ML Journal

Craig Sutton shares how Eaton is scaling digital transformation across 200 plants by focusing on strategy, culture, and technology.

 

Penelope Brown, MLC: Well, hello everybody, and thank you for joining us for our latest executive dialogue. We are very excited today to be talking to Craig Sutton, who is the Vice President of Industry 4.0 at Eaton Corporation. And what’s also even more interesting, is he’s going to be one of our keynote speakers at the Rethink event that we are having in June in Marco Island, Florida. So we wanted to let you all get to know him a little bit before you join us down there in Florida. So, Craig, how are you doing today?

Craig Sutton, Eaton Corporation: Doing well, looking forward to the opportunity to visit today and the nice weather and the great event you guys always put on. So I hold Rethink in pretty high regard as one of those can’t-miss events that you want to be at.

PB: Well, we’re really looking forward to your session.

So let’s get into some of our questions here. You know, you’ve got a really impressive background in manufacturing and Industry 4.0 that goes back, really, nearly there decades. Can you share a little bit about that career path and what led you to your current role at Eaton?

CS: Yeah, sure. No problem. I started several years ago as just an engineer coming out of school. But I got an opportunity to be involved in a very technical, forward-looking organization that was being launched at John Deere at the time.

It had to do with putting technology onto farm equipment, which back then was really unheard of. We felt like a small little startup in a big company. So that was great and kept that bent towards technology and an innovative spirit. At the same time, I got to go through lots of different opportunities. Some of those are just getting into like core manufacturing and new product development, whether it was in the space of being in quality teams, doing some work around operations and Six Sigma.

I was just building those foundations over the years with opportunities to even get into product engineering. So I would just say that all those core foundational years of understanding how your techniques and your processes work, managing teams—could be small teams, could be larger teams—the pressures of when things are going right, the pressures of when things have not gone right — those are all great experiences that you can look back on and say, “How did you handle those situations that you had?”

“You can create a strategy, but you also have to have your ways that you integrate those and execute them and show how they’re driving improvements”

 

But what really was an inflection point and a turning point that led me further down this path, was an opportunity to launch what was an advanced manufacturing and innovation group. It wasn’t well defined at all. I always say I think I was handed a PowerPoint with like five bullet points and was asked can you do this? And that was it. There was no playbook that was in place. It was more like “Build this. Tell us what we need to do. What are the changes that are happening in manufacturing that we need to be in front of.”

So we took that and were able to build that into these ideas. At the time, it was kind of the early days of smart factories or Industry 4.0. I went over to Germany actually, and visited with some leading thought leaders in that space to kind of figured out how do we really start to integrate the whole idea of data connectivity, the whole idea of your engineering systems to your manufacturing systems, and kind of started laying out some really nice techniques that were actually adopted and had been adopted.

While all that was going forward too, I always felt it was important to network outside of the company, so I got opportunities to really do that with some of the different types of institutes that were being stood up, and in particular the one that became MxD. That was a really foundational opportunity to connect with people outside my work group and just talk about, “Hey? How do other people do it?” and engage with these thought leaders.

Anyways, all of that kind of led to an opportunity that presented itself where I’m at now with Eaton. They definitely had seen some successes on a handful of plants for digital IoT solutions. And the leadership said, “We’ve got to scale this out. We need to find a way that this isn’t contained to a few plants or in a few departments.”

Like, how does this become something that is mainstream? It’s connected inside of all of Eaton. So that opportunity presented itself. And I’ve been doing this now for a little over four years, four and a half years, just really trying to drive the whole aspect of it.

But in the end, this career is built off the foundational things, always having a bent towards technology, always being intrigued by what was coming next, and coming back to being grounded on what’s in front of you, and balancing that all together.

PB: Yeah, that really speaks a lot to how important those really foundational elements are. No matter how advanced you get with the technology. You know it’s really important to understand all of those things. And, you know, it’s interesting that you bring up the foundations of MxD, because I remember when they were, I believe DMDII was their original name, and it was exciting at that time to be bringing those concepts that were being talked about a lot in Europe and bringing those over here to the U.S. And, of course, seeing how all of that has advanced just industry wide. So that’s all great.

Let’s talk a little bit more about your specific role with Eaton. As their Vice President of Industry 4.0, what are your key responsibilities? And how does your team really help drive that digital transformation across the company’s global footprint?

CS: Eaton is in intelligent power management. What it really means is we focus on electrical solutions, and we also have an industrial solution. But all of those have a foundation of power management in some way, whether it’s in your vehicles and your superchargers or your e-mobility efforts, or maybe it’s moving power in our aerospace, or it’s on the other side of like circuit breakers and switch gears and utilities. All of those are about managing power. So you look at that from the diversity that Eaton has.

“We always talk about one of our competitive advantages is finding a way to scale it out over this many plants. You can be successful, but if you have to start over again that’s not ideal”

 

It boils into about 200 plants globally that are under the purview of Eaton, and the responsibilities are in integrating Industry 4.0 or digital manufacturing, or M4.0—however, we want to say that—into the work structure that we do to create world class manufacturing operations. And that might sound like buzzwords and things of that nature, but you can look at the way a plant runs, and they can put a lot of effort into trying to understand their capacity or how do they manage labor and stuff. But what we do is, we look at the challenges that our plants have. It’s not uncommon for every other plant trying to manage those basic metrics and say, how does integrating data and digital tools and automation technology bring together a solution that will elevate those performance metrics that we have.

So we have teams of people and we look at it from almost an aspect of a strategy element of what’s our strategy and our roadmaps, our governances, our processes, our tech stack that we have, the ability to look at the value of scaling out solutions. And that’s really part of what we’re doing at our Eaton level—at the corporate level—but we’ve also integrated into all of our business units Industry 4.0 leaders, whether they be also translating those into their specific goals that they have, and even down to the point of integrating in some technical subject matter experts. Because, obviously with 200 plants, there’s a lot of opportunities and there’s a lot of work to be done. So you can create a strategy, but you also have to have your ways that you integrate those and execute them, and really kind of show how they’re driving, really at the shop level, improvements that that are needed to stay competitive and quite honestly keep their metrics green, right? That’s what we want to do. Or create what is viewed to them as a world class level that they’re trying to achieve.

PB: And so 200 different manufacturing facilities is quite an impressive footprint, and I’m sure that you’ve run into, probably I’m guessing, a lot of challenges in getting that integrated strategy across all of those locations. We hear a lot about disparate systems or people kind of having their own fiefdom, so to speak—maybe beyond the metrics that they want to see whatever that looks like. But you mentioned the leadership piece. What are some of the maybe pieces that you find to be important to succeeding when you’re really trying to approach scaling digital transformation across such a diverse global footprint.

CS: I won’t say we’re unique, but what we have is we have grown into this company through several years of going through acquisitions and business transformations as to what we’re going to do.

Fantastic, right? Getting an acquisition bringing them in, but also you get a chance to adopt whatever their system is, and their technologies, and their processes that they use, and—to some extent—even their culture that made them successful, and now you’re bringing them into the Eaton culture. So one of the things that’s sitting out there is that 200 is made up through an acquisition model that we have. And so we do have a lot of different systems.

“How do you not create what some people will call a snowflake or a unicorn factory every time just because they will claim ‘we’re different’”

 

At the same time, I would say, even if we didn’t have that complexity of all those systems, we do a lot of different type of manufacturing “archetypes”: engineered to order, made to stock, made to order, configured to order. Those are just elements of the realities that we have. And so, the challenge that we also have, is finding a way to implement a set of solutions when those archetypes and those processes for them to be successful are so much different. And these questions of how do you try and not create what some people will call a snowflake or a unicorn factory every time just because they will claim “we’re different,” right? And we know that they’re different, but we also don’t want to be different in the aspect that we’ve tried to almost suboptimize that snowflake that we end up not having any type of speed and scale.

For us, we always talk about one of our competitive advantages is finding a way to scale it out over this many plants. You can be successful, but if you have to start over again that’s not ideal. So all of that’s kind of brought together.

We have a framework for our strategy where we talk about governance models, we have common processes and common ways to even look at financial impacts, and how is that tying in with some of the other aspects that we have. I would say, one of the important things that we look at is a skills and a capabilities development across the board. So just an example, if we’re going to be doing automation-type technologies, we know that there are a lot of fantastic automation suppliers out there. There are also a lot of different automation techniques. But for us, we’re trying to find like, “Hey, what’s a type of technology that we’re going to double down on not only the technology and the vendor but at least raise our skill sets up, too, so that we’re not trying to like really have a lot of competing or conflicting or unaligned opportunities there.” So we do that.

And then, obviously, I still believe that it’s important to have a foundational tech stack that those skills can leverage. And those tech stacks go from the shop floor levels all the way up to a cloud level, to an integration level, across all of your ERPs and your PLMs, and your warehouse management systems. So, being very confident in how a tech stack should work.

And then the final thing—and I mentioned it earlier—we have to always be thinking about scale and not get caught up into some interesting, unique little technology that looks great and solves one small problem, but doesn’t solve some of our other problems. Or we get concerned that we lock it into like one unique environment, and we can’t take it across all those other ones.

“We have to always be thinking about scale and not get caught up into some interesting, unique little technology that looks great and solves one small problem”

 

 

Laying all that out with the complexities that I talked about with how different we are, those are the challenges that we get to tackle every day.

PB: So you’re really talking about many of the holistic elements of digital transformation. Last year we had you at Rethink on a panel where one of the things you mentioned was that digital transformation isn’t just technology, even though, as you mentioned, that’s quite important. But it also requires some structure and strategy, and really cultural change, too. So can you share how you’ve taken that three-pronged approach to succeed.

CS: Yeah, yeah. And I think that one of the things that we will continue to say, and maybe this is where an organization will naturally have to evolve through this, and don’t discount the fact that deep technical knowledge is fantastic. You have to have that right. I see that as like table stakes for being in this.

But what we started to learn is, you want to be careful that you’re only being caught up with this person who’s got a bent towards technology and that’s all they do. Because we’ve truly seen that in plants before that you may have had a leader who was really excited about something, and he got another opportunity to take on a different leadership position and the plant gets left, and you’re like, “Wait a second. We never really changed the culture in that plant.”

So we have a shift where we really have put a lot of effort into what’s the digital mindset culture that has to be implemented in your operations? And when I say that we’ve put a lot of effort into building out a framework. And we almost take technology and say, we’re going to talk about that later. Let’s first talk about plant manager, quality manager, HR manager, finance manager. Their job is to run this plant. Now, the question that we have is, what is the culture that they implemented in it.

We’ve gone in and been able to talk with hiring managers who have said, “Hey, we’ve changed our interview process. We need to know that they know how to use examples of connecting digital data, using ways of real time data to make better decisions.”

Or our finance people who are saying, “Help us to find inefficiencies in the same way that our shop floor workers have or maybe our salary workforce has in making decisions like quality managers.

So what I’m saying is, the culture starts to change whenever the whole leadership group and the whole elements of your plant workforce start to thinking that way.

“We really focus on that culture part. We focus on the next stage—like, this is here to improve your operations, this has improved your metrics, your results”

 

 

We engage with plants to have—we’ll call them “learning centers.” Some people will call them like maybe a lab. But a place that doesn’t have to be like a big massive place, but a place that somebody can walk into and say, “Hey, could you see a robot doing a task? Could you actually have them do a simple programming of a robot?”

And it’s not in the fact that we’re looking for them to be programmers and things of that nature. We’re trying to teach them that these have a lot of capabilities. They have a lot of skill sets. Maybe it has a passion that we can ignite in a person to bring that forward and empower them to make it.

We really focus on that culture part. We focus on the next stage—like, this is here to improve your operations, this has improved your metrics, your results.

In the end of the day, you can do cool stuff, but if your metrics have a lot of sustaining red in them, it’s going to discount what you did and what you did to drive it. Did it make your metrics red? Did it make you more competitive?

We even talk about what’s it doing to impact your inventory levels or your productivity levels or your quality levels. We’re trying to tie it to these important metrics that we know everybody gets measured on.

And then we try to bring our portfolio of technologies that you are willing to accept and you’re willing to understand that it might take an investment to solve those solutions. And that’s really the approach that we really doubled down on a lot. I would say that’s been a shift that we had. It felt like a technology-first approach back several years ago, to now it’s a let’s look through the culture and make that happen.

“In the end of the day, you can do cool stuff, but if your metrics have a lot of sustaining red in them, it’s going to discount what you did and what you did to drive it”

 

 

I will say the positive is we did build up a portfolio of successful stories that has been important to bring into people willing to say, “Now I buy into your culture. You showed me that it can be done. I believe in you.”

So that’s really our approach, that we do.

PB: Yeah, culture really is that intangible thing that I think is probably one of the hardest things for businesses to tackle, but also just a huge competitive differentiator. So it’s really great that you’re putting that much emphasis on that and understanding how important that is.

One last question before we let you go. You mentioned automation a little while back. And I know we’ve heard you talk before about moving away from automation toward autonomy. What’s that transition look like? And why do you think that’s important?

CS: To us, obviously, automation is a great place to start. And we see a lot of those fantastic opportunities that sit in front of us with automation.

But you have to look at it going, “Where is it taking us? Where can we go?”

And I would even say that the whole idea of going from automation to more of autonomy is way bigger than just looking at a robot. It’s truly about systems working together, and intelligence being laid on top of it.

And I really believe that if you reverse the clock to about three years ago, it did just feel like a slogan, like a north star that somebody had. The “factory of the future” is where you would get to. The lights out concepts, and all of that.

I think what’s changed a lot is how the aspects of the AI overlay into an automation overlay has now led us to the fact that these ideas of autonomy are actually viable. They’re actually something that you can achieve. We can go into work cells where you can see these work cells have a high level of automation in them.

“The whole idea of going from automation to more of autonomy is way bigger than just looking at a robot. It’s truly about systems working together, and intelligence being laid on top of it”

 

But the trick is still being able to connect systems.

Whether it’s systems on the orders, which are bringing material in and moving them out, and being dynamic to switch in the fact that, “Hey, we had a shift in an order,” or maybe “we had to kick some parts off because they need a quality check”—things of that nature. And then moving it to the point that now we got to move it over to our warehouse for shipping.

Whether it’s the first mile or the last mile to those workflows are really complex because we have a lot of decision making that we have to have. And we see that automation and AI partnering together to bring us that value that’s coming into it.

I always think about it like the fact that we’ve talked about the autonomous car. I don’t know if an autonomous car is right for me, but I am so appreciative of when I see what an autonomous car can do, because a lot of those technologies that you will see in the autonomous car, you are now buying in your car today. The lane departure things, the intelligence of presence around you, auto braking, the smart elements of cruise control, and the safety features, and the fuel efficiencies or the motor efficiencies—all of those are necessary to get to the autonomous car, but they’re not exclusive only to the autonomous car. We all get to work through that. So just having the vision of how would you get to autonomy brings it back.

The other thing I just want to talk about, because I know that people all say, “Wait, autonomy sounds like lights out factory. It sounds like there aren’t people involved.” That’s not what we’re trying to get to by any means. We all know this: there’s so much opportunity. We all probably have labor challenges every single day. Humans are very good at certain things. They are very, very good at certain aspects. There’s other things that we have no choice but to have a human do the work. But we know that automation could augment that and could enhance it.

“We’re actually finding ways to grow our businesses and enhance the productivity that we have in the plants and the people in the workforce that we have”

 

 

So if we have labor challenges, anyway, what we are actually seeing is when we put in automation, we’re actually being able to repurpose. We’re able to drive growth in our plants. We’re actually seeing the fact that we can add more material flow through it. We can take on more sales. We’re not limited by the only way to do that is to add X number of people with X number of capital going to machines. We’re actually finding ways to grow our businesses and really enhance the productivity that we have in the plants and the people in the workforce that we have. So it’s kind of an interesting dynamic that, if you look at it from a maybe a high level, you might have some macro fears and concerns, but when you boil that down to seeing the way that we are improving the efficiency of our operations and our workforce, it’s really a pretty fascinating area that we’re seeing breakthrough as we overlay these technologies together.

PB: Well, these have been some really great insights, Craig, and I know I’m very excited to see you down in Marco Island, and I’m sure everyone else watching is as well. So thank you so much for your time today, and we are very much looking forward to your keynote coming up.

CS: Thanks a lot, Penny. I appreciate it, and we’ll have a great time.

PB: All right. We’ll see you then.   M

Portions of this interview have been edited for clarity and length.

 

About the Interviewer:

 

Penelope Brown is Senior Content Director for the NAM’s Manufacturing Leadership Council