Investor Day

February 22, 2012

Tailored Supply Chain

Annette Clayton
EVP, Global Supply Chain

Disclaimer
All forward-looking statements are Schneider Electric
managements present expectations of future events and are
subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described
in the forward-looking statements.

Our Global Supply Chain figures at a glance

Purchasing

11B of purchases

Manufacturing

260 plants
48 countries

Logistics

110 distribution
centers
~400,000 SKUs

Total industrial headcount (incl. Purchasing, Manufacturing and Logistics)

75,000 employees
Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

What have we done?

Focused execution of our priorities led to

important improvement of our supply chain

Footprint

Match geographical and

currency exposure to
our customer base

SKU reduction & brand

rationalization

Simplification

Supplier concentration
Local supply chain

Move to low cost

Lean Manufacturing
Continuous improvement
2004-2008

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

Footprint & Lean Manufacturing

Continuous improvement
2009-2011

We also adapted to a tough and fast changing

environment in the past few years
Increased supply chain complexity

Sharp swings in sales during One

From 2004 to 2011

Portfolio

Japan supply
chain crisis

businesses

+8%
+12%

Acquisitions:

Growth

Sharp
rebound

plants

-16%
distribution
centers

Footprint

Unprecedented
drop in sales

2008

2009

2010

2011

sales in new economies

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

We generated a significant amount of industrial

productivity with new2 and One
Fixed manufacturing costs
substantially reduced

Gross industrial productivity

600

from 8.8%* of sales in

2004 to 5.9%* of sales in
2011

500
400

~300m p.a.

~330 m p.a.

300

More efficient plants

200

From 2004 to 2011:

100
0

Sales

2005 2006 2007 2008 2009 2010 2011

.
*
Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

Number of plants

Manufacturing Base Cost before Development Cost

and depreciation & amortisation
7

We have rebalanced our industrial footprint

2004

2008

2011

New economies
Mature countries

26%

32%

39%

18%

41%

46%

Sales in new
economies

Cost of good
sold in new
economies

We matched our industrial footprint to our customer footprint

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

Our priorities for the next

3 years

We will bring our supply chain to a new level

of excellence
Tailored supply
chain
Simplification

Simplification

Footprint &
Lean

Footprint &
Lean

Footprint &
Lean

Continuous
improvement

Continuous
improvement

Continuous
improvement

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

10

Enhance and differentiate our supply chain

based on customer buying behaviors
Customer
segments

Supply chain models

Delivery
model

Customer satisfaction
Distribution
partners

Standard
products

Make
to Stock

Equipments

Make
to Order

Model 2

Systems

Configure
to Order

Model 3

Services

Engineer
to Order

Model 1

A true differentiator to fit

customer needs
Reduced lead time

Direct
partners

End-users

Model N

Higher inventory
efficiency
Reduce bad inventory while
increasing good inventory
Better cash management

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

11

6 initiatives to support our supply chain

transformation
Planning

Build best-in-class
planning process by
customer segment

Accelerate
IT capability
Align IT strategy with
supply chain
segmentation
strategy and targeted
process capabilities

Purchasing

Step up purchasing ability to drive

proactive planning of procurement

Footprint
optimization

Critical component footprint

management to improve our leadtime management

Supply Chain
flow re-design

Lead time reduction through plant

and Distribution Center footprint
and flow design optimization

Transportation
rationalization

Increased partnerships with

selected carriers to improve
customer service

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

12

Significant savings targeted for 2014 while

raising efficiency and customer satisfaction
Customer satisfaction

Inventory efficiency

Improve net
customer promoter
score

Reduce inventory
level by ~2 pts of
sales by 2014

Schneider Electric - Investor Day Tailored Supply Chain February 22, 2012

Productivity

Industrial
productivity
savings of 0.9bn
to 1.1bn by 2014

13

Help people make the

most of their energy