SE Circularity

Prepared for:

circularity plan

Circularity Mission Statement

At Schneider Electric, we are dedicated to achieving a Circular Economy through innovation, collaboration, and responsible practices We design and enable circular solutions, optimize resource consumption, collaborate and innovate with partners, educate and empower stakeholders, and measure and report our progress. Together, we transform our business operations, products, and services to foster sustainability and create a more sustainable future.

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INDEX

1 The Team p 4-5

2. What is the Circular Economy? p. 6-7

3 SE Circularity Plan Framework p 8-9

4. Ten Key Steps p. 10-11

5 SE Circularity Goals p 12-13

6 Objectives p 14-15

7. Challenges p.16-17

8 Single Source Partnering p 18-19

9. Recommended Logistics Partner p. 20-21

10 Recommended Packaging Partner p 22-23

11. Circularity Packaging "Storefront" p. 24-25

12 Packaging Development Costs 26-27

13 Reusable Packaging Checklist p 28-29

14. Location Mapping - Hubs p. 30-31

15 Master Circularity Hub (MCH) Role p 32-33

16. SE Hub & Spoke Routings p. 34-35

17 Fixed Routings p 36-37

18. Counter Routings p. 38-39

19 Inbound Vendor Materials Flow p 40-41

20 Recycling Strategy p 42-43

21 Central Processing p 44-45

22 End-of-Life Strategy p 46-47

23. Key Performance Indicators (KPIs) p. 48-49

24 Financial Benefits p 50-51

25. Decarbonization p. 52-53

26 Continuous Improvement p 54-55

27 Team Requirements p 56-57

28 Process/Function/Ownership p 58-59

29 Appendix p 60

30. Contacts p. 67

circularity

It All Starts With a TEAM!

The Schneider Electric Circularity Team is an essential entity within the company, dedicated to driving sustainable improvements and better efficiencies. By establishing itself internally, the team creates a unified identity and purpose, fostering a sense of cohesion and collaboration With a distinct logo, clear mission statement and compelling designs, the Circularity Team can effectively communicate its mission and initiatives to stakeholders, employees, and partners This visibility and recognition are crucial for garnering support, engagement, and participation from all levels of the organization By existing as a known entity, the SE Circularity Team can coordinate systems, implement best practices, and facilitate the integration of circular principles across Schneider Electric Their presence ensures a focused approach towards achieving sustainability goals, reducing waste, and maximizing resource efficiency. Through their concerted efforts, the SE Circularity Team plays a vital role in transforming Schneider Electric into a leader in sustainable practices and a champion of circular economy principles

The Schneider Electric Circularity Team not only needs to establish itself internally but also maintain constant messaging and engagement with internal customers. By consistently reinforcing the importance of circularity and sustainability, the team can create a culture of awareness and accountability within the organization Through regular communication channels, such as newsletters, intranet updates, and workshops, the team can educate employees about the benefits of circular practices and inspire them to actively participate in the company's sustainability efforts By engaging with internal customers, such as different business units or departments, the Circularity Team can understand their unique needs and challenges, tailor solutions, and provide guidance on implementing circular strategies This collaborative approach fosters a sense of ownership and involvement, ensuring that everyone is aligned towards the common goal of achieving a more sustainable and circular future. By establishing internal customer engagement as a priority, the Circularity team can harness the collective power of the entire organization, driving innovation, and accelerating the adoption of circular practices throughout Schneider Electric

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circularity

Circularity Defined:

The Circular Economy is an economic system that aims to maximize resource efficiency and minimize waste by rethinking the traditional linear model of production, consumption, and disposal. It is based on the principles of designing out waste and pollution, keeping products and materials in use for as long as possible, and regenerating natural systems In essence, the circular economy seeks to create a closed-loop system where resources are continuously cycled back into the economy, rather than being extracted, used once, and then discarded

The circular economy operates on three key principles:

Designing out waste and pollution: In this principle, products are designed with the goal of eliminating waste and pollution from the outset. This involves incorporating principles such as durability, recyclability, and the use of non-toxic materials. The aim is to ensure that products can be easily disassembled, repaired, or recycled at the end of their life cycle, rather than becoming waste

Keeping products and materials in use: This principle focuses on prolonging the lifespan of products and materials by promoting reuse, repair, and refurbishment Instead of a linear "take-make-dispose" model, the circular economy encourages businesses and consumers to embrace practices such as sharing, leasing, and remanufacturing By extending the life of products, the need for new resource extraction is reduced, leading to less waste and environmental impact.

Regenerating natural systems: The circular economy recognizes the importance of restoring and regenerating natural resources and ecosystems It emphasizes the use of renewable energy sources, the conservation of water, and the preservation of biodiversity. By adopting sustainable practices and technologies, the circular economy aims to minimize the depletion of natural resources and the negative impacts on ecosystems

Every Great Plan Starts with a Strong Foundation:

This Plan Framework for Schneider Electric Power Products Circularity Team's includes the following key goals and focus areas:

Total elimination of Single-Use Plastics (SUP)

Waste Reduction and Diversion (WRD)

Transport Cycle Reduction (TCR)

Central Circularity Hub for Product/Materials Disposition, Recycling, or Reuse

Transition from Vendor to a Partnership Model

Development of a Corporate Packaging Standard (CPS)

Adoption of Reusable Packaging and Stackable Solutions

Increased use of Recycled and Up-Cycled Materials for Packaging

Creation of Refurbishment/Reconditioning Operation (RRO)

Development of a Central Communication Standard (CCS)

Efficient Asset Management to Improve Security and Visibility

By following this framework, Schneider Electric can effectively drive their circularity program, promoting sustainability/decarbonization, reducing waste, and optimizing processes The Centralized Hub Operation serves as a pivotal component in achieving these goals, enabling streamlined processes and fostering a culture of sustainability throughout the organization

Ten Steps to Operational Circularity:

Assess Current Operations: Conduct a comprehensive assessment of the company's existing processes, waste generation, resource consumption, and environmental impact. Identify areas with the highest potential for circularity improvements. (see: Circularity Scorecard)

Set Clear Goals: Define specific and measurable goals for the circular economy implementation, such as waste reduction targets, increased use of recycled materials, or product life extension.

Design for Circularity: Rethink product design and packaging to prioritize circular principles Focus on durability, reparability, recyclability, and use of eco-friendly materials Explore opportunities for modular design and product life extension strategies.

Establish Reverse Logistics: Develop a robust system for product take-back, collection, and recycling Implement processes to recover and repurpose materials from end-of-life products Collaborate with recycling partners and establish partnerships for responsible disposal

Optimize Resource Management: Implement strategies to minimize resource consumption and maximize resource efficiency Explore closed-loop systems, such as reusing wastewater, implementing energy-saving measures, and reducing raw material inputs through recycling and remanufacturing

Engage Suppliers and Stakeholders: Collaborate with suppliers to source sustainable materials and components. Encourage suppliers to adopt circular practices and reduce their environmental footprint. Foster partnerships with stakeholders to promote circularity throughout the value chain

Enable Circular Procurement (CP): Incorporate circularity criteria into procurement processes, prioritizing suppliers with sustainable practices, reusable packaging options, and extended producer responsibility.

Implement Circular Business Models (CBM): Explore innovative business models such as product-as-a-service, sharing platforms, or leasing options Shift from a linear "take-makedispose" model to a circular model that emphasizes product longevity and value retention.

Educate and Engage Employees (3E): Provide training and awareness programs to educate employees about the circular economy and their role in achieving circularity goals Foster a culture of sustainability and encourage employee participation in circular initiatives.

Monitor, Measure, and Improve (MMI): Implement robust tracking and monitoring systems to measure progress towards circularity goals Continuously evaluate performance, identify areas for improvement, and adjust strategies accordingly Regularly communicate achievements and challenges to stakeholders to maintain transparency and accountability.

By following these steps, Schneider Electric can establish a comprehensive circular economy that maximizes resource efficiency, minimizes waste, and promotes sustainable practices throughout its operations.

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Specific, Focused and Measurable Goals:

To achieve circularity in Schneider Electric's supply chain, it is crucial to set Specific Goals and measure progress towards those goals Key areas to focus on include waste diversion, such as reducing landfill waste through recycling and composting, and increasing the use of reusable packaging materials By setting measurable targets and tracking the volume of waste diverted and the adoption of reusable packaging solutions, SE can monitor progress and identify areas for improvement

Additionally, goals should be established to address single-use plastic reduction, metals reclamation, recycling rates, single-source transport providers, damage reduction, and systems standardization and centralization. Measuring the reduction in single-use plastic usage, the percentage of metals reclaimed, the recycling rate of materials, the consolidation of transport services, the decrease in product damage, and the level of systems standardization provides tangible metrics to assess the company's circularity efforts By regularly monitoring and analyzing data related to these goals, SE can make informed decisions, drive continuous improvement, and demonstrate their commitment to building a circular supply chain.

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Circular Economy Plan for Schneider Electric:

Objective: To fully integrate the principles of the circular economy into Schneider Electric's operations and solutions, driving sustainability, resource efficiency, and economic growth, while prioritizing standardization, centralization, reusable packaging, transportation reduction, security, and visibility

Design for Circular Solutions: a. Incorporate circular design principles into product development, ensuring durability, recyclability, and the use of non-toxic materials, while adhering to relevant industry standards b Collaborate with industry associations and regulatory bodies to drive standardization efforts, ensuring compatibility and interoperability across Schneider Electric's product lines c Implement centralization strategies in product design to simplify repair, refurbishment, and material recovery processes.

Product Life Extension: a Develop comprehensive repair and refurbishment programs for Schneider Electric products, establishing standardized procedures and guidelines b Utilize centralized repair centers equipped with state-of-the-art facilities and trained technicians to ensure high-quality repairs and maximize product lifespan. c. Implement reusable packaging solutions for product shipping and returns, minimizing waste and promoting closed-loop material flows d Implement comprehensive tracking and traceability systems to monitor the lifecycle of products and components, ensuring security and visibility throughout the value chain

Digitalization and Data-driven Solutions: a Utilize digital technologies, such as IoT, AI, and data analytics, to optimize resource utilization, energy efficiency, and material recovery processes b Develop centralized platforms for data collection, analysis, and decision-making, enabling real-time monitoring and optimization of resource usage. c. Leverage digital tools to provide customers with visibility into their energy consumption, facilitating informed decision-making and behavior change. d Integrate blockchain technology to enhance security, traceability, and transparency of supply chains, ensuring the integrity of circular economy practices

Collaborative Networks and Business Models: a. Foster collaboration with suppliers, customers, and industry stakeholders to drive circular economy initiatives and promote standardization b Develop partnerships with packaging suppliers to design and implement reusable packaging solutions, reducing waste and enhancing resource efficiency c Collaborate with logistics providers to optimize transportation routes, reduce emissions, and consolidate shipments to minimize environmental impact. d. Encourage circular economy-oriented business models, such as product-as-a-service, sharing platforms, and circular leasing, to maximize product utilization and reduce waste generation

Employee Education and Stakeholder Engagement: a Provide comprehensive training and educational programs for Schneider Electric employees on circular economy principles, standardized processes, and digital tools b Engage with suppliers, customers, and industry associations to promote the importance of standardization, centralized processes, and reusable packaging c Collaborate with local communities to raise awareness about the benefits of the circular economy and encourage responsible consumption and recycling practices.

Performance Tracking and Reporting: a Establish key performance indicators (KPIs) to monitor progress in standardization, centralization, reusable packaging, transportation reduction, security, and visibility b Regularly track and report on waste reduction, packaging reuse rates, transportation emissions, and data security measures. c. Conduct regular audits and certifications to ensure compliance with industry standards and regulations related to circular economy practices d Communicate transparently with stakeholders through sustainability reports, highlighting achievements and progress in standardization, circularity, and resource efficiency

By implementing this comprehensive plan, Schneider Electric will strengthen its position as a leader in the circular economy, driving sustainability, minimizing waste, enhancing resource efficiency, and ensuring standardized, secure, and visible processes throughout its value chain

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Anything Worth Doing - Challenges to Implementation:

Implementing circular economies into supply chains can pose significant challenges for companies These challenges typically revolve around change management, limitations in time, money, and resources. Overcoming these hurdles requires strong sponsorship from top-level management and the alignment of all business units

Change Management: Transitioning to a circular economy requires a fundamental shift in the way a company operates and thinks about its supply chain. This transformation involves changes in processes, technologies, and mindsets. Resistance to change, lack of awareness, and internal politics can hinder progress Effective change management strategies, including clear communication, employee engagement, and training programs, and especially Sr Management engagement and support are essential to overcome resistance and drive successful implementation.

Time Limitations: Implementing circular economy principles takes time It requires the assessment and redesign of products, processes, and supplier relationships Integrating circularity into the supply chain may involve finding alternative suppliers, establishing new partnerships, and developing recycling or take-back programs. The time required for research, planning, and execution can be a challenge, especially for companies operating in fast-paced industries A long-term perspective and patience are necessary to navigate this process

Financial and Resource Constraints: Implementing circular economies may require upfront investments in technology, infrastructure, and new business models These investments can strain a company's financial resources Additionally, companies may face limitations in terms of expertise, personnel, and infrastructure to support circular initiatives To overcome these challenges, SE needs to allocate sufficient budgets, prioritize circular projects, and explore partnerships to share costs and resources. However, when properly implemented Circular Economies will provide significant costs savings through reduction in transport cycles, reclamation of valuable materials, less waste due to reduction in redundant purchases and reuse and sharing of materials through multiple facilities

To address these challenges effectively, Schneider Electric must have strong sponsorship from toplevel management This ensures that the circular economy initiative receives the necessary support, resources, and strategic direction. Leadership commitment is crucial for driving organizational change and securing buy-in from stakeholders

Furthermore, it is essential to have all business units on board Siloed approaches can hinder progress and limit the integration of circular practices across the supply chain. Engaging all business units, including procurement, operations, logistics, and marketing, fosters cross-functional collaboration and facilitates the alignment of goals and strategies Clear communication of the benefits and opportunities of a circular economy can help generate enthusiasm and participation from all levels of the organization

By addressing change management, time limitations, and resource constraints while gaining sponsorship from top-level management and involving all business units, SE can overcome challenges and successfully implement a total circular economy into the supply chain This will lead to greater resource efficiency, reduced waste, and long-term sustainability.

A Different, Powerful Concept Shift from Vendors to Partners:

While seeming counter to the traditional procurement concept of having multiple sources, partnering with a single-source providers offers numerous advantages for companies seeking to optimize their operations and embrace a circular economy Firstly, consolidating transportation, packaging and other services with a single partners enables cost savings By eliminating the need to manage multiple vendors, Schneider Electric can negotiate better pricing and leverage economies-of-scale This streamlined approach minimizes overhead costs associated with coordination, communication, and administration, resulting in significant cost efficiencies.

Additionally, partnering with a single-source providers enhances visibility and communication throughout the supply chain With a single points of contact, SE will benefit from improved visibility into shipment statuses, tracking information, and overall logistics operations. This real-time information allows for better planning, more accurate forecasting, and proactive problem resolution The single-source partner acts as a central hub of information, providing a "single point of truth" that ensures clear and consistent communication, reducing the risk of miscommunication or misunderstandings

Moreover, this collaborative partnership approach fosters stronger relationships and a sense of shared responsibility Working with a single-source partners creates a long-term, strategic partnerships rather than a transactional relationship with multiple vendors The provider becomes invested in Schneider Electric's success and actively works towards shared goals, such as sustainability and circularity This alignment promotes proactive problem-solving, continuous improvement, and the development of innovative solutions to optimize operations and drive the circular economy forward.

In summary, partnering with a single-source providers offers cost savings, enhanced visibility, streamlined communication, and a collaborative partnership These benefits contribute to the optimization of overall operations, supporting SE's robust circular economy goals. By consolidating transportation, packaging and other services, SE will unlock efficiencies, promote sustainability, and drive continuous improvement throughout the supply chain operations

Rights Size, Services and Experience:

We believe that AIT Worldwide is the ideal partner to support Schneider Electric in establishing a ground-up circular economy Thier agile and responsive nature, coupled with their optimal size and strategic positioning, positions them as the perfect collaborator to swiftly implement sustainable practices

With their extensive experience in global transportation spanning over 40 years, AIT possesses the necessary expertise to guide Schneider Electric in building a circular economy model from the ground up. AIT's comprehensive range of services, including customs clearance, warehouse management, and white glove services, enables them to provide end-to-end support throughout the logistics process

What sets AIT apart is their ability to operate quickly and efficiently. As a well-established company, they possess the necessary resources and infrastructure to swiftly implement sustainable initiatives By leveraging their strong global network and logistics expertise, AIT can help Schneider Electric establish a circular economy framework that aligns with their goals and values

Furthermore, AIT's optimal size ensures a personalized and dedicated approach. They are wellpositioned to cater to Schneider Electric's unique requirements and provide customized solutions that drive the circular economy AIT's commitment to quality and their scalable, user-friendly technology further enhance the collaboration, ensuring a seamless and efficient transition towards a sustainable logistics model.

In summary, AIT's agility, optimal size, and industry experience make them the ideal partner to assist Schneider Electric in establishing a ground-up circular economy Their ability to operate quickly, coupled with their personalized approach and comprehensive services, positions AIT as the perfect collaborator to guide Schneider Electric towards sustainable logistics practices.

https://www.aitworldwide.com

RECOMMENDED LOGSITICS PARTNER

Technology:

Open API enables real-time order fulfillment, inventory status updates, and custom reporting

The online portal provides visibility for all stakeholders to track open orders and obtain proof of delivery

EDI billing streamlines the sales-to-cash cycle by eliminating paper invoicing and email exchanges

BI tools analyze data trends to assist with planning, forecasting, and optimizing routing to reduce the number of trucks used and minimize CO2 emissions.

Operations:

AIT employees have an average length of service of 9 8 years, bringing valuable intellectual capital for efficient operations.

TSA certification ensures enhanced security with card swipe entry and comprehensive surveillance systems

Same-day order pulling and shipping are standard practices, with the ability to provide ground and air expedited services nationwide and globally

AIT's operations are ISO 9001 and GMP certified, reflecting adherence to rigorous quality standards and regulatory compliance

Customer Service:

A control tower service model is implemented for large accounts, offering a dedicated team for prompt assistance and executive oversight.

AIT aims to exceed client expectations by proactively addressing problems and providing timely updates and solutions

Standard Operating Procedures, Key Performance Indicators, and Statement of Works are collaboratively managed with clients to define success.

AIT's Quality Management System collects data throughout the shipment lifecycle, enabling quarterly performance evaluations based on client feedback

Reusable Packaging - A Primary Key to Circular Success:

Choosing LARC as a single-source freight packaging partner is a strategic decision for Schneider Electric, given LARC's expertise in reusable packaging, custom-engineered solutions, and commitment to the circular economy. By consolidating LARGE PART packaging procurement with LARC, Schneider Electric can reap numerous benefits. Firstly, LARC's expertise in reusable packaging ensures that Schneider Electric can adopt sustainable practices and reduce waste by utilizing packaging materials multiple times, contributing to a more environmentally friendly approach

Moreover, LARC's ability to provide custom-engineered packaging solutions aligns perfectly with Schneider Electric's unique requirements This partnership allows for the development of packaging designs tailored specifically to Schneider Electric's products, optimizing protection, efficiency, and space utilization. By utilizing LARC's expertise, Schneider Electric can enhance its packaging solutions, improving product safety during transportation and minimizing the risk of damage or loss

Single-sourcing packaging procurement with LARC brings additional advantages, including cost savings through economies of scale and simplified supplier management. By consolidating packaging needs with one trusted partner, Schneider Electric can negotiate favorable pricing, streamline procurement processes, and benefit from consistent quality across its packaging materials This single point of contact simplifies communication, enhances collaboration, and ensures efficient problem resolution, ultimately driving operational efficiencies and cost optimization.

In summary, partnering with LARC as a single-source packaging provider allows Schneider Electric to leverage their expertise in reusable packaging, custom-engineered solutions, and commitment to the circular economy. This collaboration not only supports sustainable practices but also brings cost savings, customized packaging solutions, and streamlined supplier management By embracing a single-sourcing approach, Schneider Electric can optimize its packaging procurement, enhance operational efficiency, and further its commitment to a circular economy

https://www.larc.co

Online Circularity Storefront - A One-Stop Shop!

An online "Circularity Storefront" approach can be leveraged by Schneider Electric to centralize standard packaging-type designs across the company, leading to significant environmental benefits. By implementing an online store where internal "customers" can requisition multiple standard package types, Schneider Electric streamlines its packaging processes and capitalizes on economies of scale, while also prioritizing sustainability

The centralized system provided by the online storefront ensures consistent packaging throughout the company, promoting interchangeability and reducing waste By standardizing packaging designs, Schneider Electric minimizes the need for excessive packaging variations, resulting in a more efficient use of resources and a reduction in environmental impact Moreover, the centralized approach eliminates the need for customers to source packaging individually, reducing carbon emissions associated with transportation and minimizing the company's ecological footprint.

Centralizing standard packaging designs also facilitates economies of scale, allowing Schneider Electric to optimize its environmental efforts By consolidating packaging requirements across various business units, the company can leverage bulk ordering and negotiate with suppliers to prioritize eco-friendly packaging materials This not only reduces overall packaging expenses but also promotes the use of sustainable options, such as recycled or recyclable materials, further advancing Schneider Electric's commitment to environmental stewardship

Furthermore, the interchangeability of standardized packaging materials enables resource optimization and waste reduction Different business units within Schneider Electric can easily share and exchange packaging materials, minimizing unnecessary packaging waste and maximizing efficiency This contributes to a more sustainable and circular approach to packaging, where resources are utilized effectively and waste is minimized throughout the company's operations.

Implementing a storefront to centralize standard packaging-type designs at Schneider Electric not only streamlines operations and achieves cost savings but also fosters environmental responsibility By standardizing packaging, leveraging economies of scale, and promoting resource optimization, Schneider Electric reduces its environmental footprint, supports sustainability goals, and contributes to a more environmentally conscious circular economy

CIRCULARITY PACKAGING STOREFRONT

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Money Makes the World Go Round:

To facilitate the adoption of new reusable containers within Schneider Electric, it is crucial to address the initial costs associated with tooling or engineering for such containers, as they can serve as a limiting factor. To overcome this obstacle, it is recommended that Schneider Electric's Circularity Team creates a discretionary budget specifically dedicated to expediting the adoption of new reusable packaging solutions This budget would provide the necessary funds to approve new packaging development, including engineering and design, as well as partial funding for tooling

To replenish the capital invested in the development of these new solutions, Schneider Electric can offer the newly developed packaging to the respective business units or plants at a discounted price during the initial 12 or 24 months of use This price level would allow for the recouping of a portion of the Circularity Team's budget investment in the new packaging The Circularity Team would be responsible for justifying the expense and closely monitoring the savings and other metrics associated with its use.

The primary objective is to prioritize projects that demonstrate both justified savings and significant sustainability benefits, even if they may lack immediate approval due to a lack of sponsorship within the business units or tight short-term budget constraints. By effectively implementing this strategy, the Circularity Team budget can be replenished from the savings generated by the new reusable packaging. This, in turn, not only helps fund ongoing sustainability initiatives but also accelerates the development and adoption of other innovative packaging solutions

Through this approach, Schneider Electric can establish a self-sustaining cycle where savings from reusable packaging investments fuel further advancements in sustainable packaging, leading to long-term cost reductions and increased environmental benefits

PACKAGING DEVELOPMENT COSTS

Once the new reusable packaging solutions have been successfully developed and implemented, Schneider Electric can integrate them into the Circularity Storefront The Circularity Storefront serves as a centralized platform where standardized packaging types, including the newly developed ones, can be showcased and made available to various business units and plants within Schneider Electric.

The Circularity Storefront acts as an internal marketplace, offering a wide range of standardized packaging options that adhere to sustainability and circularity principles These packaging types could include reusable crates, containers, and other innovative solutions designed to optimize the supply chain while minimizing environmental impact.

By incorporating the new reusable packaging solutions into the Circularity Storefront, the Circularity Team enables easy access for business units and plants across the organization This centralized platform streamlines the process of sourcing sustainable packaging, ensuring consistency in design, quality, and environmental performance.

The Circularity Storefront provides numerous advantages It offers visibility into the available packaging options, allowing business units and plants to make informed decisions based on their specific needs and sustainability goals. Standardization of packaging types promotes scalability, as reusable containers can be deployed across multiple locations, reducing the need for individualized solutions and fostering resource optimization

Furthermore, the Circularity Storefront facilitates transparency and knowledge sharing within Schneider Electric. It serves as a hub for information on the benefits, performance, and usage guidelines of different packaging options This empowers teams to select the most suitable packaging solutions, leveraging the expertise and insights gathered through the Circularity Storefront

Overall, the integration of standardized packaging types, including the newly developed reusable containers, into the Circularity Storefront ensures efficient and sustainable procurement practices within Schneider Electric It enables the organization to fully embrace circularity by providing a one-stop platform for accessing environmentally friendly packaging solutions that drive cost savings, reduce waste, and enhance overall supply chain sustainability

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Quality Checklist for Reusable Crates and Packaging in a Circular Supply Chain:

Durability: Ensure that the crates and packaging are made from high-quality materials that can withstand repeated use and handling without compromising structural integrity Check for any signs of wear, cracks, or damage that may affect their functionality

Cleanliness and Hygiene: Prioritize cleanliness and hygiene by thoroughly cleaning and sanitizing the crates and packaging after each use Implement appropriate cleaning procedures and inspection protocols to maintain a hygienic and safe environment for the products being transported

Functionality: Assess the functionality of the crates and packaging to ensure they meet the specific requirements of the supply chain Verify that they can effectively protect the products during handling, transportation, and storage Confirm that closures, fasteners, and handles are in good working condition

Traceability and Identification: Implement a system to track and identify the reusable crates and packaging throughout their lifecycle Use unique identifiers, labels, or RFID tags to facilitate easy identification and traceability, allowing for efficient asset management and control

Repairability: Evaluate the ease of repair for damaged crates and packaging. Assess whether they can be repaired or refurbished to extend their useful life Establish a process for promptly addressing any repairs or replacements needed to maintain the quality and functionality of the assets

Compatibility: Verify that the crates and packaging are compatible with the products they are designed to transport. Ensure proper sizing, padding, and customization options to accommodate various product shapes, sizes, and fragility levels

REUSABLE PACKAGING CHECKLIST

Load Capacity and Stacking: Evaluate the load capacity and stacking capabilities of the crates and packaging to optimize storage and transportation efficiency. Verify that they can withstand stacking without compromising the integrity of the products or the crates themselves

Standardization: Encourage standardization of crate and packaging designs across the supply chain to ensure compatibility, ease of handling, and efficient utilization of resources. Align with industry standards and collaborate with suppliers to establish common specifications

Inspection and Quality Control: Implement regular inspections and quality control measures to identify any defects or issues with the reusable crates and packaging. This may include visual inspections, structural integrity checks, and functionality testing. Address any identified problems promptly

Training and Education: Provide training and educational resources to personnel involved in handling and using the reusable crates and packaging. Ensure they understand the importance of maintaining quality standards, proper handling procedures, and the significance of their role in the circular supply chain

Mapping Overview - Clear Visibility:

Schneider Electric's North American map analysis indicates that San Antonio, Texas, is the ideal location for a Master Circularity Hub (MCH) due to several compelling factors. Firstly, San Antonio's central position on the map ensures proximity and easy accessibility to all Schneider Electric locations across North America. This strategic placement significantly reduces transportation costs and transit times, optimizing the efficiency of the supply chain network

Another key advantage of San Antonio is its close proximity to major transportation lanes The city is situated near major highways and interstates, facilitating seamless connectivity and efficient movement of goods to various Schneider Electric locations Additionally, its proximity to international border crossings allows for streamlined operations with the Mexico plants, enabling smoother coordination and reduced lead times.

San Antonio's location in the Central Time Zone (CST) is another significant benefit. This time zone alignment ensures better coordination and synchronization of operations between Schneider Electric's North American facilities, avoiding challenges associated with time differences It fosters efficient communication, collaboration, and decision-making, contributing to overall operational effectiveness

Furthermore, San Antonio offers a range of other positives for establishing a MCH The city has a robust infrastructure, including warehousing and distribution facilities, as well as a skilled workforce experienced in logistics and supply chain operations. It also boasts a favorable business environment, with supportive policies and incentives for companies in the manufacturing and distribution sectors. These factors, combined with San Antonio's central location, accessibility, and time zone advantage, make it an ideal choice for Schneider Electric's Master Hub in North America

Nashville, Tennessee, is an ideal choice for an Eastern Sort Hub for Schneider Electric due to its strategic location in the Eastern Region of the United States With easy access to major transportation arteries and proximity to key markets, Nashville (Smyrna) allows for efficient sorting and distribution, reducing transit times and improving supply chain efficiency Similarly, San Bernardino, California, serves as a prime location for a Western Sort Hub, benefiting from its proximity to major ports, transportation hubs, and extensive logistics infrastructure. Establishing hubs in these strategic locations enables Schneider Electric to optimize its supply chain operations, improve transit times, and effectively serve customers in both the Eastern and Western regions of the United States

Note: proposal is based on location of facilities and does not take into account external facilities (CMs or DCs) volumes of cargo, flows of cargo or existing densities of truckloads.

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Every Circle Has a Center:

The Schneider Electric Master Circularity Hub (MCH) (San Antonio, TX) plays a pivotal role in Schneider Electric's circularity program, serving as a central hub, sort and disposition facility within the larger Hub & Spoke operation. As the Central Sort facility, it consolidates products and materials from various locations and streamlines the sorting process, ensuring efficient distribution and resource optimization This centralization enables better inventory management, reduces transportation costs, and facilitates the reuse and repurposing of products within the circular economy framework

Additionally, the MCH serves as a vital center for repair, refurbishment/reconditioning, and recycling activities It will collect and sort retired, used and surplus equipment and will send to third party facilities dedicated to repairing and refurbishing products, extending their lifecycle and reducing waste If executed properly this could be a significant revenue recapture opportunity Going with third party already established operators will be the fastest way to implement this program and avoid the long delays and high costs of setting up internal SE facilities/operations. Moreover, the hub acts as a recycling center for valuable materials like copper and other metals, promoting responsible disposal practices and facilitating the recovery and reuse of valuable resources This focus on repair, refurbishment, and recycling aligns with Schneider Electric's commitment to sustainability and resource conservation

Furthermore, the MCH serves as a storage facility and auction house for abandoned or refurbished products By centrally managing these products, Schneider Electric can optimize their value and reduce waste through appropriate channels Additionally, the hub acts as a central purchasing hub for packaging and other bulk purchase commodities, consolidating procurement efforts and leveraging economies-ofscale. Lastly, the MCH acts as a central point of communication, facilitating seamless coordination between various stakeholders, including suppliers, business units, and customers, ensuring efficient operations and timely information exchange within Schneider Electric's circularity program

Hub & Spoke Transport Network:

Implementing a Hub & Spoke transport network is essential for achieving the Schneider Electric circular economy goals by cutting costs, improving environmental scoring, and building efficiencies through standardization, centralization, and visibility This approach involves establishing central hubs that consolidate shipments, optimizing transportation routes, and maximizing vehicle utilization by moving to set scheduled truckloads that are shared among multiple regional facilities. By doing so, SE can significantly reduce costs associated with fuel consumption, vehicle miles traveled, and logistics operations, contributing to improved profitability and resource efficiency

Furthermore, a Hub & Spoke transport network plays a crucial role in environmental sustainability. Concentrating shipments at central hubs will enable SE to optimize packaging design, reduce waste generation, and minimize carbon emissions by utilizing more efficient transportation modes

Additionally, standardizing processes, centralizing operations, and enhancing visibility provides SE with better control and insights into the supply chain. This results in improved decision-making, streamlined workflows, and enhanced internal and external customer service, ultimately driving operational efficiencies and contributing to the circular economy goals

A3ROUTE

WEST LINE

SOUTH LINE

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CENTRALHUB

WEST HUB

D ROUTE

D2 ROUTE LTL

CENTRALHUB

Fixed Routings Build Significant Efficiencies:

Implementing fixed truckload routings on a schedule within a structured Hub & Spoke network will bring numerous benefits to Schneider Electric's Circular Goals, including reduced total transit cycles, cost savings, and time efficiency Establishing predetermined routes and schedules, SE can optimize transportation operations, minimizing unnecessary stops, , detours, and delays and reduces "crossdocking" and the high touch points of LTL shipping This streamlined approach leads to improved transit times, ensuring products reach their destinations promptly, in better condition and enabling better planning and coordination across the supply chain.

Moreover, utilizing fixed truckload routings within a Hub & Spoke network enhances visibility and security Predefined routes and schedules, will provide better control and oversight of shipments SE can better track the movement of goods more accurately, providing real-time visibility into the transportation process This enhanced visibility allows for proactive monitoring, timely interventions, and effective problem resolution, resulting in improved customer satisfaction and reduced risks of theft or damage

In addition to the operational benefits, implementing fixed truckload routings within a structured Hub & Spoke network contributes to a more sustainable and environmentally friendly approach. By optimizing transportation routes and making transport a shared economy within the company's network, SE can minimize empty miles, reduce fuel consumption, and decrease carbon emissions This approach aligns with the principles of a circular economy by maximizing resource utilization and minimizing waste, promoting greater efficiency and environmental stewardship.

FIXED ROUTINGS

ROUTING CONCEPT

2,265 Miles - 48-56 Hrs Truck Departs SAT HUB Once Every Two Days (48 Hrs)

Counter Routing Trucks for Optimization

1.Departure: Both trucks start their journey from a central distribution point simultaneously, heading in opposite directions

2 Route Split: The overall route is divided into two equal halves Each truck is assigned one of the halves for the initial drop-off phase

3.Drop-Off Phase: Each truck begins by delivering the goods to their respective destinations along their assigned half of the route. This ensures that the first half of the delivery is efficiently covered by each truck

4 Passing Point: The trucks are planned to pass each other at a predetermined point along the route, ideally equidistant from the central distribution point This point will act as the transition point for the trucks to switch their routes.

5 Route Switch: At the passing point, the trucks exchange the remaining goods for their return journey This ensures that the trucks are always loaded with deliveries, minimizing empty travel

6 Pick-Up Phase: After switching routes, each truck starts its pick-up phase, collecting goods from the locations where the other truck has made deliveries. This ensures that the second half of the delivery is covered by the truck that initially covered the other half.

7 Return Journey: Each truck now travels back along the opposite half of the route from where they started Since they have already made deliveries on the first half, the return journey is focused solely on picking up goods

8.Return to Central Distribution Point: Once the second half of the route is completed, each truck heads back to the central distribution point, completing their logistics operation Trucks are unloaded and sorted for next routing distribution

This logistic breakdown allows for a constant flow of drop-offs and pickups throughout the route, minimizing empty travel time, and ensuring efficient utilization of both trucks. The passing points and route switches enable the trucks to cover the entire route with a balanced load, maximizing efficiency and reducing overall transportation costs

Upper Route Truck

Last In -First Off Sequence

Drop Off SMR, MRV, SMR

Pick- Up WLC, SNC, CLB - SORT @ NSH

Lower Route Truck

Last In -First Off Sequence

Drop Off CLB, SNC, WLC

Pick-Up GSO, MRV, SMR - SORT @ NSH

Return Trucks after Final Pick-Up

No Specific Loading Sequence - Will Go Through Sort @ NSH

Transport for Raw Materials In-Flow - Another Opportunity:

Use of the Schneider Electric Hub & Spoke Network can also offer a streamlined approach for materials and inbound supplies from vendor locations to reach SE facilities within regional zones quickly and within the circular network. By leveraging this network structure, the materials can be efficiently directed to the closest facility of Schneider Electric or AIT Worldwide and then onward to final destination using the fixed route network This proximity reduces the overall freight transport distance from vendor locations and uses the already established network, resulting in shorter transit times and enhanced efficiency Once the materials arrive at the nearest facility, they seamlessly enter the standard hub and spoke system, where they are consolidated with other shipments destined for various locations. This optimized process not only reduces transportation costs but also minimizes resource use, as it eliminates the need for lengthy detours and excessive travel distances

By utilizing the Hub & Spoke Network, Schneider Electric can achieve significant benefits in terms of cost reduction and resource optimization. The network's design allows for the materials and inbound supplies to be efficiently injected into the system, ensuring a seamless flow towards their final destinations The consolidation of shipments within the standard Hub & Spoke system enables economies-of-scale and maximizes the utilization of transportation resources As a result, the overall freight transport is shortened, reducing fuel consumption and greenhouse gas emissions.

Additionally, by minimizing the distance traveled and streamlining the supply chain, Schneider Electric can achieve cost savings while promoting sustainable practices The Hub & Spoke Network thus serves as an effective solution for enhancing the efficiency, cost-effectiveness, and environmental sustainability of material and inbound supply transportation.

INBOUND VENDOR MATERIALS FLOW

Schneider Electric Facility or HUB

AIT Warehouse or Agent

circularity

Taking Out the Trash...Not Exactly:

Schneider Electric can leverage its Master Circularity Hub as a central gathering point for all recyclable materials, providing a streamlined and efficient process for managing these resources By utilizing the hub as a central collection and sorting facility, Schneider Electric can benefit from the following advantages:

Centralized Material Management: The Master Circularity Hub serves as a central point for collecting recyclable materials from various locations within Schneider Electric's operations This centralized approach ensures efficient logistics and reduces the need for separate collection and management processes at individual sites

Comprehensive Sorting and Segregation: At the Master Circularity Hub, the gathered recyclable materials, including wood, paper, and metals like copper and steel, can be properly sorted and segregated This allows for the identification and separation of different materials, maximizing their recycling potential and reducing contamination

Local Recycling Partnerships: Schneider Electric can establish partnerships with local recycling operations and facilities. By selling the sorted materials to these local recyclers, the company contributes to the circular economy and supports sustainable practices within the community.

Vendor Collaboration for Metal Recycling: Metals like copper and steel can be returned to the original vendors for resmelting This collaboration enables Schneider Electric to obtain credits on future purchases of new materials, encouraging a closed-loop system and incentivizing sustainable procurement practices

Environmental and Sustainability Gains: By effectively managing recyclable materials through the Master Circularity Hub, Schneider Electric significantly reduces waste, minimizes the need for raw material extraction, and decreases the environmental impact associated with manufacturing. These efforts align with the company's commitment to sustainability and contribute to a circular economy model.

To implement this approach, Schneider Electric can establish clear guidelines and agreements with recycling partners and vendors, ensuring smooth material flow, quality standards, and revenue-sharing models The company can also develop robust reporting and tracking systems to monitor the flow of recyclable materials, measure performance, and communicate progress to internal and external stakeholders.

By utilizing the Master Circularity Hub as a central gathering point and implementing effective sorting and recycling strategies, Schneider Electric demonstrates its commitment to environmental stewardship, resource optimization, and the circular economy principles

circularity

A Simple...But Powerful Solution:

Schneider Electric can greatly optimize its supply chain operations by implementing a standardized labeling system, which assigns unique codes to each factory location using the location code (i.e. CLB is Columbia, SC on Route "A") and the routing code for or specific process such as Scrap, Refurbishment, Recycle, or Sortation. By utilizing these labels, products and cargo can be seamlessly moved and easily identified for sort through the "milk runs" of the Hub & Spoke System, streamlining the logistics process.

The Master Circularity Hub (MCH) serves as the central location for all these processes, facilitating efficient coordination and monitoring. The benefits of standardizing this labeling process are manifold. Firstly, it enhances traceability and visibility across the supply chain, enabling real-time tracking of products and resources. Secondly, it simplifies inventory management, ensuring accurate stock levels and reducing the risk of errors or misplacements. Thirdly, it promotes operational efficiency by optimizing routing and resource allocation based on the standardized labels. Overall, this standardized process improves productivity, reduces costs, and enables Schneider Electric to effectively embrace circularity in its operations. With labels provided to each SE location, the implementation becomes seamless and enables consistent practices across the organization.

As part of the standardized labeling process, Schneider Electric can introduce dedicated and specifically labeled bins in each plant for different types of materials, such as "Copper Scrap." These bins would be strategically placed within the factory premises. Once these bins are filled, the "milk run" trucks can efficiently collect them and transport them to the Master Circularity Hub (MCH). At the MCH, the contents of these bins can be weighed, sorted, and prepared for the proper centralized partner specializing in reclamation or recycling. Once empty these bins are then returned to the appropriate factory/location on the next milk run. This streamlined approach ensures that all recycling, up-cycling, or recaptured materials are handled appropriately and sent to the relevant partners, maximizing the circularity of Schneider Electric's operations and most importantly data can be captured on KPI's and performance of each factory in hitting Sustainability and Circularity goals. By providing clear labels for each plant and bin, the process becomes more efficient and reduces the likelihood of errors or mix-ups during the collection and sorting stages.

Out with the Old...in with the New:

Schneider Electric has a unique opportunity to develop a comprehensive product End-of-Life (EOL) strategy that maximizes value while prioritizing environmental sustainability. One highly effective approach is to establish partnerships with third-party refurbishing companies and leverage their expertise and established infrastructure By doing so, Schneider Electric can efficiently and responsibly manage the process of sending old, unused, or returned products to the Master Circularity Hub, where they will be sorted and distributed to these refurbishers for resale on secondary markets.

One of the major advantages of partnering with established refurbishing companies is the significant time savings it offers Building an internal system to handle product refurbishment can be a lengthy and resource-intensive process. By tapping into the existing capabilities of third-party refurbishers, Schneider Electric can expedite the implementation of their product end-of-life strategy, ensuring a quicker and smoother transition This allows them to start reaping the benefits and maximizing value recovery without delay

Another key advantage lies in the operational savings achieved through these partnerships. Refurbishing companies have already developed streamlined processes and expertise in product restoration, enabling them to optimize the value recovery from returned or unused products By leveraging their capabilities, Schneider Electric can reduce costs associated with refurbishment, such as labor, equipment, and logistics. This translates into significant operational savings and ensures that the products are refurbished to high-quality standards, maximizing their market value and desirability to potential buyers.

Additionally, embracing a third-party refurbishment approach brings substantial environmental and sustainability gains By refurbishing and reselling products, Schneider Electric can extend their lifecycle and divert them from becoming waste in landfills. This significantly reduces the environmental impact associated with the production of new products Moreover, refurbishment often requires fewer resources and consumes less energy compared to manufacturing new items, resulting in reduced carbon emissions and conservation of valuable natural resources By partnering with refurbishers who share their commitment to sustainability, Schneider Electric can amplify their environmental efforts and contribute to a more circular economy.

EOL as Marketing Strategy:

Once the system of partnering with third-party refurbishers is successfully established, Schneider Electric can extend this offering to its existing customers By encouraging customers to return their old, outdated, or obsolete equipment, Schneider Electric can facilitate responsible disposal and create a closed-loop system. Customers could be incentivized with the opportunity to receive a discount or credit towards the purchase of new and updated Schneider Electric products.

This approach brings several advantages for both Schneider Electric and its customers Firstly, it allows customers to responsibly dispose of their outdated equipment, avoiding the potential environmental harm associated with improper disposal methods. By returning the equipment to Schneider Electric, customers actively contribute to the circular economy and reduce the overall impact on the environment Secondly, by offering incentives such as discounts or credits, Schneider Electric encourages customers to invest in new and more efficient products, promoting technological advancement and sustainability This initiative aligns with Schneider Electric's commitment to providing innovative and environmentally friendly solutions.

Furthermore, implementing a customer return program strengthens the relationship between Schneider Electric and its customers It fosters a sense of partnership and demonstrates the company's dedication to supporting the entire product lifecycle. By engaging customers in the circular economy, Schneider Electric can build customer loyalty, increase customer satisfaction, and differentiate itself as a sustainability leader in the industry

Overall, extending the product end-of-life strategy to customers for returning old equipment and providing incentives for purchasing new products brings numerous benefits. It enhances environmental sustainability, promotes technological advancement, and strengthens customer relationships By establishing a comprehensive system that encompasses both internal and external refurbishment processes, Schneider Electric can truly embody a circular approach that maximizes value, minimizes waste, and drives positive change within the industry.

Measure Everything...15 KPIs

Key performance indicators (KPIs) that SE can use to measure the success of its circularity program:

Waste Diversion Rate: The percentage of waste that is diverted from landfills through recycling, reusing, repurposing, or composting initiatives.

Material Recycling Rate: The percentage of recyclable materials that are successfully recycled and reintroduced into the production process

Product Reuse Rate: The percentage of products or components that are refurbished, repaired, or reused instead of being discarded

Resource Recovery Rate: The percentage of valuable resources recovered from waste streams, such as metals, plastics, or energy

Circular Design Integration: The number or percentage of products or packaging designs that incorporate circular principles, such as recyclability, reparability, or use of recycled materials

Extended Product Life: The average lifespan extension achieved for products through repair, refurbishment, or remanufacturing processes.

Supply Chain Transparency: The level of transparency achieved in the supply chain, including traceability of materials and compliance with sustainability standards

Carbon Footprint Reduction: The amount or percentage of greenhouse gas emissions reduced through circularity initiatives, such as energy-efficient processes or reduced material consumption.

Water Usage Reduction: The amount or percentage of water saved through water-efficient practices or closed-loop systems

Cost Savings: The monetary savings achieved through waste reduction, resource recovery, and operational efficiencies resulting from circularity programs.

Customer Engagement: The level of customer engagement and satisfaction with circularity initiatives, measured through surveys, feedback, or customer loyalty metrics

Partnership Collaborations: The number or quality of partnerships established with suppliers, customers, or other stakeholders to enhance circularity efforts and leverage shared resources

Circular Economy Training and Awareness: The number of employees trained or educated on circular economy principles and their understanding of the company's circularity goals and initiatives

Regulatory Compliance: The company's adherence to local, national, and international regulations related to waste management, recycling, and environmental sustainability

Stakeholder Reporting: The frequency and quality of reporting on circularity progress and performance, including public disclosures, sustainability reports, or certifications.

KEY PERFORMANCE INDICATORS

Circularity is a Financial Win:

Transitioning to a circular supply chain brings significant financial benefits to Schneider Electric. By implementing single-source partnerships instead of working with multiple vendors, SE can streamline their procurement processes and negotiate better pricing Consolidating services with a trusted partner creates a shared services model avoiding redundant functions, reduces administrative costs, simplifies invoicing and payment processes, and improves overall supply chain efficiency.

Moreover, incorporating a Hub & Spoke transport system into the supply chain can result in cost savings

The Hub & Spoke model optimizes transportation routes, reduces empty miles, and improves resource utilization. By centralizing distribution and leveraging a network of spokes, SE can achieve better load consolidation, reduce transportation costs, and minimize fuel consumption. This efficient transport system lowers operational expenses while maintaining reliable and timely deliveries

Furthermore, a circular supply chain reduces the reliance on new raw materials and will enable SE to reuse and refurbish products. This not only saves on material costs but also reduces expenses related to production, such as energy consumption and waste disposal By extending the life of products through refurbishment and reselling, SE can generate additional revenue and capture value from items that would have otherwise been discarded

Overall, by embracing single-source partnerships, implementing hub and spoke transport systems, and integrating circularity principles into the supply chain, SE can realize substantial financial benefits, including cost savings, improved resource utilization, and revenue generation from product recovery and resale

Decarbonization Benefits of Hub & Spoke Networks:

Reduced Carbon Emissions: Hub & Spoke networks can significantly contribute to decarbonization efforts by optimizing transportation routes and reducing overall carbon emissions By consolidating shipments at central hubs and using more efficient modes of transport, such as trains or electric vehicles, companies can minimize the number of vehicles on the road and decrease fuel consumption, resulting in lower greenhouse gas emissions

Efficient Resource Allocation: Hub & Spoke networks enable better resource allocation and utilization, leading to reduced energy consumption and carbon emissions. By strategically planning routes and consolidating shipments, companies can minimize empty miles and maximize the capacity of each vehicle This reduces the need for multiple vehicles traveling independently, leading to more efficient use of fuel and reduced carbon footprint

Renewable Energy Integration: Decarbonization efforts can be further enhanced by integrating renewable energy sources into hub operations As the system grows Schneider Electric can explore powering their hubs with renewable energy, such as solar or wind, reducing reliance on fossil fuels and decreasing carbon emissions associated with energy consumption By adopting renewable energy solutions, hub and spoke networks can operate with a lower carbon footprint and contribute to a cleaner energy future.

Modal Shift to Sustainable Transport: Hub & Spoke networks provide an opportunity to shift transportation modes towards more sustainable options such as Electrified Vehicles (Note: AIT is now utilizing Electrified Semi Trucks creating "Green Zones" for other Enterprise Level Customers). By prioritizing greener transport modes like truckload, rail or barge for long-distance travel between hubs and utilizing last-mile delivery methods that minimize emissions, such as electric vehicles or bicycles, companies can significantly reduce carbon emissions associated with transportation

Collaboration and Shared Resources: Hub & Spoke networks promote collaboration and shared resources among different stakeholders, enabling more sustainable practices By coordinating shipments and consolidating resources at central hubs, companies can reduce the number of vehicles on the road and optimize load capacities This collaborative approach leads to improved efficiency, reduced emissions, and a shared commitment to decarbonization across the network.

Decarbonization Benefits of Reusable Packaging:

Reduced Material Production and Waste: Reusable packaging significantly reduces the need for single-use packaging materials, such as cardboard boxes or plastic containers By using durable and long-lasting packaging solutions, companies can minimize the production and disposal of packaging waste, thereby reducing the carbon emissions associated with material extraction, manufacturing, and waste management

Lower Transportation Emissions: Reusable packaging often allows for better product stacking and utilization of transport space, optimizing logistics operations and reducing the number of shipments required. This leads to fewer vehicles on the road and decreased fuel consumption, resulting in lower greenhouse gas emissions Additionally, the lighter weight and compact design of reusable packaging can further contribute to fuel efficiency during transportation

Energy-efficient Packaging Production: Reusable packaging is typically designed for durability and multiple cycles of use Compared to single-use packaging, which requires continuous production and disposal, reusable packaging can be manufactured with more energy-efficient processes This includes using recycled materials, implementing eco-friendly manufacturing techniques, and minimizing the overall energy consumption and carbon emissions associated with packaging production.

Extended Product Lifespan: Reusable packaging solutions can extend the lifespan of products by providing adequate protection and minimizing damage during transportation and storage This reduces the need for replacements or rework, thereby reducing the carbon footprint associated with manufacturing and distributing new products By maximizing the lifespan of products through reusable packaging, companies can achieve significant decarbonization benefits

Circular Economy Principles: Adopting reusable packaging aligns with the principles of a circular economy, where resources are kept in use for as long as possible. By implementing closed-loop systems for packaging, companies can minimize resource extraction, promote recycling and reprocessing of materials, and reduce overall carbon emissions Reusable packaging supports the circularity of resources and contributes to a more sustainable and low-carbon economy

circularity

Continuous Improvement, Continuous Gains:

Continuous improvement is a critical aspect of a circular logistics system as it enables companies to adapt and refine their operations to maximize efficiency and sustainability In the context of circularity, continuous improvement involves identifying areas of opportunity for optimization, implementing innovative solutions, and consistently monitoring performance to drive ongoing enhancements. This iterative process helps companies identify waste reduction opportunities, streamline processes, and identify new methods to close material loops within the supply chain

By embracing continuous improvement in the circular supply chain, SE can uncover ways to minimize waste generation, increase resource recovery, and reduce environmental impact This may involve evaluating packaging designs to promote reusability and recyclability, implementing technologies that enable more precise inventory management, or exploring alternative transportation methods that minimize carbon emissions. Additionally, continuous improvement fosters a culture of innovation and collaboration, encouraging employees to contribute ideas and share best practices that can further enhance the circularity of the logistics system

Continuous improvement in circular logistics not only drives operational efficiencies, but also supports the achievement of broader sustainability goals. Through ongoing evaluation and refinement, SE can uncover new opportunities for waste reduction, cost savings, and environmental stewardship By continually striving for improvement, SE can stay at the forefront of circular logistics practices, leading to more resilient and sustainable supply chains

Team is Critical to Circularity Success:

Building a true circularity program at Schneider Electric requires a focused full time multidisciplinary team comprising various key members. The team should include Circularity Team Leads who oversee the strategic vision and implementation of the circularity program Logistics and Supply Chain professionals are essential to optimize transportation, warehousing, and distribution processes to support circular practices Operations team members play a crucial role in implementing circularity principles within manufacturing, repair, and refurbishment operations.

Finance experts are necessary to assess the financial viability and impact of circular initiatives, such as calculating cost savings from waste reduction or analyzing the return on investment for circular supply chain solutions. Purchasing and Procurement professionals are responsible for engaging with suppliers to source sustainable materials, prioritize reusable packaging, and evaluate circular product options. Senior Executive sponsorship is crucial to provide the necessary resources, support, and strategic direction for the circularity program

Additionally, successful implementation may require collaboration with other departments such as Product Development and Design to integrate circular design principles, Marketing and Communications to promote circular initiatives to internal and external stakeholders, and Sustainability and Environmental Health and Safety teams to ensure compliance with relevant regulations and certifications Engaging employees across the organization and fostering a culture of circularity is also vital for the program's success, requiring strong change management and employee engagement capabilities within the team.

circularity

Operating a circular supply chain requires a clear focus on process, function, and ownership to ensure its effectiveness Here are key areas within the supply chain that demand specific levels of ownership and accountability:

Partner Services: Establish partnerships with suppliers, vendors, and service providers aligned with circular objectives. Clearly define roles, responsibilities, and contractual agreements to foster collaboration. Maintain ownership of partner relationships through regular communication and address any issues promptly

Visibility: Maintain real-time visibility throughout the supply chain to track materials, products, and resources Utilize data management and technology integration to collect and analyze information for process improvement. Ownership of visibility processes ensures accurate and up-to-date information is available to all stakeholders.

Logistics/Transport: Coordinate and optimize transportation of goods to minimize waste and environmental impact Take ownership of logistics processes by planning efficient routes, selecting sustainable transport modes, and exploring alternative options Reduce carbon footprint by using electric vehicles and consolidating shipments.

Facilities: Own and manage facilities that support circular operations, including recycling centers, repair workshops, and remanufacturing plants Ensure proper maintenance, compliance with environmental regulations, and efficient utilization of these facilities Responsible ownership ensures their effectiveness in supporting circular practices

Security: Protect materials, products, and intellectual property through effective security measures. Take ownership of security processes by implementing access control, surveillance systems, and cybersecurity protocols Responsible handling and disposal of hazardous materials are crucial components

Communications/Training: Foster effective communication and provide training to promote a circular mindset among employees, partners, and stakeholders. Develop clear messaging, conduct training programs, and establish regular communication channels. Ownership of communication processes ensures awareness of circular initiatives and individual roles in achieving sustainability goals

Engineering: Drive circularity through responsible engineering practices Incorporate circular design principles, conduct lifecycle assessments, and collaborate with cross-functional teams Take ownership of engineering processes to encourage innovation and sustainable product development.

APPENDIX

This section reserved for additional documents.

Marketing/Communication Flyers

Design for Durability: Create products and packaging that are built to last, considering the intended lifespan and ensuring high-quality materials and construction. This principle aims to minimize the need for frequent replacements and maximize the utilization of resources.

Design for Reuse: Develop products and packaging that can be reused multiple times without compromising their functionality or performance. This principle encourages the use of durable materials, standardized designs, and easy disassembly for maintenance, repair, and refurbishment.

Design for Recyclability: Design products and packaging with materials that can be easily and efficiently recycled at the end of their useful life. Consideration should be given to material selection, labeling, and compatibility with existing recycling infrastructure to facilitate the recycling process.

Design for Remanufacturing: Incorporate design elements that enable products and components to be disassembled and reprocessed into new or refurbished products. This principle promotes the efficient use of materials and encourages the closed-loop recycling of valuable resources.

Design for Resource Efficiency: Optimize the use of resources throughout the product lifecycle, from raw material extraction to manufacturing, distribution, and disposal. This involves minimizing waste, energy consumption, and environmental impact at every stage of the product's journey.

Design for Biomimicry: Draw inspiration from nature's circular systems to develop sustainable solutions. Mimic natural processes and ecosystems to create products and processes that are efficient, regenerative, and aligned with the principles of the natural world

Design for Collaboration: Foster collaboration and partnerships across the value chain to enable the efficient flow of materials, information, and resources. This principle emphasizes the importance of cooperation between suppliers, manufacturers, distributors, and consumers to create closed-loop systems and maximize circularity

Design for Transparency: Promote transparency and traceability throughout the supply chain, enabling stakeholders to make informed decisions and assess the environmental and social impacts of products and packaging. This principle involves sharing information on materials, manufacturing processes, and supply chain practices to drive responsible consumption and production

By embracing these circularity principles, SE can transition from a linear "take-make-dispose" model to a more sustainable and "Regenerative" approach. This shift promotes resource efficiency, reduces waste generation, and minimizes environmental impacts, contributing to a more circular and resilient economy.

Unleashing the Power of Circularity: Exploring the Benefits for Businesses

In today's rapidly changing world, businesses are increasingly looking beyond traditional linear models and embracing the concept of circularity. A circular business model aims to eliminate waste, maximize resource efficiency, and promote sustainability. By rethinking product lifecycles, embracing innovation, and fostering collaboration, companies can unlock a multitude of benefits. From cost savings and enhanced brand reputation to environmental preservation and long-term success, the advantages of adopting a circular approach are vast. Join us as we delve into the transformative power of circularity and discover how it can shape a more sustainable and prosperous future for businesses and the planet.

Enhancing Resource Security: Navigating Turbulence with Confidence

In an era of unpredictable market dynamics and resource volatility, circularity offers businesses a lifeline. By diversifying their resource streams and reducing reliance on linear inputs, companies can enhance their resource security. This not only shields them from price fluctuations but also ensures a consistent supply, enabling them to navigate uncertainties with confidence.

Driving Innovation and Creativity: Embracing a New Mindset

Circularity fuels innovation and creativity within organizations. As companies seek alternative ways to design, produce, and consume, they unleash their creative potential. Embracing a circular mindset sparks fresh ideas, leading to novel product designs, innovative business models, and transformative solutions. This fosters a culture of innovation and positions businesses at the forefront of industry trends.

Unlocking Cost Savings: Doing Well by Doing Good

Circularity is a gateway to significant cost savings for businesses. By reducing waste generation, reusing materials, and optimizing resource utilization, companies can drive down operational costs. From reduced raw material expenses to streamlined production processes, the financial benefits of circularity contribute to improved profitability and long-term sustainability.

Elevating Brand Reputation: Making a Lasting Impression

In an era of conscious consumerism, a company's commitment to sustainability can make or break its brand reputation Embracing circularity not only demonstrates environmental responsibility but also resonates with customers who prioritize eco-friendly choices Businesses that actively engage in circular practices can cultivate a positive brand image, attract a loyal customer base, and differentiate themselves from competitors

Fostering Collaboration and Partnerships: Strength in Numbers

Circularity thrives on collaboration By forging partnerships with suppliers, customers, and other stakeholders, businesses can create a robust circular ecosystem. This network enables the sharing of resources, knowledge, and best practices, fostering collective problem-solving and driving the circular agenda forward Collaborative initiatives also enhance brand visibility and open doors to new market opportunities

Preserving the Environment: Sustaining Our Future

At the heart of circularity lies the profound benefit of environmental preservation. By reducing waste, minimizing resource extraction, and promoting recycling and reuse, businesses contribute to a healthier planet. Embracing circularity is a powerful way to mitigate climate change, conserve natural resources, and protect biodiversity, ensuring a sustainable future for generations to come

Transforming Business Models: Paving the Way for Long-Term Success

Circularity necessitates a fundamental shift in traditional business models By transitioning from a linear approach to a circular one, companies future-proof themselves against changing market dynamics and evolving customer demands This transformation enables businesses to adapt, innovate, and thrive in an everchanging world, laying the foundation for long-term success.

Embrace the Circular Revolution: A Path to a Brighter Future

The benefits of embracing circularity extend far beyond individual businesses By collectively adopting circular practices, we create a ripple effect that transforms industries, communities, and the planet Let us seize this opportunity to unlock the potential of circularity, driving sustainable growth, and building a brighter future for all Together, we can unleash the power of circularity and shape a world that thrives in harmony with nature

circularity

Project Contacts:

Schneider Electric

Marissa Ainsworth, PMP, Sustainability and Decarbonization Strategy Leader

e: marissa.ainsworth@se.com

Logistics Advanced Research Center, LLC (LARC)

Sam Berman, CEO

e: sam@larc co

p: (408) 202-9876

Chris Taylor COO

e: chris@larc.co

p: (615) 804-4884

AIT Worldwide Logistics

David Niday, Strategic Account Executive

e: dniday@aitworldwide com

p: (913) 233-9040

circularity

circularity plan

circularity scorecard

Purpose and Scope

This scorecard enables a comprehensive assessment of the environmental impact, resource efficiency, and overall sustainability practices of Schneider Electric facilities By assigning scores to different aspects such as energy consumption, waste management, and product lifecycle, it becomes easier to identify areas that require improvement and implement targeted strategies.

Secondly, this scoring provides a benchmark for comparison, both internally and externally It allows Schneider Electric to measure progress over time and compare its facilities against industry standards, enabling a transparent evaluation of its sustainability performance.

Lastly, scoring fosters a culture of continuous improvement by creating awareness and accountability By quantifying sustainability efforts, it motivates employees, stakeholders, and suppliers to actively participate in achieving higher scores, leading to more sustainable practices and positive environmental outcomes.

Overall, scoring Schneider Electric facilities for sustainability and circularity promotes transparency, accountability, and drives the company towards its sustainability goals

Site Survey Sustainability and Circularity Scorecard for Recycling, Reuse, and Circularity

The Site Survey Sustainability and Circularity Scorecard is designed to assess and measure the sustainability and circularity practices related to recycling, reuse, and circularity initiatives at a specific location This scorecard serves as a guide to conduct a thorough site survey, identify areas of strength, and pinpoint opportunities for improvement. By using this scorecard, you can gather essential data and evaluate various aspects of your site's sustainability and circularity efforts

To use the scorecard effectively, follow these instructions:

Objective: Clearly define the objective of conducting the site survey, such as evaluating recycling, reuse, and circularity practices

General Site Information: Provide accurate and up-to-date information about the location, including its name, address, site contact information, and the date of the survey.

Assessment Criteria: Review each section of the scorecard, focusing on areas such as recycling infrastructure, waste reduction and reuse, circular procurement, collaboration with recycling partners, circular design and innovation, performance tracking and reporting, employee engagement and training, continuous improvement and innovation, and stakeholder communication.

Scoring: Rate each of 3 questions of 18 sections on a scale of 1 to 10 based on the effectiveness and implementation of the identified practices Consider the current state and level of compliance within your location. Total possible points in this survey are 540.

Audit Results and Recommendations: Document the results of the site survey, including strengths and areas for improvement Use this information to generate recommendations and action plans to enhance sustainability and circularity practices.

Note: The scorecard serves as a framework, and you can customize it by adding or modifying questions to align with your location's specific operations and goals Regularly conduct site surveys using this scorecard to track progress, measure improvements, and continuously enhance your recycling, reuse, and circularity initiatives.

Recycling Infrastructure: SECTION 1 SCORE

1.1) Are there designated recycling bins and sorting areas available throughout the site?

Are the recycling containers easily accessible and properly labeled for different waste streams?

1.2) Are there clear guidelines and training provided to employees on proper recycling practices?

1.3) Are recycling containers regularly emptied and maintained?

Waste Reduction and Reuse: SECTION 2 SCORE

2.1) Are there initiatives in place to minimize waste generation and encourage reuse of materials within the site?

2.2) Are employees encouraged to use reusable containers, cups, and utensils instead of single-use alternatives?

2.3) Are there mechanisms in place to collect and repurpose materials that would typically be considered waste?

Circular Procurement: SECTION 3 SCORE

3.1) Are there guidelines or policies in place to promote the procurement of products and materials with circularity principles?

3.2) Are suppliers evaluated based on their commitment to sustainability and circularity?

3.3) Are there ongoing efforts to source materials with recycled content and consider end-of-life recyclability when making procurement decisions?

Collaboration with Recycling Partners: SECTION 4 SCORE

4.1) Are there partnerships or collaborations established with recycling facilities or organizations to ensure proper handling of recyclable materials?

4.2) Are there regular communications and feedback loops established with recycling partners to address any challenges or improve recycling rates?

4.3) Are there opportunities to work together with recycling partners to explore innovative recycling technologies or programs?

Circular Design and Innovation: SECTION 5 SCORE

5.1) Is there a focus on designing products and packaging with circular principles in mind, such as recyclability, reparability, or modular design?

5.2) Are there initiatives or teams dedicated to driving innovation in circular design and exploring new materials or packaging alternatives?

5.3) Are there mechanisms in place to gather feedback from customers or end-users on product design and circularity aspects?

Performance Tracking and Reporting: SECTION 6 SCORE

6.1) Are there key performance indicators (KPIs) established to track and measure progress in recycling, reuse, and circularity efforts?

6.2) Is there a system in place to regularly monitor and report on recycling rates, waste reduction, and material reuse within the site?

6.3) Are the performance metrics communicated internally to raise awareness and drive further improvement?

Employee Engagement and Training: SECTION 7 SCORE

7.1) Are employees provided with training and education on recycling best practices and the importance of circularity?

7.2) Are there engagement initiatives, such as employee-led recycling campaigns or recognition programs, to promote active participation in recycling efforts?

7.3) Is there a feedback mechanism in place to gather suggestions and ideas from employees on improving recycling and circularity within the site?

Continuous Improvement and Innovation: SECTION 8 SCORE

8.1) Is there a culture of continuous improvement and innovation in recycling and circularity practices?

8.2) Are regular assessments and audits conducted to identify areas for improvement and address any system flaws?

8.3) Are there channels or forums for sharing best practices and lessons learned with other sites or teams within the organization?

Stakeholder Communication: SECTION 9 SCORE

9.1) Is there regular communication and reporting on recycling and circularity initiatives to internal and external stakeholders?

9.2) Are there mechanisms in place to gather feedback and suggestions from stakeholders on improving recycling and circularity efforts?

9.3) Are there opportunities for collaboration with customers, suppliers, or other external partners to advance recycling and circularity goals?

Packaging Materials and Design: SECTION 10 SCORE

10.1) Are there efforts to optimize packaging design for recyclability, using materials that are widely accepted in recycling systems?

10.2) Are there guidelines or standards in place for reducing packaging waste, such as right-sizing packaging or using reusable alternatives?

10.3) Are packaging materials sourced from sustainable and responsibly managed sources?

Packaging Recovery and Recycling: SECTION 11 SCORE

11.1) Is there a well-defined system for collecting and segregating packaging waste for recycling?

11.2) Are there partnerships or contracts in place with recycling facilities or organizations for the proper handling and processing of packaging materials?

11.3) Are the recycling rates and diversion of packaging waste regularly measured and reported?

Reusable Packaging: SECTION 12 SCORE

12.1) Are there initiatives to promote the use of reusable packaging, such as returnable crates or containers?

12.2) Is there a system in place to track and manage the circulation of reusable packaging throughout the supply chain?

12.3) Are there procedures for inspecting, cleaning, and refurbishing reusable packaging to ensure its quality and longevity?

Circular Procurement of Packaging: SECTION 13 SCORE

13.1) Are there guidelines or policies in place to promote the procurement of packaging materials with circularity principles, such as using recycled content or considering end-of-life recyclability?

13.2) Are suppliers evaluated based on their commitment to sustainable packaging practices?

13.3) Are there ongoing efforts to explore innovative packaging solutions that support circularity objectives?

Packaging Waste Reduction and Optimization: SECTION 14 SCORE

14.1) Are there initiatives to minimize packaging waste generation, such as source reduction or alternative packaging materials?

14.2) Are packaging processes optimized for efficiency and waste reduction, such as right-sizing packages or implementing automated packaging systems?

14.3) Are there mechanisms in place to collect and repurpose packaging materials that would typically be considered waste?

Performance Tracking and Reporting: SECTION 15 SCORE

15.1) Are there key performance indicators (KPIs) established to track and measure progress in packaging recycling, reuse, and circularity efforts?

15.2) Is there a system in place to regularly monitor and report on packaging waste generation, recycling rates, and material reuse within the location?

15.3) Are the performance metrics communicated internally to raise awareness and drive further improvement?

Employee Engagement and Training: SECTION 16 SCORE

16.1) Are employees provided with training and education on sustainable packaging practices, including recycling, reuse, and circularity?

16.2) Are there engagement initiatives, such as employee-led campaigns or recognition programs, to promote active participation in sustainable packaging efforts?

16.3) Is there a feedback mechanism in place to gather suggestions and ideas from employees on improving packaging sustainability within the location?

Continuous Improvement and Innovation: SECTION 17 SCORE

17.1) Is there a culture of continuous improvement and innovation in packaging sustainability practices?

17.2) Are regular assessments and audits conducted to identify areas for improvement and address any system flaws in packaging operations?

17.3) Are there channels or forums for sharing best practices and lessons learned with other locations or teams within the organization?

Stakeholder Communication: SECTION 18 SCORE

18.1) Is there regular communication and reporting on packaging sustainability initiatives to internal and external stakeholders?

18.2) Are there mechanisms in place to gather feedback and suggestions from stakeholders on improving packaging circularity and sustainability efforts?

18.3) Are there opportunities for collaboration with customers, suppliers, or other external partners to advance packaging sustainability and circularity goals?

Site Survey Sustainability and Circularity Scorecard for Recycling, Reuse, and Circularity

Points Accumulation: Add up the points achieved in each category to calculate the total points earned by the assessed entity Ensure that all sections of the scorecard are considered when tallying the points

Grade Determination: Use the provided grading scale to determine the letter grade based on the total points earned. The scale is as follows:

A+ Grade: 97% to 100% of the total points

A Grade: 93% to 96% of the total points

A- Grade: 90% to 92% of the total points.

B+ Grade: 87% to 89% of the total points

B Grade: 83% to 86% of the total points

B- Grade: 80% to 82% of the total points

C+ Grade: 77% to 79% of the total points.

C Grade: 73% to 76% of the total points.

C- Grade: 70% to 72% of the total points

D Grade: 60% to 69% of the total points

F Grade: Less than 60% of the total points

Facility:

Location:

Total Score: Grade:

Assessor Name: Signature

Date of Assessment:

Comments:

circularity scorecard