A Schematic is an Upgrade that has been acquired but not yet installed. It can be installed on your Ship Board by using the INSTALL action when you Visit a Port, at half the cost (rounded down) of what's printed on the Upgrade card.
Alternatively, Schematics can be sold, for half the Upgrade cost printed on the card.
The Schematics need to be distinguished from installed Upgrades, since they are marked by the same card. The cards have the word "SCHEMATIC" printed upside down at the bottom, so one alternative for marking a Schematic as such is to keep the card flipped around so the word "SCHEMATIC" is right side up.
Upgrade
Upgrades come in two forms: Improvement cards and Artillery cards. Both types can be bought and installed on your Ship Board via the IMPROVE action when you Visit a Port.
When installing an Upgrade, place it in the appropriate slot on your Ship Board. Upgrades of the Improvement type are installed in slots in the Below Deck, while Upgrades of the Artillery type are installed in one of three special slots marked as being on the Port side, Bow/Stern or Starboard.
If the only slot(s) the Upgrade can fit in are taken, you can discard an older Upgrade to make room for the new one.
Upgrades can sometimes be gained in other ways as well; for example by lucky Fate Die rolls on the Spoils table when Looting a Shipwreck. In these cases, they are usually acquired as Schematics, and need to be installed (usually via the INSTALL Service action when you Visit a Port) before they can be used.