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Dialogue: Justin Kershaw -- Powering Supply Chain Innovation

Posted By Paul Tate, June 13, 2012 at 8:45 AM, in Category: Global Value Networks

Kershawv1.jpgEaton Corp.’s latest IT initiatives, led by Justin Kershaw, aim to support a step change in supply chain innovation, infrastructure growth, and manufacturing productivity.

Q: What excites you about your leadership role at Eaton?

A: Right now, it’s just a fantastic time to be in the power management business. It’s a real sweet spot all over the world—the needs are there, and we are growing rapidly in emerging markets and doing well in all the developed economies, too. What’s really driving power management today is infrastructure growth and the development of the fastest-growing economies like China and India. The second thing that’s exciting at Eaton is innovation. I get a chance to lead the innovation of information technology in manufacturing and the manufacturing operations that are producing power management products.

What’s your most important corporate initiative at the moment?

A: Right now, it’s driving supply-chain data health and accuracy, and the management of that in every single operation with real-time data monitoring. We initiated a capability in some relatively new technology, and have taken that to every single plant and operation in the form of monitors that really give an X-ray of the information systems and what’s operating and what’s flowing through those operations. From an information standpoint, it’s really helping our businesses maintain some of the fundamental aspects of supply chain excellence and helping to lean out our operations and improve velocity.

The second is our data centers. We built two new major world-class data centers, around 20 miles apart in Kentucky. We are moving all the information technology infrastructure in Eaton to be operated out of those data centers, and they’ll be running all Eaton Corp. product. From a sustainability point of view, they will have Gold LEED certification and be some of the most efficient data centers in the world.

Q: What challenges still keep you awake at night?

A: Actually I consider myself a pretty sound sleeper, but there are two things that I really sweat over. One is talent – the management of talent and the acquisition of talent. It’s a day-to-day, week-to-week, year-to-year challenge to infuse my teams, and the teams that we serve, with talented people. That’s the make-or-break. We have lots of talented people at Eaton. But there are always more opportunities for success and growth as an employee at Eaton than we have the talented people to fill. It’s a great problem to have, but when you are going after big changes and dealing with gnarly problems to stay competitive and serve your customers really well, you’ve got to have talent. I worry about that all the time.

The second challenge is “go-lives.” We’re driving a lot of change, constantly working to improve velocity, efficiency, on-time delivery, and customer service, so we’re putting in a lot of new systems changes. So, [with] a go-live on really big events—and we have a lot of plants, so we have a lot of big events going on all the time—you have got to be a leader who is willing to sweat the details of those system changes. Those things will sometimes keep me worrying, and double-checking, and triple-checking and making sure, because we don’t want operations to go backward when we are making changes. We always want them to progress going forward.

Q: What are the key lessons you’ve learned over the past year?

A: There are lessons to be learned all the time, but I think the constantly changing idea of what “good” is has to be a top one. To be good, you’ve got to know what “good” looks like, but “good” or “great” keeps changing at a faster rate than it used to. I’ve been doing this for more than 25 years, and you used to be able to define what “good” or “great” was, and you could write it in a book and read about it and then go try to achieve it. Now, you’ve got to be constantly on the lookout for what it is today, so that’s a big lesson.

The other lesson is about the volatility of financial markets and the impact it’s having. You can’t really have just one plan anymore. In my team, and across Eaton, we now have a plan A, a plan B, and a plan C. So, when you go into profit planning or budgeting or whatever, we’ve learned that you now have to plan for an up market, a down market, and a flat market. And you have to set priorities for what you will do in each case. So, that gives us the ability to be less reactionary. It’s more a case of, OK, we need to move to plan B or plan C now. That’s been the lesson of the last couple of years. You now need to have multiple plans for the future in such an increasingly volatile world.

Q: What, in your opinion, will be the greatest opportunity for manufacturers over the next five years?

A: The way I see it, the greatest opportunity for the next five years in manufacturing is achieving another step change in productivity – measured by things like zero safety incidents, not just better quality but “perfect” quality, and more Lean, more flow, more velocity than anything we have today. It’s being able to look at anything with a long lead time and do it twice as fast, in half the time. And provide options for those who are going to pull through the market to be able to customize more, or standardize more. This will be another step change for the greatest manufacturing companies over the next five years.

The amount of information that’s available today in operational data stores and that we can provide in real time has been available in banking and other industries for a while. But in manufacturing, it hasn’t really arrived on the shop floor yet. But there are many new advances in mobility technology, large data stores, search capability, and the ability to do mashups really quickly. So, if you get the right talent in manufacturing operations, you’ll be able to look at the information flows in the supply chain, whether it be the supply chain right inside a plant or the connected supply chain around the world. Then we are going to see a new level of Lean capability and a step change in productivity.

We haven’t done all this at Eaton yet, but we’re already seeing individual plants where we have been successful and have shown significant increases in productivity, and it’s making its way across our whole corporation.

So, I think the future will be about the constant redefinition of what “great” is, trying to standardize it, and then rolling it out everywhere to make that productivity step change happen.

Justin Kershaw,a member of the Manufacturing Leadership Council, is senior vice president and CIO of Eaton Corp.’s Industrial Sector.

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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