Walker Mattox, Gray Solutions PostedThursday, April 14, 2022 Q Getting back more specifically to Gray Solutions, talk a little bit about the culture there and what it means to be a Solutioneer. A Gray has been an amazing employer, particularly in the in the Southeast, for 60 plus years. So, when we started the business in 2018, people saw us as an immediate extension of Gray. And we got a lot of value from that. And we still keep that. A good example is we have an open office environment, even in our hubs, there are very few walls. My messy desk is right in the middle of the floor with everybody else's, even though I think there are people that probably wish it weren't. The other thing we weave into there is the spirit of entrepreneurship within the business. People can come up with ideas, bring them forward and execute on them if they like. Our new robotics division was created because one of our project managers brought an idea forward. He wanted to start robotics work. So, we've made a small investment. And now it's turned into a large investment, and an entire department that's dedicated to our advanced automation team. That entrepreneurial spirit, the ability to be small part of a nimble team, but with the support of a company like Gray, is very unique and valuable. We're an independent operating company within Gray. But we have all the benefit in support of being part of that larger organization. Q What makes you optimistic about the future of the automation control systems industry? A One thing that makes me the most optimistic about the future is we're seeing customers start to make decisions as it relates to their automation and their systems integrator much earlier than they used to. They're asking the questions well before a shovel goes into ground for a new facility: What is the automation going to look like? How are we going to do this? As customers put more of an emphasis on how important it is to their business, it's only going to make it more important that we can provide those services. We're also seeing those become partnerships. As this industry becomes more and more important to our customers, we're starting to see those relationships deepen, and make it even more powerful as we go. Q What kinds of trends and challenges are you seeing in industrial automation right now? A Well, the biggest challenge that we're all having today is probably on a boat in the Long Beach port right now in California. Everyone's impacted by supply chain. Outside of the challenges of today, the trends we're really seeing is a focus on outcomes. Customers are buying outcomes. They're not buying individual deliverables very often anymore. We're also seeing a trend toward investments in newer technologies. The rate of change is very rapid. Things we couldn't do last year we can do today. And that's going to continue, if not accelerate inside of the industrial automation space, as companies deal with labor shortages, demand for personalized and premium products, and better insight into the food chain specifically in quality. Consumers are demanding to know where their food comes from. And industrial automation is going to play a part. Q What advice would you give to a prospective customer researching controls engineers or system integrators? A When you think about hunting for controls engineers or a new systems integrator or expanding your current system integrator base, the most important thing to focus on right now is the relationship. Can you form a relationship with that company? Some people may say price, they may say technical prowess, they may say all these things. In today's market, technology is evolving very rapidly. We're seeing industry stalwarts start to pull back and pull away and not be the leading edge anymore. We're seeing new technologies emerge every day. And at the rate of innovation in other markets that's going to continue. So, what matters then when you need a new integrator? Well, can you build a relationship with somebody that's going to last for many years to come? Because it's the knowledge of how your business works, the knowledge of how you make your products that really matters. You can put an ad in a newspaper for a PLC tech but investing in that relationship with your integrator and having a partnership is going to make both of you more successful. Q How has Gray Solutions grown or changed in the past year, and what do you expect for the company in the next 12 to 24 months? A Well, in the last year, we grew from 70 to 250 people today. We've gone from a single hub to four hubs around the country and really adopted a lot. So, what has changed? I think we didn't change our name. That's probably about it. Part of this is just that we're responding to the market and the demand for our services, and the market is responding to the way we're delivering our services as well. And we want to keep up with that. We think it's very important that we maintain the right pace to support the industry and support our team members. Because when we give them challenges to solve, they're happier. And over the next 12 to 24 months, we expect that to continue. We invested this year in our Innovation Center, which is a location here in Lexington, Kentucky, with our robotics lab for advanced automated material handling, creative robotic solutions, many other things that are part of what we see is going to come in the next five years. So, we're really focused in the next 12 to 24 months to ensure that our business is ready to support the growing market for the next seven to 10 years out. Q What would you say is the smartest decision your company has made recently? A Investing in Solutioneers. It's the easiest answer that I can give. We're in a services business. And the most important thing we have are people that help our customers. And so, we spend a lot of time investing in them and thinking about ways to invest in them. And I say that's a decision we've made recently. As long as I'm still here, we're going to keep making that same decision and making it our priority. Q What's unique about how you approach a project? A I tell new Solutioneers in their orientation that if they signed up to come work for a company, an engineering firm where they're going to receive a spec book and be asked to go build the thing in the spec book, they should probably go home. What we do is based on an outcome-focused approach to all our projects. When we begin a project, we want to understand what is the outcome we're actually trying to get to towards the end of the day? And if we're spending calories on something that doesn't get us toward that outcome, we should stop doing it. We need to focus on what do our customers need, what are the outcomes that they're trying to get to? One of our favorite projects was very challenging. And we had a situation where the customer, they needed 10,000 hogs a day through their facility. And they did not really care how they got it done. They wanted to make sure that they could process that. And one of my both favorite moments and scariest moments was we had – we were working on a system that wasn't quite online yet. We were rapidly trying to get it there and the operations lead looked at me over a conference room table and said, "The pigs are coming. You get ready for them. But they're going to be here tomorrow. So, figure it out." And we work collaboratively with that customer, with the outcome in mind that our job wasn't to make the automation work, our job wasn't to write brilliant code, or even process a sophisticated interface with an ERP system. The pigs were coming. And that was all we had to deal with. Q Give an example. A What we're seeing from our customers is they're thinking very differently about how they produce their product. And instead of just thinking about how they can mass produce, let's say cat food. They're thinking instead, OK, what should I do in my planning, in my automation, in my production, so that I can provide cat food for Walker Mattox in Lexington, Kentucky? And that can be part of a larger order that then gets processed. They're seeing that happen. It was a trend that the industry was looking for and thought was coming, and COVID-19 and the last two years have just really accelerated the demand for those types of products. Q What challenges are your customers facing right now. A One of the unique challenges that we're seeing with our customers inside of their product expansion is they need to make more product, it's the premiumization of their products. As consumer habits have changed, we'll say a hybrid world, where you have work-from-home, you're traveling less frequently, maybe for work, we're really starting to see a more accelerated growth of premium products and personalized products across various industries. We were seeing it very heavily in Petfood prior to 2020. I would say as we look at what customers are asking us to solve for, it's to help them figure out the best way to embed that into their production processes. Q What led Gray to form Gray Solutions. A For many years Gray had been serving the industrial market. In the 2008, 2009 timeframe, they decided to really double down on a specific market and that was food and beverage. Gray recognized at that time that serving the food and beverage market would look very different than how we service our other markets in our traditional design, build business, constructing facilities around the globe. What we recognized was that we needed a deliberate focus to expand out and provide additional services to those customers. That could look like process design, it could look like architectural and more detailed engineering services specific for that market. We also saw the trend in the industry say, "OK, it's got to be a little more than that, and be very deliberate." And so, we began a journey that we're still on today to expand our service offerings. We decided that it was important to be different and include digital services. That's everything from automation and controls, your IO, that you have down at the plant level up through SCADA platforms, digital transformation projects with MES, IoT connections to all kinds of ERP platforms that we engage with today. We can manufacture equipment for our food and beverage and pharmaceutical and life sciences customers within the Gray family of companies today. And it’s a continuing evolution as we're expanding into robotics, advanced automation, advanced material handling solutions and vision systems as the business continues to grow.