Generally unknown to consumers, Schneider Electric is a mammoth supplier to organizations. The €30 billion, France-based company manufactures electrical components and provides software and other services that help clients electrify and digitize their physical infrastructure.
Digitization and electrification enable increased automation and efficiency for any physical structure that consumes energy. Such upgrades also provide a golden opportunity for increased sustainability by replacing old systems running on oil or gas.
Although almost 200 years old, Schneider’s business is decidedly forward-looking, notes Joshua Dickinson, finance chief for North America, the global company’s largest operating region with more than a third of its overall revenue.
Dickinson was promoted to the role in July 2022 after seven years with the company, which is in the midst of a $146 million capital program to expand North American manufacturing capacity and ratchet up the sustainability of its operations and products.
In October, the company underscored its commitment to sustainability by announcing a new partnership with Walmart and Danish power company Ørsted. Under the deal, five Walmart suppliers — Amy’s Kitchen, Great Lakes Cheese, Levi Strauss, J.M. Smucker, and Valvoline — agreed to collectively purchase renewable energy over 12 years under better terms than they’d have had access to individually.
CFO of North America and senior vice president, Schneider Electric
This interview has been edited for clarity and length.
Joshua Dickinson: The partnership supports Walmart’s effort to reduce the carbon footprint and greenhouse gas emissions in its value chain. We’re electrifying five suppliers, enabling them to purchase renewable energy that will come from [Sunflower Wind Farm, a facility in Kansas that Ørsted is developing].
Schneider plays a role in the opportunity for sustainability at any organization that consumes energy, which is the source of most emissions. And regardless of your political alignment, it’s emissions that are the source of most pollution.
Equipment that runs on oil and gas is a finite resource, regardless of whether it runs out in my lifetime or somebody else’s. Schneider is making sure innovation is starting and accelerating, so we can keep moving down the path of having more access to renewable energy.
Dickinson: It changes what I do because we’ve made very public comments and commitments that we will be carbon neutral and drive sustainability and renewable energy consumption through our supply chain and customer base. So I have to make sure the company makes the investments that allow us to meet those commitments.
My job would be similar even if Schneider wasn’t focused on sustainability. It doesn’t necessarily change the financial aspect of what I do. But it puts another element in play — it changes who I talk to and certain things I will focus on, and I have to make sure to incorporate it into our decision-making.
Dickinson: Having experience in the manufacturing environment is important because it represents so much of our cost structure. So while I’m not an engineer, I do have a fair amount of experience in manufacturing facilities.
But it’s not a one-person show. A big part of our organizational structure is our global supply chain, and I have peers in the company who spend their entire careers in the manufacturing environment. Others are fully responsible for the financial operations of the manufacturing facilities. From a CFO perspective, controlling and authorizing those costs forces me to take very much of a team approach.
Dickinson: The investments are partly designed to rebalance Schneider’s operations so that more is in North America. There are elements of our supply chain that definitely will benefit from being able to procure from a more local supplier.
Just from a logistics standpoint on air freight and even cargo freight, [reduced availability stemming from the COVID pandemic and other global issues] has really caused significant issues and delays, even if you’re willing to pay the costs.
I’m four months into the CFO role, so those specific investments had already been approved. Our team in the front office works closely with our sales and commercial teams to understand the demand outlook for our products and services.
Finance is aligned internally with a strategic group to identify areas where we want to continue to grow and push faster, and those where we’re looking to do less. If we decide to make more product, we partner with our supply chain group [to assess] the demand we see coming.
We look at the current utilization of our facilities, the opportunity to make them more efficient and effective, and what that will cost.
Part of my job is making sure we’re facilitating these discussions and bringing all these pieces together.