In February 2017, Marty Neese joined Velodyne Lidar as Chief Operating Officer. His primary focus is the rapid expansion of production at Velodyne’s megafactory in San Jose, CA, in addition to overseeing global operations and other facilities. Prior to joining Velodyne, Neese was COO of SunPower Corp, where he led operations across four continents to supply over 30 countries with solar energy solutions. In this installment of Reflections, Neese sits down with the Velodyne 360 Blog to discuss the rapid growth of the company.
360: Thanks for talking, Marty. So, what brought you to Velodyne?
Neese: A couple things. First, the solar industry was ending its economically entertaining period. When I went to solar, our mission was to make clean energy cheaper than dirty energy, like fossil fuels. When I left, at the wholesale power level, solar energy was about 50 percent cheaper than coal. Coal is around five and a half cents per kilowatt hour and the last winning bid I was part of for wholesale solar, in Mexico, was 2.5 cents.
So, I was looking for a new challenge. Being in the [Silicon] Valley, I’m surrounded by never-ending cycles of new stuff. And I kept hearing things like autonomy, robotics, mobility revolution, AI, deep learning, IoT, sensors, etc. All these things were swirling, and then I heard about this company called Velodyne. I went, oh my gosh, they do all of these things! The more I learned, the more I realized Velodyne is on the leading edge of this revolution. I wanted to be a part of it.
360: Can you talk about your role as chief operating officer?
Neese: So, for everything Velodyne makes, there’s a supply base and a supply chain that brings together all the parts—circuit boards, assemblies, optics, mechanical components—that go into a sensor. My group is responsible for securing, sourcing, and managing all the suppliers in the chain, to make sure we have everything we need. Then, at our factories in Morgan Hill and San Jose, we manage the assembly of those parts into finished sensors. We test them, calibrate them, load them with software, and make sure customers get what they want and need.
360: Folks are pretty curious about the Megafactory—are you on the floor much?
Neese: I go see the shop floor every single day. My office is right upstairs, so it’s easy to take a walk and see what we’re making and how we’re making it. I try to walk through the whole operation at random times. Sometimes, I like to be undisturbed, so I’ll come in early when it’s quiet. Other times, I like to check in on first or second shift, or the weekend operations.
360: What are you looking for when you stop by each day?
Neese: I’m looking for change and continuous improvements. We’ve been making a lot of changes. Increased capacity, more output, more status changes. I like to see how our visual controls are working. Are we following those visual standards in a disciplined fashion? Cleanliness. Orderliness. No day is the same at Velodyne. Each day brings new learning opportunities and presents new technical challenges or operational issues that require in-depth problem solving. Our mantra is “problems are treasures.” We learn from each problem, defect, or issue, in order to continuously improve, get smarter, and get better. It’s a never-ending journey of seeking perfection by solving one problem at a time.
360: Can you describe your problem-solving method?
Neese: Every day we gather yield information. How many units were started? How many units went through each step? How many units passed inspection and testing? We get a percentage yield, and the flip side of yield is the percentage of defects. Defects are problems that need to be solved. A scratch. A missing part. A part not working right. A bad solder joint. A component in the wrong spot. Every single day of every manufacturing operation, there are defects.
I think of manufacturing and producing a product like herding cattle. When our operation is working properly, the herd is moving in the right direction. The cowboys are my team. If there’s an abnormal product, or a deviation from our processes—say one sensor in a hundred has a defect—that’s a stray. So we rally up the cowboys and look for where in the process the defect may have strayed: clean room activities, electro-mechanical assembly, alignment—as in laser or detector alignment, initial image or calibration, final image, balancing, pack-out. All of those are assembly steps that might lead to a defect. We get the stray back into the herd, metaphorically.
360: And you’re ramping up production, right?
Neese: At the end of February, Velodyne [employed] about 225 people. By the end of June, we were at 550. From an operations standpoint, this is rapid growth. We shipped as much in Q2  as we did all of last year. That has to grow by another 50 percent by the end of this year, and then has to double again next year.
360: That’s certainly a breakneck pace! When you were with SunPower, you spoke about being motivated by solving environmental challenges. Is that desire still in play now that you’re at Velodyne?
Neese: The short answer is yes. The World Economic Forum plots trend lines, related to temperature rise from CO2, based upon various scenarios. One scenario is minimal change, which sees temperatures continue to rise significantly—the “business as usual” status quo case. Another trend involves the COP 21 voluntary carbon reduction initiatives agreed to last year in Paris. In that middle trend, global temperature rise will ameliorate and flatten a bit, which is a very good thing.
But there’s one more trend the WEF calls the optimist case, and it’s the result of the mobility revolution. In this trend, the mobility revolution actually reverses CO2 emissions and global temperature rise by the year 2030.
But a few features have to happen. One is reaching affordability with electric vehicles. This may happen with electric vehicles being operated as fleet vehicles instead of being privately owned. A fleet vehicle involves a paradigm of renting vehicles by the mile instead of consumers owning vehicles outright. This is also called “mobility as a service.” Making these electric fleet vehicles autonomous increases the payback to fleet operators by seven to nine times according to some financial estimates. And, of course, it addresses the fossil fuel situation.
Total global liquid fossil fuel consumption is about 500 billion gallons [per year]. And 45 percent of that consumption is from the transportation sector. Addressing this requires a total reimagining of the transportation sector. Starting over, we’d never design a situation where four of the five seats in a car are empty. Where the vehicle sits idle 94 percent of the time. Sixty percent of the earth’s population lives in urban centers. The idea that everyone needs a private vehicle is not really rational in densely-populated urban environments.
360: It sounds like you have a real passion for global change. Do you enjoy seeing the world?
Neese: My wife and I try to see a new country or two every year. We use our travel time and vacations to see as much of the planet as we can. Some people collect stamps, we collect countries on our travels.