By Pearl Lai and Susan Lan

Samsara is one of the fastest-growing public companies, reaching nearly $800M in annual recurring revenue in 8 years. Most fleet and physical assets used in operations are not yet connected to the cloud, so Samsara provides plug-and-play hardware and the Connected Operations Cloud that today serves thousands of customers across diverse industries. Samsara’s Hardware Engineering and Operations teams in Taiwan play a critical role in working with our joint design manufacturers and suppliers, who are primarily located in various locations in Asia.

When the global supply chain crisis began in 2021, it affected many industries’ abilities to manufacture electronics. The economy was staring at a potential bottleneck for growth. However, our team and U.S. colleagues quickly pulled together ways to keep our production lines running to effectively fulfill customers’ demands. In this article, we’ll explain how we maintained an adaptable supply chain and what our cross-functional team has learned about scaling in a highly constricted environment.

Facing a global supply chain crisis

As the pandemic endangered our health and daily life, it also strained the hardware supply chain. With quarantines shutting down factories and adding shipping delays, global production was disrupted. Meanwhile, demand for electronic equipment increased due to an uptick in remote work and home-schooling. Soon, downstream suppliers were facing overall component shortages and sought to build inventory given the increased lead times.

Finding creative solutions to keep our production lines running

During the crisis, our top priority was to fulfill customer demand and maintain hardware functionality while keeping cost limitations in mind. Here’s how we did it.

1. Analyzing market availability and optimizing supplier relations

Our team worked closely with our manufacturing partners to review and identify shortages on a weekly basis. This level of scrutiny is uncommon when in a typical situation we can expect an order placed with proper lead time would be produced without a hiccup. You can have 99.99% of a BOM (bill of materials), but if you’re missing one component, you can’t build a product.

The supply chain team tracked the list of short components on a daily basis. They built relationships with new vendor channels for alternate components, significantly increasing the number of suppliers we worked with. Once the supply chain team found a potential alternative, they collaborated with the hardware and firmware engineering teams to evaluate the component’s specifications, performance, and cost.

There was a constant back-and-forth between our US and Taiwan teams to sync up on the latest issues, seek solutions, and document any process updates. Having our team in Asia close to the manufacturers was essential to minimize delays.

2. Dynamic engineering to meet customer demand

One product encountered frequent component shortages due to a competitive supply dynamic with vehicles and industrial products. As we faced the manufacturing crisis, we needed to think outside the box.

Some components were particularly difficult to source due to compatibility. However, we found some hardware components could be swapped out on the same printed circuit board (PCB), while others couldn’t because of differing electrical, thermal, and mechanical characteristics. This meant that to use a certain alternate component, we would sometimes have to redesign the circuit board. We designed, built, and tested dozens of Bill of Materials combinations. We even replaced a microcontroller unit, requiring the firmware team to rewrite their codebase to accommodate the different parts — twice!

3. Balancing cost and delivery times when shipping to customers

While component lead times increased, so too did shipment lead times. Ocean freight that historically averaged 30–45 days door-to-door was taking 75–90 days on average, with blank sailings and congested ports limiting availability and service. Air freight was also not spared; with decreased passenger travel (a behind-the-scenes carrier of cargo), freight capacity was reduced dramatically, and lead times lengthened.

With traditional shipping routes through the West Coast becoming more backlogged, Samsara’s operations team investigated and established new routes, which sometimes required new trucking routes to bring products to our warehouses. By consolidating products manufactured by different suppliers into one ocean container, the team was also able to maximize early ocean shipment bookings. We worked to optimize space within the container, which was no small feat, given that our products have different weights and dimensions, and are produced by different manufacturers in different geographic areas.

Lastly, with the uncertainty of transportation times and inbound supply, the supply chain team closely partnered with the demand planning team to ensure we could match demand and supply in real time. This allowed us to consistently communicate with our sales teams to accurately provide estimated shipping times to our customers, who could then appropriately plan their operations and installation plans.

Looking forward

With quick decision-making and creative solutions, we were able to keep hardware production lines effectively running — fulfilling customers’ demands over the past two years with industry-leading performance. Even during the worst of the crisis, we met customer demand and achieved 71% YoY growth in FY2022 while maintaining gross margins above 70% throughout. As the world is moving forward to post-COVID, the supply chain crisis appears to be improving. What we learned during this volatile period helped evolve the way we think and operate at Samsara.

In addition to the lessons described above, we’ve reflected on the value of cross-functional teamwork accompanied by a growth mindset. Even veterans on the team who’ve worked in the industry for 20 years were faced with entirely new challenges. We met these challenges with a can-do attitude and came together across time zones and roles: hardware, firmware, supply chain, operations, go-to-market, product management, and more.

Do you see yourself at Samsara? We’re hiring for a variety of engineering roles, including on our Hardware and Operations teams in Taiwan. Check out our open roles here.