Meet Flora Chan, the trilingual Vice President of Manufacturing Operations at Matterport.
Two decades ago, she initially dipped her toes into the world of inventory analysis and reconciliation as a student at California State University. Since then, she hasn’t looked back. With her bachelor’s in Business Administration in tow, Flora followed her passions for people, relationship building and product development to an extensive supply chain career.
She led teams within pioneering Silicon Valley companies - Solectron Corporation (acquired by Flextronics), Transmeta Corporation, Pure Digital Technologies (acquired by Cisco) and Lytro (acquired by Google). From sourcing materials needed for the popular FLIP camcorders, low-power CPUs reference design, Light Field cameras and more, there’s a chance you’ve used a product that Flora and her procurement teams touched.
The time came for her to move on two years ago, and Flora’s reputation as an experienced supply chain leader preceded her entrance into Matterport.
And when faced with 2020’s sudden turn of events due to a devastating global pandemic, her actions and leadership didn’t disappoint.
We sat down with Flora to discuss some of the highlights and obstacles she strategically navigated within her department since the outbreak of COVID-19.
Demand for the Matterport Pro2 camera tripled between March and April 2020, but due to COVID-19 a backlog also grew due to a shortage of critical components.
Can you speak to this and some of the other challenges the company faced?
For decades, North American businesses have looked to China as their supply chain hub. Asian suppliers have the labor and raw materials needed to efficiently build assembly-line ready components, saving buyers production time while increasing their bottom line.
When I learned about the outbreak in Wuhan, I ordered six weeks’ worth of component inventory. This helped allay preliminary delays in production. However, we still had to overcome some challenges in the initial months, especially because China shut down from mid-January to mid-March.
We also had to shut down our production line on March 17 to comply with California shelter-in-place orders, so nobody could go to the office for over a week. This meant we couldn’t build or ship new cameras to customers because we assemble and test them in Sunnyvale.
In addition to not being able to produce, we were running short of raw materials.
So, during that first week, we worked directly with Santa Clara County officials to define an acceptable plan that would allow our teams to return to work. We established new health safety precautions, including having people wearing masks, regular cleaning of work stations and social distancing protocols.
We also had to separate the team into two groups, and add an extra shift to allow for enough distancing.
Because of all of this, our initial production capacity was 50% lower, meaning we could only build half the normal number of cameras all while sales were going through the roof! Receiving and shipping also slowed down because nobody could go to the office.
What did you do to address these challenges?
We ended up hiring more people. Starting in the month of May and extending into June, we were hiring contractors continually.
Moreover, we changed up the schedule, having the team work overtime on Saturdays for many weeks in order to catch up.
I also shuffled around my team, which consists not only of production, but receiving, fulfillment, and purchasing as well. I lent one of my colleagues to the production team to help them out.
What were the results of this?
We bore many fruits from the initiatives implemented during these past months.
For starters, on the production side, we broke the record high of the daily production and shipping quantity, even breaking quarterly and monthly records at Matterport. We have more than doubled our pre-COVID levels.
Also, to shore up the supply chain, I worked hand-in-hand with suppliers of our critical components to reduce lead times and increase the frequency of deliveries to help keep the production line moving as we continued to increase the output.
In one case, with our camera sensor module, I was able to cut the material lead time by weeks and increase volume by 50%.
So, these components you speak of come in from overseas. However, the Matterport Pro2 cameras are built in the Sunnyvale, California headquarters. Can you speak to this decision when almost every company outsources manufacturing overseas?
Since the time I joined, we’ve changed a lot of the supply chain.
Just in two years, we’ve reduced our number of suppliers by about two thirds by streamlining and consolidating to specific vendors. This decreases labor, saving about 25% on bottom-line costs.
One piece of the camera is pre-assembled, which also reduces labor costs and increases efficiencies here in Sunnyvale.
Most importantly, we manufacture in California because it allows us to control the calibration of the cameras more closely, which protects our intellectual property, a competitive advantage for us.
As Vice President of Manufacturing Operations, you’ve experienced many challenging situations. What did you learn from this experience in particular that sets it apart?
Communication and staying on top of the key supply chain relationships is critical.
You need to understand each process in order for them to ship the product.
What does their supply chain look like as well as their lead time? What is the risk for that? What is the bottleneck? What are their challenges?
Focusing on the whole supply chain means starting with the raw materials, not only the components that we buy from them.
We also need to encourage the suppliers. We realize they’re suffering with a lot of cancelled orders due to COVID. They’re losing a lot of business. So, this is a good opportunity for us because we are having more demand. They see our business is growing, while their other clients’ are shrinking.
Simply put, they invest more resources on us, and I – likewise – give them an incentive for improved production and decreased lead time.
What advice would you give to hardware manufacturers facing similar supply chain issues?
Plan and understand your sourcing, which boils down to your components.
Because factories could be closed due to COVID, you need to really understand the chain all the way down to the smallest parts. If you don’t, you can’t proactively plan for situations like this.
Also, keep yourself updated about what’s going on in the world. Anything can affect your supply chain logistics.
As you know, we are short of flights in the world right now, and everyone is choosing freight. As such, costs have skyrocketed. So, we need to understand how we can mitigate that.
Basically, we need a different way of looking at the supply chain because it’s not like it used to be anymore. Now, more than ever, we need to keep up with environmental changes.
What advice would you give to women considering a career in manufacturing or supply chain management?
Personally, once I got into the line, got my hands dirty, and learned from the team, I was able to increase my confidence level and realize it’s not only a “man’s job.”
I always say, whatever we believe, it will come true. I know there can be a lot of uncertainty, but if we just try, things can have different results.
Navigating uncertainty builds up confidence that we can do it, too!