It's generally recommended to use managed switches in high-demand industrial networking applications because of the diagnostic features and the management features they provide.
In *some* applications it's a requirement, or more important than in others, because of features like QoS or IEEE 1588. Some of those applications (like CIP Motion or CIP Safety) can involve PowerFlex 750 series AC drives.
Fault Code 037 should be displayed in conjunction with a DPI Port Number. The host main board itself is Port 00 so it will just display "037" for a Net IO Timeout fault on the embedded EtherNet/IP port of a PowerFlex 755.
If this fault is immediate and persistent, then you've got some kind of network or PLC configuration error. The most common one is when you take the PLC offline for a download and the I/O connection breaks ! You can configure the drive to ignore those or display a warning only, but the conservative default is to trigger a Fault.
If the fault is intermittent, then you've got a noise or cable problem, which may be where the "use a managed switch" advice is coming from.