he said. “So at least we want optionality and ideally want sources closer to where we are.”


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.