As the first person from the top management of Schneider Electric to come to China three years after the outbreak of the epidemic, Barbara Frei, the global executive vice president of Schneider Electric and the head of industrial automation business, shared with us her very full and busy trip to China.
"China is one of the most important markets in the world for us. It is not only the market with the largest single volume of Schneider Electric's industrial automation business, but also contributes a huge growth momentum and innovation." Barbara Frei said, "This trip to China has given me a lot of inspiration, and I am impressed by the speed and agility of China's rapid response."
It is precisely out of the high importance attached to the Chinese market that Barbara Frei came to the side of Chinese partners and attended the signing ceremony of Schneider Electric China Research Institute - Automation R&D Center and the 20th anniversary celebration of Wuxi base, which also made a clear statement for continuing to deepen China and increase R&D investment in China.
In Barbara Frei's view, China is changing from a world factory and a world market to a world innovation center. With the continuous enhancement of intellectual property protection, Schneider Electric hopes to "feed back" global innovation with China's local innovation. This is not only the reason for setting up multiple R&D centers in China, but also an example of the continuous upgrading of the strategy in China.
"We will continue to research, develop and manufacture products in China, form large-scale innovation effect, and export to the world, which will be a very open process." Barbara Frei spoke firmly.
Made in China into a global blockbuster
It is an emerging trend for China's local innovation to "feed back" global innovation, and it is also an opportunity that global giants who have long cultivated in China hope to seize.
Schneider Electric, which welcomed the first native president in China more than ten years ago, is a pioneer of multinational enterprises in China to open up deep localization. From selling technology and products to the Chinese market, to placing manufacturing plants and supply chains in China, and now more and more R&D centers and regional headquarters are located in China, the localization strategy of foreign investment in China has more dimensions.
Schneider Electric continues to strengthen the strategic layout of "Multi Hub" in China, and has established a China Hub integrating technology, research and development, supply chain, sales and service. Today, China has become one of the four major R&D bases of Schneider Electric in the world, including Shanghai, Shenzhen, Xi'an, Beijing and five R&D centers to be located in Wuxi, with more than 2000 R&D personnel and more than 2800 patents.
Seven months ago, Schneider Electric Industrial Automation China R&D Center - IA China Hub was newly upgraded, aiming to respond to local demand with local R&D, integrate international quality and local innovation, help build an elastic supply chain at Chinese speed, and promote sustainable growth of local business. In November this year, Schneider Electric signed a cooperation agreement with the Management Committee of Wuxi National High tech Industrial Development Zone to establish Schneider Electric China Research Institute - Automation R&D Center in Wuxi, which will also be the fifth largest R&D center set up by Schneider Electric in China. Since then, Schneider Electric has once again strengthened its industrial layout in China and around the world, accelerated the construction of the local supply chain, and shortened the chain of innovation and marketization. While driving the local innovation and development, Wuxi R&D Center will also provide strong support for the strategic layout of scientific and technological innovation integration in the Yangtze River Delta of China.
For Schneider Electric, China's local innovation "feeds back" the world, including two situations.
One is that more and more Chinese teams participate in global projects aimed at global market research and development;
The other is the "original" products developed, designed and produced by the Chinese team based on the needs of the local market, which are sought after by overseas markets and become global blockbusters. Such a trend is also being significantly enhanced.
A vivid data is that Schneider Electric specially developed and produced a frequency converter product for the Chinese market. In recent years, the export growth has exceeded 100%. The story of Chinese original becoming a global blockbuster is happening more and more.
only when there is a market can there be investment power, and investment can promote greater innovation competitiveness.
"At present, Schneider Electric devotes 5% of its operating income to research and development every year. The growth performance of related businesses also gives us more confidence. In the future, we will continue to increase our innovation and research and development in China.". Barbara Frei proposed that, facing the future, Schneider Electric would increase its investment in innovation and research and development in R&D personnel, testing facilities, production and other aspects.
At the same time, Schneider Electric is also increasing its continuous investment in production and supply chain building, aiming to further enhance its resilience and have higher production capacity in China.
In recent years, affected by uncertainties such as the COVID-19 epidemic, the global supply chain has faced severe challenges. Deepening localization is the best way for Schneider Electric to cope with new demands and rapid changes in the environment.
Barbara Frei said that how to enhance the resilience of the supply chain has become a difficult problem for enterprises. In this regard, Schneider Electric has a good solution.
First, promote localization of production and manufacturing.
"In any case, the supply chain needs backup solutions or redundancy." Barbara Frei explained that redundancy is not only the production link, but also the procurement link. This is why Schneider Electric insists on investing in its manufacturing capacity - facing the Chinese market, most of the products provided by Schneider Electric can be produced in more than 20 Chinese factories. Benefiting from the advantages of short supply chain and fast response speed, Schneider Electric can quickly adjust to meet user needs in the face of demand changes and order changes.
Second, localization of upstream supply chain.
"We will choose localized suppliers in the Chinese market. At present, more than 1600 Chinese suppliers of Schneider Electric can provide the vast majority of parts and raw materials procurement, and the localized procurement rate has reached more than 90%." Barbara Frei proposed that in order to better assist the growth of suppliers, it needs a lot of investment and efforts to help them improve their supply capacity, so as to jointly improve the quality and level of product delivery and further enhance the resilience and stability of the supply chain.
Third, localization of decision-making.
Barbara Frei said that for the local market, Schneider Electric has more choice to delegate decision-making power to the direction closer to the market, so that the Chinese team has more decision-making power at the market level. Schneider Electric China has a complete team and full autonomy in terms of industrial strategy, lean production, quality, system assurance, planning, safety system, etc. The local team can give feedback in a timely manner according to the needs of the market and users.
Customizing solutions for green and low-carbon
Under the background of the "double carbon" goal, the demand of the Chinese market is changing fundamentally.
Barbara Frei pointed out that customers' needs in the past were more like "transactional processes", that is, Schneider Electric finished the process when it provided products and delivered them to customers. After China proposed the goal of "double carbon", the enterprise needs to focus more on the "integrated delivery" of the whole set of solutions. Schneider Electric first provides consultation for enterprises, then formulates a suitable transformation and upgrading roadmap according to the actual situation, and finally provides corresponding software solutions and hardware solutions, so as to achieve the goals one by one.
Barbara Frei believes that China, as a manufacturing power, is leading the world in industrial transformation. For common situations such as labor shortage, enterprises need automation transformation, including process automation and data based process optimization. "This trend will not only continue in the future, but also continue to accelerate".
At the same time, in the process of helping customers reduce carbon, achieve the "double carbon" and sustainable goals, more than 80% of the world's dioxide is related to energy, and the energy waste rate exceeds 60%. In the industrial field, enterprises need to gradually improve efficiency, reliability and productivity, while achieving sustainable development, easily respond to market changes and meet customer needs.
based on climate change and the above mentioned changes in customer demand, as an expert in digital transformation in the field of global energy management and automation, Schneider Electric's current two major concerns are, first, continuous electrification to effectively reduce energy consumption. Second, continuous digitalization, through a series of software and hardware solutions, realizes the collaborative management and whole process optimization of industrial chain design, construction, operation and maintenance. In other words, electrification and digitalization are the key driving forces, and they are also the key driving factors to promote green and intelligent industrial development in China and even the world.
Barbara Frei explained that in terms of electrification, electric energy is the most efficient energy and the best carrier to achieve zero carbon emissions. The global energy structure is transforming from fossil energy to new energy. The traditional rigid power energy system with one-way flow is also transforming to a new power system with complementary production and consumption and multi energy integration. This involves a lot of renewable energy, such as wind energy, hydropower, solar energy and so on. The relevant businesses in this field are booming in China.
Data shows that the growth rate of demand for electrified energy in the future will be more than twice that of demand for other forms of energy; 70% of the world's new energy will be in the form of renewable energy.
