Inside Schneider Electric’s Smart Factory

Schneider Electric’s factory in Lexington, KY, has been mass-producing electrical equipment for more than 60 years. But, the low-mix, high-volume assembly plant is not sitting back and living in the past. Instead, it has become a state-of-the-art showcase for the future of digital manufacturing.

The brownfield facility recently underwent one of the most dramatic transformations in its history. Today, the 500,000-square-foot factory has a bright future, because it’s a leader in applying Industry 4.0 tools that empower operators, reduce costs and improve productivity.

Schneider Electric Lexington has been making load centers and safety switches since Dwight D. Eisenhower was president. It opened in 1957, a year before the first issue of ASSEMBLY magazine rolled off the printing press.

Back then, the jet age had just begun and steam-powered locomotives were still in use on American rails. Polyethylene was a new-fangled material, and a world’s fair was about to be held celebrating atomic energy. However, cell phones, collaborative robots, cordless screwdrivers, laptop computers, paperless work instructions, RFID tags, torque sensors and other things that engineers take for granted today were unheard of.

When Schneider Electric Lexington celebrated its 50th anniversary, it was the recipient of ASSEMBLY’s 2007 Assembly Plant of the Year award. The vertically integrated facility was honored for its cost-cutting continuous improvement and lean manufacturing initiatives.

By implementing the Schneider Production System in the late 1990s, the plant achieved a 20 percent growth in volume between 2002 and 2006. The facility also spent a decade streamlining all areas of fabrication and assembly to remove 113 minutes of process lead time.

Quality Products

Today, the 64-year-old Schneider Electric Lexington plant is still going strong, producing more than 10,000 units a day. Every year, operators assemble 2.8 million load centers and 800,000 safety switches.

The metal boxes house an assortment of bus bars and other aluminum, copper and plastic components that distribute and control low-voltage electricity. Contractors and builders buy the boxes and electricians stuff them with different types of circuit breakers to protect homes from electrical overloads and short circuits.

It’s a simple solution to a potentially deadly problem. Although most load centers look the same, they’re not. A wide variety of options are available. In fact, assemblers at the Lexington plant build more than 200 different configurations of load centers. And, safety switches vary in size from 30 to 200 amps.

To maintain high levels of quality and productivity, while keeping lead times and costs low, Schneider Electric Lexington is a vertically integrated facility. All injection molding, metal stamping, electroplating and painting is done in-house, in addition to packaging.

The Lexington plant also features state-of-the-art production equipment, such as smart parts bins, torque monitoring systems, robotic palletizers and a power-and-free conveyor system.

However, the Lexington plant has not rested on its laurels. Continuous investment in cutting-edge technology has made it one of the “smartest” factories in North America.

In fact, the facility was recently cited by the World Economic Forum as a “lighthouse” factory of the future. It shares the distinction with two other Schneider Electric factories in Batam, Indonesia, and Le Vaudreuil, France.

The Lexington plant harnesses Schneider Electric’s Industrial Internet of Things (IIoT) based EcoStruxure system, which provides digital tools such as augmented reality, remote monitoring and predictive maintenance to drive energy efficiency, sustainability and overall cost savings.  

“Manufacturing organizations around the world are facing new challenges arising from the pandemic and subsequent economic downturn, combined with the ever-growing threat of climate change,” says Annette Clayton, CEO and president of Schneider Electric North America.

“Schneider Electric is proof of IIoT’s power to positively impact the bottom line and further sustainability goals,” claims Clayton. “Being part of the global lighthouse network allows us to share our knowledge and collaborate with industry peers to bring about greater sustainability and resilience for organizations so that we can recover and thrive amidst periods of adversity.”

According to Clayton, the goal of Schneider Electric’s IIoT initiative in Lexington is to boost efficiency and overall market competitiveness by introducing technologies that modernize and reinvent the control, monitoring and management processes of the plant.

It’s part of Schneider Electric’s global effort to digitally transform its factories and distribution centers. The 183-year-old company’s supply chain encompasses nearly 300 factories and logistics centers in more than 40 countries. Most of those facilities use the same IIoT technology that the company offers to its customers.

“These facilities are core to [our] Tailored Sustainable Connected Supply Chain 4.0 program, which creates a customized, sustainable and end-to-end connected supply chain across the plan, procurement, make, customer and sustain domains,” explains Clayton.

“With ExoStruxure, we’re implementing IIoT throughout our global supply chain,” says Clayton. “Across our smart factories and smart distribution centers, we’ve reduced energy costs by between 10 percent and 30 percent, and maintenance costs between 30 percent and 50 percent.”

Continuous Improvement

Schneider Electric is one the world’s largest suppliers of equipment for electrical power distribution in residential, industrial and commercial buildings. The company is also a leading provider of industrial automation and controls. In 1991, it acquired Square D (a well-known company that invented the safety switch decades earlier), including its flagship factory in Lexington.

The plant’s semiautomated assembly process has evolved over the years from manual fabrication, assembly, packaging, batch processing, quality inspection and MRP scheduling to a facility supported by a multitude of lean manufacturing processes. 

Over the past 30 years, a significant amount of capital has been invested to drive labor productivity, improve quality, increase capacity and reduce cycle time.

For instance, in 2008, Schneider Electric Lexington installed a $4 million power-and-free conveyor system that improved productivity and ergonomics by delivering painted parts directly to assembly workstations. The one-mile-long conveyor snaking through the plant eliminated manual palletizing and greatly reduced internal fork truck traffic.

“Conveyors have enabled us to streamline material handling,” says Luke Durcan, director of IoT and EcoStruxure at Schneider Electric. “The amount of work in process (WIP) has been significantly reduced to prevent blockages from the press department to welding and then from the paint shop to final assembly. RFID tags tied into a Magelis PLC enable us to track and synchronize WIP movement throughout the facility.”

“Our processes are complex and, as with any aged facility, there are multiple applications that have evolved from necessity,” adds Mike Labhart, innovation leader for North American smart factories at Schneider Electric. “Often, these legacy applications made data sharing and analysis difficult, as proprietary systems tend to silo valuable information. To drive higher levels of efficiency, we recognized that those data silos needed to be unlocked.”

The Lexington facility’s digital journey began about 12 years ago when connected products were deployed on the plant floor to eliminate material handling waste. At the time, the RFID system was installed and it eventually delivered more than $1 million in productivity gains.

This base of connected products enabled the factory to take the next steps: more precise edge control, plus a new generation of advanced software apps and data analytics.

“By making our existing infrastructure smarter, we are able to extract data that was never available to us because it was trapped in silos; we now use that data to make the right decisions quickly,” says Steve Lyczkowski, plant manager at Schneider Electric Lexington. “We are now quite developed at the connected products level. The push buttons, lights, back lights, terminal strips, limit switches, photo eyes, RFID switches and HMIs are all connected.

“If a technician or an operator on the shop floor has a problem, I get an alert,” explains Lyczkowski. “This make the assembly line more efficient and I have the ability to control my core processes remotely.”

Today, the Lexington plant continues to drive efficiencies and establish new smart factory benchmarks. For instance, monitoring and analyzing energy usage has driven a savings of 3.4 percent year-over-year, contributing to $6.6 million in regional savings since 2012.

In addition, unplanned machine downtime has been reduced by nearly 6 percent through increased visibility into operations. And, 90 percent of paperwork has been eliminated.

Other impressive improvements include a 26 percent energy reduction, a 78 percent CO₂ reduction in conjunction with renewable energy credits and a 20 percent water use reduction.

State-of-the-Art Technology

Schneider Electric Lexington has deployed a digital energy management strategy that leverages IIoT connectivity, edge-based descriptive analytics and cloud-based predictive analytics to drive efficiencies across the operation.

EcoStruxure technology forms the heart and soul of the Lexington factory. Schneider Electric’s proprietary system is a vendor-neutral, IIoT-enabled architecture that includes an open but tailored stack of connected products; edge control-level software; and cloud-based apps, analytics and services. End-to-end cybersecurity for supporting applications and data analytics are embedded across the EcoStruxure architecture.

This open architecture approach accommodates information technology and both Schneider Electric and third-party equipment and software.

At the connected products layer, EcoStruxure Augmented Operator Advisor (AOA) has enhanced operational insight and reduced equipment downtime by 20 percent. Residing at the edge, EcoStruxure Power Monitoring Expert utilizes connected meters and sensors to create powerful visualizations and descriptive analytics of energy consumption by machines and processes.

Cloud-based EcoStruxure Resource Advisor pulls granular plant data and provides a platform for energy management at a global level. It offers predictive insights to energy trends and spend patterns that enable manufacturing engineers to optimize their energy costs.

“Several years ago, we created a global smart factory plan,” says Durcan. “It provides a standard template for digital technologies across our manufacturing footprint. For instance, the Le Vaudreuil facility assembles totally different products than our Lexington plant. But, both facilities share some digital infrastructure, such as common building management, energy management and predictive maintenance systems.

“They also share AOA, which is an augmented reality system,” explains Durcan. “However, all of the facilities vary in how they adapt technology to deliver return on investment.

“One of the key things about our smart factory plan is that it’s not about rolling out the same technology to every Schneider Electric facility,” Durcan points out. “Each plant operates as an individual cost center, so they have their own discretionary investment decisions to make. Most of our facilities are brownfield plants that have evolved over a number of years.

“Three years ago, we started to think about the Lexington factory as an integrated data architecture,” says Durcan. “To bring disparate systems together, we introduced a solution called AVEVA Insight. We created a hybrid manufacturing cloud environment that enables us to look at real-time information coming from our lean digitization system, which combines operator input data with production and MES information.

“Insight is very flexible, which makes it much easier to do data integration,” claims Durcan. “It uses standardized templates with customization that enables the plant to adapt. Operators get to manage data and create individual dashboards based on their unique needs. It enables us to get tools into the hands of the people who need them the most.”

Easy Operator Access

The EcoStruxure architecture allows for much easier management of core processes across the key elements of cloud, edge and on-premise. Operators, for instance, are able to view cloud-connected critical data anytime, anywhere from any device. Resiliency and visibility are improved through live sensor data, predictive analytics and smart alarming. Operators also have 24/7 access to experts monitoring connected assets.

“EcoStruxure improves the agility of manufacturing organizations by enabling key process owners to respond more quickly to market dynamics,” says Durcan. “By providing a collaborative workspace that connects applications and analytics to machines on the shop floor, the architecture allows teams to view combined intelligent dashboards in real-time, enabling fast and accurate decisions.”

One recent addition, EcoStruxure AOA, digitizes machine information in an augmented reality format, and the data is viewable from a standard portable tablet. For instance, a maintenance technician can walk up to a piece of equipment and determine whether or not a cylinder has retracted inside the machine without ever having to open up the machine.

The tool provides information augmented over a real-time view of the machine and, more importantly, provides the latest set of schematics and documentation pertaining to that particular machine. As a result, technicians no longer have to spend time digging through a panel looking for print manuals that are often outdated.

“We’ve had great success in Lexington with AOA,” says Durcan. “This tool improves operational efficiency with augmented reality, enabling operators to superimpose current data, links to documentation and virtual objects onto a cabinet or machine via their tablet computer’s camera. EcoStruxure AOA puts real-time information at their fingertips, wherever and whenever it is needed.

“It provides overlays into asset performance, which has streamlined predictive maintenance,” explains Durcan. “This has enabled us to reduce mean time to repair at the Lexington plant by 18 percent.

“Another tool called Asset Advisor monitors data and looks for trends and anomalies,” adds Durcan. “For instance, we look for interesting patterns that are not obvious, such as variables in temperature fluctuations that may be due to a blocked filter or a compressor failure.

“One of the reasons why we have been so successful with our digital implementation is the fact that we started with a mature lean culture developed over a number of years,” says Durcan. “In addition to focusing on managing flow and reducing waste, it empowers individuals to contribute to improving the production process.

“Before we started implanting Industry 4.0 tools, our workforce in Lexington already had a continuous improvement mindset,” Durcan points out. “That made it easier for them to adopt new technology and see the impact.

“With any new type of technology, we’re always looking for productivity, which means incremental overall equipment effectiveness,” explains Durcan. “Our higher level of data is driving additional insight. But, you can’t do that if you don’t have a solid data infrastructure in place.”