https://tube.lokad.com/about/instancehttps://tube.lokad.com/videos/localhttps://tube.lokad.com/videos/watch/79f6dec2-7683-4564-8593-2194a336d708https://tube.lokad.com/static/thumbnails/d72132cd-3316-41fe-9199-bc9f53aef9c0.jpgSeasonality - Supply Chain In 3 MinutesOne of the things we noticed when we started LokadTV was how confusing some of the fundamentals of supply chain science can be. There’s loads of resources out there but none of them get straight to the point and explain things simply or concisely. As such, we decided to have a go ourselves and explain everything you need to know about supply chains in about the time it takes to have a coffee. Our first topic is Seasonality, a trend that can be shown to have an impact on almost every part of daily life. We explore the basic idea of seasonality and learn how it can be confusing to keep track of due to factors such as noise. We explain the impact this can have and why computers are better than humans at predicting the future. It is widely known that seasonality can lead to uncertainty in amplitude, however another complication is that seasonality can also lead to uncertainty in frequency. So, we try and get to the bottom of how best to approach seasonality in your supply chain. ****** Find out more about seasonality: https://www.lokad.com/definition-seasonality ******https://tube.lokad.com/videos/embed/79f6dec2-7683-4564-8593-2194a336d708https://tube.lokad.com/videos/watch/03a45adc-08e8-4939-83af-ae4d1fb58d56https://tube.lokad.com/static/thumbnails/458e2f37-096d-42c4-a124-4e72df8b13da.jpgABC Analysis - Supply Chain In 3 MinutesABC analysis is an inventory categorization method that provides a prioritization mechanism to concentrate efforts and resources on the items that matter most for a company. The approach can be traced back as far as the 19th Century and the Pareto principle (commonly known as the 80/20 rule). This states that the top 20% of the items usually represent 80% of the sales volume. The method works by dividing items into categories based on their perceived importance and highlights the most frequently sold and consumed items so that resources can be allocated accordingly. As ABC analysis is intended to be accessible to a diverse audience within the company it can be argued to be one of the more crude inventory management techniques. When it first emerged it was intended to minimize the clerical overheads associated with inventory. However, with the advent of low cost perpetual inventory systems and barcode readers, this practice has gradually faded away. As such, from a purely reporting perspective ABC analysis still has its uses but, with the computational power we now have at our disposal, simpler methods such as product scoring perform better. ****** Find out more about ABC Analysis: https://www.lokad.com/abc-analysis-(inventory)-definition ******https://tube.lokad.com/videos/embed/03a45adc-08e8-4939-83af-ae4d1fb58d56https://tube.lokad.com/videos/watch/f15671d1-6f2d-4d9e-aedf-b5493d0050cahttps://tube.lokad.com/static/thumbnails/cf7b304f-31a5-492f-815e-fc0617feb9d0.jpgInventory Turnover - Supply Chain In 3 MinutesInventory turnover is a popular inventory management concept that is used to determine the overall efficiency of an entire supply chain. The ratio reflects the number of times inventory is replaced during a given period of time, and can give a useful indication of both trends and how well a company controls its merchandise. Numerically, it is calculated as the ratio between the cost of goods sold, divided by the cost price of the average stock level over the same time period. Typically, retail companies want this ratio to be as high as possible, as it indicates that they don’t overspend by buying too much inventory, or waste resources on items that don’t sell, and that the inventory they do buy can be sold effectively. This result can provide valuable insights from a supply chain management perspective, as SKUs associated with low inventory turnover ratios indicate that a company is holding excessive, or even dead inventory, and as such can help in identifying items to be written off. As such, inventory turnover gives companies a clear aim; to rotate inventory as many times as possible to maximise profit. This introduces a multiplier effect that highlights a company's capacity to generate profit on capital. However, despite the popular belief that inventory turnover ratios are a good proxy of a company’s supply chain performance, these indicators do have their limitations. In reality, businesses want to look at the margin they are making with a product, as this is a key driver that shows which items you should be focusing on turning over as many times as possible. The concept also ignores supplier constraints, like batch sizes, MOQs and lead times that in practice are usually the driving force behind the observed inventory turnover ratios. For example, with overseas suppliers it makes sense to hold higher stock levels, as the stock needed to cover the whole lead demand is higher. As such, inventory turnover only takes an average viewpoint and does not reflec...https://tube.lokad.com/videos/embed/f15671d1-6f2d-4d9e-aedf-b5493d0050cahttps://tube.lokad.com/videos/watch/915eac34-be2c-4a98-951f-af674d2b14c6https://tube.lokad.com/static/thumbnails/6d32041f-368d-4fb9-9946-ed1c83e9ca5a.jpgSafety Stock - Supply Chain In 3 MinutesIn inventory control, there is a financial trade-off between purchasing more inventory and the cost of a potential stock-out. The more stock you have, the more working capital is needed and with too little stock on hand there are potential sales that can be missed, and even entire production processes that could be interrupted. This balance essentially depends on two factors. Firstly - and fairly obviously - is demand and the need to understand the amount of items that will be consumed or bought. Secondly, is the lead time - i.e. the delay between a reorder decision and the stock actually being available to customers. This may seem somewhat simple, until you consider that these two factors are both subject to various uncertainties. Demand can vary massively due to human behaviour, causing it to evolve in unpredictable ways. Lead times can always be impacted when suppliers or transporters are faced with unplanned difficulties. However, simply waiting until a stock-out occurs is not a viable method, as it usually means that it's too late to place an order. As such, businesses need a way of controlling this level of uncertainty and being prepared for every possible scenario - this is where safety stock comes in. Stock can be organised into two categories: the working stock that's actually required and this "cushion" of safety stock. What are the levels of safety stock that should be maintained? Unfortunately, there is no universal formula to calculate safety stock. But there are many methods that can help to calculate for random events such as Gaussian distribution, which allows supply chain practitioners to make educated guesses at the most likely scenarios. However, these methods assume that demand is a succesion of independent, normal, random variables, where in reality demand is very often influenced by completely external random factors. For a company's supply chain to be at its most efficient a more sophisticated approach is required. ****** Learn more abo...https://tube.lokad.com/videos/embed/915eac34-be2c-4a98-951f-af674d2b14c6https://tube.lokad.com/videos/watch/d3d6a934-87b0-4ae0-9c04-700d5f1639f8https://tube.lokad.com/static/thumbnails/3342cef0-f306-410a-a640-3bb82fc77368.jpgAccuracy in Demand Forecasting - Ep 1Forecasting accuracy is a subject that often divides the supply chain industry. Practitioners complain the accuracy of their forecasts is too low whilst software vendors claim to deliver unrealistically precise forecasts. In this episode we shed a little light on the topic, discuss the limitations of current forecasting techniques and explore how the accuracy of forecasts can be improved. For example, many entreprise software vendors claim to reduce forecasting error in percentages, which we could say is the wrong way to look at the question. Because forecasting errors aren’t - or shouldn’t be - expressed in percentages, but in the dollars or euros that they cost for the company. So why does the industry insist on working in percentages? We expand on how forecasts can concretely be made more accurate and where the data should be coming from to do so. Often most companies are already sitting on a mine of very high quality and readily available data that is just waiting to be used. To finish things up, we discuss various external elements that can be leveraged, such as weather forecasts, which have a much more “Big Data” perspective, and debate their effectiveness or lack thereof… ****** Episode Map 0:00:00 Introduction 0:00:29 Supply chain practitioners complain a lot about the accuracy of their forecasts. On the other hand, there are software vendors that claim to deliver incredible accuracy. What’s your take on this situation? 0:02:02 Why is the industry so hang up on using percentages? 0:04:05 Is there any technological process that can be followed in order to improve the percentage of error? What can software companies do in that regard? 0:05:49 There must be another way in which we can improve the accuracy of the forecasts, right? 0:07:41 In terms of the data side of things, where do you draw the line? Could we use things like weather forecasts in the probabilistic forecasts? 0:11:19 What about something like the human brain? Is there any way we could ...https://tube.lokad.com/videos/embed/d3d6a934-87b0-4ae0-9c04-700d5f1639f8https://tube.lokad.com/videos/watch/9bb726ce-fda3-42ef-8ae4-8b5ee4a21a86https://tube.lokad.com/static/thumbnails/834e1145-94a0-4292-ab18-e582a9d4f40f.jpgBill of Materials (BOM's) - Supply Chain In 3 MinutesA bill of materials - which is more commonly referred to as a BOM - is a list of the raw materials and associated quantities that are needed to manufacture, assemble or repair an end product. Much like a list of ingredients that a chef would use to make a recipe, a BOM provides us with a compact inventory-oriented representation of the requirements associated with an end product. This information is typically stored in a business' ERP or MRP systems, and leveraged to execute repetitive tasks such as replenishing all materials at once for a finished product. BOMs themselves are hierarchical in nature, with the top level representing the finished product and the items beneath representing the materials required in assembly. While they can be as small as just two components, these lists can also be extremely long, with multiple levels where sub-assemblies in the list even have BOMs of their own. Therefore, the main aim of a BOM is to make things simpler and clear up some of the mess that can occur when dealing with complex parts with multiple sub-assemblies and components. However, this simplicity can be highly deceptive. Managing BOMs is usually fairly straightforward, but optimizing anything involving BOMs makes things considerably more difficult. This high level of complexity is introduced by the interconnected components that each have their own individual constraints, such as stock levels, lead times and service levels. How can you tackle this issue of complexity and what you can do to optimize your BOMs? Namely, optimizing production and stocks in the presence of BOMs is not just about optimizing a single item but an entire system. This system is highly interdependent, which from an inventory optimization perspective results in a complex network that can only be solved using advanced statistical techniques. ****** Learn more about BOM's: https://www.lokad.com/bill-of-materials-bom ******https://tube.lokad.com/videos/embed/9bb726ce-fda3-42ef-8ae4-8b5ee4a21a86https://tube.lokad.com/videos/watch/e40c1d2c-57c9-4ccb-ad57-df6ae2c22de8https://tube.lokad.com/static/thumbnails/a1d46ffd-fd52-4a33-9104-76c6f4134819.jpgArtificial Intelligence in Supply Chains - Ep 2Artificial intelligence is a subject that has become somewhat of a buzzword in the world of technology over the last year or so. It has made numerous headlines, with certain experts claiming that AI will replace half of the jobs in the world by 2050. In this episode of LokadTV, we try and rise above some of the buzz and instead focus on AI’s applications. We discuss what these applications are likely to look like in the real world and how they could revolutionise the supply chain industry. However, we can safely say that many supply chains are still in the dark ages - too frequently managed by Excel sheets and run in a very manual, human driven way. We estimate that it’s going to take decades yet before they fully embrace Artificial Intelligence. AI, Machine Learning and Deep Learning would work very well for supply chains however, due to the mass of data at hand and the fact that processing power is so much cheaper, more performant and more readily available nowadays. Most actual supply chain challenges lie in edge cases, which take a lot of manpower to solve, and this is a problem that AI would figure out more efficiently - for example, if you’re a fashion company, being able to forecast how many people are likely to return products. But we’re not all Google, Facebook or Amazon, so how can regular companies employ experts in AI? Well, the solution is actually to outsource to another company (shameless plug: a company like Lokad)… To conclude, we discuss how AI does have its downsides, as it forces companies to become more “rational” and often challenges a business’ status-quo, completely changing budgets, roles, etc., which is why it is no easy thing to implement. ****** Episode Map 0:00:00 Introduction 0:00:35 When do you think AI will come to the supply chain industry? What sort of time frame are we talking about here? 0:02:39 What can supply chain practitioners expect from some of these advanced statistical methods? Is there anything more than "better ...https://tube.lokad.com/videos/embed/e40c1d2c-57c9-4ccb-ad57-df6ae2c22de8https://tube.lokad.com/videos/watch/07199b32-9ac4-438d-af96-be5c37db3b38https://tube.lokad.com/static/thumbnails/500017c0-7659-4baa-9416-d5394b457813.jpgBlockchain & Bitcoins - Ep 3In this episode of LokadTV, we dip our toes into the rather contentious waters of Blockchain and Bitcoins. Bitcoin has, in particular, captured the imagination of the media and it’s easy to see why. With a mysterious, anonymous inventor, “bad guys” making fortunes with get-rich-quick frauds and random students becoming overnight millionaires, it certainly has all the makings of a box-office hit. In this discussion, we strive to leave behind the mania surrounding cryptocurrencies and instead try to make sense of it all from a supply chain perspective. We discuss in more depth the importance of Bitcoin for Blockchain technology and endeavour to get to the bottom of how it can work in practice in the supply chains of tomorrow. For example, many supply chain systems have been in place for decades and function with a “security through obscurity” approach, where the infrastructure is so complex - as well as being out-of-date and nonsensically constructed - that it completely discourages hackers. Bitcoin is the complete opposite, it’s open-source and transparent. We wrap things up by elaborating how Blockchain isn’t secure enough without Bitcoin and that the two need to function together, the fact that money is involved because it fundamentally creates trust through economic incentives, which we expand on with real-life examples from aerospace. ****** Episode Map 0:00:00 Introduction 0:00:45 Just to clarify a bit, are we talking about blockchain or about Bitcoin? 0:03:00 Is there no other way of securing these blockchains at all? 0:04:01 What can supply chain chains actually do with Bitcoins? Do you have an example in the real world? 0:07:04 What about supply chains that are already very secure, where counterfeits are almost nonexistent? Do those supply chains have anything to gain from Bitcoin? 0:10:38 The aerospace industry is incredibly regulated. Do you think it can ever fully trust Bitcoin? 0:11:57 What does it mean security through obscurity? 0:14:35 Where s...https://tube.lokad.com/videos/embed/07199b32-9ac4-438d-af96-be5c37db3b38https://tube.lokad.com/videos/watch/6c2d6054-7889-4bb7-9c65-1fad2091a0d6https://tube.lokad.com/static/thumbnails/83049bac-5e80-4ef5-85aa-d5e92ce6f0b5.jpgThe Data Scientist in Supply Chain - Ep 4Five years ago, no supply chain director had any need for data scientists. However, today that has all changed with the number of job positions open for data scientists seemingly growing faster than the rate that universities can produce suitable candidates. Nowadays, it seems that every single supply chain department needs entire teams of data scientists. To wrap things up, we discuss the various impacts that data scientists can have on a business and the vital importance of data preparation. We also introduce the concept of the "Supply Chain Scientist" and how he or she is different from a data scientist. ****** Episode Map 0:00:00 Introduction 0:00:39 Why is there suddenly this need for Data Scientists? 0:01:30 If these data miners aren’t still around today, is there something we can learn from why it went wrong? 0:03:01 Should we not start selling Lokad’s technology to universities so that the next generation of Data Scientists are fully trained in the tool? 0:04:44 Is there any catch beyond focusing on the correct business problem? 0:06:56 Here at Lokad, we have Supply Chain Scientists rather than Data Scientists. Could you tell a little bit more about them? Why do they have a different name? 0:09:49 What about the IT department? What is it responsible for? 0:11:57 Are Data Scientists trained on data preparation? ****** Learn more: https://www.lokad.com/the-supply-chain-scientist ******https://tube.lokad.com/videos/embed/6c2d6054-7889-4bb7-9c65-1fad2091a0d6https://tube.lokad.com/videos/watch/d3c473b3-a02c-42e5-a560-cbe53e22644ahttps://tube.lokad.com/static/thumbnails/9d330400-3592-4fde-8833-b7b8545ed8a8.jpgMin/Max Inventory Method - Supply Chain In 3 MinutesMin/Max is one of the earliest automated replenishment methods that is now used across almost every piece of inventory software on the market. Its roots can originally be traced back to around the 19th century; it was developed as a visual method where you could physically see the amount of stock in a carefully sized bin. The core idea was that once stock reached a certain point, this would trigger a replenishment, which would return the bin back to its maximum levels, without the need to ever count the exact amount of stock that it contained. Since then, this fairly ancient method of automating variants has grown in popularity and is now used in various guises by almost every modern day company. The approach is built on two conditions: initially we start by tracking the current stock level - which is typically the sum of the stock-on-hand, plus the stock-on-order for every single SKU. Then, when the total stock reaches a Minimum value, the system automatically alerts the user, and a subsequent reorder is placed targeting a specific Maximum total stock level. Therefore, we can say that the main benefit of a Min/Max approach is its simplicity. However, don’t let this fool you: choosing the levels for a Min/Max approach is anything but... And this is where dragons can lie! If lead times were immediate, then in reality most businesses would reduce their minimums to just one unit, in order to save storage costs. However, in reality, the longer the lead time becomes, the higher the Min has to be, in order to account for delivery delay. It is worth bearing in mind that one of the core assumptions of a Min/Max concept is that the environment is static, with constant demand and lead times. Of course we know that this is far from reality, as lead times may be extended, or demand may be bigger or smaller than first predicted. All of these factors can potentially result in a stockout. Naturally, business leaders are aware of this and adapt their minimums according to...https://tube.lokad.com/videos/embed/d3c473b3-a02c-42e5-a560-cbe53e22644ahttps://tube.lokad.com/videos/watch/1b5eaf9f-77bb-4d1f-9c0f-ffd00723fa2dhttps://tube.lokad.com/static/thumbnails/f95394e3-8adc-493a-b2ed-f3221e02040b.jpgProbabilistic Forecasting - Supply Chain in 3 MinutesProbabilistic forecasts are used for everything, from predicting tomorrow's weather to generating betting odds on sporting events. Instead of looking at one possible outcome, this technique looks at all possible events and assigns a probability of each one occurring. The key insight here is that instead of pretending to know exactly what is going to happen in the future, a user acknowledges they are not omnipotent, and that the future is uncertain. This approach can be particularly useful when forecasting for our supply chains, as there are multiple uncertainties and many things that we simply don’t know. By taking a probabilistic approach, we can capture some of this "fuzziness" and allow for a sharper, more logical reasoning of future events. But what does this actually mean in practice and how does it compare to more classic techniques? When it comes to more traditional forecasting, you usually make a single statement for the future - a prediction -, then wait and see how far your result differs from what actually happens in reality. This difference between the real and virtual world is referred to as variance and is often what management ends up getting somewhat irritated about when they find that too much or too little stock has been bought. The puzzling thing with these classic approaches that look at only one single future is that they don't at all account for real world uncertainty. This is where a probabilistic approach can help, as it's the extremes that occur in real life, creating the dips and spikes on your graphs that need to be looked at in more detail, because this is where over-stock and under-stock scenarios actually happen. In conclusion, although probabilistic forecasts may sound highly technical and intimidating, many supply chain practitioners have usually already been doing a similar sort of prediction for years. By relying on their experience, knowledge of their stock and "gut feeling", they organise the likely from the less likely po...https://tube.lokad.com/videos/embed/1b5eaf9f-77bb-4d1f-9c0f-ffd00723fa2dhttps://tube.lokad.com/videos/watch/b68f7af7-ec0e-48f5-a047-5a70e08f925chttps://tube.lokad.com/static/thumbnails/f14b4e20-735e-4d33-8a32-bf7836b71729.jpgLead Time - Supply Chain in 3 MinutesLead time can be summarised as the latency between the initiation and completion of a process. In a supply chain, this is usually involved whenever goods are purchased, transformed or serviced. While this may appear pretty simplistic and not worthy of further investigation, we would argue that this is not the case. Thinking about lead times is every bit as important as thinking about future demand. The time, normally measured in days, between what you decide to do today and the time it takes for the impact of that decision to be felt, actually shapes how the entire supply chain operates. The importance can be clearly seen if you ask yourself the question: "Why do we need to forecast at all?" Forecasting stock requirements allows you to prepare for the delay of stock being delivered and helps to avoid potential stockouts. In order to do this, the demand planner needs to anticipate how much inventory will be consumed between now and the next replenishment - whilst taking into account the fact that, whilst those goods are in transit, inventory is gradually getting depleted at the same time. As such, lead times represent a lower bound of the maximal agility that a company can achieve. As a rule of thumb, a company remains committed to its past decisions for roughly the duration of this period. Logically, this means that the longer the lead times, the higher the risk if market conditions brutally change. So where do the key challenges lie? Often, when we have little or no experience on lead times, we rely on what our suppliers promise us. This value frequently goes unchallenged in IT systems - sometimes for years - and a single fixed value doesn’t take into account the wide variability we often can experience with our lead times. This is also a downside of the safety stock model, which we have discussed previously. Typically, the answer to this is to provide a buffer to account for this instability. But this approach usually falls short. Firstly, because lead t...https://tube.lokad.com/videos/embed/b68f7af7-ec0e-48f5-a047-5a70e08f925chttps://tube.lokad.com/videos/watch/3ecc1f3f-387c-43c5-a4c5-0fc55c7912b5https://tube.lokad.com/static/thumbnails/2a488618-bd12-49d7-8e7e-dd727e974813.jpgS&OP - Supply Chain in 3 MinutesSales and Operations planning, or S&OP as it's more commonly referred to, helps large organisations to synchronise their operations by leveraging a deeper alignment between the supply chain and other key departments. In order for a company to serve a market and generate demand, they need to know which product to produce, how you’re going to make it, who is going to buy it, how you’re going to distribute it and how much you’re going to charge....which we can agree is quite the list. Often, all of these elements need to be tightly coordinated on an international scale, crossing different factories, warehouses and operational teams worldwide. With the added pressure to meet client requirements, this all can become a real challenge. This is where S&OP comes in. The process is normally lead by a senior team member, often the CEO, who is in charge of the direction of outcomes and uses the S&OP process to get his teams to collaborate. It's a cyclical process that uses five steps: Sales Forecasting, Demand Planning, Supply Planning, Reconciliation of Plans and Finalisation of Plans. While it may sound fairly logical, this solution emerged in the 80's and is undoubtedly a product of its time, with numerous limitations. For example, it struggles to acknowledge the fact that forecasts are always incorrect to some extent, which is why Lokad maintains its opinion on the importance of the probabilistic forecast (which we've discussed previously). Furthermore, the sheer number of people involved in the S&OP process means that there is always going to be someone who ends up unhappy. These “design by committee” situations are rarely efficient and there will always be some department that has an incentive to distort the process - for example, a sales team that proposes highly conservative targets so that they always “exceed expectations”. To conclude, while S&OP may correctly identify many of the challenges that remain at the core of present day supply chains, such as the n...https://tube.lokad.com/videos/embed/3ecc1f3f-387c-43c5-a4c5-0fc55c7912b5https://tube.lokad.com/videos/watch/8da5522a-91fd-41c5-8b8e-c0e8614177edhttps://tube.lokad.com/static/thumbnails/963f0650-c638-4d1d-9dc5-9adf8556d4e1.jpgThe User Experience Paradox - Ep 6The future is already here when it comes to user interfaces, but that future is not evenly distributed. In this episode of LokadTV, we talk about the evolution of user experience and what supply chain user interfaces of the future will likely look like. We explain how this software can work without people in the forecasting loop and how companies can trust the results. The vision of future user interfaces is often influenced by movies such as Minority Report, which shows Tom Cruise working with a futuristic looking 3D user interface. However, this Hollywood perspective is far cry from reality. We don't want to crush any dreams, but we're sad to say that 3D user interfaces won't be making their way over any time soon. We discuss in more detail just why these user interfaces simply do not work in practice. The best user interfaces are in fact ambient and invisible, and they are often found in the places where you'd least expect them - for example the anti-spam filter in your email inbox. This filter depends on powerful, unusual metrics that work on intelligently removing outliers - which is also what successful forecasting methods for supply chain should do. Instead of relying on mean averages, intelligently removing outliers requires a use of cross entropy and machine learning, which is still alien for many forecasting software. To wrap things up, we see how better programming environments are in fact likely to become the user interfaces of the future. We also debate how supply chain software interfaces are arguably quite "dry" and how they can be rendered more dynamic. ****** Episode Map 0:00:00 Introduction 0:00:42 Lokad is still very much a 2D environment. When is that going to change? 0:02:11 Perhaps you should share your vision on how those user interfaces will look like in the future? Do you have an example? 0:04:01 How about companies? How can they trust these pieces of software if they are never going to interact with them? 0:05:46 When it comes to...https://tube.lokad.com/videos/embed/8da5522a-91fd-41c5-8b8e-c0e8614177edhttps://tube.lokad.com/videos/watch/0aa7891c-fd89-41d2-af17-5988a01621bfhttps://tube.lokad.com/static/thumbnails/807ba23b-41da-4bb9-b965-19712424e9c9.jpgForecasting Promotions - Ep 7Viral videos of shoppers viciously fighting over cut-price products on Black Friday show the dark side of consumerism. However, today, promotional periods such as these are a key part of the consumer landscape, with some companies making the majority of their profits during these periods. Yet it can be a double-edged sword, because if promotions are done badly they can reduce the credibility of a company's products and alienate the customer base into expecting constantly lower prices. In this episode of LokadTV, we investigate these various impacts of promotions and delve further into why the data behind them is currently so misunderstood. Forecasting promotions is fundamentally difficult due to their vast variability and the type of vertical they're associated to. Also, they warp the perceived levels of demand for a product. Many companies are still relying on moving averages on Excel to try and map their promotions, however this isn't sufficient. Given the recent advances in machine learning technology, it is now possible to create far better statistical models to successfully forecast promotions. Naturally, moving towards a machine learning method is often anything but simple. We try to explain how these algorithms can predict which promotions actually work and when they work best. We analyse just why enriching data is so important, as it's not just the price of a product that's important, but many other vital statistics that should be correctly tracked. Finally, we expand on the processes you should follow to have successful promotional forecasts in your organisation that do not skew your data. ****** Episode Map 0:00:00 Introduction 0:00:50 Promotions are incredibly variable depending on the industry you are in. What types of companies are we talking about today? 0:02:11 Why are promotions complicating sales? Why is there a difficulty seen with promotions? 0:03:53 How are companies adjusting these forecasts? 0:04:47 Why do companies want to change t...https://tube.lokad.com/videos/embed/0aa7891c-fd89-41d2-af17-5988a01621bfhttps://tube.lokad.com/videos/watch/13f52544-df95-4ea9-aaa4-79fa02a66d4ehttps://tube.lokad.com/static/thumbnails/53d54d37-5183-47b4-8392-3bb2150e71e7.jpgBitcoins, Supply Chains and Cartels - Ep 8Unlike what we keep hearing in the media, Bitcoin has very little to do with cryptography, and a lot more to do with simple economics. At Lokad, we have pretty much the same economical perspective on supply chain, something that we call the Quantitative Supply Chain. In this episode of LokadTV, we are lucky enough to be joined by Amaury Séchet, arguably one of the most famous Bitcoin experts and the lead developer at Bitcoin ABC, to discuss cartels and how they can occur in both Bitcoin and supply chains. Economic cartels are a type of market where participants not only compete but also cooperate. They are surprisingly common in a lot of business verticals, such as telecommunications and aerospace. We look into the properties of cartels and how they can affect Bitcoins. We discuss what happens when they break down and investigate the difference between cooperation and collusion. Cartel is often a heavily loaded word, providing a bad image, but this is not always the case and they can actually bring about various benefits. To wrap things up, we try to understand how competition can be created and finally discuss whether we can expect cartel-like tendencies in the near future of both supply chains and Bitcoins. ****** Episode Map 0:00:00 Introduction 0:00:50 Can you define what cartels are and how they are related to bitcoins? 0:02:15 I thought that the whole point of Bitcoin was that it gave complete freedom, so why are we talking about bitcoins and cartels in the same breath? 0:04:10 Are there cartels in the supply chain as well? 0:07:58 Have you got any more properties of a cartel that you can explain to us? 0:10:26 Do you have any thoughts on how this trust can be created? 0:15:02 What is this incentive? 0:16:34 Do you have any example in the supply chain industry where this split happened? 0:19:32 When does this tight cooperation stop becoming collusion? 0:26:24 Is it not a really funny concept to engineer instability? 0:28:19 What about the ne...https://tube.lokad.com/videos/embed/13f52544-df95-4ea9-aaa4-79fa02a66d4ehttps://tube.lokad.com/videos/watch/1e7aa7dd-3a17-4f6b-820a-c715897ac255https://tube.lokad.com/static/thumbnails/9d0880dc-d1ab-4940-82b9-fd92a1ccbc93.jpgData Preparation in Supply Chain - Ep 9Data preparation is one of the fundamental principles of data science. Put simply, it’s about transforming raw data into an easy to understand format so that it can be used successfully. This is no mean feat when you consider that data often comes from multiple sources and can be incomplete, inconsistent and likely to contain errors. This can lead to a "garbage in, garbage out" dilemma, which is to be avoided at all costs. To conclude, we discuss in further detail the impacts of these complications, why data is currently so badly managed by companies and what good data preparation actually looks like. ****** Episode Map 0:00:00 Introduction 0:00:46 Could you clarify why we are talking about data preparation today? 0:02:02 How long should it take to prepare a little bit of data? 0:03:15 Six months sounds like a long period of time. Is there any way we can speed up this process? 0:06:06 What do you expect to see in this documentation? 0:07:11 Is all that documentation needed? 0:10:07 Do you have a good example of how one of your clients did it in the past? 0:14:58 Obviously, here at Lokad, in order to build our probabilistic forecasts, we are fairly reliant on having clean historical data. Is there anyone other than us who really cares? 0:18:38 Should the IT department be preparing the data, making sure it is clean? 0:24:37 To sum things up, what does good data preparation look like? ****** Learn more: https://www.lokad.com/data-preparation ******https://tube.lokad.com/videos/embed/1e7aa7dd-3a17-4f6b-820a-c715897ac255https://tube.lokad.com/videos/watch/6583f7a4-49c2-4a46-a23e-af59d655b0f2https://tube.lokad.com/static/thumbnails/e4059ab7-80c7-4ea3-96c2-d55df1fbd175.jpgInternet of Things for Supply Chains - Ep 10By 2020 it is estimated that there will be 30 billion ‘Internet of Things’ devices in the world, with a global market value of $7.1 trillion. IoTs are physical devices, vehicles, home appliances and other items that when embedded with electronics, software, sensors and connectivity become "smart". They can then be used to connect and exchange data, thereby merging the physical world with computer-based systems. In this episode of LokadTV, we try to understand the hurdles that companies must overcome in order to implement these systems in their own companies and their potential for the supply chains of the future, for example better monitoring for the transportation of sensitive goods. Increased connectivity undoubtedly has its benefits. For example, in Shenzhen there was more than a staggering 50% reduction in crime when over 40,000 smart cameras were deployed across the city. However these innocent-looking devices can of course be hacked. At best, the hackers may use a device to generate information for targeted advertising campaigns. At worst, these loopholes can be used to launch service attacks that have been known to take down an entire country's banking systems, which happened in Estonia in 2007. To wrap things up, we therefore discuss the security of these systems and how IoTs can be protected correctly so that Black Mirror-like storylines don’t become the reality of tomorrow. ****** Episode Map 0:00:00 Introduction 0:01:05 Perhaps we could start with a few examples of IOTs? 0:03:01 From a human being perspective, how is it really changing the way we are interacting with these objects? 0:04:46 What is the potential of the Internet Of Things from a supply chain perspective? 0:07:14 All of these IOTs need some sort of power. Where is this power coming from? What about the batteries, do they not need to be frequently recharged? 0:09:46 Can the data produced by this technology be somehow integrated within existing ERP systems? 0:11:27 Are there any comp...https://tube.lokad.com/videos/embed/6583f7a4-49c2-4a46-a23e-af59d655b0f2https://tube.lokad.com/videos/watch/55e1c678-f9ac-444c-a61d-eec97a884913https://tube.lokad.com/static/thumbnails/2a7ca84e-e93b-4d93-b436-a8e3acf6bd39.jpgThe Foundations of Supply Chain - Lecture 1.1Supply chain is the quantitative yet street-smart mastery of optionality when facing variability and constraints related to the flow of physical goods. It encompasses sourcing, purchasing, production, transport, distribution, promotion, ... - but with a focus on nurturing and picking options, as opposed to the direct management of the underlying operations. We will see how the “quantitative” supply chain perspective, presented in this series, profoundly diverges from what is considered the mainstream supply chain theory. References: * Inventory Management and Production Planning and Scheduling, Edward A. Silver, David F. Pyke, Rein Peterson * Fundamentals of supply chain theory, Lawrence V. Snyder, Zuo-Jun Max Shen ****** 0:00:00 - Introduction 0:00:54 - Observational definition 0:02:44 - The short definition 0:04:51 - Why and How 0:08:00 - Scope and non-scope 0:11:07 - Skin in the game + conflict of interest 0:14:53 - Mainstream supply chain theory 0:21:53 - Confusing jargon 0:25:42 - Nature of the challenge 0:37:57 - The method behind the madness 0:49:54 - In conclusion: two IYI pitfalls 0:54:02 - Questions from the audience ****** Check out our website: https://www.lokad.com/lectures ******https://tube.lokad.com/videos/embed/55e1c678-f9ac-444c-a61d-eec97a884913https://tube.lokad.com/videos/watch/9ede1c9c-d66d-40a1-8ffa-28d1e3c04dd6https://tube.lokad.com/static/thumbnails/ee55b2e7-5ac0-4446-a1d3-3ec0b685b179.jpgThe Quantitative Supply Chain in a Nutshell - Lecture 1.2The manifesto of the quantitative supply chain emphasizes a short series of salient points to grasp how this alternative theory, proposed and pioneered by Lokad, diverges from the mainstream supply chain theory. It could be summarized with: every single decision is scored against all the possible futures according to the economic drivers. This perspective gradually emerged at Lokad as the mainstream supply chain theory, and its implementation by (nearly?) all software vendors, remains challenging. ****** 0:00:00 - Introduction 0:02:30 - How to? Supply chain lectures 0:04:27 - The Quantitative Supply Chain Manifesto 0:06:51 - All possible futures 0:17:08 - All feasible decisions 0:22:05 - Economic drivers 0:30:48 - Robotization 0:35:34 - Supply Chain Scientists 0:40:28 - From vision to reality 0:42:04 - The myth of the supply chain maturity 0:45:37 - In conclusion 0:46:18 - Questions from the audience ****** Check out our website: https://www.lokad.com/lectures See the original episode: https://www.youtube.com/watch?v=qLVlxM-cLx4 ******https://tube.lokad.com/videos/embed/9ede1c9c-d66d-40a1-8ffa-28d1e3c04dd6https://tube.lokad.com/videos/watch/a8951c6d-e26b-4a78-80f3-71f7b2bc23a6https://tube.lokad.com/static/thumbnails/f7b167c5-3298-4a42-a77d-ca37aff1e7d4.jpgProduct-oriented delivery for Supply Chain - Lecture 1.3The goal of a quantitative supply chain initiative is either to deliver or to improve a software application that robotizes a scope of routine decisions (e.g. inventory replenishments, price updates). The application is viewed as a product to be engineered. While mainstream supply chain theory struggles to prevail in companies at large, one tool; namely Microsoft Excel, has enjoyed considerable operational success. Re-implementing the numerical recipes of the mainstream supply chain theory via spreadsheets is trivial, yet, this is not what happened in practice despite awareness of the theory. We demonstrate that spreadsheets won by adopting programming paradigms that proved superior to deliver supply chain results. References: * Joel on Software: And on Diverse and Occasionally Related Matters That Will Prove of Interest to Software Developers, Designers, and Managers, and to Those Who, Whether by Good Fortune or Ill Luck, Work with Them in Some Capacity - By Joel Spolsky, 2004 ****** 0:00:00 - Introduction 0:02:40 - Why a product? Because capitalism 0:08:18 - What should the product do? 0:10:05 - Software diseconomies of scale 0:12:43 - Let's buy a SCO product off the shelf 0:21:58 - SCM vs SCO 0:25:58 - Interlude 0:28:21 - SCO is not your average software product 0:33:26 - Software Ingredients for SCO 0:42:49 - Yet spreadsheets are not the endgame 0:46:51 - Python is not the endgame either 0:58:52 - SC is not a division of IT 01:03:19 - In conclusion, two challenges to overcome 01:07:04 - Questions from the audience ****** Check out our website: https://www.lokad.com/lectures ******https://tube.lokad.com/videos/embed/a8951c6d-e26b-4a78-80f3-71f7b2bc23a6https://tube.lokad.com/videos/watch/ea37ba69-f5ae-4d46-9a83-8a1035f26b04https://tube.lokad.com/static/thumbnails/8d4257fe-37a8-4e76-99b1-4a4550f18e8c.jpgProgramming paradigms for the Supply Chain - Lecture 1.4While mainstream supply chain theory struggles to prevail in companies at large, one tool; namely Microsoft Excel, has enjoyed considerable operational success. Re-implementing the numerical recipes of the mainstream supply chain theory via spreadsheets is trivial, yet, this is not what happened in practice despite awareness of the theory. We demonstrate that spreadsheets won by adopting programming paradigms that proved superior to deliver supply chain results. Book reference (given in the Q&A session): * Dynamic Supply Chains: How to design, build and manage people-centric value networks, John Gattorna, 2015 ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 00:00:00 Introduction 03:03 The story so far 06:52 A selection of paradigms 08:20 Static Analysis 18:26 Array programming 28:08 Hardware miscibility 35:38 Probabilistic programming 40:53 Differentiable programming 55:12 Versioning code+data 01:00:01 Secure programming 01:05:37 In conclusion, tooling matters in Supply Chain too 01:06:40 Questions from the audiencehttps://tube.lokad.com/videos/embed/ea37ba69-f5ae-4d46-9a83-8a1035f26b04https://tube.lokad.com/videos/watch/0c5d4709-822f-4a4c-8410-0adf3ea4e064https://tube.lokad.com/static/thumbnails/7bf261fc-67cb-44d9-915e-5174f41aeb14.jpg21st century trends in supply chain - Lecture 1.5A few major trends have been dominating the evolution of supply chains over the last decades, largely reshaping the mix of challenges faced by companies. Some problems have largely faded away, such as physical hazards and quality issues. Some problems have risen, such as overall complexity and competition intensity. Notably, software is also reshaping supply chains in profound ways. A quick survey of these trends helps us understand what should be the focus of a supply chain theory. References (Q&A Session) : * Tokeda whitepaper, Joannes Vermorel, 2018 (blockchain use case to fight counterfeits on page 28), [(pdf)](https://blog.vermorel.com/pdf/tokeda-2018-04-30.pdf) ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 0:00:00 - Introduction 0:00:57 - Average - Supply Chain terms shaping the world 0:03:58 - The story so far 0:05:02 - Promitheiadynamics 0:06:43 - Better UX via Tougher Supply Chain 0:21:26 - Programmatic Options in Supply Chain 0:40:22 - Supply Chain (d)evolutions 0:58:21 - Conclusion: XXIst century supply chain is about conquering complexity 01:01:04 - Questions from the audiencehttps://tube.lokad.com/videos/embed/0c5d4709-822f-4a4c-8410-0adf3ea4e064https://tube.lokad.com/videos/watch/224697f7-9041-4ac3-bc21-2ddf6de84c2bhttps://tube.lokad.com/static/thumbnails/ec6ec6eb-975d-4534-8fbb-767a460709a8.jpgQuantitative principles for supply chains - Lecture 1.6While supply chains can’t be characterized by definitive quantitative laws - unlike electromagnetism - general quantitative principles can still be observed. By “general”, we mean applicable to (almost) all supply chains. Uncovering such principles is of prime interest because they can be used to facilitate the engineering of numerical recipes intended for the predictive optimization of supply chains, but they can also be used to make those numerical recipes more powerful overall. We review two short lists of principles: a few observational principles and a few optimization principles. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 0:00:00 - Introduction 0:02:25 - On the nature of progress 0:05:26 - The story so far 0:06:10 - A few quantitative principles: observational principles 0:07:27 - Solving "needle in a haystack" via entropy 0:14:58 - SC populations are Zipf-distributed 0:22:41 - Small numbers prevail in SC decisions 0:29:44 - Patterns are everywhere in SC 0:36:11 - A few quantitative principles: optimization principles 0:37:20 - 5 to 10 rounds are needed to fix any SC issue 0:44:44 - Aged SCs are unidirectionally quasi-optimal 0:49:06 - Local SC optimizations only displace problems 0:52:56 - Better problems trump better solutions 01:00:08 - Conclusion 01:02:24 - Questions from the audiencehttps://tube.lokad.com/videos/embed/224697f7-9041-4ac3-bc21-2ddf6de84c2bhttps://tube.lokad.com/videos/watch/d7b12f9f-6463-48d4-9df9-418217f9959ahttps://tube.lokad.com/static/thumbnails/5763ed9d-51bd-4663-9b7d-d3e342f76fd8.jpgSupply Chain Personae - Lecture 2.1A supply chain “persona” is a fictitious company. Yet, while the company is fictive, this fiction is engineered to outline what deserves attention from a supply chain perspective. However, the persona is not idealized in the sense of simplifying the supply chain challenges. On the contrary, the intent is to magnify the most challenging aspects of the situation, the aspects that will most stubbornly resist any attempt at quantitative modelling and any attempt at piloting an initiative to improve the supply chain. In supply chain, case studies - when one or several parties are named - suffer from severe conflicts of interest. Companies, and their supporting vendors (software, consulting), have a vested interest in presenting the outcome under a positive light. Moreover, actual supply chains typically suffer or benefit from accidental conditions that have nothing to do with the quality of their execution. The supply chain personae are the methodological answer to these issues. References: * An introduction to the study of Experimental Medicine, Claude Bernard, 1865 * The Phoenix Project: A Novel about IT, DevOps, and Helping Your Business Win, Gene Kim, Kevin Behr, George Spafford, 2013 * Unsupervised Machine Translation Using Monolingual Corpora Only, Guillaume Lample, Alexis Conneau, Ludovic Denoyer, Marc'Aurelio Ranzato, 2018 ****** 0:00:00 - Introduction 0:11:19 - The story so far 0:13:39 - Supply Chain Experiments? 0:19:21 - Experimental methods : against case studies 0:20:50 - On Big Names 0:28:14 - On Taboos 0:35:03 - On Job Prospects 0:37:51 - On Pseudo-neutrality 0:42:59 - On Vendors 0:45:57 - Experimental methods : pro personae 0:46:54 - Fiction vs Reality 0:52:19 - Crafting a supply chain persona 0:55:26 - Rejection criteria 01:02:33 - Problem vs Solution, 1/3 01:08:53 - Problem vs Solution, 2/3 01:11:41 - Problem vs Solution, 3/3 01:16:13 - Upcoming personae 01:17:06 - Conclusion 01:18:29 - Supply Chain Personae - Questions? ****** Check out our websi...https://tube.lokad.com/videos/embed/d7b12f9f-6463-48d4-9df9-418217f9959ahttps://tube.lokad.com/videos/watch/62b278b0-28df-46b6-8a50-726961a59f29https://tube.lokad.com/static/thumbnails/7ac92be9-36b7-4b74-91ee-b9e9441d68b2.jpgParis, a fashion retail network (supply chain persona) - Lecture 2.1.1Paris is a fictitious European fashion brand operating a large retail network. The brand targets women and positions itself as being relatively affordable. While the design line is relatively classic and sober, the main business driver has always been novelty. Multiple collections per year are used to push waves of new products. Pushing the right product, at the right time, at the right price and with the right stock quantity is one of the core challenges. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Timestamps: 0:00:00 - Introduction 0:02:14 - Novelty 0:03:32 - The story so far 0:05:16 - The short definition (recap) 0:07:00 - Crafting a supply chain persona (recap) 0:08:50 - Paris, 10 000-foot view 0:16:18 - Range planning 1/3 0:19:25 - Range planning 2/3 0:21:18 - Range planning 3/3 0:25:08 - Pre-season pricing 0:29:27 - Purchasing 0:38:12 - Inbound distribution center 0:41:36 - Store "initial" push 0:47:51 - Store "routine" push 0:56:02 - In-season pricing 01:00:59 - Other elements - limitations of this Personae 01:04:16 - Conclusion 01:06:42 - 2.1.1 Paris, a supply chain persona - Questions?https://tube.lokad.com/videos/embed/62b278b0-28df-46b6-8a50-726961a59f29https://tube.lokad.com/videos/watch/06f83ad0-f03e-43e0-8861-02d1cc4e2cf6https://tube.lokad.com/static/thumbnails/cf75912d-f80f-4333-abc6-b124f7f5aabd.jpgExperimental Optimization - Lecture 2.2Far from the naïve Cartesian perspective where optimization would just be about rolling-out an optimizer for a given score function, supply chain requires a much more iterative process. Each iteration is used to identify “insane” decisions that are to be investigated. The root cause is frequently improper economic drivers, which need to be re-assessed in regards to their unintended consequences. The iterations stop when the numerical recipes no longer produce insane results. References: * The Logic of Scientific Discovery, Karl Popper, 1934 ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 0:00:00 - Introduction 0:02:23 - Falsifiability 0:08:25 - The story so far 0:09:38 - Modelling approaches : Mathematical Optimization (MO) 0:11:25 - Overview of Mathematical Optimization 0:14:04 - Mainstream supply chain theory (recap) 0:19:56 - Extent of the Mathematical Optimization Perspective 0:23:29 - Rejection heuristics 0:30:54 - The day after 0:32:43 - Redeeming qualities? 0:36:13 - Modelling approaches : Experimental Optimization (EO) 0:38:39 - Overview of Experimental Optimization 0:42:54 - Root causes of insanity 0:51:28 - Identify insane decisions 0:58:57 - Improve the instrumentation 01:01:13 - Improve and repeat 01:04:40 - The practice of EO 01:11:16 - Recap 01:14:14 - Conclusion 01:16:39 - 2.2 Experimental Optimization - Questions?https://tube.lokad.com/videos/embed/06f83ad0-f03e-43e0-8861-02d1cc4e2cf6https://tube.lokad.com/videos/watch/b71a7d7f-53bb-443d-8905-67bed919cbbdhttps://tube.lokad.com/static/thumbnails/5810ae3a-bf55-4c38-aae2-9e2092637c08.jpgNegative Knowledge in Supply Chain - Lecture 2.3Antipatterns are the stereotypes of solutions that look good but don’t work in practice. The systematic study of antipatterns was pioneered in the late 1990s by the field of software engineering. When applicable, antipatterns are superior to raw negative results, as they are easier to memorize and reason about. The antipattern perspective is of prime relevance to supply chain, and should be considered as one of the pillars for its negative knowledge. References: * ''AntiPatterns: Refactoring Software, Architectures, and Projects in Crisis''. y William J. Brown, Raphael C. Malveau, Hays W. "Skip" McCormick, Thomas J. Mowbray, 1998 ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ***** Timestamps: 0:00:00 - Introduction 0:02:28 - Smart Fridge 0:05:28 - Survivorship bias 0:07:28 - The story so far 0:08:46 - On Taboos (recap) 0:12:06 - Rejection heuristics (recap) 0:13:34 - Low quality positive knowledge 0:15:27 - Software Antipatterns, 1/2 0:20:11 - Software Antipatterns, 2/2 0:25:34 - Supply Chain Antipatterns 0:27:00 - Naked Forecasts 0:32:36 - The 100% service level 0:37:06 - The Jedi initiation 0:44:31 - The Non-Euclidian Horror 0:51:45 - Devil's advocate 0:57:35 - Recap, negative knowledge for supply chains 01:01:04 - Conclusion 01:02:45 - 2.3 Negative Knowledge - Questions?https://tube.lokad.com/videos/embed/b71a7d7f-53bb-443d-8905-67bed919cbbdhttps://tube.lokad.com/videos/watch/bd712c1c-2593-4ed0-8da2-c69803c4c428https://tube.lokad.com/static/thumbnails/89847b21-7198-4051-a98a-9adaf80637bb.jpgAdversarial market research for enterprise software - Lecture 2.4Modern supply chains depend on a myriad of software products. Picking the right vendors is a matter of survival. However, as the number of vendors is large, companies need a systematic approach in this undertaking. The traditional market research practice starts with good intent but invariably ends up with bad outcomes, as market research firms end up acting as marketing fronts for the companies they are supposed to analyze. The hope that an unbiased research firm will emerge is misplaced. However, the vendor-on-vendor assessment is a methodology that allows even a biased market research firm to produce unbiased results. References: * Epistemic Corruption, the Pharmaceutical Industry, and the Body of Medical Science. Sergio Sismondo, 2021 * Influence: The Psychology of Persuasion. Robert B. Cialdini, 1984 * Procurement Guidance, Conflict of Interest, The World Band, 2020 ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Timestamps: 0:00:00 - Introduction 0:01:59 - The world of enterprise software 0:05:07 - Epistemic Corruption 0:14:15 - The story so far 0:15:57 - Case Studies, On Vendors (recap) 0:18:15 - Market Research - Direct 0:18:55 - Misguided questions 0:25:11 - Conflict of interest 0:32:30 - Pretense of neutrality 0:32:59 - Wishful thinking 0:36:40 - Market Research - Adversarial 0:36:55 - The silver bullet test 0:40:12 - Qualitative questions 0:44:01 - Rank rivals 0:46:16 - Vendor-on-Vendor format 0:48:45 - Objections 0:54:47 - Recap, market research 0:59:31 - Conclusion 01:01:28 - Adversarial Market Research - Questions?https://tube.lokad.com/videos/embed/bd712c1c-2593-4ed0-8da2-c69803c4c428https://tube.lokad.com/videos/watch/b57cdce3-51ee-4b6d-910c-7b926cff9eaahttps://tube.lokad.com/static/thumbnails/999362e2-dc20-4804-b303-41fa38afda47.jpgWriting for supply chains - Lecture 2.5Supply chains involve the coordination of large teams. Thus, written materials are king. Modern supply chains are simply not compatible with oral tradition. Yet, supply chain practitioners often fare terribly as far as their written communication skills are concerned. Let’s review what usability studies, and some notable experts, have to say on these matters. Also, supply chain initiatives, executed through the experimental optimization approach, must be thoroughly documented. The formulas and the source code answer the what and how questions, but they do not answer the why. The documentation must ensure that the supply chain scientists understand the problem they are facing. Over time, this documentation becomes the key to ensure a smooth transition from one supply chain scientist to the next. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news References: * The Elements of Style (First Edition), William Strunk Jr, 1918 * F-Shaped Pattern For Reading Web Content, Jakob Nielsen, 2006 ***** 0:00:00 - Introduction 0:02:17 - Omit needless words 0:04:26 - Supply Chains 0:08:12 - The story so far 0:09:20 - F-Shaped Pattern For Reading Web Content (2006) 0:15:15 - Inverted pyramid writing form 0:20:35 - Writing for Supply Chains - Situations 0:21:10 - Problem 0:24:48 - Data 0:28:56 - Product 0:34:18 - Process 0:39:32 - The Manual 0:44:26 - Writing for Supply Chains - Antipatterns 0:45:37 - Happy Talk 0:50:07 - Arcane Naming 0:54:53 - Hell's bullets 0:59:13 - Droning 01:02:10 - Conclusion 01:04:30 - 2.5 Writing for Supply Chains - Questions?https://tube.lokad.com/videos/embed/b57cdce3-51ee-4b6d-910c-7b926cff9eaahttps://tube.lokad.com/videos/watch/344bd1a0-2a0c-4fa3-8afb-2f59c336b5abhttps://tube.lokad.com/static/thumbnails/d861f544-d606-4bd8-92a6-515873803115.jpgProbabilistic Forecasting for Supply Chains - Ep 11Probabilistic forecasts can step in to help when you have imperfect information about the future, as instead of taking one possible future into account, probabilistic forecasts assign a probability to each of a number of different possible outcomes. It is probably the most accurate type of forecasting because it embraces the very notion that you can't know everything about the future and you don't need to pretend to know, as there simply is no way of knowing! In this episode of LokadTV, we investigate more and see why this type of forecast can be beneficial and just how these forecasts can be used to improve the way supply chains operate as a whole, particularly as they comprehend the various asymmetries of supply chains. Meanwhilst, classic forecasts aim more for the average, which is not ideal for many business verticals, such as aerospace operations or fresh food. These probabilistic forecasts are used for everything, from predicting the next day's weather to generating betting odds for sporting events. But if you have a probability for every possible outcome, how can its accuracy be measured more concretely? We therefore discuss in more detail the notion of accuracy in relation to these forecasts and where their limitations lie. Probabilistic forecasts work best when uncertainty is involved, such as for e-commerces (longtail), fashion and aerospace for example. To conclude, we discuss industries where probabilistic forecasts don't work so well and debate why the industry is still so committed to more traditional forecasting techniques (spoiler: it's because too many companies are far too reliant on Excel). We also expand on what the future of forecasting is likely to look like. ****** Episode Map 0:00:00 Introduction 0:00:28 Perhaps you could explain what are probabilistic forecasts? 0:02:43 What do you mean by all the asymmetries? 0:04:25 How can we establish where our boundaries are? 0:05:33 Can you really use any single and possible future? 0:07:38 ...https://tube.lokad.com/videos/embed/344bd1a0-2a0c-4fa3-8afb-2f59c336b5abhttps://tube.lokad.com/videos/watch/a5f9efb6-911a-4edd-95d2-32b225a5aaa5https://tube.lokad.com/static/thumbnails/d77c6401-20dc-4ef0-a990-1aecf4a72792.jpgSoftware Frankensteinisation in Supply Chain - Ep 12Enterprise software can often be influenced by the requirements of key customers. This can lead to a type of ‘Software Frankensteinisation’ where the software morphs into an unmanageable beast, with more add-ons than teams of software engineers can manage. (Don't worry, we do know that Frankenstein was the creator, and not the mosnter!) In this episode of LokadTV, we investigate the social dynamics between companies and software vendors and try to understand how companies can evolve and adapt without relying on technology that can rapidly become unmanageable. We examine how Lokad, by developing Envision - its own domain specific programming language, managed to create somenthing that is completely customizable for its clients, while avoiding such a software frankeistinization. Often businesses are run on the ethos that the customer is king. We discuss why, in this multi-tenant world, this is not the ethos to follow and how it can result in serious scars within the software. Through a series of examples coming from giants of the tech world, just like Google, we attempt to understand what can be done to ensure that the demands of customers are met without compromising on quality. To finish up, we give some practical advice, intended for Supply Chain Executives, concerning the right way to negotiate possible customizations of the software they are using. We learn more about why the relationship with the vendor's CTO is of primary importance and why it is important to choose a series of specialized softwares, instead of the sometimes more tempting but quite ineffective choice of just one that seemingly does it all. ****** Episode Map 0:00:00 Introduction 0:00:22 What do you actually mean when you say Software Frankensteinisation? 0:02:32 What does those “scars” look like? 0:05:32 When does something become a scar and when does it become a good feature? 0:08:55 How can software companies introduce these features to keep their clients happy without introducing a...https://tube.lokad.com/videos/embed/a5f9efb6-911a-4edd-95d2-32b225a5aaa5https://tube.lokad.com/videos/watch/34c44c76-2bdb-4fb8-ba58-872f08a0ffcfhttps://tube.lokad.com/static/thumbnails/61679680-c663-4e1d-be74-99604ef878aa.jpgStartups: Myth vs. Reality - Ep 13With three new startups launching globally every second, there is a huge amount of pressure on them to be doing something unique. For today's episode of LokadTV, we are joined by Olivier Ezratty, the author of the "Guide des Startups”, to discuss the myths that startups often create in order to help them attract the best talent and resources to be able to make technological breakthroughs. Olivier has over 30 years of experience in the technology industry, including over 15 of those spent at Microsoft. Together with our Founder Joannès Vermorel, we discuss some of the various myths that surround the world of startups and explore the ways in which certain startups get funded. Considering that nine out of ten new startups fail, this leads to a huge amount of pressure on them, with some companies resorting to making bogus claims in order to source investment funding. In addition, we discuss just who is funding all these startups and why? We focus on the particular example of Theranos, a startup that raised more than $700 million from venture capitalists and private investors despite not actually having the breakthrough technology in the blood-testing market that it claimed. We then try to understand where the line lies between confidence in a technology that is not yet finalized and shear fraudulent activity. We learn how startups can be assessed and discuss what are the best ways a startup can act in order to increase their chances of success in a highly competitive marketplace, filled with empty buzzwords and stretched-out truths. ****** Episode Map 0:00:00 Introduction 0:00:25 Olivier, perhaps we should kick things off with a little bit of an introduction from yourself. How did you first get interested in startups? 0:01:31 Can you explain what are these myths we are seeing in startups? 0:03:37 Do you agree with the fact that startups are claiming more than they can possibly do? 0:04:36 Are there any other incentives? 0:08:22 Let’s talk about funding. Wh...https://tube.lokad.com/videos/embed/34c44c76-2bdb-4fb8-ba58-872f08a0ffcfhttps://tube.lokad.com/videos/watch/3c9545f1-c050-4dd3-8bce-6eac78c2cc38https://tube.lokad.com/static/thumbnails/b9d0b22b-aae6-4e74-a545-504fc8f7a1b3.jpgFear of Change in Supply Chain - Ep 14To coin a phrase from the renowned author Aldous Huxley, we are now living in a "Brave New World" which, for many, takes some adapting to. Humans typically do not like change and even fear it. As such, when change does come to a company there will always be portions of staff who will be resistant to this new environment. Realistically, there are categories of people who have a right to feel uncomfortable about technology and change undermining their roles within a company, for example the possible rise of autonomous vehicles threatening truck drivers' livelihoods. So how can such a fear be mitigated for white collar jobs? Supply chain is often a domain that is anxious about change, and rightly so, because of the possible havocs it can wreak if a change is badly implemented. Yet innovation and the latest technological advances should be embraced by supply chains and business leaders. In this episode of LokadTV, we discuss how we can minimise the drama of an implementation and how managers can adapt and go from managing large, unqualified teams to instead small teams of highly capable individuals. Nevertheless, it's not always about downsizing teams. Looking ahead to the future, we try to understand how people rotate organically and how the implementation of modern forecasting techniques can create new, more fulfilling roles for employees. Change is inevitable and can bring many benefits. To wrap things up, we discuss in more detail how people currently working in roles such as demand planning can improve their skill set, in order to ensure they remain adaptable and continue to bring added value to a company. ****** Episode Map 0:00:00 Introduction 0:00:20 Why are we talking about fear? 0:01:59 What are the people afraid of? 0:04:54 How many people are affected? 0:06:37 How can we mitigate this fear? 0:09:11 Surely there will be a reduction in headcount, right? 0:11:34 Let’s talk about the implementation of the solution. What can we do to ensure that this tra...https://tube.lokad.com/videos/embed/3c9545f1-c050-4dd3-8bce-6eac78c2cc38https://tube.lokad.com/videos/watch/1d9874d2-df9a-4bc7-b261-7e62342d7bf1https://tube.lokad.com/static/thumbnails/b3bc5bc7-58c2-424d-986c-46b78fae5c50.jpgForecasting Demand for New Products - Ep 15Forecasting product launches is inherently difficult. However it is a vital part of the product lifecycle and must be carefully planned in order to capitalise upon the spike in demand that often follows a products release. In this episode we discuss how to forecast for new products given the amount of unknowns there are and the lack of data that exists. We find out how deep learning compares to more classical forecasting techniques and if we can have any confidence in the results of forecasts. One of the reasons companies can have high stock levels is due to launching a new product that was unsuccessful. This results in poor cashflow and drains valuable resources.We understand the impact of product cannibalisation and how new products can skew the results of whole forecasts. Finally we discuss the future impact of more sophisticated forecasting techniques which utilise images and product descriptions to group the attributes of various products. ****** Episode Map 0:00:00 - Introduction 0:00:30 - Can we forecast for new products? 0:01:55 - Why the “time series approach” does not work? 0:03:41 - Can you actually forecast for something that is completely new? 0:07:16 - With the advances in deep learning technology, is there anything that can be applied to look at these attributes in more detail? 0:11:47 - How can we have confidence in these new product forecasts? 0:14:23 - When we produce our forecasts we are looking at business decisions across a whole catalogue, will new products not skew our whole forecasts? 0:18:02 - Is there any way of producing multiple forecasts to work out what that sensitivity of price will be? 0:21:50 - What can we see in the near future in terms of forecasting new products in terms of technology advancements? ****** Learn more: https://www.lokad.com/forecasting-technology ******https://tube.lokad.com/videos/embed/1d9874d2-df9a-4bc7-b261-7e62342d7bf1https://tube.lokad.com/videos/watch/2b61fe8a-db81-47f1-ae5d-d7c464f85aedhttps://tube.lokad.com/static/thumbnails/05662cb4-5c77-4d31-aedf-5ad549f623cf.jpgData Requirements for Supply Chain Optimization - Ep 16Not all data is appropriate for a Lokad solution to be effective. Today we understand what data a customer needs in order to work with us and how best to record it. We investigate the depth of data that our clients actually require and also the common mistakes and shortfalls that can be encountered along the way in collecting this data. The four main datasets which Lokad require are as follows: - Catalogue - Sales history - Purchase orders - Current stock levels In this episode we discuss why these core datasets are required and also what other data can be included to better inform the results of the forecasts. ******* Episode Map 0:00:00 - Introduction 0:00:22 - Why is that the data may not be appropriate for working with Lokad? 0:01:39 - What is the minimum time frame of history that you should have? 0:04:24 - We often talk about the four main datasets that we require. Let’s start off with the catalogue, what's interesting here? 0:07:06 - With the sales history what other information do we need other than what has been ordered, where, when and by who? 0:11:16 - Other than knowing how much we are paying historically for our goods, what other key information can we generate from Purchase orders? 0:16:54 - Can we not just use or sales and purchase history to generate the Stock level? 0:20:54 - We have spoken a lot about the main core data that is required. What about the other data that can be included? 0:23:12 - What can we learn from the companies that Lokad deal with on a daily basis? What common mistakes do they make? 0:26:25 - If there was one thing we takeaway from today’s discussion, what would that be? ****** Learn more: https://www.lokad.com/data-preparation ******https://tube.lokad.com/videos/embed/2b61fe8a-db81-47f1-ae5d-d7c464f85aedhttps://tube.lokad.com/videos/watch/3458083c-47c9-4812-9efb-be02eb0a0427https://tube.lokad.com/static/thumbnails/44aa851d-218b-4622-b31d-8ab1cf70e169.jpgData Jobs in Supply Chain - Ep 17For a supply chain initiative to succeed it needs a strong team behind it. In this episode we discuss the various job roles within this team and understand how their individual skills can contribute to the success or failure of a data management project. We also discuss the unique challenges that these teams can face and the key ingredients required in order to execute an initiative effectively. Recruitment for these roles can be difficult. We understand the roles of the Supply Chain Executive, Data Officer, Supply Chain Scientist and Project Manager and discuss which industries these professionals are classically recruited from. Finally we understand the risks in generating these roles and how organisations can facilitate their tasks. ******* Episode Map 0:00:00 - Introduction 0:00:24 - What is the role of a Supply Chain Executive 0:03:24 - Why does the Data Officer work separately from the I.T. department? 0:05:35 - Which are the key deliverables that the Data Officer is providing? 0:06:46 - What is it that a Supply Chain Scientist is doing on a daily basis? 0:08:30 - Why is it that the Supply Chain Scientist is responsible for both of these tasks? 0:11:07 - Why does it make sense for the Supply Chain Scientist to be external? 0:15:49 - Why is a Project Manager required in a Supply Chain initiative? 0:19:28 - What are the skill sets that we should be looking out for when recruiting for these roles? 0:24:40 - What would the key ingredients that this team has in order to insure that our supply chain initiative succeeds? ****** Learn more: https://www.lokad.com/the-supply-chain-scientist ******https://tube.lokad.com/videos/embed/3458083c-47c9-4812-9efb-be02eb0a0427https://tube.lokad.com/videos/watch/c4b6fce6-f532-465d-b823-ca2028e90e8ehttps://tube.lokad.com/static/thumbnails/5e1ae958-9fc4-44c8-8864-622dc6765161.jpgSales and Operations Planning (S&OP) - Ep 18Sales and Operations Planning (S&OP) is a business management process through which the executive leadership team come together to determine how best to manage company resources. This is by no means a new process and sounds straightforward enough, however it can be incredibly complex to be implemented effectively. For example, just opening up communication to align all your various departments in the first place can be difficult enough, not to mention that this alignment not only has to be internal but has to correspond to what the market demands. In this episode of LokadTV, we discuss just exactly why it is such a difficult tool for businesses to use and investigate, and what are the various alternatives available to a CEO looking to improve the way their company functions. For example, we elaborate on the widespread phenomenon of "sandbagging", where incentives are introduced for employees to reach certain quotas and why this more often than not ends up being highly counterproductive, with employees tweaking figures, forecasts or their workload in order to get those much desired bonuses. Given the latest advances in technology, it can be argued that S&OP is becoming outdated. We explore in more depth why consultants are still so happy to use these processes and explain how the introduction of computers can improve on many of S&OP's beliefs. To finish up, we take a look at which companies are paving the way with their operational processes and what lessons can be learnt from their unique approaches. ****** Episode Map 0:00:00 Introduction 0:00:27 Perhaps we should start with describing exactly what S&OP is? 0:02:25 Where did this concept come from? 0:03:17 What is not so good about this approach? 0:06:17 Aren’t you just looking at things from a supply chain perspective? 0:08:39 You talk about this poor alignment with S&OP proces. Would that just not shift to a poor alignment on economic drivers? 0:10:38 Can’t sales teams just have a bonus for accuracy? ...https://tube.lokad.com/videos/embed/c4b6fce6-f532-465d-b823-ca2028e90e8ehttps://tube.lokad.com/videos/watch/13899d88-6afd-4415-9c0a-48a7f0b8862bhttps://tube.lokad.com/static/thumbnails/fc5f7632-069a-40d3-b68d-abb1262070ab.jpgModularisation in Supply Chain - Ep 19After 7 years and a spend of over 500 million euros, Lidl have announced that they are putting a stop to the project replacing their in-house legacy ERP system with SAP. In this episode we discuss why the project went so wrong and why it is so difficult for large multinationals to upgrade from their existing monolithic systems. We understand how these systems can be replaced by a number of separate sub-programs or apps, a process known as Modularisation. If you’re going to fail, fail fast. We understand why, with regards to ERP systems, this is the case. We discuss both the benefits and drawbacks of a modular approach and learn how the use of these systems can lead to duplicate or redundant data. We understand how companies have become so dependant on their systems and what can be done to ensure that your business can make a smooth transition to a more modular approach. ****** Episode Map 0:00:00 - Introduction 0:00:20 - What part of a businesses processes are we talking about making more modular? 0:04:07 - What do you mean by “monolith”? 0:04:19 - So was the idea that we had just one big machine where everything connects to that locally? 0:06:30 - The Internet has been around for quite some time. Why are we still talking about modularization? 0:08:47 - Any examples of how this dependency on one system has affected a company in the real world? 0:11:16 - What are the benefits of changing from one larger system to many smaller ones? 0:13:33 - Surely this is introducing a reliance on many more companies instead of relying on one large ERP system which is realistically so large it will not face any issues? 0:16:49 - Do we have an example of a company that tried this and failed? 0:19:12 - Surely there is going to be some crossover between technology? How can things be decoupled? 0:22:47 - So what is the moral of today's story? Do things simply, do it right and build things that work together well? ****** Check out our website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/13899d88-6afd-4415-9c0a-48a7f0b8862bhttps://tube.lokad.com/videos/watch/2c1fad2d-cc2a-49b5-a57f-308a93793d10https://tube.lokad.com/static/thumbnails/a87ed956-b791-410c-85f3-eb4a1c03c5f9.jpgABC analysis does not work - Ep 20ABC analysis is an inventory categorization method that has its roots in Pareto’s 80-20 rule. The method works by splitting up a catalog based on its perceived worth. The Pareto principle was formulated by Italian economist Vilfredo Pareto; it dates back to the late 19th century and states that 80% of the overall consumption value is based on only 20% of total items. In other words, demand is not evenly distributed between items and top sellers vastly outperform the rest. We discover how ABC analysis works and examine both the positive and negative sides of it. We see that despite the fact that it has been around for multiple decades and that it's majorly incorporated into many major ERP packages - not to mention widely adopted by the supply chain industry as a whole - it fails to embrace a more modern approach and make the most of easily available software that can automate the bulk of inventory management. One of the major issues of ABC analysis is its over-simplification of products, which leads to instability over time. We learn more about this ABC approach, its underlying problems and what can be improved upon, so that you can take care of the most important products in a catalogue, without classifying them. To finish up the episode, we also debate in further depth Lokad's unique approach to inventory management and the philosophy behind it: focus on the ROI, where every product is optimized against its own fine-grained properties. ****** Episode Map 0:00:00 Introduction 0:00:24 Can you explain a little more about what ABC analysis actually is? 0:02:02 How does it work? 0:03:05 Is ABC analysis something that is being used by companies on a daily basis? 0:06:04 Why categorizing products according to their importance is not so relevant for you? 0:08:58 What are the problems with the ABC approach? 0:13:01 How can we approach things in a better way? If you’re not classifying your products, how do you know you are taking care of the most important items...https://tube.lokad.com/videos/embed/2c1fad2d-cc2a-49b5-a57f-308a93793d10https://tube.lokad.com/videos/watch/c3f5b325-0a5d-423a-97b3-3cb3c0b069e2https://tube.lokad.com/static/thumbnails/6587449e-f11f-418e-952c-d11fc2bca134.jpgHow To Forecast Seasonality - Ep 21Despite being one of most frequently used statistical patterns to improve the accuracy of demand forecasts, seasonality is often a subject which is misunderstood. In statistics, the demand of a given product is said to exhibit seasonality when the underlying time-series undergoes a predictable cyclic variation depending on the time within the year. In this episode we understand how accurate these seasons are and discuss how much faith can be put into results given the number of distortions which can occur to the data. It can be argued that seasonality impacts the vast majority of human activities. Christmas shopping, changeable weather conditions and even the SuperBowl are all examples of how seasonality can have a very real impact on sales. We discuss how companies can improve their approach to forecasting to take into account seasonality and understand what challenges they are likely to face. ****** Episode Map 0:00:00 - Introduction 0:00:25 - What do we mean by core patterns when it comes to seasonality? 0:02:22 - What are the difficulties people face when using seasonality? 0:06:52 - How can we know the seasonality of new products? 0:08:22 - If you forecast one month in advance, how can you know if summer is going to be elongated by an extra month? 0:12:07 - How do you know what is seasonal demand and what is just a spike due to a promotion? 0:16:18 - There seems to be many ways to have the data distorted, is there any way we can have confidence in the results? 0:19:40 - How can companies improve their approach to forecasting and take into account seasonality? ****** Learn more: https://www.lokad.com/definition-seasonality ******https://tube.lokad.com/videos/embed/c3f5b325-0a5d-423a-97b3-3cb3c0b069e2https://tube.lokad.com/videos/watch/56425b53-2ae7-485f-9461-de7858534eaahttps://tube.lokad.com/static/thumbnails/97828752-ee14-4305-99a7-c9f4699269b4.jpg3PL in Global Supply Chains - Ep 223PL - or third-party logistics - represent a way for companies to externalize their warehousing, distribution and fullfillment. Often when ordering a product on Amazon or eBay for example, the merchant is not actually going to ship the product directly to you themselves and instead uses a specialized company called a 3PL who ships the product on their behalf. In this episode of LokadTV, we are joined by Jingyang Xu, the Chief Strategy Officer at Winit (https://winit.com.cn/) who has had a long and dynamic career, having worked for 10 years at Microsoft as a developer on many of its major products, then moving on to Light in the Box, one of the world's first major e-commerces providing products directly from the manufacturer to the consumer and then working at Weibo - China's biggest social network -, before finally co-founding Winit. Winit is an integrated supply chain solutions provider for cross-border e-commerce. Together we discuss how with the continuing growth of online shopping supply chains and the marketplaces are evolving. Manufacturers are becoming closer to the consumers and small to mid-size vendors are now able to develop their business more easily thanks to the development of e-commerce. 3PL’s such as Winit are having to rapidly develop and make the best use of software to react to the ever more demanding needs of their clients. The worldwide market of 3PL has been steadily increasing for the last decade, and it is still expected to grow steadily for the next decade to reach a trillion dollars by 2025. In this episode, we try to understand how technology can impact upon this growth and how the rise of automation is making the global marketplace smaller. To round things off, we debate how future 3PL’s will change and try to understand the role that advanced forecasting techniques will have to play in this, as well as the impact on the modern supply chain. ****** Episode Map 0:00:00 Introduction 0:00:35 Jingyang Xu, perhaps as an introduction...https://tube.lokad.com/videos/embed/56425b53-2ae7-485f-9461-de7858534eaahttps://tube.lokad.com/videos/watch/ff582f9c-8045-4bda-a85b-813e6e4c16c9https://tube.lokad.com/static/thumbnails/fdf01cfb-a6ab-49ab-b4ca-9962ab313239.jpgForecasting High Growth - Ep 23Forecasting demand for existing products is difficult enough. But forecasting for radically well performing products is a happy dilemma that can derail even the most experienced supply chain practitioner. There are no past trends to reassuringly extrapolate into the future and there are many factors which can affect whether that growth is sustainable. In this episode we discuss why forecasting growth is so difficult and what can be done in order to have some degree of confidence in purchase decisions. A major problem with forecasting for too much growth is the valuable revenue that is wasted on stock that cannot be shifted. This can happen to even the largest companies such as such as H&M who reported $4.3 billion dollars of unsold stock in March 2018. This week on LokadTV we understand what growth patterns look like and why statistical patterns work best with uncertainty. Finally we discuss what clues a company should be looking out for so they can understand whether the product they are forecasting for is a hit or a miss scenario. ****** Episode Map 0:00:00 - Introduction 0:00:27 - What problems do companies face when forecasting for high-growth scenarios? 0:01:15 - What different kinds of ways can companies grow? 0:04:05 - How should you respond to a hit or miss scenario with a product? 0:05:43 - What other problems can occur when trying to forecast growth? 0:07:59 - A company might know it’s going to grow but not exactly when, what can be done to counter that? 0:09:21 - There’s no guarantee that your product will succeed, how do you forecast such a scenario? 0:14:12 - What kind of clues can a company look out for to know that they’ll enter in to a growth period? 0:15:14 - Could website visits and statistics be included in forecasts? 0:16:22 - What can a company do to be best prepared if they’re growing exponentially? 0:18:12 - What happens in the real world, do people often over-forecast their growth? 0:21:09 - What’s the core message for businesses to t...https://tube.lokad.com/videos/embed/ff582f9c-8045-4bda-a85b-813e6e4c16c9https://tube.lokad.com/videos/watch/fde01f54-2305-4a5d-bc6f-7bba9fb643aahttps://tube.lokad.com/static/thumbnails/b336b010-ec9d-4ad6-be19-7da563030219.jpgForecasting For Aerospace - Ep 24Nowadays it is often taken very much for granted that we will be able to go to the airport, then sit on a plane to arrive safely and on time at our destination. However, behind the scenes there are so many factors that ensure this not only happens safely for the client, but also profitably for the companies involved. In this episode of LokadTV, we discuss the aerospace sector and the key features of this market that make it so unique from other businesses. Nowadays, aircraft are made of up to 300,000 pieces and airlines need to have them fly as much as possible to be profitable. As a matter of fact, it costs up to $200,000 per day to ground a plane for maintenance. This makes on-time aircraft movement a critical success factor that drives both costs and revenue. We understand how airlines manage their stock and even collaborate with each other to ensure that losses due to aircraft on ground (AOG) are kept to a minimum. In addition, we explore how airline maintenance works and the budget constraints that affect even the largest aerospace companies, who can own over a billion dollars of inventory each. We also discover how airlines manage to work together, even in a highly competitive world, in order to keep aircraft flying. Finally we wrap things up by explaining why classical supply chain models can't be applied to aerospace supply chains and why a probabilistic approach that completely embraces the fact that your supply chain is built on loops and not on a direct flow from producer to consumer, is actually what works best. We also go further into seeing what a supply chain solution for aerospace should try to achieve in terms of KPIs. ****** Episode Map 0:00:00 Introduction 0:00:33 What are the key features that make this market so different? 0:02:02 How does the maintenance work? 0:03:02 How many components are we talking about here? What is the scale of operations? 0:03:54 What are the complexities that we associate with this supply chain? 0:05:59 How ...https://tube.lokad.com/videos/embed/fde01f54-2305-4a5d-bc6f-7bba9fb643aahttps://tube.lokad.com/videos/watch/bc6e4035-a37b-42a8-87c6-448c43b1f1b4https://tube.lokad.com/static/thumbnails/56defca7-682e-4a34-ad54-15efbb82d539.jpgTransforming Complex Supply Chains with Hervé Hillion - Ep 26For this episode of LokadTV, we are joined here in Paris by Hervé Hillion, one of the founding members of SAY Partners, a renowned supply chain consultancy. With more than 20 years experience in operations consulting and the strategic management of complex supply chains, Hervé explains how change can be effectively conducted across an entire supply chain. Together with Lokad's founder Joannès Vermorel, we discover how various business sectors that were once considered incredibly ahead of their time concerning the modernity of their supply chains are now lagging far behind other verticals. Over the years, supply chains have fundamentally changed. We discuss what the organisational structures of tomorrow could potentially look like and the skills needed in order to adjust to the introduction of the numerous new technologies available today and the overall complexities of modern supply chains. Historically, it used to be the repetitive, mundane jobs that were being replaced, however now white collar jobs are also gradually being replaced. Should we fear a complete disappearance of middle management in favour of a complete automation of supply chains? In this episode we try to understand how these white collar roles could be evolved, what are the skills required and how management should deal with such large organisational changes. Finally, we talk about the many buzzwords that are thrown around in the world of technology, such as AI, Deep Learning, Cloud Computing, Machine Learning, etc. With so many buzzwords and their often short-lived fads, just how can we actually discern what is simply a trend and what is actually a piece of technology that is here to stay - therefore worth a company investing both their time and money in? We try and provide you with some tips for successfully navigating this ever-changing tech landscape. ****** Episode Map 0:00:00 Introduction 0:00:32 Hervé, perhaps we could start by you telling us a little more about your background?...https://tube.lokad.com/videos/embed/bc6e4035-a37b-42a8-87c6-448c43b1f1b4https://tube.lokad.com/videos/watch/88243360-4797-477a-b119-79d93f3e7afehttps://tube.lokad.com/static/thumbnails/6011d709-dbd9-4c6d-9ca6-2b3a91c0b913.jpgThe Limitations of the Min/Max Approach - Ep 27Many in the supply chain industry are bound by the capabilities of their ERP system. Often the Min/Max approach is hard coded into the software making it an approach that many companies rely upon. The method was developed as a visual way of managing stock levels with the primary benefit being its simplicity. However as one of the earliest automated replenishment methods to be used in inventory management software, this approach has its limitations. In this episode we explain why the method is geared towards simplicity rather than correctness and how ultimately through taking this approach you are on a path destined to failure. We explain why it doesn’t account for MOQ’s and why it works very poorly with multi-item constraints. We understand the first steps that a Supply Chain manager should take to improve their approach and debate why, even if a company has a min/max approach that is currently working, they should still take steps to move away from this method. ****** Episode Map 0:00:00 - Introduction 0:00:31 - What do Min/Max approaches actually entail? 0:01:45 - In addition to being simplistic, what other benefits does the Min/Max approach have? 0:02:30 - What are its limitations? 0:04:38 - So what are the real world problems that come from using this approach? 0:07:05 - If it’s such a “poisonous” approach, why is it incorporated in to so many ERP’s? 0:09:20 - A lot of companies are bound by Min/Max, what are the other available options? 0:12:00 - Is reverse-engineering an approach to recommend? 0:14:20 - What are the key differences between a Lokad and a Min/Max approach? 0:17:05 - Why should a company move away from a Min/Max approach if its working well enough? 0:18:59 - For a Supply Chain Manager, what would be the first steps to move away from a Min/Max approach? ****** Find out more: https://www.lokad.com/min-max-inventory-planning-definition ******https://tube.lokad.com/videos/embed/88243360-4797-477a-b119-79d93f3e7afehttps://tube.lokad.com/videos/watch/7ae1589c-f7f9-4ee2-9e08-07acaa80fd20https://tube.lokad.com/static/thumbnails/4e541217-b49d-4deb-be00-51c1cfa529d7.jpgService Level vs. Fill Rate - Ep 28Often we take for granted the fact that you will be able to walk into a store and for an item to just be sitting on the shelf there, waiting for you when you need it. With huge catalogues to keep track of, fill rates and service levels are two of the most common tools that supply chain managers rely on to keep track of whether they are fulfilling their customers' needs. However, despite their relative simplicity to implement, service level is often mistakenly confused with fill rate, and vice-versa, despite the two indicators being numerically very different. In this episode, we clarify exactly what they are and find out which tool is the best to apply to prevent stock-outs. As always when it comes to measuring how happy customers are, there is a certain "vanity metric" that can get in the way. Many managers are content to keep thinking they are doing well rather than really scrutinising their approach in detail. We discuss if there is a better way of measuring how demand is fulfilled and how easy it is for a company that has been using these metrics for a while to change from their current approach to a new, more efficient one. Finally, we learn how to identify what is a good service level or fill rate and explore how companies can use this to keep their customers satisfied. It's a highly complex question and, contrary to popular belief, 100% is not acutally the best service level or fill rate percentage that managers should be aiming for. ****** Episode Map 0:00:00 Introduction 0:00:30 Perhaps a good place to start would be if we define what service level and fill rates are and the key differences between them? 0:02:03 Do you have an example to explain this? 0:03:59 How do you know what is a good fill rate, or what is a good service level that you should actually work to obtain? What is the percentage you should be choosing? 0:05:21 How does the service level actually work in practice? 0:09:35 It sounds like the methods can be fairly simplistic. Is ther...https://tube.lokad.com/videos/embed/7ae1589c-f7f9-4ee2-9e08-07acaa80fd20https://tube.lokad.com/videos/watch/21993610-cfcc-41de-a0a4-f7cef9e3782ehttps://tube.lokad.com/static/thumbnails/87affc38-af84-43e4-bd6b-529c5cd0b9b3.jpgLead Times matter in Supply Chain - Ep 29Accurately estimating future lead times is critical for accurately estimating the amount of inventory needed to fulfill future demand. However it is often it is a factor which is overlooked by companies, with a far greater importance being placed on forecasting. On this episode of LokadTV we explain why they are critical to strong business performance and why if you don’t take them seriously you might as well use a random number generator for your forecasts. We talk to Joannes Vermorel and get his views on why many of his customers have had a rather inexperienced approach to their lead times. Lead Time is an important factor for customer satisfaction. It can be summarised as the amount of time between process initiation and completion. But despite its apparent simplicity, often it is not so simple to actually record lead times, with the metrics often confused by companies. In this discussion we explore why there is uncertainty surrounding something which should be simple and understand how we can have more confidence in the lead times used to make purchase decisions. Finally we understand how to account for the variation in lead time between different transportation methods and how you can keep on top of the shear number of variables which must be taken into account. ****** Episode Map 0:00:00 - Introduction 0:00:34 - Why are we talking about something that seems so simplistic? 0:02:47 - Approaching lead times can be complex, what are the first steps someone should take to improve their lead times? 0:05:23 - What are the key factors that contribute to variability in lead times? 0:07:01 - So you’re saying that you should break down lead times in to individual parts, does this not add a new layer of complexity? 0:08:21 - With these added complexities, how can you have confidence in your lead time predictions? 0:10:03 - What’s a real world example of a customer improving their lead times and how did that affect their business processes? 0:12:37 - How can unexpe...https://tube.lokad.com/videos/embed/21993610-cfcc-41de-a0a4-f7cef9e3782ehttps://tube.lokad.com/videos/watch/144dad30-65ec-47d3-8f8a-fe3d570c21d2https://tube.lokad.com/static/thumbnails/8cb619ba-1cc6-4a55-817b-763f7f5fa4da.jpgData Science For Supply Chain Forecast with Nicolas Vandeput - Ep 30The rise of open-source software and the widespread adoption of programming languages such as Python has allowed supply chain practitioners to work with increasingly more advanced statistical models. However many professionals still have the impression that implementing advanced forecasting techniques is an insurmountable challenge, best left to professionals. In todays episode we discuss with Nicolas Vandeput his new book, “Data Science for Supply Chain Forecast”, which aims to dispel this myth and show that anyone can create their own forecasts. Machine learning comes with different questions than old school statistics. It requires a different mindset, different experiments and different data. Joannes Vermorel joins us to discuss how going from a statistical forecast to a machine learning forecast will change some of our habits. We understand how open-source software fits into the vision of Lokad and discuss the benefits of collaboration and competition. Finally we understand what the open-source supply chains of the future could look like and what the first steps executives can take to start implementing advanced forecasts for their organisations. ****** Episode Map: 0:00:00 - Introduction 0:00:33 - Nicolas, how did you get involved in the world of supply chains? 0:01:22 - What is your book “Data Science for Supply Chain Forecasts” about? 0:01:58 - Joannès, what’s your perspective on the book? 0:06:08 - Joannès, it’s not just the forecasting world benefitting from open-source software, which other industries have really benefited? 0:10:37 - Joannès, does it make you nervous that there are so many easy to use, open-source forecasting tools out there? 0:14:23 - A lot of these ideas have been developed from a theoretical perspective, could they be applied in a production setting? 0:15:33 - Joannès, for using these ideas on a daily, production basis how could Lokad help? 0:21:30 - What do we do to evangelize the market so that there’s more importance placed on ...https://tube.lokad.com/videos/embed/144dad30-65ec-47d3-8f8a-fe3d570c21d2https://tube.lokad.com/videos/watch/e428174d-2f87-4c7e-bf86-32b4149af2b4https://tube.lokad.com/static/thumbnails/349e0a14-39e8-4ea7-93b1-5ec89c96dce7.jpgQuantitative Supply Chain For Fashion - Ep 31Edith Head once famously said that “You can have anything you want in life if you dress for it". With the fashion industry reaching a global value of around 3 trillion dollars, it seems that few disagree. However, all that glitters is not gold. That's why, in this episode of LokadTV, we decide to shed light on the numerous supply chain challenges within the industry. First of all, the lifecycle of a fashion product seems to be disseminated with a series of constraints, like MOQs, container shipments or the problem of the dispatch between the different channels - to name but a few. If we think about ultrafast fashion, the challenges are even bigger, considering that the lead times are often extremely short: less than a week from design to the shelf. In this video, we discover how technology can help us automate a series of time-consuming decisions. We also talk about sales and pricing, which are an integral part of the fashion industry and one of its key challenges as well. Price elasticity is the main mechanism that brands use to liquidate their inventory at the end of a collection, but with millions of items spread over different channels, it requires a massive workforce. See how a Quantitative Supply Chain initiative can help you in dealing with this riddle. Finally, we discuss how the items of clothing that a celebrity decides to wear can often result in stockouts. Can brands really forecast these 'freak' spikes in demand? How could a probabilistic approach take into account those statistical outliers? What about social media, especially Instagram? Are companies nowadays overstocking certain items in anticipation of what influencers will wear, and should this kind of marketing via platforms be taken into account in future stock management decisions? We debate these questions and more. ****** Episode Map 0:00:00 Introduction 0:00:31 Perhaps a nice place to start is to look at how the industry currently operates. So what is the more traditional approach the ...https://tube.lokad.com/videos/embed/e428174d-2f87-4c7e-bf86-32b4149af2b4https://tube.lokad.com/videos/watch/4a4bd6c9-8664-4ab7-b3f2-b03a6937a5d2https://tube.lokad.com/static/thumbnails/ca5abf1e-86b1-466b-8e9e-40049baecdb0.jpgGenerations of Machine Learning - Ep 32AI algorithms are being used to drive vehicles, translate languages and even identify cancers. As such they have captured the attention of the world's media, but these advances in machine learning technology are not the overnight sensation that many are led to believe. In this episode of LokadTV, we go back right to the start; we investigate the gradual development of computational analysis over the last few decades and understand if this gradual evolution of the industry can give us any clues as to what the future may hold. We discover what the first generation of computational statistical analysis, based on the parametric models, looked like. In addition, we explore how the 80s and 90s welcomed the arrival of non-parametric statistical models - which increased the chance of overfitting -, while the new millennium saw the arrival of Deep Learning, characterised by "hyper-parametric" models. The increase in spending on research has had a real impact upon the computational capability. We discuss how something designed to support video games was actually revolutionary in terms of processing power. We also discuss the impact of technology such as the Cloud, which allowed us to store more data, more efficiently. Finally, we talk more in depth about the key problems that the “Big Four” are currently focusing on. We debate why the supply chain industry is often a few years behind the latest advances in technology, and to wrap things up, we try to understand how an executive can keep up in an environment that is constantly changing. ****** Episode Map 0:00:00 Introduction 000:36 When did the first generation of Machine Learning come about? What did it look like? 0:02:13 I imagine back then things were very different in the world of computational analysis. What was the main focus at the time? 0:03:23 How long did it take for the next generation to come about? 0:06:12 How did Machine Learning come about? What impact did it have? 0:07:58 What were the big improvemen...https://tube.lokad.com/videos/embed/4a4bd6c9-8664-4ab7-b3f2-b03a6937a5d2https://tube.lokad.com/videos/watch/0ed9c4fc-cf77-40fc-ab12-55de5c3ddc56https://tube.lokad.com/static/thumbnails/0cb3743f-f007-493a-9a12-9a5bf86a3a72.jpgMulti-echelon supply chain optimization at Bridgestone - Ep 33With around 180 manufacturing plants and business presence in more than 150 countries, Bridgestone is the largest manufacturer of tyres in the world. In this special episode of LokadTV, we are lucky enough to take a peek behind the scenes and understand the daily operations and challenges that are faced by a multinational corporation such as Bridgestone. We welcome Nicolas Vandeput to discuss the recent project completed between Lokad and Bridgestone to improve their European supply chain operations. We discover how things were managed before the arrival of Lokad, whith multiple teams in multiple countries fighting to get as much stock as they could in order to avoid stockouts in their own country. We discuss why our tailor-made and programmatic approach proved to be the best option in the market for such a multi-echelon network. With a multitude of locations around Europe, from Latvia all the way to Portugal, and up to 60 000 SKUs, the Bridgestone supply chain is inherently complex. We explore the difficulties that are introduced when tackling a multi-echelon problem and discuss how a company, which places such huge emphasis on lean stock management, battles daily to service their customers as efficiently as possible. Finally, we understand the challenges of implementing a project such as this across such a diverse organisation and we learn how the change management process was approached with minimal impact to daily operations. ****** Episode Map 0:00:00 Introduction 0:00:28 Nicolas, I guess a nice place to start would be to illustrate the scale of the project and the supply chain at a multinational corporation such as Bridgestone. So how many SKUs and locations are we talking about? 0:01:40 With such a multitude of locations around Europe, from Latvia all the way to Portugal, what are the complexities that are introduced? 0:02:20 What was the initial idea behind the project? How did it start? 0:03:28 What was so different about the approach Lokad was t...https://tube.lokad.com/videos/embed/0ed9c4fc-cf77-40fc-ab12-55de5c3ddc56https://tube.lokad.com/videos/watch/bbd39e5f-0d36-4f00-94e0-caa1298abe53https://tube.lokad.com/static/thumbnails/9a77c540-a29f-4754-9544-07e28298041f.jpgWhy Safety Stock Is Unsafe - Ep 34In the 1920’s people came up with the idea of inflating demand predictions in order to more safely cover periods of high demand. This method, commonly known as safety stock, gained a huge following and as a result was hard wired into many ERP’s to protect against variability in both demand and lead times. Despite the fact that this method was conceived before computers were even invented and that both technology and supply chains have transformed so dramatically since, saftey stock still remains a staple approach in many supply chains. Furthermore, even though it is a relatively simplistic concept, it is unfortunately often used far too conservatively, resulting in overstock and wasted inventory. In this episode of LokadTV, we explore just how this approach became so extremely popular, why it is still so widely used and where this methodology fails. In addition, we discuss the modern alternatives that are available to a supply chain professional. Often, when people use safety stock, they blame the results of forecasts for any errors rather than the tool itself. The root cause of the problem is the fact that normal distribution will always underestimate risk. Uncertainty is inevitable and needs to be embraced, yet safety stock methods don't usually approach this the right way. Here, we try to explain why many professionals never really notice when they are overstocked and why they add coefficients to safety stock to overcompensate for stockouts. We investigate the idea that uncertainty can be seasonal, as well as demand. Finally, we try and see how businesses can achieve less stockouts with less stock. ****** Episode Map 0:00:00 Introduction 0:00:33 How would you define safety stock? 0:02:05 When did these ideas come about? Why is this something the market is hang up on? 0:04:04 Where are the key difficulties with safety stock? 0:08:57 Why is the probabilistic approach better than the safety stock one? 0:13:08 How do you deal with customers that need ...https://tube.lokad.com/videos/embed/bbd39e5f-0d36-4f00-94e0-caa1298abe53https://tube.lokad.com/videos/watch/1de6a72f-e417-4d61-a092-2215eb2f98bbhttps://tube.lokad.com/static/thumbnails/3b89ff2a-403c-4bd3-805e-85a5ca71d26f.jpgPOCs (Proofs Of Concept) don't work for Supply Chains - Ep 36Proofs of concept (POC) are one of the most common requests we get from prospective clients wanting to try out the Quantitative Supply Chain method for themselves. However, this is something we frequently decline. Why? Because often it can hurt the client's company as well as impacting Lokad negatively. In this episode of LokadTV, we try to help differentiate between the multitude of varied softwares out there and give insights into how each company approaches a problem. POCs do work well for narrow, very specific questions. However, supply chains present a very distributed challenge that are difficultly framed by a POC. We explain why, at the end of the day, POCs don’t actually work for supply chain, despite their stark presence within the industry. Supply chains are incredibly complex and POCs fail to take into account the bigger picture, due to their short time frame that doesn't allow for a proper assessment of key elements (such as lead times). Therefore, we try to understand some of the common problems that can be encountered and what a company should be doing instead if they want to evaluate and choose between the vast range of supply chain softwares that exist on the market nowadays. POCs have been around for decades and often people assume that the accuracy of a solution is stable over time. Sadly, it rarely is. We discuss exactly why and learn how backtesting can give an overly simplistic solution to problems that are fundamentally far more difficult. ****** Episode Map 0:00:00 Introduction 0:00:35 What are the industries where POCs actually work? 0:02:22 What characterizes POCs as an open problem? 0:03:23 POCs don’t work just for the quantitative supply chain, or for the supply chain industry as a whole? 0:06:54 For how long should you persevere with a POC before seeing a result? 0:08:50 Why is gathering data so difficult? 0:12:20 Why doesn't backtesting really work? 0:15:10 What are some of the key problems that you have experienced when doing...https://tube.lokad.com/videos/embed/1de6a72f-e417-4d61-a092-2215eb2f98bbhttps://tube.lokad.com/videos/watch/eaa66633-b777-40a3-86ac-828fce09337dhttps://tube.lokad.com/static/thumbnails/17a5741c-d7fc-4f03-a831-fbddc9633fcb.jpgData Lakes in Supply Chain - Ep 37William Edwards Deming once famously said that “without data you're just another person with an opinion”. In this episode of LokadTV, we find out why he is absolutely right and tackle the subject of data lakes. We try to understand why many companies are failing to consider both how and where their data is stored, and instead are putting huge amounts of resources into expensive Business Intelligence tools that don't always do the job properly. Here we discuss the mulitple drawbacks of some of these tools and try to comprehend just why they are still so commonly used across the industry despite their shortcomings. So what exactly are data lakes and why should companies be that much more interested in them? Around 20 years ago the trend of data warehouses was sweeping the world of technology, but it sadly didn't live up to expectations. However, things have since vastly progressed and this is now something that is ready to be put in place properly. We investigate what exactly has changed and why now is the right time to revisit this topic. We try and understand how the mass of technological advancements is making it easier for companies to keep track of their processes. Finally, we discuss the history and downsides of Business Intelligence systems and why they might not be as efficient as they initially appear. We learn how easy it is to implement a data lake into an organisation and discover in more detail the various technical challenges that can be encountered when implementing a data lake. ****** Episode Map 0:00:00 Introduction 0:00:34 What is a data lake? 0:02:24 Around 20 years ago, we had the trend for data warehouses; what has changed? 0:04:11 What changed in the mindsets and what changed in the way we are using data lakes? 0:06:29 What about today? 0:07:29 How do you know that the data you are actually using is good data? 0:13:12 Why should a big multinational company be interested in a data lake? 0:16:40 How easy is it to implement a data la...https://tube.lokad.com/videos/embed/eaa66633-b777-40a3-86ac-828fce09337dhttps://tube.lokad.com/videos/watch/926cc146-f791-43bf-9651-ae942c3acd54https://tube.lokad.com/static/thumbnails/82428402-b137-498a-965c-945bf20ee2ed.jpgPricing Optimization and Supply Chain Management - Ep 39One of the first things we're taught in basic economics is that price is inherently linked to demand. There is no demand without price. However, despite pricing being such an integral part of a demand forecast, until now the vast amount of variabilities meant that modelling the link between the two has been intrinsically difficult. Pricing has become the elephant in the room. To compensate, many companies use micro optimizations of a moving average, or even more simplistic Excel models to set prices. Classic supply chain optimisation tools focus mainly on demand, with pricing being pretty much inexistant, creating an enormous blind spot in this vital area. In this episode of LokadTV, we explore the concept of pricing optimization and learn how, instead of pricing being just something you need to forecast, it can - and should - be something you engineer into your supply chain solutions. Up until now, one of the main challenges has been understanding the vast number of external factors that can affect sales. We discuss how well existing techniques work and understand how much trust can actually be placed in these models. In addition, we learn how the latest advances in machine learning mean that a company can keep track of the shear number of variables and why machines are so well equipped for this task, particularly when there is lots of "noise". Finally, we discuss the technical requirements needed to implement pricing optimization and what does a company actually need to put this in place. We also investigate how the latest advances in machine learning and big data mean that pricing optimization is now no longer an aspiration of the future, but a very real possibility for businesses today. ****** Episode Map 0:00:00 Introduction 0:00:31 How is pricing currently approached from a Supply Chain perspective? 0:01:25 How well does the pricing work as a mechanism? 0:02:47 Is that the reason why pricing isn’t really taken into account? 0:04:11 Where do you star...https://tube.lokad.com/videos/embed/926cc146-f791-43bf-9651-ae942c3acd54https://tube.lokad.com/videos/watch/6a37837d-e620-4a88-b4d1-61d2ba5cfc0ehttps://tube.lokad.com/static/thumbnails/0d525371-54ec-42d6-9535-33032d30135a.jpgBlackboxing and Whiteboxing - Ep 40In computer science, a black box refers to a system or an object that can be viewed both in terms of its inputs and outputs without any knowledge of its internal workings, which can evidently be highly problematic. This phenomenon is something that is being observed more and more frequently, particularly with the use of non-trivial numerical recipes and the rapid growth in popularity of Artificial Intelligence technology. In this episode, we learn how blackboxing can come about in supply chains and why to a certain extent it is exhibited in every single ERP with the computation of safety stock. Often, this can be harmful for companies as decisions are made without a full and sufficiently broad comprehension of what is happening within. Supply Chains are already such complex systems, involving so many products and people, that they naturally have their own opacities. Therefore, adding even more layers of opacity obviously can't bring any benefits. Frequently, companies respond to blackboxing issues by requesting more information, KPIs for example, which just adds more complexity, more opacity and so the vicious circle continues. So just what is the solution? Here, we investigate the antithesis, something that is known as ‘Whiteboxing’. We understand how by building an environment that supports checking, whiteboxing can provide a way of verifying that the results you are producing are sane. We discuss how this works in practice and how at Lokad we use Envision, our in-house created programming language, to defeat opacity, therefore ensuring that our clients can easily see that all operations are on show. ****** Episode Map 0:00:00 Introduction 0:00:30 What is "Blackboxing" about? 0:03:20 How widespread is this problem? Is this something we frequently observe in the industry? 0:05:11 Why is this white box approach occurring? 0:06:04 Do you have a real life example of how these black box issues have affected companies in the real world? 0:09:01 Why the "Wh...https://tube.lokad.com/videos/embed/6a37837d-e620-4a88-b4d1-61d2ba5cfc0ehttps://tube.lokad.com/videos/watch/c13e4ac3-716a-4084-8fa2-58846c7634cfhttps://tube.lokad.com/static/thumbnails/0f3228b6-5960-4faa-a925-95ccc3488c80.jpgData Security in Supply Chain - Ep 41With celebrities, businesses and even governments falling victim to hackers, data security has become a topic of huge media interest. In this episode of LokadTV, we discuss how, as cloud computing continues to gain in popularity and hacking techniques become more and more sophisticated, we can be fully confident that our data is safe. Nowadays we are more dependent on software and online services than ever and it's no surprise if cyber attacks are on the rise. In this video, we learn which criteria you should consider when determining if a company can be trusted, or instead should be avoided at all costs. For example, would you consider a large company who exposes tons of resources online as being cyber-secure? Would you outsource your systems to such a company? What do we, at Lokad, do as a company in order to keep our own systems safe from attacks? For us, security is one of our major concerns, running parallel to the accuracy of the forecasts we deliver. In this video, we reveal some of our own "secrets" and explain why we choose to rely on Microsoft Azure for our security and why we decided not to use any sequel or relational databases. We also look at the concept of hackers and "Whitehats", freelancers who spend their time trying to hack into companies' codes in order to find security issues that they will subsequently report to the company itself. Are they our allies in improving the security of IT systems? In addition, we debate on why the systems used by governments or military forces are among the most vulnerable in the world and why "security by obscurity" is no longer something to long for. Finally, we talk about the future. Can we possibly envisage a day when IT systems are completely safe and hacking becomes a relic of the past? Even though we are far from idle, there's a field where this can happen faster. Are you wondering which one? Supply Chain... ****** Episode Map 0:00:00 Introduction 0:00:30 Is data security a new issue? 0:01:58 Why is...https://tube.lokad.com/videos/embed/c13e4ac3-716a-4084-8fa2-58846c7634cfhttps://tube.lokad.com/videos/watch/4bd64b82-7141-4549-8cde-58bdf6e01fdfhttps://tube.lokad.com/static/thumbnails/dc848e7f-f55f-4491-a20e-4cc9c30aee06.jpgThe Problem With Flowcasting - Ep 42Flowcasting has been previously described as "The Holy Grail of demand-driven supply chain planning." But just what is it exactly? "Flowcasting the Retail Supply Chain", a book published in 2006, presents a series of techniques that were intended to revolutionize the retail industry. In this episode of LokadTV, we learn a little more about this concept and debate why a technique that was published in 2006 is still of interest today. This theory presents a lot of interesting ideas on paper, but when it was used it apparently didn't live up to expectations - here we try to understand why. We discuss how well flowcasting works in practice and try to comprehend exactly why and how it fell apart when actually implemented. The root causes seem to be linked to issues and missing insights that still persist within the supply chain industry today, so many will be doomed to make the same mistakes unless they can learn from them. We look at how the tool relates to what we do here at Lokad with Envision, our own in-house programming language, and we examine just what were the good insights that Flowcasting provided at the time. Finally, we take a closer look at whether flowcasting actually had the right vision and was just ahead of its time, simply lacking some of the mathematical and technological expertise required to really make it work. At the end of the day, supply chains are incredibly complex and there are simply no silver-bullet solutions, which is something that no amount of buzzwords can change. ****** Episode Map 0:00:00 Introduction 0:00:31 What flowcasting actually is and how it does work? 0:03:36 What do you mean by disaggregated? Are we really separating this down to every single individual SKU? 0:06:55 Why does it all fall apart? 0:10:11 If there were so many problems with the approach, what was the outcome when retailers actually tried this out? Were there any full scale disasters? 0:15:05 What are the key differences between flowcasting and what we ...https://tube.lokad.com/videos/embed/4bd64b82-7141-4549-8cde-58bdf6e01fdfhttps://tube.lokad.com/videos/watch/27e1a178-7a14-4ffe-8caf-e2a2931bbd9chttps://tube.lokad.com/static/thumbnails/c9eb23cd-596b-4ea6-838e-6666974fe920.jpgWhy DDMRP Is Fundamentally Flawed - Ep 43Demand Driven Material Requirements Planning (DDMRP) is a multi-echelon planning and execution method. This technique is a further development of MRP and works through strategically placed decoupling points and stock buffers that promote the flow of information throughout a supply chain. Previously, it has been described as being ‘Built for People, Not Perfection’. However, in this episode of LokadTV we try and learn whether this method really works in practice and why, as a technique, it is unfortunately fundamentally flawed. The approach was built in response to the frustration that many practitioners were feeling with their supply chains and has gained traction over the last few years. DDMRP is made up of four pillars of innovation. We learn more about these four innovations and discuss exactly why introducing decoupling points is far too simplistic and naive an approach to take, especially when faced with the multitude of complexities that supply chains represent. We discuss the principle of net flow calculation and understand why it is merely a glorification of a highly simple relationship between stock and demand that already exists. We also explain what the somewhat dramatic sounding "decoupled explosion" actually boils down to in practice. To round things up, we go into more details on how using human inputs to tweak the systems through these decoupled explosions is, in fact, too crude a solution for satisfactory results and discuss the valuable insights that DDMRP does give on moving averages for forecasting, specifically in the frequency domain. ****** Episode Map 0:00:00 Introduction 0:00:32 What is the general idea behind DDMRP? 0:02:32 Why doesn’t it actually work in practice? 0:05:40 How well does the net flow equation work in practice? 0:08:45 What about the decoupled explosion? What is going on here? 0:10:20 Who is actually making those choices? 0:13:08 Do we prefer to rank by economic strength? 0:17:17 DDMRP has its flaws then, so should...https://tube.lokad.com/videos/embed/27e1a178-7a14-4ffe-8caf-e2a2931bbd9chttps://tube.lokad.com/videos/watch/5fb93fbb-2b43-4828-a4c2-217eac792251https://tube.lokad.com/static/thumbnails/7858a7b3-4978-4007-99d8-c7759390d74d.jpgDemand Forecasts for Hard Luxury - Ep 44Being located here in Paris we get exposure to some of the world's finest luxury brands. However, forecasting for these luxury brands and the luxury market is a completely different ball game, based on extremely high value products and sporadic, often difficult to track, purchasing patterns. In this episode of LokadTV, we learn a little more about the lucrative world of luxury products and try to understand how you can forecast for those items that we want and desire, rather than need. We learn more about the approach that is currently taken and why the luxury market is so unique from other industries from a forecasting perspective. Even in luxury brands, where one could think that money is no object, the pricing of a product has a real role to play. Assortment optimisation is also a major question that needs to be considered from multiple angles. Here, we discuss how prices can be determined with such an intermittent and sporadic sales history and why it is paramount to hold stock within a store to create demand. Demand generation and truly understanding your clientele are two central elements when it comes to the luxury sector, this former element meaning that a talented Store Manager can often be indispensable. We investigate Lokad’s take on the industry and learn how highly interconnected products and a highly structured market means that statistical optimisation can be successful. Finally, we go in depth on just why luxury brands rotate products and how to calculate the opportunity cost of taking a product away from the eyes of potential clients. ****** Episode Map 0:00:00 Introduction 0:00:32 The luxury market is very different to some of the more classic markets we work with. Perhaps we could start with what makes it so unique from a purchasing perspective. 0:04:52 How do they know which items they should put on display? 0:07:52 How about pricing? 0:11:14 Are we saying that those luxury brands are sort of gambling to get the initial pricing right fro...https://tube.lokad.com/videos/embed/5fb93fbb-2b43-4828-a4c2-217eac792251https://tube.lokad.com/videos/watch/52ec7b2f-4f0e-4605-ac81-efd9effff5e5https://tube.lokad.com/static/thumbnails/66ad75c7-e07f-427b-a9c2-f585c41c4357.jpgDifferentiable Programming in Supply Chain (Part 1/3) - Ep 45Differentiable programming is the latest descendant of deep learning. It has unlocked a series of challenges which were previously seen as “unsolvable” and has paved the way for considerable progress and superior numerical results in the world of Supply Chains. In this episode of LokadTV we tackle this extremely exciting new development and learn how this major breakthrough means we can now perform optimizations, even when faced with high levels of uncertainty. In supply chains there are a whole series of unsolved problems that the industry has been struggling with for years. We learn how solutions to the big AI problems, such as voice recognition, image analysis and autonomous vehicles, can be applied to specific supply chain products and why the present time has been the better moment to revisit these failures. We explore how differentiable programming provides a joint resolution to these problems and makes it possible to mix factors that are logically so different. Finally, we discuss what this breakthrough in large-scale numerical optimisation means for future supply chains and how considerable progress and superior numerical results can be made. But there are still many "wicked" problems that remain unsolvable, despite these technological leaps and bounds. Problems that would "take Skynet to solve". So how far away are we from a Terminator-esque future with robots taking over the world? Watch and find out! ****** Episode Map 0:00:00 Introduction 0:00:28 Today, we are going to talk about tackling some unsolved problems. What kind of problems are we talking about? 0:01:48 What sort of problems has the Supply Chain industry been struggling with for years? 0:04:20 Can we combine existing methods to get something satisfactory? 0:09:22 Where does it work really well in the real world? What are the classic challenges that it is really good at solving? 0:13:18 Which are the problems in the Supply Chain world which Differentiable Programming cannot solve? 0:17...https://tube.lokad.com/videos/embed/52ec7b2f-4f0e-4605-ac81-efd9effff5e5https://tube.lokad.com/videos/watch/44a07c44-8781-490a-8d2f-4e3892cb904dhttps://tube.lokad.com/static/thumbnails/1b52a80e-8a50-4ff6-bd39-9c1c37c194b9.jpgDifferentiable Programming in Supply Chain (Part 2/3) - Ep 46Yann LeCun, the director of AI research at Facebook, recently argued that ‘Deep Learning’ has out-lived its usefulness. As such, he proposed that it’s time for a new buzzword to reflect the development of a new kind of software - Differentiable Programming. In this episode of LokadTV, we continue our mini-series by looking at Differentiable Programming's origins and understanding where this technology actually emerged from. We discuss how the thinking behind it varies from the neural networks of old and why we are revisiting theories such as stochastic gradient descents and automatic differentiation, which have already been around for well over 50 years. For Differentiable Programming to come about, there were a number of basic intuitions that needed to be proved completely wrong, but its development has been incredibly incremental. We understand why the classic idea of mimicking biological processes through technology leads to inefficiencies and discuss how software can have an affinity with its underlying hardware. We learn how to combine the different statistical models that are currently being used through floating points. Finally, we discuss how Differential Programming provides the ability to capture highly complex patterns and the capability of an open toolkit for optimization. Yet, how exactly can new technological advances such as image and sound recognition, incredible though they may be, possibly be linked to supply chain optimization? Watch the video and find out. ****** Episode Map 0:00:00 Introduction 0:00:29 Differentiable Programming: did we really need another buzzword? 0:06:28 It was quite an iterative approach to get to Differentiable programming. Is that right? 0:09:40 What was the inspiration behind Differentiable Programming? 0:12:30 How do you implement the code behind Differentiable Programming? 0:15:25 How can you know that you are going to have the right answer if there are those blank spaces? 0:16:22 How closely is the R&D we are d...https://tube.lokad.com/videos/embed/44a07c44-8781-490a-8d2f-4e3892cb904dhttps://tube.lokad.com/videos/watch/fb569b52-db36-492a-9d47-7728315cc07chttps://tube.lokad.com/static/thumbnails/391386f8-dcd2-4df7-aa72-b2e8fbf0d904.jpgDifferentiable Programming in Supply Chain (Part 3/3) - Ep 47In this final episode we conclude our short series on Differentiable Programming by looking at some of its potential use cases and discuss the far reaching consequences it can have throughout a supply chain. We learn how Differentiable Programming can be used to combine challenges that previously were broached in complete isolation and how the approach varies between different verticals. We investigate the problems that can be improved upon by applying Differentiable Programming techniques and explore the various positive impacts that this exciting new technology can have. Differentiable Programming can also be used to divide and conquer silos, a key element for many supply chains. By moving away from the classic time-series forecast, Differentiable Programming can take in to account a client's point of view when they enter a retail point of sale, something that allows much more intelligent and relevant purchasing decisions to be made. We talk about some of the other benefits of this approach and learn how it can be applied throughout a supply chain, from the point of sale to warehousing, through multi-echelon supply chain challenges. Finally, we compare this approach to previous iterations of Lokad's technology and learn about the critical insights that Differentiable Programming can deliver through increased expressiveness. But nobody can deny that Differentiable Programming is anything but straightforward. At the end of the day, are we using a sledgehammer to crack a nut when a much simpler tool would do? We explain why we don't think that's the case. ****** Episode Map 0:00:00 Introduction 0:00:30 What are some of the problems which can be improved by applying Differentiable Programming techniques? 0:02:55 What is the game changing property which makes this possible? 0:06:03 How about we look at things from a warehousing level. Is it mostly by forecasting demand more accurately that Differentiable Drogramming can help us ? 0:08:10 Was this something w...https://tube.lokad.com/videos/embed/fb569b52-db36-492a-9d47-7728315cc07chttps://tube.lokad.com/videos/watch/4704586d-9a87-457d-b143-1e09539f3eb5https://tube.lokad.com/static/thumbnails/7df5ed40-ee36-4686-81a5-869cd25b75cb.jpgToxic Patterns In Supply Chain Software - Ep 48It often seems that when it comes to Supply Chain software, we simply use them out of necessity rather than because they are truly ‘great’ products. In this episode of LokadTV we explore why we are so “out of love” with the products we use in the Supply Chain industry and learn what are the key symptoms of the dismal IT landscape many companies find themselves in nowadays. So what makes a truly great product? We discuss the recipe for a truly great piece of software and learn about some of the common pitfalls that can be encountered when creating this truly perfect product. On top of all this, many of the smaller, more pioneering players are gradually being acquired by larger companies who often milk the value of the companies rather than innovating and improving. We explore some of the root causes behind some of these worrying patterns and learn how companies can break the mold and escape a monolithic approach. In addition, we discuss why implementing exactly what a client requests can lead to the failure of a Supply Chain initiative and why ‘design by committee’ rarely works. Supply Chains are highly complex and fragile; it often only takes one badly implemented ERP to wreak havoc and even destroy a company completely. The tough question enterprise software companies often need to ask themselves is to what extent do they actually listen to their clients. To quote Henry Ford, "“If I had asked people what they wanted, they would have said faster horses.” Plus, the larger your company is, the harder it is to be truly innovative. Even huge companies such as Google actually have very small teams that work on specific developments. So what do you do, fire half of your current R&D team? All of this is of course often highly counterintuitive and not at all an easy or feasible task. ****** Episode Map 0:00:00 Introduction 0:00:33 Why is it that we are so “out of love” with the products we use in the Supply Chain context? 0:03:10 What is the root cause beyond thes...https://tube.lokad.com/videos/embed/4704586d-9a87-457d-b143-1e09539f3eb5https://tube.lokad.com/videos/watch/63372771-e8fc-4d3e-b173-49a59f030365https://tube.lokad.com/static/thumbnails/1d2a8da0-87d6-4206-be0e-7abfaadb4ac7.jpgDigitalization in the Fashion Industry with Madeleine Czigler - Ep 49When you think about the industries that ‘digitalization’ has really impacted upon, fashion is probably not the first one that springs to mind. However, with the rising use of smart materials and the ability to design your own clothes online, it could be argued that the link between technology and fashion is actually closer than ever. This week we are joined by Madeleine Czigler, a journalist, TV producer and Professor at the American University of Paris who specializes in culture and the fashion industry, to discuss with us how the digital age has really changed the face of the fashion industry. Digitalization is not just a technological challenge but also a people challenge that involves getting people to work differently together. In this video, we learn which are the areas most influenced by the digital and social media tools currently on the market and discuss which of these will be most important for the future of the fashion industry, be it Instagram, Facebook or Twitter. We also try to understand the supply chain challenges which need to be overcome to make on demand fashion available to the masses. On a more technological note, we discuss how statistics can be applied to products that cover so many variables and combinations, given the complexity of supply chain in Fashion. And of course, we wonder just when you will be able to 3D print your own clothes at home! Finally, we discuss the environmental and ethical implications that the industry must consider for companies to stay relevant in the modern world, such as the development of eco-friendly fabrics and so on. We also try to put that in perspective to debate what is the real impact of fast fashion for our planet, and how much that impact really weighs when compared to other industries. ****** Episode Map 0:00:00 Introduction 0:00:38 Perhaps you could tell us a little more about your background? 0:02:50 What’s your take on Digitalization in Fashion? 0:06:40 What do you see as the most importan...https://tube.lokad.com/videos/embed/63372771-e8fc-4d3e-b173-49a59f030365https://tube.lokad.com/videos/watch/493eec72-1505-4987-a0ea-bf0f32605d8dhttps://tube.lokad.com/static/thumbnails/37b38bb7-7ec2-4fae-b786-7025329e3388.jpgNegative Knowledge in Supply Chain - Ep 50When it comes to assessing previous projects, companies are very good at recognising their successes, but often not so good at keeping track of their failures. In this episode, we learn why discussing failure is so difficult and how often it can end up being somewhat of a taboo subject, particularly in big companies. To err can be considered human and here we discuss the impact of this negative approach and learn how it often can result in future teams repeating the mistakes of their predecessors. We talk about how some of the best companies actually learn and document their failures - and also why relying on PowerPoint to articulate understanding can be dangerous... In Supply Chains there is lots of simple information that is not very difficult "in isolation". However, the high volume of data and possible decisions makes understanding the whole picture challenging. We discuss why in Supply Chains there are no guarantees for success, but a number of guarantees for failure and how without negative knowledge, having an understanding of these can be far more difficult. We try to see how different industries approach negative knowledge and in particular why the computer science domain and software initiatives can allow themselves to take more risks than a typical Supply Chain initiative. We also discuss toxic mottos such as "Get it right the first time", which is actually a recipe for disaster, forcing people to hide their failures instead of communicating them and building on them. Instead, we need to be ready to take risks: "Fail fast", a Silicon Valley motto, is a much more positive and constructive way of seeing things. Hence the importance of documenting our failures, poignantly summed up with a rather tragic anecdote from the Manhattan Project, where two pieces of uranium got too close. ****** Episode Map 0:00:00 Introduction 0:00:34 Today, we explore the concept of negative knowledge. What do we mean by this? 0:02:14 Let’s look at the soft domains. Why a...https://tube.lokad.com/videos/embed/493eec72-1505-4987-a0ea-bf0f32605d8dhttps://tube.lokad.com/videos/watch/8c767cc8-7f56-45a2-b0ab-d7b014b70833https://tube.lokad.com/static/thumbnails/8932c31b-d111-4aa9-9988-667ba80f0a0c.jpgReal Time Visibility in Supply Chains with Pierre Khoury - Ep 38With operations in over 20 countries and more than 3 million loads tracked per year, Shippeo is the European leader in supply chain visibility. Each day, they use machine learning algorithms to keep track of their customers' deliveries using real time information. In this episode of LokadTV, we are joined by Pierre Khoury, the CEO and co-founder of Shippeo, who discusses with us both the benefits and challenges of real time visibility in a supply chain. We learn how, through the use of these machine-learning algorithms, Shippeo manages to give their customers a complete oversight of deliveries, overcoming particular elements such as road transportation, which has been considered as a black box in supply chain visibility for many years. In addition to this, we discuss the importance of obtaining real time information for supply chain professionals to be able to better evaluate their supply chain. For example, Shippeo were able to help one of their clients in a highly valuable way when faced with the "gilets jaunes" (yellow jackets) protests that have been occurring in France. For Lokad, the use of connected ‘IOT’ devices can improve the accuracy of lead time calculations. We investigate and evaluate how the two tools can work well together and how having a real time perspective of operations companies can make better economic decisions. To conclude, we learn how understanding the location of stock and shipments has been used in the past to quickly anticipate problems and improve the efficiency of supply chains as a whole. ****** Episode Map 0:00:00 Introduction 0:00:36 Pierre, perhaps you could tell us a little more about your background and how Shippeo came about? 0:01:21 What exactly is real time visibility? 0:02:51 Pierre, can you explain to us a little more about how your technology actually works in practice? 0:03:37 From a supply chain perspective why is real time visibility something we are interested in here at Lokad? 0:05:35 How does it compare t...https://tube.lokad.com/videos/embed/8c767cc8-7f56-45a2-b0ab-d7b014b70833https://tube.lokad.com/videos/watch/e1fd0f0f-bd4c-4f3b-a009-7931dc97d00fhttps://tube.lokad.com/static/thumbnails/9576af44-41b0-4345-9140-346748e368e9.jpgWhat Is Slowbalization? - Ep 51From Europe to Asia to the United States, there are changes in the air that have resulted in political forces around the world leaning away from long-standing trends of economic globalization, such as Donald Trump's recent tariff stance against China. Recent evidence indicates that now, for the first time in over a century, there is a general slowdown in overall economic activity across the globe and a shift towards a new pattern. World trade as we know it is evolving. This pattern is becoming known as ‘slowbalization’ and in this episode of LokadTV, we learn more about this concept and its impact on the world of supply chains. Over the last few decades, globalization has resulted in the rapid growth of worldwide trade. We look back and question what were the technical factors that led to such an explosion of trade. We try to understand what has since changed in recent times: for example, the considerable gains in productivity due to automation and the ensuing massive lowering of both production and transportation costs - which are paradoxically contributing to this slowbalization phenomena. We also investigate the macroeconomic indicators that show that slowbalization really is happening. In addition to this, we discuss why there is an overall slowdown in trade activity and a reduction in long-term border investment. Finally, a number of industries are switching to what could be considered as 'local supply chains'. We try and explore these local supply chains in more depth and review why many companies would choose to do this. We take into consideration how they are becoming more efficient, the pros and cons, and whether a heightened awareness of environmental questions has had an impact on this shift. ****** Episode Map 0:00:00 Introduction 0:00:36 Today, we are exploring the concept of “Slowbalization”. What is the basic idea behind this? 0:02:17 What are the external effects which can be blamed for this sudden slowdown in economic growth? 0:04:43 This...https://tube.lokad.com/videos/embed/e1fd0f0f-bd4c-4f3b-a009-7931dc97d00fhttps://tube.lokad.com/videos/watch/2e9a14dc-c81b-4de2-9d9b-c11bcd083f95https://tube.lokad.com/static/thumbnails/7fe14ead-5d42-41ad-b06e-6b1f8169e021.jpgDigital Transformation in Supply Chain - Ep 52In this episode of LokadTV we are joined by the Global Head of Terra Numerata, Axelle Lemaire. Axelle previously worked as Minister for Digital Affairs within François Hollande's government and has recently taken on this new role at Terra Numerata - the digital arm of Roland Berger. Terra Numerata is a curated global network composed of start-ups and innovative companies offering services that are complementary to Roland Berger's business expertise. Here, she is bringing together both startups and technology companies alike in order to maximise their potential within an ever more competitive digital world. In this episode, we get her insights on the topic of digitalization and how the widespread adoption of digital technologies has lead to traditional companies completely reinventing themselves. The business landscape has changed vastly over the past few years, creating a highly dynamic and exciting environment with more start-ups than ever, meaning that numerous other businesses have had to adapt. Smartphones, e-commerces and social media have all revolutionised how many industries function. We can say that nearly all companies have been digitalised for quite some time. However, many companies claim to be fully digitalized but in reality this is often only on the surface. We learn why digitalization actually requires a completely different culture, where a company entirely rethinks their strategy in depth. We discuss some of the key digital trends that we have seen across a range of different industries and why many companies are expanding on all verticals in order to have a greater control over their supply chain. To round things off, we debate whether there are any negatives to digitalization and if having such an increasing reliance on computers for all aspects of our lives could be problematic in the future. Awareness of this is definitely increasing, but is it enough and just how is it transforming the inner structure of businesses? We also explore s...https://tube.lokad.com/videos/embed/2e9a14dc-c81b-4de2-9d9b-c11bcd083f95https://tube.lokad.com/videos/watch/e2933b36-5ba1-48a7-8d77-aeecd93ecc24https://tube.lokad.com/static/thumbnails/7db7d602-a0f2-4485-8f9d-b719598b7a8a.jpgA Domain Specific Language (DSL) for Supply Chain - Ep 53A domain-specific language, or DSL, is a computer language that is specialized to a particular domain. These can be incredibly diverse, ranging from common tools such as HTML for web pages to specific languages that are only used by one single piece of software, much like the DSL that is used here at Lokad for supply chain optimization. In this episode of LokadTV we find out a little more about how DSLs work, how they're developed and just why they can be advantageous when compared to more mainstream general-purpose programming languages such as Java, Python, etc. We explore the process of creating such a language from scratch and we discuss the roots that early DSLs had in algebraic modeling languages. We also discuss exactly how DSLs are used and applied in "the real word". For example, Microsoft Excel is the archetype of a successful DSL that gives us the flexibility to code logic for ourselves whilst working with the constraints of a decently large database. We consider the major advantages of using a DSL compared to more common programming languages and learn how they can equip a software engineer with the necessary tools to solve certain classes of problems quickly, reliably and with as little friction as possible, without requiring access to all the underlying technology. To conclude, we discuss the various challenges and we question whether a start-up company setting out now should consider developing its own programming language, as was Lokad decided to do a few years ago. ****** Episode Map 0:00:00 - Introduction 0:00:38 - What are DSLs? 0:02:08 - What are the problems in the real world we use DSLs for? 0:04:09 - Why are you not using more mainstream programming languages for these tasks? 0:05:25 - Why was a DSL so interesting to Lokad as a Supply Chain company? 0:07:25 - Does using a more mainstream language mean that configuration would have taken more time? 0:09:28 - Does using a DSL introduce any limitations? Does it stop you from imple...https://tube.lokad.com/videos/embed/e2933b36-5ba1-48a7-8d77-aeecd93ecc24https://tube.lokad.com/videos/watch/ace0f0ce-d0c2-468a-9dd9-866844ec040bhttps://tube.lokad.com/static/thumbnails/4b921e47-e132-43b6-8803-35fff03a38f9.jpgNew Media for New Supply Chains - Ep 54The supply chain industry arguably lacks some of the glitz and glamour of other industries with sparse media coverage and a lack of large influencers. However with the internet gradually breeding a smaller community of supply chain aficionados, the industry is gradually evolving. In this episode of LokadTV we welcome Sarah Barnes-Humphrey, the presenter of the podcast ‘Let’s Talk Supply Chains’ and one of Canada’s most influential women working in supply chain, live from Toronto to discuss the role of the media in this evolution and the impact it is having on promoting best practice amongst the next generation of supply chain professionals. The use of buzzwords and acronyms has grown somewhat exponentially over the last few years. We discuss whether there are too many and what the industry can do to move towards something with a little more substance. We learn about how the messy structure of the supply chain industry and how an industry, which has classically communicated through gossip, is starting to collaborate and share knowledge. Finally we understand the biggest challenges which face the media and understand the responsibility not to ‘overstate’ the potential of young technology. ****** Episode Map 0:00:00 - Introduction 0:00:40 - Perhaps tell us a little more about your background? 0:03:16 - Currently you’re working on a new series called The Trade Squad. What’s the idea behind this? 0:04:36 - Today our topic is Media in SC’s, certainly not quite as glamorous as some other industries. What’s your take on it? 0:07:22 - An industry which has it’s fair share of buzzwords, do you think there are too many of them? 0:10:47 - What about this idea of fake news? Now we are in the age of free information, how do you actually know who is a trustworthy source of news? 0:12:09 - Can you see influencers coming through in the Supply Chain industry? 0:15:10 - What have you observed in the way that knowledge is presently passed around the industry? 0:16:25 - What has ch...https://tube.lokad.com/videos/embed/ace0f0ce-d0c2-468a-9dd9-866844ec040bhttps://tube.lokad.com/videos/watch/56dd69e8-c95b-47d9-834b-cac3362705a8https://tube.lokad.com/static/thumbnails/37f28c55-628d-4746-bc4a-c84c9b9e6600.jpgWhy SKU’s Aren’t That Simple - Ep 55In the field of supply chains, the concept of stock keeping units, or SKU’s, is one of the first ones you will learn about. As a fairly basic concept, it is completely ingrained in the practice of inventory management and as such is a major part of modern ERP systems. However what is a basic concept on the surface, can come with many assumptions which can be deceptive. In this episode of LokadTV we explore where the limitations lie within the concept of a SKU and understand why it can be easy to get carried away with things which appear to be a foundational concept. We understand the edge cases which this affects and look at real world examples such as the need to track expiration dates in fresh food and the amount of flight hours a part has been subjected to in the aerospace market. We discuss how availability at SKU level not always relevant and understand the impact that substitute products can have. Finally we look at the alternative approaches that can be taken and debate whether each vertical should have a specific definition of a SKU which takes into account key characteristics of the market. ****** Episode Map 0:00:00 - Introduction 0:00:30 - What is the definition of a SKU? 0:01:28 - What is so interesting about a SKU? What is interesting about the features of a SKU? 0:03:26 - What are some of the assumptions we make by using SKU’s? What issues can arise from making these assumptions? 0:03:58 - What kind of real world assumptions are there? 0:05:03 - What are some of the issues that you have observed as a result of this? 0:07:19 - So SKU’s don’t take into account substitute products and there is no linking between them? 0:08:36 - What’s the alternative? Is there a better approach we can take instead of using SKU’s? 0:10:03 - So what we are saying is that each vertical should have a specific definition of a SKU which takes into account the key characteristics? 0:12:19 - Have those industries where it doesn’t work moved away from using SKU’s? 0:13:58 ...https://tube.lokad.com/videos/embed/56dd69e8-c95b-47d9-834b-cac3362705a8https://tube.lokad.com/videos/watch/72636fa3-575f-4e1c-a830-c60af73e57c3https://tube.lokad.com/static/thumbnails/545db23e-59c1-4735-97eb-8a0bebd504fd.jpgUsing Weather Forecasts to improve Demand Forecasts - Ep 56When General Eisenhower was asked why the D-Day landings were such a success he reportedly replied ‘because we had better meteorologists’. And with technology increasing forecasting accuracy each year a common question we are often asked here at Lokad is whether meteorological data can be leveraged to optimize purchasing decisions. In this episode we explore this concept in a little more detail and discuss whether data can be leveraged in any way to improve accuracy, particularly for weather sensitive products such as ice creams and winter coats. From a technical perspective weather data is now available on a daily basis. We learn why from a supply chain perspective weather forecasts are often too short-term to be useful and why it is so difficult to leverage this data. We discuss how the inherently local nature of weather can introduce complications and debate how much trust can be put in meteorological data. Finally explore the implications of climate change and understand whether global warming will have any impact upon seasonal forecasts. ****** Episode Map 0:00:00 - Introduction 0:00:37 - What’s the idea behind this? 0:01:47 - How well does it work in practice? 0:03:01 - What did we learn when we tried to use this data at Lokad? 0:06:30 - What are the technical challenges which are introduced? 0:08:35 - Is there something more reactive we could introduce? Is there not something simplistic that can be useful? 0:11:55 - Could it be something we use in the future when we forecast more accurately and have greater control of our supply chains? 0:14:19 - How about climate change? Can we leverage this insight to improve our seasonal forecasts? 0:17:03 - What other data should we be looking at? What is more important than weather data? 0:19:28 - What is our main conclusion today? It is possible to use weather data but there are other things which are more important? ****** Check out our website: https://www.lokad.com/forecasting-technology ******https://tube.lokad.com/videos/embed/72636fa3-575f-4e1c-a830-c60af73e57c3https://tube.lokad.com/videos/watch/3d24296d-e096-4119-8e6b-39385b212597https://tube.lokad.com/static/thumbnails/38bf93b2-dabd-4998-a31d-c827c2cddb73.jpgShadow IT in Supply Chains - Ep 57Shadow IT is the name given to IT systems which are created without explicit approval of the management. Often they are the result of exasperated staff trying to do their jobs more efficiently but these unofficial data flows can be difficult to maintain and have a higher risk to data security. In this episode we learn why these systems are created and understand what management can do to stop them becoming harmful to their organisations. Rather than being a specific Supply Chain challenge, Shadow IT is a phenomenon which can affect other departments too with IT departments struggling often lagging behind the needs of their staff. We learn about the potential security implications and the widespread impact these tools can have on a company. Finally we debate whether companies actually aware of the workarounds that their staff are introducing and learn what management can do to dissuade their staff from taking matters into their own hands. ****** Episode Map 0:00:00 - Introduction 0:00:32 - What exactly is Shadow IT? 0:02:27 - Is this just a specific supply chain issue or something we see around businesses as a whole? 0:04:39 - How does a problem such as this come about? How does it start? 0:05:29 - Why is it the IT departments are so behind the needs of their staff? 0:07:10 - Are companies actually aware of the workarounds that their staff are introducing? 0:09:22 - Is it such a problem? Haven’t users found a more efficient way of working? 0:11:15 - What impact can these tools have on a company as a whole? What about data security? 0:13:10 - What can management do about these Shadow IT systems? Is there anything they can do to prevent staff aren’t tempted to take matters into their own hands? 0:15:26 - What’s the conclusion today? Is the lesson that as Shadow IT is a human phenomenon we can never truly get rid of it? ****** Check out our website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/3d24296d-e096-4119-8e6b-39385b212597https://tube.lokad.com/videos/watch/6d825b10-a476-4f4f-af35-0507789262c9https://tube.lokad.com/static/thumbnails/44d0d3aa-89a4-43fa-b617-10a0b739773b.jpgThe Role of Returns in e-Commerce with Paul Bello - Ep 58The convenience of being able to return a product easily has revolutionised online shopping with customers now able to shop for a multitude of items which previously would only have been possible in stores. Many large e-commerces have embraced this approach with companies such as Amazon, Zappos and Zalando being amongst the first to popularise easy returns and introduce policies far more generous than was previously possible. In this episode we welcome Paul Bello from Revers.io to discuss with us this change of mindset and how returns have become such an important part of the e-commerce industry. Retailers estimate that around 30% of the items sold online are returned by customers. We learn why this strategy can be challenging from a logistics perspective and discuss how the burden is gradually shifting from the consumer to logistics providers to redistribute stock back to the main hub. We understand more about the impact that easy returns is having on the environment and how, with customers not being required to drive the last mile to a hypermarket, this approach can be argued to be beneficial. Finally we discuss the future role that returns will take in our shopping experience and debate whether a day will exist where stores do not exist at all. ****** Episode Map 0:00:00 - Introduction 0:00:41 - Perhaps you could start by telling us a little more about Revers.io? 0:01:45 - Joannes, today we are going to talk a little bit about the importance of returns in the e-commerce industry. What is your experience here? 0:03:20 - What are the main benefits of an easy returns policy? 0:04:10 - Is this a recent shift? When did these changes start being introduced? 0:05:06 - What kind of supply chain challenges does this ease of returns policy introduce? 0:07:50 - How do you differentiate between what is a return for a defect and what is a return just out of taste? 0:09:50 - Here at Lokad returns I assume a standard part of an optimization, so how do you work with that? 0...https://tube.lokad.com/videos/embed/6d825b10-a476-4f4f-af35-0507789262c9https://tube.lokad.com/videos/watch/ffb54e1b-aea5-4232-9656-05008185bb8ehttps://tube.lokad.com/static/thumbnails/d29479f4-84cb-4904-bed4-34e51c28999d.jpgA/B Testing, Exploration vs. Exploitation - Ep 59A/B Testing is a sub-approach of experimental design which compares two variants in order to determine which is most effective. A good example of this is the placebo effect which compares new drugs against the status quo in order to determine how well they function. In this episode we learn why this type of testing is currently still being used in a number of industries and why it has historically been so popular. We learn how this approach is profoundly approach weak when applied to a Supply Chain and the complexities which mean alternative approaches work much better. In business the rules are constantly changing all of the time. We investigate the trade off between exploitation and exploration and why it can be beneficial to introduce some intentional error to algorithms in order to find out a little more information for the future. We debate whether this will be of interest to companies which normally prioritize profitability and learn whether is is possible to actually quantify knowledge. Finally we learn about the impact introducing noise can have on pricing optimization and understand how a Supply Chain professional can decide between the options which are worth exploring and the options which should remain consistent. ****** Episode Map 0:00:00 - Introduction 0:00:34 - What is A/B Testing? 0:01:50 - What types of testing are we talking about here? 0:02:37 - So the idea is to see what out of two possibilities perform the best? 0:03:31 - Why is this something which is of interest to us here at Lokad? 0:04:37 - How well does this technique actually work in the real world? 0:08:15 - What would be a better approach? 0:11:59 - How can we generate information on all of the possible scenarios within a Supply Chain? 0:14:49 - So we are talking about intentionally introducing a percentage error to find out more about what could possibly happen? 0:19:05 - Companies are normally most interested in maximising their profitability. As such is it difficult to get a com...https://tube.lokad.com/videos/embed/ffb54e1b-aea5-4232-9656-05008185bb8ehttps://tube.lokad.com/videos/watch/aa0723c0-22f9-4187-a794-dc321c40e371https://tube.lokad.com/static/thumbnails/a6ea07ca-9a6e-41fd-9599-5f36de60e986.jpgPseudo-science in supply chains - Ep 60From aeroplanes to internet banking, often as humans we have to place our trust in things we don’t completely understand. This overconfidence in science, often referred to as ‘Scientism’, is unfortunately all too frequently seen in the Supply Chain industry. In this episode we investigate the elements of a Supply Chain which are so difficult to model and understand how the dark art of forecasting can result in many professionals overcomplicating the challenges they are faced with. Scientism can be said to be a form of naive rationalisation, where a person takes a first order problem and makes incorrect conclusions without assessing the far reaching consequences. We discuss why the Supply Chain industry is often so happy to rely on mathematical models which they don’t fully understand and whether something that something that looks clever on the surface, actually always is in reality. Finally we learn how companies can fight the illusion that everything can be solved with numbers and how instead they can promote the importance of high-level judgement. ****** Episode Map 0:00:00 - Introduction 0:00:35 - What is Scientism? 0:02:18 - Are there any real world examples of how people have become over reliant on science? 0:04:06 - In a supply chain what is an example of things that look easy on the service but when you get into aren’t so rational? 0:06:49 - What’s the alternative? 0:08:26 - How can these oversimplifications impact on a Supply Chain professional? What is the result of them? 0:10:43 - Has anyone noticed the shortfalls of their approaches? 0:13:36 - Humans are naturally risk averse, is there really an alternative to using these scientific approaches? 0:15:40 - You could argue that some of our clients have a fair bit of naive rationalism at Lokad. How do you ensure our clients at Lokad understand everything we do? 0:18:27 - What’s the key lesson? It’s good to have scientific approaches but they need to be combined with a fair bit of common sense too? ***...https://tube.lokad.com/videos/embed/aa0723c0-22f9-4187-a794-dc321c40e371https://tube.lokad.com/videos/watch/1050066f-8b32-420f-9a9a-73e5fa55e7a0https://tube.lokad.com/static/thumbnails/afaf845a-14d9-4704-b088-a79d7ef5de24.jpgForecasting Demand for Automotive Spare Parts - Ep 61With around 80 million cars sold worldwide each year, the automotive aftermarket industry is expected to reach a global value of over $700 billion by 2020. In this episode we look into the range of challenges which have been introduced into the industry as consumers become more aware of the importance of preventative maintenance and regular services to maximize the lifetime value of their vehicles. We discuss the introduction of e-commerce players into an industry which has largely been dominated by garages and how the rising trend for DIY maintenance has resulted in a rising demand for aftermarket parts. The automotive market exhibits demand patterns which are often sporadic and difficult to map. We discuss the importance of statistical stability to be able to forecast accurately and learn what makes the automotive parts aftermarket so particular when compared to other industries. Finally we expand on how pricing has a key role to play in relation to demand and the best way to approach competitive pricing strategies in a ‘cause-driven’ market where purchases are made due to a specific incident. ****** Episode Map 0:00:00 - Introduction 0:00:34 - What is so special about the automotive aftermarket? 0:02:37 - How can you forecast the demand for such a wide range of options? 0:03:57 - The real challenge I can see here is the lifetime of a car part is dependant on factors such as driving style and weather. Can we really forecast for when someone breaks down? 0:06:40 - Let’s talk about some of the challenges, does having so many parts which are compatible not make a practitioners life easier? 0:08:28 - Has nobody created databases which makes use of the expertise of the practitioner and tells you which compatibility exists? 0:10:35 - What’s the best way to keep track of this then? How can we keep track of which components were used in the manufacture of a certain vehicle? 0:13:30 - What about pricing? How important is pricing when it comes to the demand for the...https://tube.lokad.com/videos/embed/1050066f-8b32-420f-9a9a-73e5fa55e7a0https://tube.lokad.com/videos/watch/9cc6ad9f-8e75-4e9b-827d-56b9d24cf52ahttps://tube.lokad.com/static/thumbnails/c3ef6a36-1640-4c36-b133-b363eb5dcd53.jpgWillingness To Pay - Ep 62Willingness to pay is a basic economic concept that determines the maximum amount an individual is happy to pay for a specific good or service. This can be affected by many factors such as marketing and trends, and can often vary massively from consumer to consumer. One of the major factors that affects a customer's willingness to pay is quite obviously pricing. In this episode of LokadTV, we learn why pricing strategy decisions should definitely involve a company's supply chain department and the ways you can actually measure how much people are willing to pay through the use of statistics, in order to understand a potential customer's perception of value. Typically, pricing points are decided by the marketing department; some companies even have their own specific pricing team, yet more often than not, a company's supply chain practitioners are sadly missing from these discussions when they should in fact be taking part. In addition, the situation frequently ends up getting segmented by the sheer number of teams: pricing, planning, production, forecasting, etc., and these teams don't always communicate well between themselves. Although it appears highly complex to evaluate an individual's perception of a product's worth, there are certain elements that can be leveraged, such as seasonality. However, many companies are not analyzing seasonality to its full potential, with only a small number of verticals managing to do so. We go into more detail about why from a consumer's point of view it would actually be beneficial for the market. It in fact makes the market more democratic for consumers when a company can, and does, master its customers' willingness to pay. To conclude, we underline the importance of quantitative modelization within your supply chain for an all-round better perception of your client base's willingness to pay and the fact that your supply chain experts should absolutely play a crucial role in evaluating this willingness to pay. ****** Ep...https://tube.lokad.com/videos/embed/9cc6ad9f-8e75-4e9b-827d-56b9d24cf52ahttps://tube.lokad.com/videos/watch/34791433-a7b3-4d82-8954-be7f0d5b32c9https://tube.lokad.com/static/thumbnails/739b4540-0378-405b-9859-ca9c5e89a49f.jpgFresh Food Supply Chain Challenges - Ep 63Food trading is probably one of the earliest commercial activities recorded in the whole of human history. However, despite this initial head start, it's an industry that often lags behind in terms of cutting edge technology when compared to other verticals. In this episode of LokadTV, we learn more about the vast array of challenges that must be overcome in order to provide the variety and freshness in food retail that modern shoppers now demand. The main particularities of the fresh food industry are its massive size and the fact that it has been around for such a long time. It's a combination of factors that is somewhat rare, therefore there are very few industries that are comparable to the fresh food industry in this respect. Due to its age, a lot of the solutions for its various problems were found way before many technological advances took place, which often complicates its supply chain matters. We can say that, for many modern supply chains, everything is characterized by packaging and barcodes, but fresh food supply chains are often dealing with raw materials, such as meats, that are sold by weight and are not packaged in a standardized way. This is an aspect that has disappeared from pretty much every other industry - even the chemicals industry packages and measures its products with barcodes and fixed units. Additionally, fresh food is actually an umbrella term that groups together various different supply chains, each with their own specificities. For example, frozen food has its own challenges when compared to fresh products produced locally and again when compared to fresh products that have to be imported from overseas. There is also the all important factor of perishability. We discuss in more detail how the SKU (stock keeping unit), a supply chain cornerstone, usually doesn't take into account this crucial element of expiry date. To top it off, supermarkets and hypermarkets are "noisy" environments in terms of data and tracking your stoc...https://tube.lokad.com/videos/embed/34791433-a7b3-4d82-8954-be7f0d5b32c9https://tube.lokad.com/videos/watch/b778473f-9e5c-4923-9961-ca19e208c172https://tube.lokad.com/static/thumbnails/adb4116c-19fa-44d5-bad9-fd57898ce871.jpgERP's and Supply Chains - Ep 64Lokad and Microsoft are both digital natives and software companies that enable their customers to prosper in an increasingly challenging digital world. Here, we discuss the development of ERPs, from their humble beginnings to the well-known product they are today and try to understand the potential they have for the future. In this episode of LokadTV, we are joined by Akshey Gupta, who is responsible for Microsoft Dynamics ERP & supply chain solution sales in Europe, the Middle East and Africa. Akshey has over 20 years of experience in ERP, Big Data and AI solutions that are specialised in planning and optimization. He has helped to develop Microsoft Dynamics ERP solutions, looking specifically at ways to integrate the various new technologies available today. We look more closely at how ERPs came about. In the 80's, interconnecting products was extremely difficult, so ERPs as an 'all-in-one solution' gave software vendors a huge boost that created many major players in the market. However, nowadays with the Cloud and other resources, interconnectivity is no longer an issue, which has brought a massive wave of change and novelty. One of the biggest changes to ERPs is that they have become smaller and simpler - more focused. It's now much rarer that companies purchase "monolith" solutions, instead preferring modular solutions for specific domains, such as customer service, finance, etc. Whilst simplicity is indeed a noble goal, for supply chains this isn't always the case, in particular due to the sheer amount of data to crunch under the hood of the various ERPs that Lokad encounters. A major benefit ERPs have brought is the adoption of a common language between businesses and users, which have made multiple business processes that much more efficient. We talk more about the impact of this. To conclude, we discuss in greater detail the importance of the user interface and how to make this more receptive and intelligent. ****** Episode Map 0:00:00 - Introdu...https://tube.lokad.com/videos/embed/b778473f-9e5c-4923-9961-ca19e208c172https://tube.lokad.com/videos/watch/ecd567d0-bdaf-4bf7-a676-3d9b3e36b774https://tube.lokad.com/static/thumbnails/2453fb7f-30cc-4557-9eff-24a965de395e.jpgBad Data in Supply Chain - Ep 65"Bad Data" is often somewhat of a scapegoat when it comes to the failure of many supply chain optimization projects. However, when you explore this concept in more detail, you usually discover that it is a vague term that can hide a multitude of sins. In this episode of LokadTV, we explain why this is such an imprecise diagnostic and reveal some of the data challenges that can be encountered by both supply chain practitioners and software vendors alike. In fact, "Bad Data" is an easy and convenient excuse because data can't complain, it can't defend itself and - unlike a colleague - it won't take anything personally. But that doesn't mean that the data isn't without fault; data related problems are usually the number one cause for failure when it comes to supply chain optimization projects. Yet, there are numerous misconceptions. For example, when we talk about "Bad Data" we usually think of corrupted data with incorrect numbers and typos, when really that's not the main issue. For over a decade, thanks to the use of barcode and scanning technology, the vast majority of data is correct in this regard. So where do the real data problems lie? Access to the data can be an issue, where old, out-of-date ERP systems are often to blame. Many of these systems are also not very "company friendly" when it comes to exporting and extracting data, some don't even have a relational sequel database backing them up for example. Data integration can be another problem. Sometimes companies can even be placed in difficult positions due to conflicts of interests between the external IT company responsible for integrating the data and software vendors. To wrap things up, we go into more detail about the key mistakes to avoid when handling and preparing supply chain related data - especially historical data - in order to be able to implement a supply chain optimization successfully. Supply chains are complex - this is unavoidable - with a richness of data that needs to be organis...https://tube.lokad.com/videos/embed/ecd567d0-bdaf-4bf7-a676-3d9b3e36b774https://tube.lokad.com/videos/watch/ac2252cf-40a8-4209-bf35-9f0144cd8664https://tube.lokad.com/static/thumbnails/8480d653-3907-4b0a-a9ba-8e7cb7b6abb9.jpgSustainable Supply Chains - Ep 66With Extinction Rebellion, Greta Thunberg and the Netflix hit series "Our Planet", it seems that today people are paying attention to the issue of sustainability more than ever. Can we say we've finally reached a turning point? In this episode of LokadTV, we welcome Valentina Carbone, a Professor and researcher specialised in supply chain management, economy and sustainability from ESCP Europe, and scientific co-director of the ESCP Deloitte Chair. Together, we discuss whether this pressure has made its way to the world of supply chains and how companies are changing their approach to act in a more environmentally friendly manner. Luckily, even if it's from "greedy" perspective, supply chain optimisation goes hand in hand with sustainability. Nowadays, companies are increasingly looking at how to make their supply chains more lean and efficient, which, as a result, is better for the planet. Is this a sustainable trend however? For example, there are often unintended consequences such as e-waste. No matter what, supply chains remain complex systems that cannot be underestimated. Unfortunately, best intentions don't always provide the best solutions. Often, by solving one problem it only in fact displaces it - the debate over clean energy sources and how they're constructed is an example of this. To conclude, we debate where the responsability should lie - with companies or consumers - and how best to shape our habits to move towards a sustainable lifestyle that doesn't decrease our quality of life. ****** Episode Map 0:00:00 - Introduction 0:00:31 - Could you start by telling us a little more about your background and your research interests? 0:01:19 - What have you observed regarding sustainability in Supply Chains over the last couple of years? 0:02:26 - Would you say that companies are acting as efficiently as they possibly can, or are they maximizing their profits at the expense of the environment? 0:03:40 - Are Supply Chains currently acting ...https://tube.lokad.com/videos/embed/ac2252cf-40a8-4209-bf35-9f0144cd8664https://tube.lokad.com/videos/watch/96b82c44-df6b-4203-a40d-4ac392a88633https://tube.lokad.com/static/thumbnails/91f0f879-6143-476c-b7ed-85970f81afd0.jpgSoftware Design for Supply Chains - Ep 67When starting a company, there are a number of strategic decisions that have a very real impact on future operations. Physical decisions, such as location and vertical, have an obvious impact; however the very design of a piece of software is something that is often poorly understood and has an impact that is often more far-reaching. In this episode of LokadTV, we try to expand on how these software choices can end up ‘pigeonholing’ a company and what are some of the pitfalls to look out for. Most modern supply chains rely on a complex web of software, from machinery such as conveyor belts and barcode scanners, to ERPs, MRPs, etc. Usually, the problems don't lie in an obvious issue like a bug, but more in the applicative landscape, which is to say more pervasive, design-related problems. For example, software is slow or simply not intuitive, it's hard to modify the systems or even to update them. There is also the immense complexity of real time systems. Most supply chain systems are "real time", i.e. picking one unit off a shelf decrements the stock level immediately, which makes a lot of sense. Unfortunately, as soon as software is designed for real-time, any sophisticated calculation (such as a forecast) will be difficult to implement. Why? Because the software is designed for small, swift and simple operations. Anything else will slow it down too much. Often, companies end up with a growing backlog of non-real time elements that clog the system. In addition, when designing software you need to take into account the time scale you're operating with. Whether it needs sub millisecond response times, or a response time that takes place within a few seconds or managing decisions that can take years (locating a new factory for example), each requires a different type of software. To wrap things up, we discuss the major differences between single and multi-tenant software. There's the all important question of customizing, which creates operational problem...https://tube.lokad.com/videos/embed/96b82c44-df6b-4203-a40d-4ac392a88633https://tube.lokad.com/videos/watch/ffa24508-feec-4646-81f7-d91c88dd843ahttps://tube.lokad.com/static/thumbnails/add7b5c2-640c-439c-a3a8-44e961ed795b.jpgNaked Forecasts Considered Harmful - Ep 69Here at Lokad, our commitment is to deliver the best forecasts that technology can provide. As a result, potential clients often ask if we can provide forecasts alone instead of a full managed solution. In this episode of LokadTV, we explain why these ""naked forecasts"" can introduce a whole host of different problems and how, even with better forecasts, a practitioner can actually end up degrading the performance of a supply chain. Many clients request naked time-series forecasts from Lokad. Conceptually, time-series forecasting is something very simple, with time-series being both the input and output of the forecast, yet it's very seldom the best way to solve supply chain issues, despite their popularity. When Lokad first started out in 2008 delivering these naked forecasts, they simply weren't working effectively. The problem wasn't statistical, the metrics were correct, with a very low error margin and high accuracy in regards to Mean Absolute Percentage Error, Absolute Error and Mean Square Error, etc. The forecasts Lokad were producing were arguably state-of-the-art, so just why didn't they work as they should have? It took a large European retailer back in 2011, who organised a benchmark for forecasting solution vendors, for Lokad to realise what was missing. This retailer set a problem involving forecasting demand for mini-markets, each with 5000 products, getting replenished twice a week. Lokad managed to produce results that were 20% more accurate than the other vendors based on the metrics set for the benchmark... by forecasting zero demand... thus zero replenishment and zero sales. This is what happens with more accurate forecasts expressed only in percentages of error: you get nonsense. We go on to explain why it's not the average that is of interest for any business but the extreme scenarios, the factors that create stock-outs and vast excesses of stock. A classical, naked forecast doesn't look at these extremes, it looks at the middle groun...https://tube.lokad.com/videos/embed/ffa24508-feec-4646-81f7-d91c88dd843ahttps://tube.lokad.com/videos/watch/b617aeb9-f4b8-4def-9b2d-0fd183f62428https://tube.lokad.com/static/thumbnails/135c7b4d-47b0-47be-8b83-9639d7195dd9.jpgReal-Time Route Optimization - Ep 68With the latest advances in crowdsourced data, we are now able to forecast the impact of traffic congestion and optimize our routes more accurately than ever before. For this episode of LokadTV, we are joined by Cédric Hervet to discuss how real-time route optimization has changed the way delivery companies operate and how the research into AI and quantum computing could very well be a major game-changer in the future. Cédric is the Co-founder and Head of R&D at Kardinal, a route optimization software company. Kardinal's philosophy is that humans shouldn't be removed from the equation when it comes to optimizing routes and delivery times, as the human brain is equipped to deal with situations and has prior knowledge that an algorithm simply can't replicate. Instead, Kardinal seeks to combine cutting-edge technology with human intelligence for peak optimization. From a supply chain perspective the time-scale isn't the same, as route decisions can be re-challenged every minute. Lokad optimizes decisions for the next day or even for the next year ahead, for example rebalancing inventory between locations such as stores and warehouses, which naturally depends heavily on the crucial agility and flexibility that route optimization softwares can provide. More agility for supply routes means a greater range of possible optimization at a lower cost. A major problem is the number of stops that need to be visited by a transporter. There are often such an overwhelming number of combinations that it would take years to compute, requiring algorithms that work more intelligently than just numerating. Accurate data is key here, otherwise the probability of unfeasible routes being suggested is very high. In addition, we discuss how Google has been a major player in this domain, absolutely transforming how routes are optimized and inspiring many other companies. We also talk about the various complexities that come with working in real-time, whether today we rely too much on...https://tube.lokad.com/videos/embed/b617aeb9-f4b8-4def-9b2d-0fd183f62428https://tube.lokad.com/videos/watch/a1ccc234-d9c9-4077-8196-43bc9c81fd09https://tube.lokad.com/static/thumbnails/d1c602f3-bc8f-4df9-adeb-651b34f820a6.jpgThe Supply Chain Triangle of Service, Cost and Cash - Ep 70Finding the equilibrium between costs and the amount of cash coming in is a constant battle for any modern day company that provides goods or services. This daily struggle can be captured with a concept called ‘The Supply Chain Triangle’. In today's episode of LokadTV, we meet The Supply Chain Triangle's creator, Bram Desmet, to learn more. . Bram is Professor of Operations & Supply Chain at Vlerick Business School and Peking University, as well as the founder and CEO of Solventure, which implements S&OP primarily in production companies. After nearly 20 years in the field of supply chain observing the various problematics that businesses face, Bram created The Supply Chain Triangle. The three corners of The Supply Chain Triangle are "service," "costs" and "cash". More and more companies are sourcing their products in Asia to reduce the cost, but due to longer lead times and more complex quality controls, they ignore the fact that their inventory will also go up, which has an impact on both service levels and cash. Another example is that marketing departments push for a more expansive product portfolio, believing that it will increase service levels for the customer and sales revenue. However, if a company were to introduce 20% more products, this risks introducing a longtail of slow moving products. This means that more inventory is needed on average. As inventory is "cash", sometimes supply chain managers try and lower safety stocks to free up cash, which reduces inventory but introduces a whole slew of service issues and their resulting costs. Overall, it's a very delicate balance to achieve. It could be said that the core of the problem lies in a reoccurring conflict between sales and operations. Supply chains are extremely complex and it's sometimes difficult to get different key stakeholders to understand its various facets. The Supply Chain Triangle aims to make these complexities easy to understand, putting supply chains more at t...https://tube.lokad.com/videos/embed/a1ccc234-d9c9-4077-8196-43bc9c81fd09https://tube.lokad.com/videos/watch/02510018-af65-45e8-bcc0-af1ce80e6befhttps://tube.lokad.com/static/thumbnails/94bb55fd-ef08-4c10-ac80-6374c9d145a6.jpgDemand Sensing, a Textbook Illustration of Mootware - Ep 71Demand Sensing is a forecasting method that combines the latest mathematical techniques and real-time information to create an accurate forecast of demand. It is also yet another buzzword in the Supply Chain industry. In this episode of LokadTV, we discuss how well it works and learn what a Supply Chain practitioner can do to sort the good buzzwords from the bad to be able to see what in fact is simply a marketing gimmick. The basic concepts advertised by Demand Sensing vendors are a use of real-time data and machine learning, but most of what is promised by Demand Sensing documentation is somewhat vague and undefined. Overall, Demand Sensing could be described not as vapourware (a software or hardware that exists but is not yet available to purchase, as it is still in the concept or design stage), but as "mootware", i.e. a software that won't deliver what it claims. The various ideas behind Demand Sensing stand up on their own, but why does Demand Sensing as a whole seem so unrealistic? For example, how can you qualify real time data, which is one of the key elements proposed by Demand Sensing? It could be said that real time data is when the latency goes below human perception, for example 100 milliseconds. This isn't strictly below human perception but it's very close to what we can qualify as "real time". In a Supply Chain context, let's imagine we're forecasting demand for a product that has three years worth of sales history for the sixth months ahead. Here, does having "real time data" fresh from the past 100 milliseconds when compared to data from the past 24 hours or two days ago actually make any considerable difference to the forecasting accuracy? Along with this real time data aspect, Demand Sensing promises "superior" machine learning techniques. Yet machine learning is an extremely broad domain, so this is a very vague claim with little substance or clarity provided by any of the Demand Sensing documentation. Shallow buzzwords will always...https://tube.lokad.com/videos/embed/02510018-af65-45e8-bcc0-af1ce80e6befhttps://tube.lokad.com/videos/watch/824c5863-7921-4132-843c-b1d9bc65e808https://tube.lokad.com/static/thumbnails/8707a7c7-521f-4784-ac3b-0d50544c05f1.jpgThe Bionic Supply Chain - Ep 72The convergence of a range of evolving technologies such as blockchain, Artificial Intelligence and the Internet of Things have ushered in a new concept known as the "Bionic Supply Chain". In this episode of LokadTV, we are delighted to be joined by Stefan Gstettner to discuss with us how we can integrate people with machines and how this new concept compares to more traditional approaches that already exist on the marketplace. Stefan is a Partner & Associate Director at Boston Consulting Group (BCG), where he focuses on end supply chain management and logistics. In addition to this, he is adjunct Professor at MIT, teaching digital supply chain management to future young supply chain talents. His current focus at BCG is helping their core clients to digitalize their supply chains and achieve a "Bionic Supply Chain" - which is to say leveraging the latest technologies and establishing the ever growing colloboration between humans and machines. In an industry already filled with buzzwords, we have to be careful not to add more, which is not the idea here. The BCG Thinktank already developed an idea of what the future of companies will look like, which they named the "Bionic Company". This is now being applied to supply chains as they are a complex system that relies very heavily on the collaboration of humans and machines. Human insight is also incorporated at Lokad through the concept of the "Supply Chain Scientist", we can't quite say we're bionic yet but this is the path that we're naturally following. One of the major pitfalls is that humans are usually resistant to change, being less than enthusiastic to embrace new technologies and algorithms, preferring to stick with their Excel sheets. In addition, without fully grasping the end-to-end aspect of a supply chain and its related problems, technology implementations can end up simply displacing these problems instead of solving them. To reorganize a supply chain fully and end-to-end with new softwares ofte...https://tube.lokad.com/videos/embed/824c5863-7921-4132-843c-b1d9bc65e808https://tube.lokad.com/videos/watch/6b2e1a0c-47b4-494c-a48f-15b6f664f9abhttps://tube.lokad.com/static/thumbnails/dd8461f3-ce86-456b-afb9-6e8ec66f0ef8.jpgThe Role of Excel in Supply Chains - Ep 73Microsoft Excel is a staple in the supply chain industry, used by everyone from the smallest retailers to the largest multinationals. Despite this, over the last decade many CIOs have made it their main aim to get rid of it in favour of more modern, scalable tools. In this episode of LokadTV, we discuss why so many CIOs have reached this decision yet Excel is still preferred by the vast majority of organizations. You could say that Excel is the "swiss knife of supply chain", due to its ubiquitousness and the fact that it's used everywhere for practically everything. Why is it so widely used? For a start, there have been very few credible alternatives. Excel is an excellent tool and two of the major strengths that render it very powerful is its programming ability and the level of expressiveness that comes with this system, plus the fact that it can be heavily distributed throughout an organization. For example, supply chain practitioners managing different product lines in different locations around the world are able to craft their own heuristics. Heuristics are numerical recipes that are only approximately correct. An example of a supply chain heuristic could be keeping an amount of stock that equals twice the amount of units sold a year ago, at the same period, considering a window of 3 months. Why two times the stock? Why last year? Why a 3-month window? Heuristics are recipes that have been "battle tested" but aren't strictly mathematically founded. But seeing as these heuristics are tried and tested and deemed "good enough", supply chain practitioners aren't motivated to change their methods, especially after using them for so many years. However, Excel could be seen as a technological dead-end for supply chains, because Excel - and all spreadsheets in general - have a scalability issue. This is linked to their programming model, where a piece of logic is copy and pasted across the spreadsheet, thus from a programming perspective its a massive logic re...https://tube.lokad.com/videos/embed/6b2e1a0c-47b4-494c-a48f-15b6f664f9abhttps://tube.lokad.com/videos/watch/639676e7-d731-4269-9b92-5747f0d58f86https://tube.lokad.com/static/thumbnails/9f322965-a454-4484-b2c6-122e95bad817.jpgDrones in Supply Chain - Ep 74Ever since Jeff Bezos revealed plans for Amazon Prime Air, back in 2013, there has been a lot of hype surrounding the possibility of using drones for deliveries. For this episode of LokadTV, we are joined by Emmanuel de Maistre to discuss the numerous questions of safety, efficiency and costs and whether drone supply is actually a viable possibility for the supply chains of tomorrow. Emmanuel witnessed the birth of the commercial drone industry from its very beginning and has been in the drone business for seven years, which is quite a long time for the industry. He founded his own French drone company called "Redbird" in 2012. Redbird was then acquired five years after its creation by the American company Airware. Airware was in turn acquired by Delair two years later, where Emmanuel now works. Delair is a leading provider of drone-based solutions that enable enterprises to monitor and digitize their physical assets from the sky and allows companies to turn the collected data into valuable business insights. Even if drones are becoming smaller, cheaper and more efficient, they have not yet become a commercial reality for everyday package deliveries. However, there are very interesting use cases being developed for drone delivery in remote areas, for industries such as mining. But having said that, approximately 3 billion USD have been invested over the last decade into the drone industry, yet very few drone companies make significant revenue, with most companies being of small, start-up size and on the cusp of being profitable. The exception is of course the Chinese giant DJI. To wrap this episode up, we go into more detail about the environmental benefits of increased drone use, the social acceptance that is also required if we are to use drones for more varied tasks, and the possible new uses for drones in the near future - including the idea that drones will carry people one day. This is something that Airbus, Boeing, Uber and various other companies ...https://tube.lokad.com/videos/embed/639676e7-d731-4269-9b92-5747f0d58f86https://tube.lokad.com/videos/watch/8705367b-1404-4ce0-8e5c-e0d5a8c33464https://tube.lokad.com/static/thumbnails/569f1b9e-e3e7-4d0e-a06b-ddc8bf5e28c7.jpgNurturing Supply Chain Excellence - Ep 75John Gardner once famously said that "excellence is doing ordinary things, extraordinarily well". However, when you consider that many of the largest supply chains have been around for well over a century, it is no small surprise that often they remain…somewhat ordinary. With time, we get set in our ways and innovation can become difficult. For this episode of LokadTV, we are joined by Luc Baetens, a Partner and Managing Director at Möbius Business Redesign, who discusses with us how companies can create an environment that encourages operational excellence. Excellence is very much scale dependent, with an "anti-economy of scale" - i.e. the bigger the company is, the more it regresses towards the mean. The more a company grows, the harder it is to maintain high standards. Achieving excellence can often be seen as highly counterintuitive. Sometimes it's more about what you don't do, instead of what you do. It's also important to be able to install a standard of excellence that's resilient and able to withstand the unexpected and turbulent world of business. A change that first started in the finance industry, before moving to the software industry is finally arriving to supply chains: encouraging and recognizing exceptional people and their value within a company, no matter their age or experience. This was a phenomenon that helped to coin the term "yuppie" in the 80's. To conclude, we debate the importance of humans vs. the importance of the system in place within a company, as well as the increasing role of automatization in supply chains. In addition, we go into more detail on "hands-on" business leaders getting involved with the more mundane and grass-root level problems. For example Jeff Bezos, or Elon Musk sleeping on his factory floors. But is this a desirable management style to encourage excellence? ****** Episode Map 0:00:00 - Introduction 0:00:32 - Luc, perhaps you could start by telling us a little more about your background and Möbius? 0:01:28 -...https://tube.lokad.com/videos/embed/8705367b-1404-4ce0-8e5c-e0d5a8c33464https://tube.lokad.com/videos/watch/c24a071d-cb51-4563-9fb0-60883d932b1ehttps://tube.lokad.com/static/thumbnails/c0b516bf-a79a-4923-9931-b9a2d1610d35.jpgOverstocks in Fashion - Ep 76Today, creating new technologies, making effective use of them and bringing them to the market is essential in the global race for competitiveness. However not all industries place equal importance on investment in technology, with fashion arguably lagging somewhere near the back. For this episode of LokadTV we're joined by Jan Wilmking, to discuss how fashion is finally catching up and what we can expect for the future of fashion tech. Jan has a background in management consulting, he worked for some years at McKinsey in consumer goods and retail. There, he discovered the fashion industry and was intrigued by its combination of rational and artistic processes. He was then more recently Senior Vice President of Private Brands for Zalando for over 6 years, where he was responsible for Zalando's portfolio of 15 private label fashion brands. There, he helped to scale the business from under 200 million euros to over half a billion euros. As one of the world's biggest industries, the money is definitely available to invest in better technology, so why does there seem to be such reluctancy? We go into more detail about what a complex industry fashion is, often deeply rooted in tradition, and how it comes with a whole series of problematics (seasonalities, trends, substitutes, pricing, etc.) that most standard enterprise software simply can't address. In addition, we discuss the all important question of wastage within fashion, one of the "dirty secrets" of the business that is now coming more and more to light. Overstock is something that no fashion company ever wants to talk about for a vast number of reasons. We also touch on the social and environmental issues of consumerism that are intrinsically linked to this need to overproduce. To conclude, we talk about company culture within the fashion industry and the impressive advancements that have been used for the "front-end" of fashion, i.e. marketing and audience targeting, and how this technology now needs to ...https://tube.lokad.com/videos/embed/c24a071d-cb51-4563-9fb0-60883d932b1ehttps://tube.lokad.com/videos/watch/1246d442-2527-4273-b3ae-98d7202eee77https://tube.lokad.com/static/thumbnails/efda671e-cf6b-4328-8c98-dd67f592888b.jpgEmbracing Uncertainty in Supply Chain Management - Ep 77From demand to supply, and almost everything in between, there is a huge amount of uncertainty within supply chains. Traditionally, this can be managed using buffer stock, but there are often events that occur which can trip up even the most experienced of practitioners. For this episode of LokadTV, we're joined live by Stefan de Kok to discuss why this uncertainty is not necessarily a hindrance but something that should be embraced. Stefan is the co-founder and CEO of Wahupa, a supply chain management solution for small and medium sized manufacturers. Stefan studied applied mathematics before working in various consulting roles. He came up with the idea for Wahupa in 2003, when he began to gather a talented team around him who could make it happen. In a supply chain, anything that can happen in the future is uncertain to a various degree. Therefore, we believe all possible futures should be taken into account. Yet, even in the past, there can be uncertainties - if there are data errors for example. Historically, supply chain science would deal mainly with "what if" scenarios, where normally a number of worst and best-case outcomes would be established. This is a tedious and time-consuming process. However, a probabilistic forecasting perspective where all futures are considered is actually easier to implement - with enough raw processing power available - than a complex system that manages a limited number of "what-if" scenarios. In addition, from an operational point of view, a probabilistic approach also requires far less manpower. We go into more depth about how most companies deal with uncertainty in their supply chains, mainly through the use of "buffers" and other techniques such as expediting, or even just by ignoring the uncertainty completely. We discuss why, in forecasting, we should move away from the classic idea of predicting percentages of error and instead push for calculating dollars of error. To conclude, we ask the question whether indus...https://tube.lokad.com/videos/embed/1246d442-2527-4273-b3ae-98d7202eee77https://tube.lokad.com/videos/watch/6a10fab7-1cc9-48ee-99de-5bd85f5a255bhttps://tube.lokad.com/static/thumbnails/e6815e65-300b-45a2-829f-42a755d87fb1.jpgTail Risks in Supply Chains - Ep 78With Brexit, the Corona Virus and the Iceland volcanic eruption, we can say that our recent history is littered with systemic events that have caused disruption on a massive scale. For this episode of LokadTV, we discuss whether these rogue events can ever truly be fully planned for and what a supply chain planner can do to limit their impact on their business. What do we mean by "Tail Risk"? It's all the risks that don't happen systematically and are inherently unexpected. They are extreme events and they often kill companies. They may only occur once in a decade, but companies should be prepared. Although tail risks may seem improbable, they can actually be predicted to a certain extent. For example, at Bill Gates' 2015 TED talk in Vancouver, he stated that a "highly infectious virus" would be the largest risk to humanity in the upcoming years rather than any war or natural disaster. Despite how much the world has evolved, human history is somewhat cyclical and can be analysed accordingly. For most tail risks, an obvious supply chain strategy seems to be stockpiling. However, we go into more detail about why this is more often than not an expensive, highly naive and ineffective option. It's something that we're even seeing in real-life right now on an individual level, with empty shelves in the supermarket as people stockpile pasta and toilet paper. Stockpiling goes directly against lean supply chain approaches, such as Kanban and the stockless supply chain. While stockpiling can be the response to certain classes of problems it is often a short-term answer and not long-lasting, as there are few things that can be stockpiled for a large amount of time, whilst tail risks are in nature infrequent. This is a problem that military supply chains often face. We talk about more cost-effective solutions such as a more agile production line, where you can rapidly switch from one type of production to another to create new products that meet demands, as many product...https://tube.lokad.com/videos/embed/6a10fab7-1cc9-48ee-99de-5bd85f5a255bhttps://tube.lokad.com/videos/watch/c3f28641-5a88-4068-8780-edbc4550b6f5https://tube.lokad.com/static/thumbnails/8ac5babc-96e2-4568-b656-a291404a197e.jpgBuilding Trust in a Supply Chain Network - Ep 79As humans, trust is a complex emotion that can often take years to build. It's also a highly important factor in business, which can impact on everything from speed of innovation to the perceived wealth of a nation. For this episode of LokadTV, we discuss this topic with Sheri Hinish the "Supply Chain Queen". Sheri is currently completing her degree at Harvard University and focuses on advocating, sharing and rethinking supply chain. She mainly concentrates on strategy, providing insights on emerging trends such as social media with a purpose. We can say that there is a widespread lack of understanding about the concept of trust in general when it's actually a vital ingredient in modern economics. In supply chain, there are also many simple yet counterintuitive elements that almost automatically create distrust, penalties being one example. Although it may seem very rational to claim and establish stock-out penalties for your suppliers, the instant you try and claim money, no matter how inconsequential the sum, you enter into a complicated web of ego and ultimately distrust. The same can be said for financial incentives, for example financial rewards for buyers to get the lowest price, which often creates the messy situation of extremely high MOQs, which in turn leads to a sens of distrust towards the buying team. We can say that distrust is often a product of pseudo-rationalism within supply chain. We go into more detail about cartels and the importance of networks of trust, particularly within the aerospace industry to avoid highly costly and disruptive AOG incidents. In addition, we talk about the role of Excel, digital supply chain tools and the applicative landscapes of companies that are often riddled with "bloatware" and too many layers, which adds to confusion and eventually to distrust. To conclude, we discuss how companies can create a space for change and how to establish this tricky idea of trust, especially in a world where networks are becom...https://tube.lokad.com/videos/embed/c3f28641-5a88-4068-8780-edbc4550b6f5https://tube.lokad.com/videos/watch/b21b3dc7-cb0e-4a76-9b75-a12159f86beahttps://tube.lokad.com/static/thumbnails/51f8c91f-0fdd-4126-80b4-9a19ed718acd.jpgInventory Optimization for SMBs - Ep 80In any small company the management team has to take on the responsibility for all aspects of the business. This naturally includes the burden of inventory optimization, where the choice ranges between investing in costly enterprise software to taking on the challenge of doing it manually in-house. For this episode of LokadTV, we explore this dilemma and try to understand what SMBs can do to get the best out of their, sometimes limited, resources. In terms of scope, SMBs cover quite a wide range, between 2 and 30 million dollars of turnover and they usually sell physical goods, which they either manufacture themselves or procure from suppliers. Below 1 million dollars of turnover, there isn't much possibility to optimize inventory, as at this level you can usually do a visible inspection and physically see all your inventory at a glance. You can understand how your products are moving with your own eyes. Once the 3 million dollar threshold is crossed, then the question of tools can come into play. As your business grows, so will the number of people you employ and suppliers you have. No matter how competent your employees and trustworthy your suppliers are, mistakes will happen. To err is human is after all. When humans are involved, especially in something as repetitive as inventory counting, it's very easy to make an error. In addition, mistakes linked to purchasing can be deadly for a small company - for example if too much stock or the incorrect stock is ordered. As a company grows, although it might be scary to give the power to purchase - i.e. direct access to your business' funds - to someone else, it eventually becomes unavoidable. However, this is something that business owners often try to avoid for as long as possible. We discuss this dilemma in more detail and the possibility of externalizing this competence. To wrap things up, we talk more about how to deal with a growing business and its corresponding complexities, for example with very specific...https://tube.lokad.com/videos/embed/b21b3dc7-cb0e-4a76-9b75-a12159f86beahttps://tube.lokad.com/videos/watch/887643e3-29ef-47ad-913e-e03c6c1c690bhttps://tube.lokad.com/static/thumbnails/3dc1f670-c690-404b-a298-fcb75959a710.jpgHiring for Modern Supply Chains - Ep 81With flexible working conditions and a desire to work with the latest tech stack, it seems that modern day candidates are demanding more than ever from employers. For this episode of LokadTV, we're joined by Radu Palamariu, the Managing Director of Alcott Global, who discusses with us why attracting and retaining talent is so important for modern supply chains and how companies can find the best. Alcott Global specialises in recruiting executives for supply chain, they work with a wide range of companies that mainly focus on shipping, logistics and manufacturing. They count Maersk and DB Schenker amongst their clients. Previous to working at Alcott Global, Radu had a lengthy background in management consulting before deciding to specialise in executive research, because he strongly believes that the human element within a business is truly the "make or break" factor. So just what is it about supply chains specifically that makes hiring so interesting? For starters, if a business is large enough to have a considerable supply chain, then that already means that the business has reached a certain size. All growing companies have their own set of specific challenges that accompany their expansion, and stalling this growth simply to avoid these challenges obviously isn't an option. We debate the popular belief that nowadays people, especially millennials, want to work in an environment where they feel like they're doing something meaningful. We go into more detail on what various successful companies such as Facebook, Google and Amazon do when it comes to recruitment and creating attractive work environments. Without a doubt, a major factor is the idea that talent attracts talent, which worked very well at Facebook with Yann LeCun for example. We also discuss the role that salary has to play and the "golden handcuff" effect that this can often provoke. Flexibility and the ability to work remotely is something that is now largely demanded, by both millenials and ge...https://tube.lokad.com/videos/embed/887643e3-29ef-47ad-913e-e03c6c1c690bhttps://tube.lokad.com/videos/watch/e25f216f-9f51-4d72-a859-3587ffc7652dhttps://tube.lokad.com/static/thumbnails/c9689060-c6b6-402b-8339-889f2b5a823b.jpgHard Luxury Store Assortment - Ep 82The nature of the hard luxury market means that despite a growing online presence, the vast majority of purchases are still made in store. With sales reaching as low as one or two units per year, it can often be challenging to know what to display in stores and how best to capitalize upon a demand that is so sporadic. For this episode of LokadTV, we discuss this dilemma and learn what hard luxury stores can do to optimize their assortment. What is very interesting in hard luxury is that it's the stock itself that creates demand. It's somewhat rare for somebody to buy a very expensive item without seeing it "in the flesh", so it's usually the experience in the store that leads to a successful sale. Hard luxury, much like fashion, is driven to a certain extent by novelty. One of its major characteristics is that there is very little data, due to the highly sparse sales. In addition, the classic time series forecast, that is ubiquitous in supply chain science, doesn't work at all for hard luxury. However, just because time series may not work this doesn't mean that the only way to go forward is with pure "guesstimation". What needs to be done is considering the network as a whole in order to gain other perspectives. For example, the use of customer loyalty cards and other customer data to be able to link customers to products. This way, assortments can be picked and optimized in relation to the clients that are likely to visit that store. It's certainly not easy to do, but not by any means impossible. For a start, hard luxury products have excellent traceability, which helps greatly. To conclude, we talk about the use of probabilistic forecasting to assess the performance of assortments, the possible cannibalizations that can occur and to make sure that they get distributed to the correct stores and not just the best performing stores. No matter what, there is an irreducible uncertainty in hard luxury, but probabilistic forecasts allow much clearer and more pow...https://tube.lokad.com/videos/embed/e25f216f-9f51-4d72-a859-3587ffc7652dhttps://tube.lokad.com/videos/watch/ae555539-6d7e-4b18-976e-2b9b98cf6327https://tube.lokad.com/static/thumbnails/c35a636e-d0a7-4ff3-aa18-131856e4742a.jpgSupplier Development - Ep 83A competent and capable network of suppliers is a critical ingredient of the supply chain performance. In this episode, we are joined by Muddassir Ahmed (Regional Planning & Operations Manager at Bridgestone) to discuss how both parties can extract maximum value from these relationships and what companies can do to maintain and build solid relationships with their suppliers. Muddassir is MEA Regional Planning and Operations Manager for Bridgestone and author of the blog "The SCM Dojo". He has over 8 years of senior leadership experience in developing and implementing supply chain strategy, which is a subject he teaches at various universities. Overall, we can say that over the past two decades, the lines have blurred and it's more tricky to see who is a client, a supplier or a competitor. For verticals such as fashion and consumer electronics, the advent of ecommerce has changed many things - now, suppliers can quickly become competitors or allies. On the other hand, certain industries go completely the opposite way, using gigantic market platforms such as Alibaba, which offer vast catalogs of items but often provide much less knowledge about suppliers. However, it's difficult to generalise supplier relationships as industries diverge greatly, for example aerospace, fresh food and luxury all behave very differently when it comes to their suppliers. To bring this episode to a close, we discuss in more detail the problematics of prolonged lead times, considering that supply chains are becoming more and more international, and especially what businesses can do to be less dependent on their suppliers. This is a vital issue that the Covid-19 crisis has made many companies acutely aware of recently. For example, many have turned to stockpiling as a possible solution, which is not always the best answer. ****** Episode Map 0:00 - Introduction 0:27 - Muddassir, perhaps you could start by telling us a little more about your background and your role at Bridgestone?...https://tube.lokad.com/videos/embed/ae555539-6d7e-4b18-976e-2b9b98cf6327https://tube.lokad.com/videos/watch/1fb0c007-4ac3-4e25-b226-6b8a49801a63https://tube.lokad.com/static/thumbnails/f3ca0c16-d081-48f0-a229-c030cea04085.jpgSupply Chain Responses in a Pandemic - Ep 84For this somewhat special episode of LokadTV, we hold a webinar with previous guests of the show, Cédric Hervet and Stefan Gstettner. We discuss the impact of Covid-19 on supply chains worldwide and get their views on how the situation has been handled by both companies and governments alike. Cédric is the Co-founder and Head of R&D at Kardinal, a route optimization software company, and Stefan is Partner & Associate Director at the Boston Consulting Group. One of the the most pressing supply chain challenges highlighted during the crisis has been the worldwide lack of masks and PPE. We discuss how these shortages are the product of multiple causes and how these issues have highlighted the various shortcomings of a safety stock approach. In addition, we expand upon the strategy of stockpiling and investigate how well prepared organizations were. We talk more about the role of digitalization and data in supply chains and how this can help to increase overall visibility, something that has been critiqued recently by experts due to the crisis. We learn more about the role of AI and discuss how it can help navigate volatile situations which exhibit so much uncertainty. With Coronavirus demonstrating how dependent the globe's supply chains are on single production sources, we debate how supply chains are likely to evolve. We ask whether companies will begin to shift their focus to more local supply chains and how this will impact upon their existing structure. To wrap things up, we summarize the longer term and, more notably, economical impacts and how the situation is likely to evolve once stores and business start to open again. ****** Episode Map 0:00 - Introduction 0:34 - Why was the shortage of PPE, and particularly masks, such an issue worldwide? 2:24 - Do you think we are too reliant on China and overseas trade? 4:10 - In terms of organization, what have you observed in the way businesses are changing in order to react to this situation? 6:23 - There ha...https://tube.lokad.com/videos/embed/1fb0c007-4ac3-4e25-b226-6b8a49801a63https://tube.lokad.com/videos/watch/15543aec-1a36-4101-b4a5-b918b0676eb7https://tube.lokad.com/static/thumbnails/74af3f36-cbe5-4ebb-8468-c19259f5ec77.jpgChoosing Your ERP - Ep 85In another of our remote episodes of LokadTV we tackle the all-important topic of ERP systems, a class of enterprise software that supports the routine operations of a company. We learn more about how they work and how companies can choose the correct ERP that will suit their needs. How did ERPs come about? During the 70’s, it gradually became obvious that electronic records were cheaper, faster and more reliable. ERPs followed on as the result of two key inventions: the barcode reader and relational databases. Firstly, the barcode reader made it possible to record product data in a matter of mere seconds. Secondly, with relational databases SKUs could now be organised along with products and POs. This meant that it was suddenly possible to do clerical automations automatically, which historically had been very expensive requiring entire armies of clerks. The actual term of "Enterprise Resource Planning" was coined by Gartner in the 1980's. However, it can be said to be somewhat of a misnomer due to the fact there is actually very little planning that takes place, everything is fully automated - its systems are transaction centric, much the same as a CRM is client centric. Choosing an ERP certainly frames a company, Lidl famously wasted half a billion trying to move from one system to another. We debate why so many businesses decided to take a monolithic approach. With the advent of interconnected apps and the vast number of products on the market, we discuss how a business can navigate all this to make the right choices. To conclude, we talk about what small businesses can do to choose a correct system that will work for them, hopefully avoiding unexpected and debilitating costs in the future. ****** Episode Map 0:00 - Introduction 0:22 - When did ERP systems first come about? 2:37 - Where does the name ERP come from? 5:07 - What were the core capabilities that the early ERPs had? 9:52 - How much have ERPs changed over the years? 13:15 - Where do the econo...https://tube.lokad.com/videos/embed/15543aec-1a36-4101-b4a5-b918b0676eb7https://tube.lokad.com/videos/watch/a410de95-ce3b-477b-b43c-f408df103a4chttps://tube.lokad.com/static/thumbnails/c2365c40-40bc-4e18-bce6-03888a7a3821.jpgDecision First Supply Chains - Ep 86Supply chains have historically been built with forecasting at their centre, with the actual decision making process left to the intuition and experience of senior staff. We explore the alternative approach of putting ‘decisions first’, and how this philosophy vastly improves the supply chain performance. So what do we mean by a ‘decision first’ approach? Through the definition of economic drivers, practitioners can focus on the decisions which actually matter. Many people believe this to be an easy step, but it's not. It requires a lot of refinement to get somewhere sane, as you can't actually know your optimization target until you start optimizing. It will take many feedback loops before improvement starts to show. However, the idea of starting from the base of a crude decision can feel counter-intuitive, with the obvious first step of every data project being to ensure that the data is clean to allow a solid foundation. But the chances in fact that the measurement will already be extremely flawed if KPI's are used and if consultants are involved, they're more likely to go for the easy options in order to avoid any danger. Relying on low hanging fruit means that the bigger picture isn't properly taken into account. We've always maintained that you can't optimize what you don't measure and continue to do so, therefore data is always needed to back any claim. We go more in to detail about the problems of bad data and why it's not always so simple to imagine that eliminating bad data will have a magic wand effect. To wrap this episode up, we discuss what supply chain scientists should spend their time focusing on and how supply chains as a whole can become more reactive, ultimately by taking leaner approaches and removing unneeded decisions. ****** Episode Map 0:00 - Introduction 0:25 - Joannes, perhaps you could start by clarifying what you mean by taking a "decision first" approach? 2:27 - What made you take the "decision first" approach at Lokad? How ...https://tube.lokad.com/videos/embed/a410de95-ce3b-477b-b43c-f408df103a4chttps://tube.lokad.com/videos/watch/cf521080-2e14-45c4-b340-f7c3bdee1be8https://tube.lokad.com/static/thumbnails/96290626-141c-4b1d-8627-51fec25c3b94.jpgAssessing Supply Chain Software - Ep 87Market analysts and consultants can be a useful aid in assessing the multitude of different supply chain software. However, too frequently, those 'experts' hide behind weak and irrational methodologies, instead of providing opinionated insights which would require a lot work from them. Far from being irrational, high-quality subjective reviews nearly always outperform cheap and naive methodologies. Prospects, consultants and market analysts often ask enterprise software vendors to provide an RFP (request for proposal), or more often than not ask them to participate in an assessment. Most of the time this assessment takes the default form of a very long questionnaire with hundreds of checkboxes. For an area such as supply chain, which is filled with real world complexities, these exceedingly long questionnaires become more a source of confusion than anything else. The reason for this is that the vast majority of questions are very limiting and are presented in a closed form "yes" or "no" form, which doesn't allow for any nuances. Another issue is that there is often no diversity in these questionnaires - a questionnaire for marketing software is identical to one for supply chain software, which are obviously going to be addressing highly different sets of business issues. A better way to probe the market would be to assess the fundamentals of both the problem you're trying to solve and the product you're investigating. Correctly framing a problem is essential. For example, many companies believe they need a forecasting software. But when digging deeper, we see that forecasts are frequently just a means to an end, so instead of going in to depth over this intermediate problem it would be better to investigate the actual issue at hand, which is usually supply chain performance. Furthermore, many products end up being nothing more than a huge pile of inconsistent features, which fill out the survey checkboxes very well but don't work so well in the real world...https://tube.lokad.com/videos/embed/cf521080-2e14-45c4-b340-f7c3bdee1be8https://tube.lokad.com/videos/watch/1754c612-4f81-4001-8314-6751806c1390https://tube.lokad.com/static/thumbnails/7e221acf-2bc4-4b87-9508-e52e470af724.jpgEarly Signals and Forecasting - Ep 88With a product's success so often relying upon the latest trends, the ability to capture initial demand and detect new crazes is becoming increasingly sought after. Here we discover whether the rise of social media means that forecasting these trends is now possible and what companies can do to react based on early signals. The general idea is that, by leveraging large data sources, you can obtain a glimpse into the near-future - for example something that is trending on Instagram, such as a celebrity wearing a specific type of garment. However, for supply chain forecasting early signals based on external data sources, there isn't really anything currently available on the market. Extracting data from social media may seem well and good, however most of that traffic isn't even caused by real people but by bots, therefore it's complex to discern what is real. Navigating through all this noise makes any forecasting highly problematic and it does not translate well into telling a supply chain precisely what it should buy or produce more of. Not to mention, that when a picture goes viral on Instagram, Twitter or Facebook, it's highly unlikely that the exact products featured are referenced and it's complicated to predict what potential customers will take away from the picture and products. For example with a pair of shoes, would it be more the colour, the brand or the shape? In addition, sometimes things go viral for the wrong reasons, with the multiple views and comments actually coming from a negative point of view. To wrap things up, we debate whether extreme events, such as the Covid-19 crisis, could be predicted and the prime importance of forecasting engines. We also go into more detail about how much trust you can actually place in early signals and the inherent complexity of supply chains. Due to this complexity, transforming forecasts into decisions within a supply chain is something that can never be instantaneous. ****** Episode Map 0:00:00 - Intro...https://tube.lokad.com/videos/embed/1754c612-4f81-4001-8314-6751806c1390https://tube.lokad.com/videos/watch/ed2e7a82-d841-459d-b5b2-142f3fb16aa4https://tube.lokad.com/static/thumbnails/1e7b42dd-6a02-4d61-b4b4-bdadcdb59fc2.jpgOpen To Buy - Ep 89Open-to-Buy is a budgeting and planning process that is commonly used in the fashion industry to drive purchasing decisions. Here, we discuss why this approach is so popular and discuss whether modern technology can provide alternative approaches to keep up with the ‘fast fashion’ culture. It's a simple, non-monolithic approach that exists in many flavours, and is often an alternative to the min/max inventory allocation method. The min/max method can work to a certain extent for industries that sell the same products over a long period of time. However, fashion is far too complex for such a simple method, as products rotate. The idea of Open-to-Buy is to shift this min/max idea from a product level to a more granular level, such as a category level. There is very little mathematical literature concerning Open-to-Buy. We can also say that Open-to-Buy is a rather empirical and subjective way of doing things, as it often depends on a practitioner's gut feeling about the market and there is no real forecasting involved. We go into more detail on how Open-to-Buy tools put constraints on all of the budgets for the different fashion categories' spending. On the one hand it effectively limits the grandeur of mistakes that are possible to make. On the other hand, this creates a phenomenon of self-fulfilling prophecies and a rigidity in these budgeting decisions, which are not always fully aligned with the business' actual needs. On the surface, Open-to-Buy may seem very simple to implement, but that's rarely the case. Due to the fact that it's a very manual process, a complex hierarchy who can successfully take the budget decisions needs to be in place, with various layers of management required. Then, there is the all-important element of seasonality within fashion that further complicates matters. To conclude, we talk about what fashion companies can do to make their Open-to-Buy approaches more successful and what possible lessons can be drawn from the recent Co...https://tube.lokad.com/videos/embed/ed2e7a82-d841-459d-b5b2-142f3fb16aa4https://tube.lokad.com/videos/watch/ab16511e-b125-4446-ba3b-fbb0924e7fe4https://tube.lokad.com/static/thumbnails/980ca0a8-9232-48e9-859b-25117772ee28.jpgBetter Data For Better Forecasts - Ep 90Arthur Conan Doyle’s iconic character Sherlock Holmes famously said ‘it is a capital mistake to theorize before one has data’. We certainly agree, as data is the foundation of any optimization process. Here, we discuss what companies that collect data can do and tackle the myth that data has to be "perfect" for a machine to be able to work with it. Most companies actually collect data in a way that could be described as accidental. For example, an ERP is not designed to collect data, it's instead designed so that mundane operations that occur constantly within a company are supported by a centralised IT system. For instance, at the point of sale in a store, the electronic cash register is there to obtain your payment faster, it was not put in place with the intent of obtaining a customer's entire transaction history. In this manner, companies end up incidentally amassing a vast quantity of data over a number of years. Typically, this data ends up spread out through different layers of software and contains unintended complexities. Often, when a company wishes to start improving their forecasting process to better serve demand, they put in place a system to extract a simplified form of this data, usually in the form of daily or weekly sales. They then build their forecasts on top of that. While this may appear very reasonable on the surface, a lot of critical information has actually been lost. To wrap things up, we expand on the history of ERPs and computing hardware compared to the present day difficulties of transferring data when a company changes its ERP. In addition, we go into more detail about the fallacy that faulty data is the source of many problems, when in fact it's more a question of looking at the correct data sources, as the data a company stocks is rarely faulty. In conclusion, we explain that when looking to improve forecasting you shouldn't simply look at time-series and sales data, nor concentrate on fads like social media trends. More o...https://tube.lokad.com/videos/embed/ab16511e-b125-4446-ba3b-fbb0924e7fe4https://tube.lokad.com/videos/watch/29f2e7f9-84e6-42c1-87ca-1ea53d59a635https://tube.lokad.com/static/thumbnails/8633bc15-6b3a-4337-abdc-10df7240082d.jpgWalmart Forecasting Competition - Post Game Analysis - Ep 91A forecasting competition based on Walmart store data ended June 2020. Lokad ranked 6th out of 909 teams. In this episode, we have a closer look at this unusual sporting event, and what it takes to win such a competition. We are joined by Rafael de Rezende who was leading the Lokad team in this competition. Rafael has a background in supply chain and is an industrial engineer, at Lokad he is our Head of Product Development and takes on the "geeky" topics, such as time series forecasting, solutions for multi-echelon businesses and Lokad's MOQ solver. Kaggle is a fairly large organization - recently acquired by Google - that organises machine learning competitions that involve forecasting or predictions. In order to set up a competition, two things are required: a large data-set and large prices. It's a very competitive environment, with an extremely specific discipline and could almost be described as a high-level sport, filled with hundreds of people who are pros at winning these kind of competitions. Often, the teams that win are rarely made up of researchers, but instead people who are very good at figuring out what is state-of-the-art within the latest algorithms. For this competition, Lokad's team were definitely Kaggle newbies, having never been in an environment of such a magnitude, going against almost 1000 other teams. However, despite the competitiveness Kaggle, also has a very collaborative environment, with participants working hard to help one another to improve. But this collaboration can be a double-edged sword, as an interesting observation about this collaborative notion is that it hinders creativity. For example, a team publishes what they're doing and other teams abandon what they're doing to follow their process, creating a "flock effect". To wrap things up, we discuss how this was the first competition of this nature to use quantile forecasts to evaluate the results. In addition, we go into more detail on how Lokad's team managed to sco...https://tube.lokad.com/videos/embed/29f2e7f9-84e6-42c1-87ca-1ea53d59a635https://tube.lokad.com/videos/watch/ba12bac5-2a26-4257-9f4d-324733ae414fhttps://tube.lokad.com/static/thumbnails/f8fe9129-90c6-4951-8128-c10fc18ecbf0.jpgEvent Sourcing for Supply Chain systems - Ep 92When relational databases emerged in the 70’s they provided a breakthrough for companies to turn their supply chain digital, decades before the 'digitalization' buzzword. However, event sourcing has now emerged as a more manageable, more reliable and more scalable way to design supply chain systems compared to the relational design. At the core of this revolution, a perspective on reality itself which is too frequently under appreciated by supply chain practitioners. ****** Episode Map 0:00:00 - Introduction 0:00:28 - Joannes, what exactly is event sourcing? 0:01:46 - What about the different event sourcing techniques? Are we seeing them often in the marketplace? 0:04:26 - Did the CRUD approach introduce any kind of constraints or assumptions that we are now used to work with? 0:06:03 - Are there any other benefits to events sourcing other than having an understanding of what has happened in the past? 0:09:27 - How easy is to go back to the past and check what has happened in order to get to the root cause of a problem? 0:12:29 - Should small companies be interested in event sourcing? 0:15:35 - Can you see event sourcing as being more commonplace across the market in the next couple of decades? Are there any barriers we still need to overcome for that to happen? 0:20:25 - Will Amazon take over the entire market? ****** Check out our website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/ba12bac5-2a26-4257-9f4d-324733ae414fhttps://tube.lokad.com/videos/watch/59a42c81-36b1-4a51-94df-50dc59a10f02https://tube.lokad.com/static/thumbnails/a6257114-9bf1-48f2-9b05-d07570577e19.jpgThe Importance of Network Design - Ep 93The very design of a supply chain network has a huge impact on inventory optimization. For this epsisode, we're delighted to welcome Pinak Dutta, Head of Network Optimization at Spreetail, to discuss what constitutes good design and how organisations can exploit this to improve their inventory allocation. Pinak has a background of 10 years in supply chain that spans a vast range of activities from FC engineering, transportation planning, production & supply planning, operations research, network design and inventory optimization gained from chemical manufacturing and e-commerce industries. Network design is a domain that's been heavily driven by technology and has gone through several, intriguing stages. In the 50's, many mathematical models for operations research emerged very early. These models were highly theoretical: linear algebra problematics that were simple to execute at a mathematical level but weren't actually used in any industry. Then in the late 90's, the first breakthrough came - the CD-rom. Suddenly, on an easily accessible, compact disk you could have a highly detailed electronic map for an entire region. At this time, the internet was very slow so downloading something like a map wasn't possible. With Google Maps, this may seem very simple now, but at the time it was revolutionary. Nowadays, the first question we need to ask is what's the main purpose of the network design? For example, is it developing key strategic initiatives due to growth, with capital investments being taken into account, or do inefficiencies need to be addressed that have developed due to mergers, acquisitions or natural growth? For network design, data is considered on a more strategic level, contrary to inventory optimization where data is evaluated on a more granular level. Network optimization requires you to look far into the future. To conclude, we talk about the all-important emergence of 3PLs and their impact on network design, as well as the relationship betw...https://tube.lokad.com/videos/embed/59a42c81-36b1-4a51-94df-50dc59a10f02https://tube.lokad.com/videos/watch/0d50dffb-cb6a-4d7f-9ef8-71d0a0ac08c8https://tube.lokad.com/static/thumbnails/fe6a3948-aa94-4f7b-ae35-5237a55ef06f.jpgWhat is Supply Chain? - Ep 94From a company perspective, while dealing with flows of goods, supply chain is the mastery of optionality when facing variability. This episode focuses on what the term ‘Supply Chain’ means, and what are the organisational implications of this definition. There are many things to be gained from clarifying what supply chain is. It's an important element of progress, especially when it comes to technology, because without the proper vocabulary it is practically impossible to reason about things. With supply chain being such a broad domain, it's crucial to be able to define which aspect is being discussed and to structure solutions. With the Covid crisis, many media sources talked rather a lot about "supply chain problems" - linked to toilet paper for instance -, when what they were obviously referring to were in fact "stock-outs". In the same vein, "supply chain issues" were cited when referring to an over-reliance on China for electronics manufacturing. Increasingly, the word "supply chain" is becoming somewhat of a catch-all term used to make statements appear more elaborate. We, as so many students likely do, take a look at Wikipedia's definition of supply chain and see how well it holds up. This definition of supply chain, so often found in textbooks and most supply chain literature, can be problematic. Mainly, the issues within these definitions lie in the confusion between supply chain as a field of expertise and the objects themselves that are involved within the supply chain. We go into more depth about how, contrary to many other disciplines, most supply chain literature is not being written by academics, but by consultants. This is often because the only way to really learn about supply chain is to interact with multiple large companies, which consultants naturally do. However, the way that this knowledge is generated creates biases, namely because there is a financial initiative as well as a need for branding. To wrap things up, we talk more abo...https://tube.lokad.com/videos/embed/0d50dffb-cb6a-4d7f-9ef8-71d0a0ac08c8https://tube.lokad.com/videos/watch/2d235d79-ab59-49e2-9301-003c58e64d74https://tube.lokad.com/static/thumbnails/e07f2ec3-6829-439a-8352-688fed676c14.jpgPricing Practices for Supply Chain Software - Ep 95From exorbitant one-time licenses to hidden maintenance fees, it seems like navigating the range of approaches to pricing software can often be somewhat of a minefield. Here, we explore some of the main approaches and learn more about the bad practices to look out for. The pricing of supply chain software is something that varies frequently. In supply chain, software purchases aren't made often, maybe at a rate of twice per decade. Therefore, quite often the person buying the software could be doing it for the first time in their career, which creates an asymmetry - the vendor has a lot of experience in selling their product, but for the company purchasing it's a more atypical event. On top of that, supply chain and supply chain software is an incredibly diverse environment. One option is single license software, which peaked during the 80's and early 90's. It's a simple approach that is often easy from an accounting point of view. However, despite its simplicity it usually comes with problems: while your company may then own the software and it can potentially become an asset, it's also risky as, finally, it might not turn out to be usable as intended, transferrable or resellable. Another common practice is trying out software for free before purchasing. The problem there is that supply chain is such a complex, distributed system that's it not actually realistic to be able to test a software effectively within a short time-span. To even test one WMS for one sole warehouse would require months of efforts and the potentially costly re-training of many employees. Between these two options there's the "pay as you go" process, which may seem like a nice compromise but comes with its own complexities and issues. We go into more detail about this, as well as the ever-occurring problem that technology evolves far faster than prices do. Therefore, companies are often faced with the situation where they're no longer paying a fair price compared to the technology that...https://tube.lokad.com/videos/embed/2d235d79-ab59-49e2-9301-003c58e64d74https://tube.lokad.com/videos/watch/51556813-81b3-4859-8b59-7a59ce4f9c0bhttps://tube.lokad.com/static/thumbnails/91ef1793-125e-45f0-9b2b-87099b029e7e.jpgSmoothing Warehouse Operations - Ep 96Despite the rise of automation, modern day warehouses still rely heavily on manpower, which can lead to diseconomies of scale in periods of heavy demand. As such, we learn more about how decisions can be prioritized and why smoothing warehouse operations is so important when it comes to managing fluctuations in activity. Why are we talking about "smoothing" and not "streamlining" warehouse operations? We can say that smoothing refers to the day-to-day warehouse operations, for example the amount of manpower needed remains pretty constant from one day to the next. Streamlining, on the other hand, would apply in the case of buying a new conveyor belt, which would improve overall warehouse productivity. Yet, once this investment is done, you'd be back to the initial situation where you're looking to "smooth" those daily operations that require accommodating variations in demand. The reality of the market is that flexibility is always an option during periods of high demand, by hiring contractors for example, but this doesn't change that it's an expensive option. By being relatively inflexible, you can lower your costs. Therefore, whenever you diverge your warehouse from your optimal, nominal schema it results in diseconomies of scale. Currently, it is practically impossible to achieve an efficient smoothing of warehouse operations with classic supply chain paradigms. These classic approaches place too much importance on time series and glorified min/max reordering policies, which places focus on the wrong elements within the supply chain. The main problem lies in not looking at things from a network perspective, as often formulas just isolate one single SKU instead of acknowledging the rest of the network in place and how it all reacts together. To conclude, we discuss replenishment challenges, how to increase ROI and go into more detail about why Lokad's approach is so different from the classic approach when it comes to warehouse operations optimization. ...https://tube.lokad.com/videos/embed/51556813-81b3-4859-8b59-7a59ce4f9c0bhttps://tube.lokad.com/videos/watch/a9f7aabf-622a-4292-9c04-76d685d1792ehttps://tube.lokad.com/static/thumbnails/61affe4c-fdb6-4f7d-94ad-331f8df46f35.jpgScenario Planning vs Probabilistic Forecasting - Ep 97Scenario planning was first pioneered by Shell in the 1970’s and since then has been promoted by consultancies worldwide as a powerful tool to help companies prepare for every eventuality. Here, we discuss the effectiveness of this approach and whether it can be replaced by alternative methods, such as probabilistic forecasting. The two methods are similar as they deal with uncertain futures; as nobody can be sure of what the future holds, it's normal that you want to explore options. However, how the two methods explore these options is very different. Scenario planning is conceptually extremely simple and creates "what-if" scenarios; it's elegant and easy to replicate. Due to the extreme complexity of supply chains - demand, lead times, 1000's of SKUs, multiple locations etc. - technology is required to help deal with the multitude of possible, future scenarios. As scenario planning is so easy to implement and easily creates mulitple scenarios, from a software perspective it's literally a question of "cutting and pasting". Despite this apparent simplicity, manual tweaks are required due to the numerically overwhelming amount of combinations. Therefore, it remains a very human-driven affair, as human expertise is required to cherry-pick these scenarios. In terms of productivity, supply chain planning is already highly time consuming, requiring entire teams of planners and forecasters to create primary scenarios - i.e. average classic forecasts. To add more scenarios and fuel the process, far more manpower is required. When it comes to the day-to-day running of supply chains, scenario planning is rarely used because it's so costly. Yet, it's still a technique that consultants and vendors continue to push. The alternative approaches that have now emerged, most notably probabilistic forecasting, have been able to come into being thanks to more readily available computational power that simply wasn't a possibility before. Naturally, probabilistic forecasting is a...https://tube.lokad.com/videos/embed/a9f7aabf-622a-4292-9c04-76d685d1792ehttps://tube.lokad.com/videos/watch/eea1ecfd-f66a-4889-b4a3-890b84d1d386https://tube.lokad.com/static/thumbnails/933a2c80-5c16-4ae4-83e5-60aaf6209364.jpgQuantitative/Qualitative Paradox in Supply Chains - Ep 98Better quantitative results in supply chains are frequently obtained through better qualitative, if not highly subjective, perspectives rather than from better numerical methods. Most the breakthoughs at Lokad, that ultimately lead to quantitative improvements, were of a qualitative nature. In supply chain, there is often this quantitative/qualitative paradox. At Lokad, our approach is the "Quantitative Supply Chain". People frequently challenge this approach and wonder why there isn't a simpler way to measure everything in pure, monetary figures. However, it's far more complicated than that. It actually takes a lot of qualitative understanding to make sense of any quantitative figures we can give. Usually naked figures, i.e. "your company will save 10 million dollars", are very misleading. The paradox is that although we have a highly quantitative methodology - numerical tooling, technologies for crunching numbers at scale, advanced statistics; all taking place on a programmatic platform - usually the only way to make sense of our findings is to make qualitative judgements. One of the most important things to understand is that every measurement you can make is highly subjective. You could think that all personal judgements and biases can be removed, but this is practically impossible. Supply chains are part of a huge ecosystem of software, machines, people and processes; therefore judgement calls are required. As the saying goes: "turnover is vanity, profit is opinion, cash is king". Depending on what you look at, is it something "real" or something that requires interpretation? As Lokad advanced, beginning with a classic forecasting approach and producing only one straightforward number, we realised that something was missing and that was uncertainty. Our initial perspective was incorrect because we were dismissing any possible uncertainty. We began to see the subtleties and nuances in the numbers we were producing and this required us to take arbitrary j...https://tube.lokad.com/videos/embed/eea1ecfd-f66a-4889-b4a3-890b84d1d386https://tube.lokad.com/videos/watch/05b8ec8b-66c8-435e-8b91-6e62338905c3https://tube.lokad.com/static/thumbnails/40b1d7e0-56ce-4fd7-9edc-613f9fe8283d.jpgPredictive Analytics for Business Forecasting - Ep 99Here we're joined by the host of IBF’s On Demand Podcast, Eric Wilson, to discuss the role of analytics in modern day organisations and in particular, what we can learn from Eric’s new book titled ‘Predictive Analytics for Business Forecasting’. Eric has 30 years of plannning and analytics experience and is a Certified Professional Businesses Forecaster (CPF), as well as being Certified in Production and Inventory Management (CPIM). At the Institute of Business Forecasting & Planning (IBF), he helps to drive their strategy, as well as conducting, researching and creating content in addition to hosting the bi-weekly "On Demand" podcast. He is currently in the process of publishing a book entitled "Predictive Analytics for Business Forecasting", which goes into more detail on the key concepts that he has used throughout his career. Nowadays, it's extremely easy to create thousands of numbers with machines, but how do you produce something that is actually worth the attention of a human being? This is the main challenge. We can say that data should be considered as building blocks that need to be transformed into insights. Unfortunately, many companies often struggle to access these precious insights. With analytics, there are several ways that you can arrive at non-productive lines of thought. To avoid this, it's important to focus on something that has a mundane, physical or tangible impact on your supply chain. For example, a purchasing decision, a stock movement, or a price change. Often, it's easy to get lost in "vanity metrics", KPIs where nothing is "key" and instead they're simply vast oceans of numbers that lack focus, or any built-in intent, and serve only to distract. We talk in more detail about the roles of Demand Planners and Supply Chain Scientists and how they can be positions that are challenging to recruit for. We compare these two roles and the various skill sets that are required. We also discuss the peaking interest in supply chain, which fo...https://tube.lokad.com/videos/embed/05b8ec8b-66c8-435e-8b91-6e62338905c3https://tube.lokad.com/videos/watch/977dc9c6-02bc-4801-98d8-3b4b9b3e8472https://tube.lokad.com/static/thumbnails/ab291ff3-5a4b-4bfe-b8e0-09c68d60dabc.jpgThe Quantitative Supply Chain Journey - Ep 100When starting Lokad back in 2008, we thought we had the solution already worked out. However, since those early days there have been many twists and turns along the road, and we have had to change the entire strategy of the company on a number of occasions. In this episode we are going live to look back at the Lokad journey so far, and revisit how the ‘Quantitative Supply Chain’ emerged. We will cover a number of key areas such as forecasting with bias, the drawbacks of common enterprise ‘plug and play’ approaches and the generations of deep learning which helped our solution to evolve to where it stands today. And to celebrate our 100th episode, we are going to do this live from Paris! We will try to answer as many questions as we can that you have either sent us before or that you post during the stream. ****** Reach Joannes Vermorel (CEO, Lokad) at j.vermorel@lokad.com Company website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/977dc9c6-02bc-4801-98d8-3b4b9b3e8472https://tube.lokad.com/videos/watch/62b51678-d6c9-4680-8daf-75eb51fb3052https://tube.lokad.com/static/thumbnails/d3ed6cb2-4af7-4e98-a60f-63166f9360c5.jpgCyber Risk in Supply Chains - Ep 101As coronavirus swept the world, numerous organisations quickly transitioned towards remote working. However, with so many employees working from home, these less secure environments created new security vulnerabilities. As such, for this episode of LokadTV, we are joined by Professor Richard Wilding who tackles with us this complex topic of cyber risk in supply chains. Richard is a Chair (Full Professor) in Supply Chain Strategy at the Centre for Logistics and Supply Chain Management, Cranfield School of Management UK. He works with both European and international companies on logistics and supply chain projects for a vast variety of sectors, such as pharmaceutical, retail, automotive, food, drink and professional services. He also conducted research into inventory policies of organisations in times of risk and uncertainty, which resulted in international media coverage, including live interviews on BBC1 News, BBC News 24, BBC's "The Money Programme", BBC 5 Live and Independent Radio News. He was appointed an Officer of the Most Excellent Order of the British Empire (OBE) by Queen Elizabeth II in the 2013 New Year Honours, for services to business in recognition of outstanding achievements in the area of logistics and supply chain management. Cyber risk is something that is often extremely counterintuitive in practice. For example, it's very difficult to detect security problems in software as most of the usual testing methodologies do not work, as do many development practices. It's a topic that could be described as illusive. Nowadays, many companies use cloud software, which is generally more secure. However, it is also more exposed to attacks as there are more entry points. Web apps also present entire classes of potential security problems that are, by design, practically impossible to eliminate. From a supply chain perspective, companies want and need things to be relatively open - to be able to connect with the various elements that make up the chain...https://tube.lokad.com/videos/embed/62b51678-d6c9-4680-8daf-75eb51fb3052https://tube.lokad.com/videos/watch/f4201f7a-22d2-4ea9-acc7-43500b57550bhttps://tube.lokad.com/static/thumbnails/1ad4db4c-0466-4d3b-accf-2db8f5d737b9.jpgThe Supply Chain Law of Small Numbers - Ep 102Mainstream statistics are all about the law of large numbers. Yet, supply chains are the opposite. It's the law of small numbers that prevails. For decades, this mistunderstanding has generated problems for practitioners due to misdesigned tools, methods and processes. In this episode, we discuss the challenges and the appropriate perspectives when it comes to small numbers. As a company that specialises in big data, it may seem that we're focusing on small numbers. Yet, it is small numbers, and not large ones, that are ubiquitous in supply chain. By "small numbers" we mean all the numerical choices and quantities that really matter, not streams of barcode digits. For example, when it comes to quantities in supply chain, sometimes you're even talking in single digit numbers. However, most statistics are geared towards large numbers. The performance of most calculations is driven by the size of the data. The bigger the data, the slower it will be. The bottleneck here isn't the CPU, but the simple fact of loading and unloading the data, which can sometimes take days. Great gains in computation speed can be made by simply shrinking and compacting the data size. Even at Lokad, when we talk about investigating "all possible futures", we are still thinking in small numbers, as reality and reasoned judgement are already able to eliminate many of the futures. To wrap things up, we discuss how, if basic supply chain science concepts from the 80's were used, that Walmart could in fact be run on a modern day smartphone. We also discuss the various problematics when it comes to aggregating data and the granularity needed within supply chain, and how to make the best use of the computing power that is available today. ****** 0:00:00 - Introduction 0:00:23 - As a company that deals with Big Data, it is somewhat surprising to be talking about small numbers. What is the key idea today? 0:02:21 - What do you mean with the expression "sending a number"? 0:06:17 - Why shou...https://tube.lokad.com/videos/embed/f4201f7a-22d2-4ea9-acc7-43500b57550bhttps://tube.lokad.com/videos/watch/9d19fc92-6112-4a5e-a939-b229623e4f3ahttps://tube.lokad.com/static/thumbnails/1efee2c0-7b93-44c0-b20b-db42c67c0c0f.jpgThe Unification of Pricing and Planning - Ep 103Historically, pricing and planning have been dealt with by separate divisions within companies. This has resulted in inconsistent strategic thinking and data silos. For this episode of LokadTV, we discuss why these two tasks should be dealt with in tandem and how they are actually, in reality, two sides of the same coin. When you think about demand you need to try and anticipate the future, to be able to produce or source ahead of time what you plan on selling. However, demand is also highly affected by the price, yet from a traditional forecasting perspective, the concept of pricing usually doesn't exist at all. When Lokad first started out, we also tried to solve the two problems separately with two separate pieces of software: "Salescast" and "Priceforge", before we realised that the two perspectives and their data needed to be handled together, which took us some time. When it comes to pricing, willingness to pay is often seasonal, especially in fashion. But each industry (fresh food, aeronautics etc.) has its own distinctive perspective on planning and pricing and these two subjects are nearly always entangled. Therefore, planning and pricing teams should work much closer together, which isn't the case in most companies. Or to get even better results, the two teams shouldn't be separate, as you're just looking at the same problem from two angles. An example of a company that is already doing this and doing it well is the usual suspect - Amazon. For example, Amazon begins to raise the price of products as soon as the stocks start to run lower. To conclude, we discuss if in the future there's any possibility that pricing and planning software companies will try and join forces to produce solutions and why Amazon and Alibaba; despite being so enormous, still continue to grow precisely because they analyse pricing and planning together. ****** Episode Map 0:00:00 - Introduction 0:00:26 - Joannes, we have already spoken about pricing before. What is the...https://tube.lokad.com/videos/embed/9d19fc92-6112-4a5e-a939-b229623e4f3ahttps://tube.lokad.com/videos/watch/4c1650c5-ea11-48df-8836-2abd64e1fab4https://tube.lokad.com/static/thumbnails/d0308a85-d0e4-43fe-b656-0fa2e1e608e7.jpgFinancial Optimization of Supply Chains - Ep 104Dollars of profits and losses are the only metric that matter in the long run for any company. At Lokad, we emphasize a strict financial optimization of the supply chain. This approach should not be confused with short-sightedness and other kinds of pseudo-rational methods which are prevalent when finance gets in charge of the strategy. This approach goes against the idea of service levels, and most of the other KPIs similarly defined through percentages. Most of the problems in supply chain are driven by its tail - it's the unexpectedly high demand that generates stockouts, and it's the unexpectedly low demand that generates inventory write-offs. In the middle, things tick over just fine; inventory rotates gently and asset utilization is more or less what it's expected to be. At the tail, things can get ugly. Focusing on service level does take consequences at the tail into account, but not fully. Therefore, we realized that in order for an efficient, thorough optimization to take place, a target is needed. A target that is unified and cross-functional for the company, which led us to understand that putting a monetary figure - be it Dollars or Euros - against each supply chain decisions was the way to go. How does this work in practice exactly? For example, if you decide to pass a purchase order to one of your suppliers, this means that you are anticipating some sort of future demand, which may or may not come to be due to multiple uncertainties. Therefore, to analyze the profitability of this decision, you can then look at the cost of the purchase, the payback in terms of generated margins, stockout penalties, inventory write-offs, carrying costs, etc. These are mundane supply chain actions, undertaken daily, that all carry a cost. However, the industry remains highly focused on service levels as a major KPI. To conclude, we go into more detail about why this is an inefficient approach and yet why it is still so prevalent within supply chain nowadays. We u...https://tube.lokad.com/videos/embed/4c1650c5-ea11-48df-8836-2abd64e1fab4https://tube.lokad.com/videos/watch/82d3d540-b567-4f8a-9092-086af1a9db1dhttps://tube.lokad.com/static/thumbnails/566d3b5a-e30e-42a0-a8c8-b40482268bdf.jpgNumerical Recipes for Supply Chain - Ep 105Much like a great chef in a Michelin star kitchen, the best data scientists have to craft statistical solutions that adapt and evolve to every scenario. As such, we investigate what it takes to create these numerical recipes and what characterizes the solutions built for our supply chains. The naive rationalism is the idea that you have a problem and a solution that goes with it. But the reality is not so simple, as usually the type of solution shapes the problem - and vice-versa. Creating solutions for supply chains is often an entire journey, with unexpected bumps along the road, due to the pure complexity of supply chains. We use the term "numerical recipe" to specifically explain that we're talking about more than just algorithms. For example, when using the archetypal "sorting" algorithm, where you have a collection of objects with an order relationship and you can "sort" them, with a well defined series of steps, the algorithm will have many aspects, such as the memory consumption, the number of steps, stochastic, deterministic, etc. However, using the sorting algorithm usually makes sense for a somewhat clear-cut situation, with a problem statement that is completely non-ambiguous and where there is a mathematical clarity. On the contrary, when it comes to solving real world problems in actual supply chains, things get much more muddy. For example you'll have MOQs, which aren't set in stone like the laws of physics, but are usually negotiated in person with suppliers and are subject to change. This is not to say we don't use algorithms at Lokad (of course we do). Algorithms are of course very useful and extensive research allows us to know their pros and cons. But algorithms are ultimately just one small screw in a much larger machine. To conclude, we talk about the importance of the expertise and insights of Supply Chain Scientists and go into more detail about how practically all companies actually operate with numerical recipes but don't realise i...https://tube.lokad.com/videos/embed/82d3d540-b567-4f8a-9092-086af1a9db1dhttps://tube.lokad.com/videos/watch/e9a88eb1-4d1f-4b0f-b757-3ad57c27dc4ehttps://tube.lokad.com/static/thumbnails/df65b246-72c3-40d2-a06b-803c6086abbd.jpgThe Future of Work in Supply Chains (McKinsey Special) - Ep 106Mahatma Gandhi famously said that “The future depends on what you do today.” ― and for the organizations of tomorrow to be successful they already need to start establishing the right set up and supply chain operating model. We're delighted to welcome Markus Leopoldseder and Knut Alicke from McKinsey to discuss with us which capabilities organizations should be focusing on, and what the future of work in supply chains may look like. Markus is Senior Supply Chain Consultant as well as Director of Knowledge of McKinsey's Supply Chain Management Practice. He has been with McKinsey for over 20 years, where he focuses uniquely on supply chain projects. Previously, he spent 10 years at IBM working on production planning. Knut has a background in mechanical engineering and undertook a PhD in logistics before doing a post PhD in supply chain management. After university, he began a start-up creating planning software for consumer electronics companies. He joined McKinsey 16 years ago, where he is now a Partner, focusing on various supply chain topics, including digital solutions. He also lectures in supply chain at the University of Cologne. We can say that supply chains are moving towards a more analytical and quantitative mindset when compared to the past. This evolution brings with it new roles. We discuss just how important programming language knowledge, such as Python, SQL etc. is for these roles and within supply chain in general, and how much more accessible programming languages have now become. Nowadays, it's practically impossible to even obtain an engineering degree without learning any programming. Yet, there is often a gap between what academia is providing and what the supply chain industry actually needs. We also deliberate the pros and cons for the important question of centralization within companies and its impact on supply chain. Centralization can be extremely effective when it comes to core IT infrastructure. For example, Amazon successfully bu...https://tube.lokad.com/videos/embed/e9a88eb1-4d1f-4b0f-b757-3ad57c27dc4ehttps://tube.lokad.com/videos/watch/6c61733c-0103-49c1-8b3d-b03e918a3ce7https://tube.lokad.com/static/thumbnails/0e705a64-d415-4e49-9671-7067f6e642ad.jpgA Day in a Life of a Supply Chain Scientist - Ep 107We've previously discussed the importance of a supply chain specialist over someone with more classic data science capabilities. At Lokad, we call them "Supply Chain Scientists". We're joined by one of our Supply Chain Scientists, Maximilian Barth, to learn more about what their role entails. Like many of our Supply Chain Scientists at Lokad, Maximilian has an international background. He was born in Germany, studied and worked in a number of countries: the US, Finland and Australia, before moving to Paris. His studies were STEM focused (science, technology, engineering, math). Maximilian doesn't have classical engineering training as such, but a financial background. Finance is often very compatible with supply chain science, as it takes into account the various complexities of real-word market risks. The Supply Chain Scientist's role is very multi-faceted, combining consulting, client management, technical capacities, as well as project management. It's a position that often involves a lot of fire fighting, as unexpected situations often arise and our Supply Chain Scientists manage multiple accounts across the world. This requires an understanding of which issues need to be addressed first. It's also a delicate balance of taking enough time to communicate with clients, in order to understand their individual supply chain needs, and actually executing what needs to be done. We go into more detail about why we moved away from the traditional method of having one department who is in direct contact with the client, who then tells the IT department what they need to be developing, and instead decided to merge these two aspects into one. In addition, we talk about the diversity of the team at Lokad and what we actually look for in our Supply Chain Scientists. ****** Episode Map 0:00:00 - Introduction 0:00:27 - Maximilian, perhaps you could start by telling us a little more about your background and how you joined Lokad? 0:01:44 - Joannes, why did you implement ...https://tube.lokad.com/videos/embed/6c61733c-0103-49c1-8b3d-b03e918a3ce7https://tube.lokad.com/videos/watch/910725a6-baf7-42cd-a570-2e252be1bd54https://tube.lokad.com/static/thumbnails/e86dbac7-e5df-4aec-b703-607165bc9a5b.jpgMaintainability of Supply Chain Software - Ep 108When investing in a piece of supply chain software, there is the expectation that it will last a company decades, rather than just a few years. However, with a rapidly changing tech landscape, this becomes a complicated endeavor. For this episode of LokadTV, we discuss this challenge of maintainability and how it can be impacted by good design. It can appear odd to think of "maintainability" when talking about software, as it would seem that unlike most physical products, which suffer wear and tear, software doesn't really degrade. This is not the case however. It may not be mechanical degradation, but software does degrade with things falling apart over time. Some of the largest and most successful software companies, such as Microsoft, have been so successful thanks to their commitment to the long-term survival of their products. For example, you could take a Microsoft Word document edited in the 90's, open it and still print it out today. This mindset is fairly unique and is one of the reasons why Excel and Word don't have any real competitors anymore. Software mostly degrades due to entropy. The landscape is forever changing and the hardware is forever changing. At its core, software is a very composite product, requiring dozens of parts from dozens of different companies. When it comes to supply chain software, it's a whole other level of complexity that makes maintainability all the more difficult. So why can't you just freeze a software product so that it can run forever? Virtualization can help but isn't a complete solution. To wrap things up, we go into more detail about how maintainability boils down to a question of design. Yet often, this maintainability is sacrificed for being "cutting-edge". We talk about Lokad, and other SaaS' strategies for maintainability and why any software vendor that lists dozens of complex sub-components and tools for their product, such as TensorFlow, Apache Spark, PyTorch etc., should be seen as a red flag and not a...https://tube.lokad.com/videos/embed/910725a6-baf7-42cd-a570-2e252be1bd54https://tube.lokad.com/videos/watch/4177403a-2551-42ab-b22e-1c3b65eb4a37https://tube.lokad.com/static/thumbnails/59b06b8b-0e9e-48e0-9735-1845f4253b8a.jpgBeyond Statistical Modelling - Ep 109Despite many companies currently investing huge amounts of resources into establishing data science capabilities, the hard truth is that the majority of these projects fail to impact upon daily business operations. As such, we look beyond classic statistical modelling and explain why the impact of a proper data science department must run far deeper than just collecting data, manipulating it and getting an output. Contrary to popular belief, when it comes to extracting patterns or replicating some form of human intelligence, all we have is statistics. These statistical methods may have names such as "deep learning", or sometimes they're referred to as "AI", but this doesn't change the fact that they remain statistical models at their core. In most companies, data science teams aren't really doing "data science"; more often than not, what they're doing is statistical modeling. It's simply not comparable to Microsoft, Google or Amazon where instead of playing with deep learning, they're already imagining what the next form of deep learning will be. Data science is often about going beyond the frame that is already in place and trying to project into the future. As a company, you ask yourself, what is missing tech-wise? Innovation usually comes from requirements. It is far too easy to invest in the latest buzzword technology, which usually only brings a cosmetic change, without thinking about how it actually impacts the business. To wrap things up, we talk more about how many didn't successfully anticipate the growth of Amazon and Alibaba and we offer a simple litmus test that companies can do to help their data science teams push for innovation. ****** Episode Map 0:00:00 - Introduction 0:00:30 - The majority of us are still getting to grips with classical statistical modelling. What is the key idea today? 0:03:36 - What are Amazon and Google doing better than what other data science teams can do? 0:06:54 - What is so wrong about the Kaggle mindset? 0:10...https://tube.lokad.com/videos/embed/4177403a-2551-42ab-b22e-1c3b65eb4a37https://tube.lokad.com/videos/watch/59ac97a1-86d1-4f3c-a802-61bd537a3f9ahttps://tube.lokad.com/static/thumbnails/fafe3a64-8adc-4b1a-b3fa-b1385ac016e1.jpgInventory Optimization Models and Simulations - Ep 110Historically, programming has often been seen as an intimidating task reserved for computer whizzes and IT practitioners. Nowadays, however, with the rise of tools such as Python, programming has become that much more accessible. For this episode of LokadTV, we're joined, once more, by Nicolas Vandeput to discuss just how simple programming can actually be. Since the last time Nicolas was on the show, he has published a new book "Inventory Optimization Models and Simulations". This publication puts forward what we believe to be a cornerstone of modern supply chain optimization, which is the need for programmatic expressiveness. This programmatic expressiveness is the only way to be able to successfully deal with real world supply chains and the real world situations that accompany them. Instead of focusing on idealized supply chains, with mathematical frameworks that fall apart when confronted with the real word, Nicolas shows how simple and straightforward numerical recipes with Python can be used to address such real world situations. Although programming has been around for quite a while, for a long time, companies were struggling to simply achieve an accurate digital counterpart of their supply chain, i.e. an ERP or WMS set-up to manage stock levels. This took some time, with the first ERPs being deployed at the end of the 70's, so we have four decades under our belts nowadays and are able to start thinking differently. Most modern supply chains are run by Excel, and Python could be seen as a natural continuation of this, permitting more programmatic expressiveness than what Excel allows. There are many other alternative programming languages, like JavaScript or Java, but Python has multiple advantages, such as an extensive library of resources, which means that it's very difficult to get stuck. But maybe its biggest benefit is its simplicity. However, although Python may be the most adapted programming language for supply chain, it definitely has its ...https://tube.lokad.com/videos/embed/59ac97a1-86d1-4f3c-a802-61bd537a3f9ahttps://tube.lokad.com/videos/watch/6266a3df-4724-45d7-a215-1054bf8f2d75https://tube.lokad.com/static/thumbnails/6c0ba058-180d-465f-ab76-7a0d511376fe.jpgCrazy Claims of Enterprise Software Vendors - Ep 111It can be said that the pursuit of truth is often what makes progress truly advance. However, in the world of enterprise software vendors, "the truth" can often be difficult to come by. Especially when the latest technology does not fit in with the design of your product. As such, for this episode of LokadTV, we discuss some of the craziest claims made by software vendors and see how you can separate fact from fiction. The long-standing joke at Lokad is that the only way we can compete with the claims of some of our competitors is to say that in addition to optimizing your supply chain that "we cure cancer too". When it comes to supply chain performance, which is much less straightforward than asset management for example, things often get a little crazy. For a start, it's very hard to debunk certain claims as supply chains are simply so complex, with multiple moving parts. The root causes of problems are often difficult to identify as the responsibility is highly diffused throughout the chain. As a result, many vendors go heavy on the superlatives, which can even cross the line into important questions of ethics. We go into more detail about how supply chain vendors often put forward claims that have all the appearance of rationality and science, but none of the actual substance. There is also a major manipulation of both buzzwords, such as AI, and companies' legitimate fears that they could be missing out on the next big thing, which could leave them by the wayside if they don't adopt it. To conclude, we talk about the role of paid analysis in the supply chain industry and how transparency is what is truly needed to advance. For example, we talk about the triumph of the open source movement for the software industry that has brought about a new level of ethics and rationality, which has also been shown by Microsoft's embrace of open source. ****** 0:00:00 - Introduction 0:00:27 - What is your initial overview on today's topic? 0:02:22 - Are there any...https://tube.lokad.com/videos/embed/6266a3df-4724-45d7-a215-1054bf8f2d75https://tube.lokad.com/videos/watch/30be0bff-e70a-4418-ae60-9dd708550c4chttps://tube.lokad.com/static/thumbnails/ce093fbe-d68d-4a90-8816-f2b7923511c0.jpgFood Producers and their Supply Chain challenges - Ep 112Everyone knows the old saying "you are what you eat", but very few of us appreciate just how complex it is to get food on plates at the right place, at the right time and at the right level of freshness. For this episode of LokadTV, we're joined by Olivier Jonard to discuss supply chain in the food industry and how technology can help. Olivier Jonard is the Supply Chain and Logistics Director at major French food producer Agromousquetaires. He has been working in supply chain for around 25 years and in the food industry for 20, working for companies such as Nestlé before joining Agromousquetaires in 2019. So why is the food industry so complex? First and foremost because food is perishable. This presents a huge array of complexities: temperature regulation, expiration dates, contamination control, etc. On top of all this, there is uncertainty on the demand side, as is the case with any supply chain, in addition to uncertainty on the production side. For example, will the harvest be good? Will the fishing boat come back with the expected yield of fish? Prices are also victim to rapid changes and food is a delicate good to transport. All in all, this makes food industry supply chains a decidedly tricky business indeed. Although there is a growing interest amongst customers for where their produce comes from and just how it's produced, price remains the all-important factor. Promotions are an extremely crucial element in the food industry. But with such a wide range of products - and therefore huge substitution possibilities - this makes various objectives, such as introducing new products, challenging. On the other hand, there are well known factors that do help demand planners to predict trends. For example, holidays, such as Christmas, and temperature changes. To conclude, we talk more about future trends, like "one stop shopping", or whether the mounting pressure for better animal wellbeing and less chemicals involved in food production can allow for pro...https://tube.lokad.com/videos/embed/30be0bff-e70a-4418-ae60-9dd708550c4chttps://tube.lokad.com/videos/watch/3375e67d-4e7e-4ed3-875d-a10e9a7b34b5https://tube.lokad.com/static/thumbnails/a47493c0-54ee-4353-964a-ca51d70a77bf.jpgAction reward, a framework for inventory optimizationThe action reward is a vast generalization of the newsvendor problem featuring: nonstationary demand, incoming purchase orders, lead times, halfway through stockouts, future decisions and more. ****** Technical documentation: https://docs.lokad.com/reference/abc/actionrwd.reward/ Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Timestamps: 0:00:05 - Introduction 0:00:23 - The inventory control problem 0:00:54 - An uncertain demand 0:01:44 - Choosing a model and a reward function 0:03:20 - Single-period inventory control 0:04:09 - Quantifying the order decisions 1/2 0:06:23 - Quantifying the order decisions 2/2 0:07:39 - Multi-period inventory control 0:10:55 - Quantifying the order decisions 1/4 0:12:05 - Quantifying the order decisions 2/4 0:13:22 - Quantifying the order decisions 3/4 0:14:41 - Quantifying the order decisions 4/4 0:15:21 - Action reward implementation in Envision 0:16:37 - Envision plot of the action reward 0:17:12 - Limited budget: Optimizing ROI 0:19:47 - Envision code example 0:20:23 - Prioritized purchase list 0:21:20 - Conclusionhttps://tube.lokad.com/videos/embed/3375e67d-4e7e-4ed3-875d-a10e9a7b34b5https://tube.lokad.com/videos/watch/943f8aa9-75fc-435f-afa9-f178ca73038ahttps://tube.lokad.com/static/thumbnails/5baba02f-1b9b-47a6-a2d9-94a8e6a8ad6b.jpgEnvision: lookups, dimensions, broadcasts, aggregationsEnvision is the domain-specific programming (DSL) of Lokad dedicated to the predictive optimization of supply chain. Here, Victor Nicollet (CTO, Lokad) illustrates some of the 'data frame' capabilities of Envision and how those capabilities are supported by the Envision code editor. ****** Check out our website: https://www.lokad.com/ Technical documentation: https://docs.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/943f8aa9-75fc-435f-afa9-f178ca73038ahttps://tube.lokad.com/videos/watch/0a8ca1ee-dd0e-492c-a450-f50fb1e4dc39https://tube.lokad.com/static/thumbnails/55e20142-4c39-4750-bdeb-bfc151b8748e.jpgEnvision: calendar elements, date, day, week, monthEnvision is the domain-specific programming (DSL) of Lokad dedicated to the predictive optimization of supply chain. Here, Victor Nicollet (CTO, Lokad) illustrates some of the 'calendar' capabilities of Envision and how those capabilities are supported by the Envision code editor. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/0a8ca1ee-dd0e-492c-a450-f50fb1e4dc39https://tube.lokad.com/videos/watch/1973c6a9-6f12-4d37-a37b-71de351230d3https://tube.lokad.com/static/thumbnails/92401cbe-7b85-4b9b-99ec-d6745de4c55f.jpgInventory optimization for an aerospace MRO - Ep 25Aerospace is a heavily regulated industry where change doesn’t happen easily. However, the arrival of the monstrous A380 introduced new supply chain challenges that highlighted the weaknesses of existing MRO procedures. In this episode of LokadTV, we are joined by Antony Nardozza, the Head of Inventory Solutions at OEM Services, and a great expert in the field of aerospace supply chain, having previously worked for both Airbus and Spairliners. Together, we talk about the pioneering new method of forecasting for aerospace that was developed with Lokad in order to respond to the specific supply chain challenges of the MRO sector. We explore why the classic "safety stock" approach just doesn't work anymore and the reason why you should instead switch to a probabilistic approach. We then try to understand how the adoption of a new approach can at first fundamentally change a company's internal mechanisms, but how in the end this allows employees to gain more autonomy in the decision process, while making a better use of their time. In addition, we discuss the evolution of the COO role over the last decade, an evolution that goes hand in hand with the transition experienced in the aerospace industry, moving from a "product logic" to a "service logic". Finally, we go into more detail by discussing the technology that we could see being introduced to the aerospace industry in the near future and comprehend the impact of this upon the daily tasks (and skills) of a supply chain professional. To wrap things up, we learn more about how data is evolving and how predictive maintenance will soon become essential for tomorrow's aerospace supply chains. ****** Episode Map 0:00:00 Introduction 0:00:27 Antony, thanks very much for joining us today. Perhaps we could start by you telling us a little more about your background? 0:00:50 Joannès, today we are going to talk a little more about the pioneering new method of forecasting for aerospace that you developed with Anton...https://tube.lokad.com/videos/embed/1973c6a9-6f12-4d37-a37b-71de351230d3https://tube.lokad.com/videos/watch/ee6b1369-5db8-4870-bc14-4cc7ebd28595https://tube.lokad.com/static/thumbnails/98271dfe-0c63-4dae-9ced-c3d20e56536a.jpgTerabyte Scalability for Supply Chains - Ep 35The ability to process vast amounts of data has been a long-standing requirement for the supply chain industry. However, this can be very costly both in terms of time and processing power when one considers that optimizing a whole supply chain can require hundreds of incremental adjustments. In this episode of LokadTV, we discuss the sheer amount of data that is managed within a supply chain and try to understand why there is a real need for an iterative approach to supply chain optimization and how this affects the scale of information being managed. We discuss the research and development Lokad has been conducting into Terabyte scalability in order to deal with these data requirements. We also evaluate why Envision, our home made programming language, is such a good tool for tackling these challenges when compared to other programming languages such as Python, Java, C#, C++, etc. - namely, because Envision is domain specific and constructed specifically for supply chain problems. Meanwhilst the others are generic programming languages, which are highly capable but have specific algorithms and "plumbing requirements" that are more difficult to tailor to supply chains. Hardware improvements are becoming increasingly more diversified. We try to understand the costs associated with these improvements and discuss why pure scalability is no longer that interesting now that we are able to process the data from the largest retail networks and supply chains in the world. We wrap things up by explaining what this breakthrough means in real world terms and finally learn what is next for Lokad in 2019, where we plan to put in place processes to address some of the more bizarre situations that can occur in supply chains. ****** Episode Map 0:00:00 Introduction 0:00:34 What exactly have you been working on in 2018? 0:01:24 What steps did you have to take to reach this improvement? 0:03:55 How does working with Envision compare with working with other programming lan...https://tube.lokad.com/videos/embed/ee6b1369-5db8-4870-bc14-4cc7ebd28595https://tube.lokad.com/videos/watch/840f4ab4-d912-4623-871d-ef8687341eaahttps://tube.lokad.com/static/thumbnails/7da96ee2-f914-4099-9165-44406108cf10.jpgLokad, quantitative supply chain softwareApplying incorrect recipes to a domain as complex and unforgiving as supply chains does not make them better, but worse. At Lokad, we strive for science while fighting against scientism. Reality tells whether a supply chain decision is good or bad. Unintended effects matter. Scale matters. IT landscape matters. Performance is about getting the economic trade-offs right. Our technology is forever in flux, progressing as our own understanding of the problem progresses. Our website: https://www.lokad.com/https://tube.lokad.com/videos/embed/840f4ab4-d912-4623-871d-ef8687341eaahttps://tube.lokad.com/videos/watch/8dd10753-2434-49c2-af90-b1d85652d0b3https://tube.lokad.com/static/thumbnails/440ec893-417e-4733-912c-828ec5e92819.jpgWhy You Should Subscribe to Lokad TVSupply chains are on the verge of digital disruption. Plants, warehouses, transport, everything is transitioning towards full end-to-end automation. On LokadTV we discover more about a rapidly evolving industry and give clarity to topics such as forecasting accuracy, artificial intelligence, blockchains, machine learning, cloud computing and big data. We talk to experts in the field, getting their views on the future and how technology will shape the world around us. So if you want less stock-outs, less inventory write-offs and ultimately want your business to reach its full potential then subscribe to LokadTV now for new videos and interviews every week. ****** Check out our website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/8dd10753-2434-49c2-af90-b1d85652d0b3https://tube.lokad.com/videos/watch/980ba177-43f2-44ff-a700-0a768ad5508bhttps://tube.lokad.com/static/thumbnails/63539e20-76c2-45b7-90bf-74cd2d980ca4.jpgUpgrading supply chain as a science - Ep 113Some topics, such as physics, can take almost a lifetime to master and have a vast library of literature. Supply chain education, on the other hand, is still in its infancy. In this episode, we discuss with Dr. Muddassir Ahmed the role of education in supply chain and what the industry can do to attract great minds. Muddassir is the MEA Regional Planning and Operations Manager at Bridgestone, as well as running the SCMDOJO, and has previously joined us on LokadTV before. The SCMDOJO is a dedicated knowledge bank for supply chain professionals looking to better themselves. What is complex is that despite 70 years or so of what we can call modern supply chain research, we can say that the field of supply chain study is still in a "pre-scientific" age. Often, when people want to research different aspects of supply chain more thoroughly, they come up empty handed. Despite the importance of supply chain, it's often a career that people seem to fall in to, instead of setting out to work in. This is very likely influenced by the lack of structured teaching available on supply chain. It can further be argued that there is a lack of structure as a whole in supply chain and that is a field of study riddled with muddled theories and groups of taxonomies with very little substance. Joannès and Muddassir debate whether supply chain should be considered as a science (Joannès is of the opinion that it should be) or rather as a pure theory of management. We argue that while soft skills are no doubt important, it is not those that will truly make supply chain advance. It is scientific knowledge, which has been proven with a multitude of examples throughout history, that truly allows breakthroughs to occur - what Amazon is currently doing with its warehouses being a prime example. ****** Episode Map 0:00:00 - Introduction 0:00:35 - Muddassir, what have you been up to since we last saw you on the show? 0:02:11 - Joannes, what is your initial overview on education within the ...https://tube.lokad.com/videos/embed/980ba177-43f2-44ff-a700-0a768ad5508bhttps://tube.lokad.com/videos/watch/8ab41de0-b248-44d1-ba95-a11180d94ceehttps://tube.lokad.com/static/thumbnails/b2f762e1-ec16-4af1-814a-f6ba837fc6d0.jpgMiami, an aviation MRO (supply chain persona) - Lecture 3.1Miami is a fictitious aviation MRO (maintenance, repair, overhaul) in the USA serving a large fleet of commercial aircraft. In aviation, security is paramount. Parts and components must be routinely inspected and potentially repaired. Miami is in the business of keeping aircraft in the air at all times, avoiding AOG (aircraft on ground) incidents, which happen whenever a part needed to conduct a maintenance operation is missing. ****** 0:00:00 - Introduction 0:02:01 - Boeing 707 0:05:01 - How many parts? 0:07:07 - The story so far 0:08:50 - Definition (recap) 0:10:03 - Crafting a supply chain persona (recap) 0:12:09 - Miami, 10 000-foot view 0:15:32 - The Mission 0:19:54 - Aviation MRO - Operations 0:20:25 - Maintenance operation 0:27:18 - Aircraft part, tangible 0:34:51 - Aircraft part, intangible 0:37:56 - Aircraft units 0:39:20 - Aviation MRO - Decisions 0:39:36 - The Float 0:46:37 - Serve P/N requests 0:51:00 - Invest and divest 0:58:40 - Manage repairs 1:02:47 - Asset Management 1:07:00 - Other elements 1:11:56 - Conclusion 1:14:38 - 3.1 Miami, a supply chain persona - Questions? ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/8ab41de0-b248-44d1-ba95-a11180d94ceehttps://tube.lokad.com/videos/watch/b358e7bc-acf8-4ecd-be48-3764dfa775f3https://tube.lokad.com/static/thumbnails/870cd588-0e36-4694-8423-8c4e31d94ce1.jpgForecasting elements that stand the test of time - Ep 114Forecasting is an ancient practice that is constantly evolving. As such, many pieces of software fail to stand the test of time. For this episode of LokadTV, we have the pleasure of welcoming Rob Hyndman, whose implemented open-source software has been downloaded by millions of users. We discuss the sustainability of real-world forecasting techniques. Rob is Professor of Statistics and Head of the Department of Econometrics and Business Statistics at Monash University, where he has been teaching for 26 years. From 2005 to 2018, he was also Editor in Chief of the International Journal of Forecasting, as well as a Director of the International Institute of Forecasters. Rob writes various research papers and has published three books on forecasting. Most software naturally decays over time, often for various reasons. When it comes to scientific software it can often be considered as "throw away software", as its sole purpose is to support a scientific paper. While at Lokad, we focus on the supply chain side of things, Rob likes to forecast for multiple areas where large amounts of data are available: electricity consumption, mortality rates, or tourist numbers for example. Tourist numbers are obviously harder to predict in the current pandemic situation, so Rob is presently helping the Australian government to forecast Covid cases. We talk more about alternatives to time series forecasting, as well as the problematics of feedback loops and the irreducible level of uncertainty that play a role in our forecasting techniques. In addition, we discuss the problems of purely academics inspired software. Academic software is often filled with many hidden flaws. Their methods may outperform on a benchmark, but when used in a real world implementation they are often numerically unstable, with ridiculously long compute times and are often fiendishly difficult to use. All this takes the focus away from the real issues at hand. To conclude, we go into more depth about th...https://tube.lokad.com/videos/embed/b358e7bc-acf8-4ecd-be48-3764dfa775f3https://tube.lokad.com/videos/watch/0de78529-6c9b-46a8-bc47-76a1a66048e7https://tube.lokad.com/static/thumbnails/b745110c-43e9-45f2-863d-fb504a7f3d85.jpgHalf a century of forecasting science - Ep 115When it comes to forecasting, we often take it for granted that there are already techniques that have been fully tried and tested. Our guest for this episode didn't have that luxury. For this episode of LokadTV, we welcome Spyros Makridakis, one of the forefathers of forecasting, to discuss its evolution over the past 50 years. ****** 0:00:00 - Introduction 0:00:32 - Spyros, perhaps you could start by telling us a little more about your background? 0:01:36 - What about the last 50 years of forecasting science? 0:05:25 - Can you take us back to when you started as a young student? 0:07:19 - What does the M5 competition mean to you? 0:11:09 - How did the introduction of computers change the way you were doing things? 0:12:50 - How have the forecasting techniques evolved through the decades? 0:15:00 - How does the approach you take in a test scenario vary from what you would do in the real world? 0:17:17 - How has the perception towards forecasting changed throughout your career? 0:19:18 - Would you say that the perception has shifted so far that people now expect too much from forecasting? 0:22:19 - Do you agree with the fact that sometimes consultants promise too much concerning forecasts? 0:26:19 - Spyros, if you look back at your career, what are you most proud of? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/0de78529-6c9b-46a8-bc47-76a1a66048e7https://tube.lokad.com/videos/watch/ed0e7987-6ca7-4bcf-8ee4-4d2c5e50bbcbhttps://tube.lokad.com/static/thumbnails/c7a20ddb-51ac-4a22-b001-203a862e96fe.jpgModern computers for supply chain - Lecture 4.1Modern supply chains require computing resources to operate just like motorized conveyor belts require electricity. Yet, sluggish supply chain systems remain ubiquitous, while the processing power of computers has increased by a factor greater than 10,000x since 1990. A lack of understanding of the fundamental characteristics of modern computing resources - even among IT or data science circles - goes a long way in explaining this state of affairs. The software design underlying the numerical recipes shouldn’t antagonize the underlying computing substrate. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ***** 0:00:00 - Introduction 0:03:36 - Orders of Magnitude 0:06:55 - Stages of Supply Chain Optimization 0:12:17 - The S-Curves of hardware 0:15:52 - The story so far 0:17:34 - Auxiliary sciences 0:20:25 - Modern computers 0:20:57 - Latency 1/2 0:27:15 - Latency 2/2 0:30:37 - Compute, clock speed 0:36:36 - Compute, pipelining, 1/3 0:39:11 - Compute, pipelining, 2/3 0:40:27 - Compute, pipelining, 3/3 0:46:36 - Compute, superscalar 1/2 0:49:55 - Compute, superscalar 2/2 0:56:45 - Memory 1/3 01:00:42 - Memory 2/3 01:06:43 - Memory 3/3 01:11:13 - Data storage 1/2 01:14:06 - Data storage 2/2 01:18:35 - Bandwidth 01:23:20 - Conclusion 01:27:33 - 4.1 Modern computers for supply chain - Questions?https://tube.lokad.com/videos/embed/ed0e7987-6ca7-4bcf-8ee4-4d2c5e50bbcbhttps://tube.lokad.com/videos/watch/50897cc3-8287-4baa-9557-8d7afcf9062ahttps://tube.lokad.com/static/thumbnails/3eaac7d3-558b-4b78-995a-194f13b42850.jpgNonsense in Management Studies - Ep 116The study of management can often tread a fine line between art and science, which naturally paints a confusing picture for many company leaders. For this episode of LokadTV, we're delighted to be joined by Dennis Tourish to discuss how much management research can be trusted and what we can learn from his book, "Management Studies in Crisis: Fraud, Deception and Meaningless Research". Dennis is Professor of Leadership and Organization Studies at the University of Sussex Business School, as well as being the editor of an academic journal called "Leadership". Joannès and Dennis elaborate on their concerns that many managers and business leaders are being pushed to be far too involved in their employees' private lives - for example with the rise of "Chief Happiness Officers" and the growth of "spirituality leadership". In the US, some organizations have even gone far enough as to organise "spiritual breakfasts" with the CEO. We argue that employees have the right to feel as spiritual or unspiritual as they like and if your employees are unhappy, it's not for you to appoint an officer but instead to get to the bottom of behaviours that could be causing unhappiness in the company and stop them. They also go into more depth on how statistics can be manipulated, or presented in a manipulative way, and what consitutes good science. This is something that is a problem with many research journals and publications about management studies. As Dennis reminds us, academics are not rewarded for finding the truth, but for publishing articles. With Big Data, now you can find a correlation between almost anything. To wrap things up, Dennis and Joannès discuss the challenges that managers face and what they should really focus on, as well as giving their thoughts on the future of management studies. ****** Episode Map 0:00:00 - Introduction 0:00:27 - Dennis, perhaps you could start by telling us a little more about your background? 0:01:09 - Joannes, what is the idea ...https://tube.lokad.com/videos/embed/50897cc3-8287-4baa-9557-8d7afcf9062ahttps://tube.lokad.com/videos/watch/b83e1430-5da3-4708-a0f6-48da8c22939ehttps://tube.lokad.com/static/thumbnails/a17f33d7-c17e-438e-a54e-c583e4f6d6c8.jpgThe Bullwhip Effect - Ep 117****** Episode Map ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/b83e1430-5da3-4708-a0f6-48da8c22939ehttps://tube.lokad.com/videos/watch/c469450f-a337-4af3-959e-2984e17460dfhttps://tube.lokad.com/static/thumbnails/30484ba7-2508-4167-aef3-58cd9e246bf4.jpgModern algorithms for supply chain - Lecture 4.2The optimization of supply chains relies on solving numerous numerical problems. Algorithms are highly codified numerical recipes intended to solve precise computational problems. Superior algorithms mean that superior results can be achieved with fewer computing resources. By focusing on the specifics of supply chain, algorithmic performance can be vastly improved, sometimes by orders of magnitude. “Supply chain” algorithms also need to embrace the design of modern computers, which has significantly evolved over the last few decades. ****** Check out our website: https://www.lokad.com/lectures Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 0:00:00 - Introduction 0:04:33 - Two definitions for 'algorithm' 0:08:09 - Big-O 0:13:10 - The story so far 0:15:11 - Auxiliary sciences (recap) 0:17:26 - Modern algorithms 0:19:36 - Outperforming "optimality" 0:22:23 - Data structures - 1/4 - List 0:25:50 - Data structures - 2/4 - Tree 0:27:39 - Data structures - 3/4 - Graph 0:29:55 - Data structures - 4/4 - Hash table 0:31:30 - Magic recipes - 1/2 0:37:06 - Magic recipes - 2/2 0:39:17 - Tensor comprehensions - 1/3 - The 'Einstein' notation 0:42:53 - Tensor comprehensions - 2/3 - Facebook's team's breakthrough 0:46:52 - Tensor comprehensions - 3/3 - Supply chain perspective 0:52:20 - Meta techniques - 1/3 - Compression 0:56:11 - Meta techniques - 2/3 - Memoization 0:58:44 - Meta techniques - 3/3 - immutability 01:03:46 - Conclusion 01:06:41 - 4.2 Modern algorithms for supply chain - Questions?https://tube.lokad.com/videos/embed/c469450f-a337-4af3-959e-2984e17460dfhttps://tube.lokad.com/videos/watch/b46c99ea-e4e9-4462-920a-c0d42f261085https://tube.lokad.com/static/thumbnails/62746e3f-a013-467c-b6ac-cd9cc0e62805.jpgHow many SKUs should a Supply Chain Planner manage? - Ep 120With modern companies providing increasingly large catalogues and technology facilitating easier stock management, a modern Supply Chain Planner must spin many plates. That's why for this episode of LokadTV we're asking: how many SKUs should a Supply Chain Planner manage? And just how many is too many? It of course depends on the specific vertical, but a ballpark number of SKUs that Supply Chain Planners manage is typically within a range of 500 - 1000. The classic way that most Planners operate is to iterate through long spreadsheets of elements in a circular fashion. When it comes to forecasting, there's an inverse relationship between erraticity and volume. For most FMCG companies you have more quantity and less erraticity, however this doesn't make forecasting any easier. On the other end of the spectrum, erratic forecasts can be found in the automotive spare parts market for example. Yet despite this erraticity, the quantities and economic weight of the articles in the supply chain are lower. Lokad takes a different approach from the classical supply chain management perspective, especially when it comes to forecasting. Most planners go through their spreadsheets in a cycle, using an ABC methodology. We can say that in this manner, the planner's time isn't fully capitalized. Meanwhile, a Supply Chain Scientist at Lokad aims to have intelligent decisions ready "out of the box". We go into more detail about what we consider to be an "intelligent" inventory replenishment choice. For example, a "stupid" decision could be only stocking your handbag store with black and brown bags. Yes they may sell better, but now the display windows look pretty glum. In our methodology, we also aim to avoid many naive yet heavily ingrained supply planning ideas, such as safety stock. Individually, we have Supply Chain Scientists at Lokad that take care of millions of SKUs and billions of dollars worth of inventory. We explain how this is possible and why some operations...https://tube.lokad.com/videos/embed/b46c99ea-e4e9-4462-920a-c0d42f261085https://tube.lokad.com/videos/watch/037d2d3d-4ac1-43d3-933d-7c70c26a1ac2https://tube.lokad.com/static/thumbnails/62a05c9d-3f04-4788-ad26-5097fdd9e93d.jpgBureaucratic core of supply chain - Ep 118With 95% of the world's supply chains existing in companies of over 1000 employees, organizations must use a complex network of systems and processes. For this episode of LokadTV, we're going to discuss just how bureaucratic these organizations are and what we can do to make supply chain practitioners more efficient. Lokad is based in Paris, France, and so we're no strangers to bureaucracy. But why can bureaucracy be a problem for our supply chains? Supply chain is all about the abstract, strategic decisions, which sets it apart from logistics and operations. As soon as you're at a level where supply chain is meaningful to your company, this high level decision making process inevitably leads to the creation of a "bureau" within the organization. This bureau, although it's very unlikely it'll have this name, is a collection of people within the company that spend their entire time creating documentation and making supply and demand related decisions. The kind of people working in this bureau usually have titles such as "Category Manager", "Inventory Manager", "Demand Planner", "Forecaster", etc. This specialized workforce emerges as your supply chain grows in importance. It's obviously a good thing to have specialized people doing this bureaucratic work and many benefits come with this. However, the downside is that various bureaucratic elements emerge that can slow down productivity. For example, something that has been well documented is that a bureau will always want to grow faster than the rest of the organization. We go into more detail about the various reasons behind this. To wrap things up, we talk about the dangers of S&OP for you company and processes that can waste time, such as needless meetings, and what you can do to combat this. ****** Episode Map 0:00:00 - Introduction 0:00:24 - Why is bureaucracy a problem for our supply chains? 0:03:04 - What kind of organisations is bureaucracy affecting? Large organizations? 0:05:04 - What is the outc...https://tube.lokad.com/videos/embed/037d2d3d-4ac1-43d3-933d-7c70c26a1ac2https://tube.lokad.com/videos/watch/1d2facae-7f9a-4409-a01f-e2fe770ecd3bhttps://tube.lokad.com/static/thumbnails/19f0d24b-9a34-46c3-a573-710177dbe50f.jpgForecast Value Added - Ep 119Much like the saying, "a problem shared is a problem halved", Forecast Value Added is a management technique that simplifies a forecast by splitting it into manageable chunks. On this episode of LokadTV, we discuss just how well this works and why decomposing a forecast can actually lead to more difficult decisions. Forecast Value Added is a process that likely emerged in the 90's or 2000's. It essentially amounts to improving quantitatively the forecast's accuracy by identifying the various steps taken. For example, a forecasting team produces the baseline forecast, the marketing team then steps in to adjust this forecast based on their insights, then the sales team will probably add their own layer of corrections, then the production team, etc. The Forecast Value Added then seeks to establish metrics to see whether these contributions have degraded the forecasting accuracy or not. This may all seem well and good on the surface and even appear logical, but it simply doesn't work. For starters, no science backs up this theory. The idea that you can have a statistical forecast that bounces from section to section in a company is simply lunacy. For example, the various winners of the "M" forecasting competitions have certainly never used such a multi-stage forecast. It's a process that may be a crowd pleaser, as it allows many different people in the organization to get involved, but it is unfortunately very far from being the most efficient way to forecast. We could compare it to a master chess player who has to let a team hold a vote to decide what the next move should be. To conclude, we talk more about the resurgent popularity that Forecast Value Added has been experiencing in the past couple of years (and why this faith is misguided), the importance of looking outward rather than inwards and just why manual interventions on forecasts bring more harm than good. ****** Episode Map 0:00:00 - Introduction 0:00:25 - What is the idea behind Forecast Value A...https://tube.lokad.com/videos/embed/1d2facae-7f9a-4409-a01f-e2fe770ecd3bhttps://tube.lokad.com/videos/watch/4009b2ba-dfef-4583-93d9-390c1079dfc9https://tube.lokad.com/static/thumbnails/bf844d98-2154-4d39-8e99-018a48243b7c.jpgSilos & Decisions in Supply Chain - Ep 5The best answer to informational silos is technology. If your technology is connected, then your information, processes, and people will be connected too. Here, we discuss how to try and make this possible and how supply chain scientists can generate better decisions, without having to resort to using a huge amount of resources. In this episode of LokadTV, we go into more detail on decision making in supply chains and introduce the concept of silos. Supply chains are highly complex and depend upon a huge number of decisions that have to be taken every day. Silos and the fragmentation of decisions happen when departments either can’t - or won’t - easily share information with other departments. This can happen for a number of reasons and results in a considerable reduction of efficiency and productivity, ultimately impacting upon the profitability of a business. We talk about both vertical and horizontal fragmentation within a business and how and why it can occur. To conclude, we discuss what technology can be put in place to render a business' supply chain more efficient and to avoid this phenomenon ****** Episode Map 0:00:00 Introduction 0:00:38 What do you actually mean by silos? 0:02:00 What sort of decisions are we talking about here? 0:04:06 Why are these decisions becoming fragmented? 0:06:28 Could you give us a practical example of vertical fragmentation and how businesses are actually loosing money on this? 0:09:03 How about horizontal fragmentation? Have you got an example of that too? 0:12:21 Why companies are still struggling with silos? 0:15:33 How can the productivity be improved? 0:20:06 What are you going to do with the rest of the supply chain staff? ****** Check out our website: https://www.lokad.com/ ******https://tube.lokad.com/videos/embed/4009b2ba-dfef-4583-93d9-390c1079dfc9https://tube.lokad.com/videos/watch/98ebca2e-2ed4-4e4d-aea7-86b980345383https://tube.lokad.com/static/thumbnails/c7e19a74-8fa5-4986-920f-d1c9029ebfb9.jpgSupply Chain Persona: Amsterdam, cheese brands - Lecture 3.2Amsterdam is a fictitious FMCG company that specializes in the production of cheeses, creams and butters. They operate a large portfolio of brands over multiple countries. Many business conflicting goals must be carefully balanced: quality, price, freshness, waste, diversity, locality, etc. By design, milk production and retail promotions put the company between the hammer and the anvil in terms of supply and demand. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** 0:00:00 - Introduction 0:06:07 - The story so far 0:07:31 - The short definition (recap) 0:08:38 - Crafting a supply chain persona (recap) 0:10:29 - Amsterdam, 10 000-foot view 0:13:28 - On the menu 0:14:16 - Supply 0:18:38 - Network 0:21:36 - Production 0:25:28 - Assortment 1/3 0:28:11 - Assortment 2/3 0:30:11 - Assortment 3/3 0:33:38 - Pricing 0:38:37 - Channels 0:44:18 - Promotions 0:52:38 - Copacking 0:55:08 - Conclusion 0:57:43 - 3.2 Amsterdam, a supply chain persona - Questions?https://tube.lokad.com/videos/embed/98ebca2e-2ed4-4e4d-aea7-86b980345383https://tube.lokad.com/videos/watch/150bb2d9-b7f2-4924-ba53-87da09d24c73https://tube.lokad.com/static/thumbnails/73cd17d6-440a-42e1-827a-90c2730f8ac7.jpgThe Future shaping the Past - Ep 121In supply chains, there's often somewhat of a catch-22 between the optimum decisions you can take today and how these can affect the decisions you can take tomorrow. For this episode of LokadTV, we're delighted to be joined by Warren Powell to discuss the difference between policy and point forecasts and how these can be used to optimize those catch-22 decisions. Warren was a Professor at Princeton University, where he taught for over 39 years, he also founded CASTLE Labs in 1990, working directly with industry to help solve their problems with computers. Together with the students who were part of the lab, they published over 250 publications. From this, three consultancy firms were born, one of which is Optimal Dynamics, which Warren co-founded and works at as Chief Analytics Officer. There are a vast litany of uncertainties when it comes to supply chain management. Additionally, wide variations in time frames when it comes to decisions is a very important element. But to really get to the core of the problem, you have to think about the sequential decision making process. Here, it's the future that is shaping the past, which feels very wrong and can be hard to get your head around. What we mean by this is that the decision that you wish to optimize in the present depends on the decision you will take later. For example, you order from an overseas supplier who has an MOQ (minimum order quantity). So you order many different products from the supplier to reach a full container - is it a good order? This entirely depends. When will you pass the order for the next containers? If you run out of a product a few days after placing the order, you're stuck. The reality in supply chain when you start thinking "is it a good decision?" is much like a game of chess A move is only a good move in relation to all the other moves that are about to be played. Warren and Joannès debate about the role of simulations and forecasts to navigate this uncertain landscape of decis...https://tube.lokad.com/videos/embed/150bb2d9-b7f2-4924-ba53-87da09d24c73https://tube.lokad.com/videos/watch/93cd0ac8-a876-44a6-a1e3-e4916b3a9709https://tube.lokad.com/static/thumbnails/5a38ca96-c82d-4baf-93c5-351f2df32c9a.jpgBlockchains for supply chain - Lecture 4.21Cryptocurrencies have attracted a lot of attention. Fortunes were made. Fortunes were lost. Pyramid schemes were rampant. From a corporate perspective, the “blockchain” is the polite euphemism used to introduce similar ideas and technologies while establishing a distanciation with those cryptocurrencies. Supply chain use cases exist for the blockchain but challenges abound as well. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Time stamps: 0:00:00 - Introduction 0:02:01 - Solving the Byzantine consensus 0:09:35 - Hard requirements of a free blockchain 0:20:31 - The story so far 0:22:42 - Getting rich quick today 0:24:01 - Mini Bitcoin 1/3 - Hashing and Signing 0:29:21 - Mini Bitcoin 2/3 - Transactions 0:34:42 - Mini Bitcoin 3/3 - Blocks and Proof of Work 0:44:45 - Scaling the blockchain 1/2 - Applicative landscape 0:49:02 - Scaling the blockchain 2/2 - Bigger blocks 0:57:08 - Speeding the blockchain 1/2 0:59:27 - Speeding the blockchain 2/2 1:06:51 - Empowering the blockchain 1:14:48 - Use case: payments 1:19:23 - Use case: passive traceability 1:25:30 - Use case: active traceability 1:32:45 - Use case: incentivized recycling 1:35:37 - Use case: incentivized security 1:41:25 - Softening the requirements 1:44:50 - Conclusion 1:49:33 - 4.21 Blockchains for supply chain - Questions?https://tube.lokad.com/videos/embed/93cd0ac8-a876-44a6-a1e3-e4916b3a9709https://tube.lokad.com/videos/watch/ccd0f57c-ac83-4ac0-bf3a-d41a1e2819f6https://tube.lokad.com/static/thumbnails/bde02ec8-9470-4a6e-aab9-f3a7d44efd10.jpgMathematical optimization for supply chain - Lecture 4.3Mathematical optimization is the process of minimizing a mathematical function. Nearly all the modern statistical learning techniques - i.e. forecasting if we adopt a supply chain perspective - rely on mathematical optimization at their core. Moreover, once the forecasts are established, identifying the most profitable decisions also happen to rely, at its core, on mathematical optimization. Supply chain problems frequently involve many variables. They are also usually stochastic in nature. Mathematical optimization is a cornerstone of a modern supply chain practice. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Time stamps: 0:00:00 - Introduction 0:02:18 - Background 0:12:08 - Why optimize? 1/2 Forecasting with Holt-Winters 0:17:32 - Why optimize? 2/2 - Vehicle routing problem 0:20:49 - The story so far 0:22:21 - Auxiliary Sciences (recap) 0:23:45 - Problems and solutions (recap) 0:27:12 - Mathematical optimization 0:28:09 - Convexity 0:34:42 - Stochasticity 0:42:10 - Multi-objective 0:46:01 - Solver design 0:50:46 - Deep (Learning) lessons 1:10:35 - Mathematical optimization 1:10:58 - "True" programming 1:12:40 - Local search 1:19:10 - Stochastic gradient descent 1:26:09 - Automatic differentiation 1:31:54 - Differential programming (circa 2018) 1:35:36 - Conclusion 1:37:44 - 4.3 Mathematical optimization for supply chain - Questions?https://tube.lokad.com/videos/embed/ccd0f57c-ac83-4ac0-bf3a-d41a1e2819f6https://tube.lokad.com/videos/watch/018439bd-9aa5-4439-8a80-c1bfe6a4a55bhttps://tube.lokad.com/static/thumbnails/ec09eeba-ca92-4c4c-855d-35e47c0885ed.jpgMachine learning for supply chain - Lecture 4.4Forecasts are irreducible in supply chain as every decision (purchasing, producing, stocking, etc.) reflect an anticipation of future events. Statistical learning and machine learning have largely superseded the classic ‘forecasting’ field, both from a theoretical and from a practical perspective. We will attempt to understand what a data-driven anticipation of the future even means from a modern ‘learning’ perspective. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Timestamps 0:00:00 - Introduction 0:01:53 - From forecasting to learning 0:05:32 - Machine learning 101 0:09:51 - The story so far 0:11:49 - My predictions for today 0:13:54 - Accurate on data we don't have 1/4 0:16:30 - Accurate on data we don't have 2/4 0:20:03 - Accurate on data we don't have 3/4 0:25:11 - Accurate on data we don't have 4/4 0:31:49 - Glory to the template matcher 0:35:36 - A deepness in the learning 1/4 0:39:11 - A deepness in the learning 2/4 0:44:27 - A deepness in the learning 3/4 0:47:29 - A deepness in the learning 4/4 0:51:59 - Go big or go home 0:56:45 - Beyond the loss 1/2 1:00:17 - Beyond the loss 2/2 1:04:22 - Beyond the label 1:10:24 - Beyond the observation 1:14:43 - Conclusion 1:16:36 - 4.4 Machine learning for supply chain - Questions?https://tube.lokad.com/videos/embed/018439bd-9aa5-4439-8a80-c1bfe6a4a55bhttps://tube.lokad.com/videos/watch/bb860bf3-c2f5-457d-9f72-93b82578ea31https://tube.lokad.com/static/thumbnails/9c4a919b-edf0-494c-a315-07e7fb7153e7.jpgService Level - Supply Chain in 3 MinutesIn supply chian, the service level is a measure of the performance of a system. However, the definition of service level has not been fully agreed on. Some use it as the percentage of total demand covered in units of product, others define it as the percentage of orders fulfilled. At Lokad, we would argue that the service level is the expected probability of not hitting a stock-out - as the likelihood of being able to serve all customer’s demand and not losing out on any sales. But is it an accurate representation of how well the inventory is managed? Should we aim for 100%? And what is considered a good service level? Let’s explore this in more detail. Remember that service level only tells you about the probability of hitting a stock out - not the actual magnitude of the loss. In fact, the stock-outs may even go unnoticed. Imagine you own a bookshop selling books on supply chain. You have a stock of 5 books. Most often, a customer purchases one unit of a book. But then, a school teacher is looking to purchase 6 books for his students on supply chain. He quickly discovers that the shop does not stock enough books - and leaves. This isn’t registered as there is still books left - hence no stock out. Yet, the actual loss in sales was of 6 units. You may also have heard the term fill rate, which is often used interchangeably with service level and wrongfully so - fillrate represents the fraction of demand that is being served. So, if there was 5 customers, 4 of which wanted 1 book, and 1 who wanted to buy 6, the total demand is 10. As you only had 5 on stock, your fillrate is 50%. Your service level, on the other hand, was 80% - as 1 out of 5 was not satisfied. In theory, having a 100% service level would mean infinite inventory, which of course isn’t feasible. In reality, it’s all about the trade-offs between cost of stock-outs and cost of inventory, which is the main challenge of all inventory management. In most retail sectors, service levels are targeted...https://tube.lokad.com/videos/embed/bb860bf3-c2f5-457d-9f72-93b82578ea31https://tube.lokad.com/videos/watch/feb1725f-621d-44e9-a197-635c1edc071ehttps://tube.lokad.com/static/thumbnails/b9fb1e13-c5ae-4dd8-8a8f-d68490107c15.jpgDusting the ERP market - Episode 122The Enterprise Resource Planning (ERP) market has become almost overgrown with the variety of software solutions offered. Several big tech giants are dominating the market, such as SAP, Oracle, Microsoft, and now also Odoo which has become a key player. In this episode, we are thrilled to be joined by Fabien Pinckaers to explore how the ERP market has been both developing in the last decades, but also stagnating. Fabien Pinkaers is the founder and CEO of Odoo, one of the few unicorns in Europe. Odoo is an open-source suite of business management software tools and is the only one amongst the top players that can also fit the market in developing countries. Odoo was founded in 2005 and now has 5.5M users and 2000 employees. What is the secret behind Odoo’s big success? How did Odoo manage to take the torch in such an established market as ERP? What is the ‘ERP curse’ of stagnation and how do we avoid it? Fabien and Joannes dive into these questions in detail and discuss what the future holds for Odoo and the ERP market. ****** 0:00:00 - Introduction 0:00:32 - Fabien, could you give us a short introduction about yourself? 0:01:08 - How did you plan to tackle the competitive landscape? 0:02:23 - Microsoft and SAP have invested billions of dollars in the S&M market and still failed. Why do you think that is? 0:04:43 - Do you agree that the evolution of ERP systems and its market has become more stagnant? 0:07:48 - Just like Odoo in the ERP market and Lokad in the supply chain software market, do we have any direct competitors? 0:08:32 - Does the average ERP integration cost 40k $? 0:10:32 - Speaking of high cost ERP systems, such as Netsuite, don’t they also have a very high operating cost? 0:14:16 - If we look at how the big Tech Giants have evolved over the years, do you agree that the user experience tends to stagnate after 20 years, the ‘ERP curse’? 0:16:52 - As a company grows, is there a growth in complexity and processing, but simultaneously a drop in auto...https://tube.lokad.com/videos/embed/feb1725f-621d-44e9-a197-635c1edc071ehttps://tube.lokad.com/videos/watch/ef8f83f4-03bc-475b-aa8e-430d6845717dhttps://tube.lokad.com/static/thumbnails/52b1d003-af85-492b-9f8f-279b536a4712.jpgSupply chain persona: San Jose, homeware ecommerce - Lecture 3.3San Jose is a fictitious ecommerce that distributes a variety of home furnishing and accessories. They operate their own online marketplace. Their private brand competes with external brands, both internally and externally. In order to remain competitive with larger and lower priced actors, San Jose’s supply chain attempts to deliver a high quality of service that takes many forms, well beyond the timely delivery of the goods ordered. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Time stamps: 0:00:00 - Introduction 0:02:22 - Selling homeware online 0:05:02 - Competitive landscape 0:07:58 - The story so far 0:09:49 - San Jose, 10000-foot view 0:13:43 - Applicative landscape 1/2 0:19:28 - Applicative landscape 2/2 0:25:34 - Home sweet home 0:26:03 - Assorting 0:29:11 - Purchasing 0:33:01 - Allocating 0:36:05 - Pricing 0:38:12 - Selling 0:43:18 - Promoting 0:49:21 - Nuturing 0:52:17 - Triaging 0:56:04 - Conclusion 0:58:12 - 3.3 San Jose, homeware ecommerce - Questions?https://tube.lokad.com/videos/embed/ef8f83f4-03bc-475b-aa8e-430d6845717dhttps://tube.lokad.com/videos/watch/1e3fc613-9c51-4d9a-b537-67fdacd93fdfhttps://tube.lokad.com/static/thumbnails/c1d224d0-494b-4244-8107-ff309f429c8f.jpgThe Bullwhip Effect - Supply Chain in 3 MinutesThe Bullwhip Effect is a well known supply chain distortion, commonly described as a problem that must be avoided. At Lokad, however, we would argue that the bullwhip effect is a phenomenon that naturally occurs in supply chains, and minimizing it is not necessarily advantageous for your business. Even thought nobody wants to heavily over- or underestimate demand, companies tend to amplify demand variations on purpose. A full container load is cheaper than a half container load, and together with price breaks from suppliers, economies of scale can significantly lower the costs. Furthermore, promotions attract customers from competitors but simultaneously disrupt consumer’s buying patterns as well as synchronizing everyone to stock up at the same time. In conclusion, the bullwhip effect comes from rational decision making from the players in a supply chain. It is important to be aware of its causes and consequences to understand how to best leverage your options in the most profitable way for your business. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/1e3fc613-9c51-4d9a-b537-67fdacd93fdfhttps://tube.lokad.com/videos/watch/4d623592-5308-42c6-853f-3c6742a6c834https://tube.lokad.com/static/thumbnails/d4f3c267-216a-45a9-9e1e-a52994fc627f.jpgNumerical Forecasting for Supply Chain - Supply Chain in 3 MinutesAt its core, the practice of numerical forecasting is about using a scientific approach to define a future anticipation based on previous historical data. When we produce, or transport goods, there are delays involved in every process. This means that what you decide today ultimately reflects an anticipated condition about the future. For example, when you produce a product, there is an expectation that there will be a demand to match this production. What all forecasting methods have in common, from simple moving average to complex sophisticated machine learning models, is the method of projecting a trend in the past into the future. In other words, if the future is not more of the same, the forecasting cannot detect it, for example a changing market such as the rise of e-commerce. Based on their set up models will react faster or slower to new data, but essentially rely on a past observation - accuracy of the forecast will thus much depend on how much the past represents future events. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/4d623592-5308-42c6-853f-3c6742a6c834https://tube.lokad.com/videos/watch/4effe602-7dcc-46ee-98e5-4b2308aff5e4https://tube.lokad.com/static/thumbnails/1f96177d-3748-4a96-859a-2a746d4fbab1.jpgLanguages and compilers for supply chain - Lecture 4.5The majority of supply chains are still run through spreadsheets (i.e. Excel), while enterprise systems have been in place for one, two, sometimes three, decades - supposedly to replace them. Indeed, spreadsheets offer accessible programmatic expressiveness, while those systems generally do not. More generally, since the 1960s, there has been a constant co-development of the software industry as a whole and of its programming languages. There is evidence that the next stage of supply chain performance will be largely driven by the development and adoption of programming languages, or rather of programmable environments. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ****** Time stamps: 0:00:00 - Introduction 0:02:50 - Two delusions 0:09:09 - A compiler pipeline 0:14:23 - The story so far 0:18:49 - Bill of landing 0:19:40 - Language design 0:23:52 - The future 0:30:35 - The past 0:35:57 - Choosing the battles 0:39:45 - Grammars 1/3 0:42:41 - Grammars 2/3 0:49:02 - Grammars 3/3 0:53:02 - Static analysis 1/2 0:58:50 - Static analysis 2/2 1:04:55 - Type system 1:11:52 - Compiler internals 1:27:48 - Runtime environment 1:33:57 - Conclusion 1:36:33 - 4.5 Languages and compilers for supply chain - Questions?https://tube.lokad.com/videos/embed/4effe602-7dcc-46ee-98e5-4b2308aff5e4https://tube.lokad.com/videos/watch/84d92daa-72c2-499d-80e2-1cb6f5773003https://tube.lokad.com/static/thumbnails/c63ab52a-4dcf-4fd1-8ba4-46b8e3ce677e.jpgForecasting Accuracy in dollars instead of percentages - Episode 123The supply chain industry has for decades been in a constant chase of better accuracy of forecasts in a desperate attempt to predict the future. In fact, forecasting is so common in supply chain practices that every large company has its own division dedicated to improving their forecasting accuracy. Nonetheless, despite the substantial resources and efforts invested in improving accuracy, it has not resulted in better performing supply chains. How can chasing better accuracy be counterproductive? Are we blindfolding ourselves by measuring accuracy in percentages, rather than dollars? We explore this key topic in this episode. A more accurate forecast simply means that according to a certain metric, there is one forecasting model that will be more accurate than another. It is thus the chosen metric that is the defining factor for a forecast accuracy. However, discussions about what forecasting method to use take away the focus from what decisions must be taken from these forecasts. As a forecast is just an educated opinion about the future, it is the decisions - and decisions alone - that affect the supply chain performance. ****** 0:00:00 - Introduction 0:00:45 - What does it mean that a forecast is more accurate? 0:01:26 - Does a forecasting accuracy depend on the forecasting metric that you use? 0:02:05 - We have a vast array of different metrics to use. Which one is the best one? 0:03:14 - Can focusing on the problem of maximizing accuracy in percentages be misleading for supply chain performance? 0:04:40 - How do you measure supply chain performance? 0:06:14 - Does forecasting accuracy in percentages coincide with forecasting accuracy in dollars? 0:06:47 - Example: Supermarket 0:11:20 - So in this example, a 100% accuracy in a forecast results in 0$ in revenue? 0:12:31 - Are we not only looking at the problem in the wrong way, but the wrong problem to begin with? 0:14:38 - Should there be a division dedicated to improving forecasting accuracy in the first...https://tube.lokad.com/videos/embed/84d92daa-72c2-499d-80e2-1cb6f5773003https://tube.lokad.com/videos/watch/83cdaf12-71c9-4422-9916-a3f65311fcddhttps://tube.lokad.com/static/thumbnails/54edc77c-2f15-46c1-b8ce-218a7bef51eb.jpgForecasting Accuracy - Supply Chain in 3 minutesForecasting is the practice of analyzing historical data to predict anticipated conditions in the future and is at the core of supply chains. Naturally, increasing their accuracy became highly sought after. But what factors affect forecasting accuracy? Perhaps surprisingly is the discovery that the forecasting method used has little effect on the quality of the forecast produced. On the contrary, the time horizon of the forecast and the level of data aggregation and variability has a direct impact on accuracy. The longer the period over which the forecast is made, the less accurate it is likely to be. For example, a forecast for next week will almost always be more accurate than a forecast for the next month or year. When it comes to data, a relatively stable demand data will output very accurate forecasts compared to data points with a high degree of variability. Owing to this, comparisons of forecasts only hold any significance when they have the same timeframe and are based on historical data exhibiting similar levels of stability.https://tube.lokad.com/videos/embed/83cdaf12-71c9-4422-9916-a3f65311fcddhttps://tube.lokad.com/videos/watch/95ba3550-2f8d-43fc-b002-45c52842e978https://tube.lokad.com/static/thumbnails/0be7abde-6d62-487c-a966-337af9a60f7c.jpgLokad's interview with Demain EntreprendreLokad's Co-founder, Estelle Vermorel, was recently a guest on the "Demain Entreprendre" show hosted by Jérôme Libeskind. Check out the interview here:https://tube.lokad.com/videos/embed/95ba3550-2f8d-43fc-b002-45c52842e978https://tube.lokad.com/videos/watch/5f1491ab-63d6-4042-826b-e415f3cec68chttps://tube.lokad.com/static/thumbnails/6b410096-e12f-44a0-8fc0-091eb9766022.jpgSoftware engineering for supply chain - Lecture 4.6Taming complexity and chaos is the cornerstone of software engineering. Considering that supply chains are both complex and chaotic, it shouldn’t come as too much of a surprise that most of the enterprise software woes faced by supply chains boil down to bad software engineering. Numerical recipes used to optimize supply chains are software and, thus, subject to the exact same problem. These problems grow in intensity along with the sophistication of the numerical recipes themselves. Proper software engineering is for supply chains what asepsis is to hospitals: on its own it doesn’t do anything - like treating patients - but without it, everything falls apart. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/5f1491ab-63d6-4042-826b-e415f3cec68chttps://tube.lokad.com/videos/watch/86816b0c-fb54-4d1f-8f85-b944c2439265https://tube.lokad.com/static/thumbnails/02710dc7-f512-43f7-9f99-3b4b1735622e.jpgCopycats in Supply Chain - Episode 124The supply chain industry is driven by buzzwords. A decade ago, cloud computing and probabilistic forecasts were not associated with the supply chain industry. Now (2021) it is the talk of the industry, alongside AI, blockchain and machine learning. Vendors are quick to keep up to date and adapt with these trends. Unfortunately, so is false advertisement. Is the tech keeping up, or are we being sold pretty brochures and empty words from our vendors? It is important to be aware that the promises of a brochure does not necessarily echo through the tech behind it. Lines between marketing and plain lies are becoming increasingly more blurred and increasingly harder to detect. How does one prove their claims of ROI (Return On Investment) for example? We are discussing this issue in more detail. If you are looking for a new supply chain software vendor, we recommend that you ask to see the public documentation and ask a competitor to make the assessment. ****** 0:00:07 - Introduction 0:00:35 - Has the software kept up with the buzzwords? 0:01:29 - What do you mean by superficial tech? 0:03:51 - So the buzzwords keep up with the trends, but the tech does not necessarily do that? 0:07:32 - Have the initial constraints that were put in place by the first version of tech implemented changed? 0:08:10 - How easy is it to trick 0:15:00 - Are vendors not used to get challenged about their tech? 0:15:52 - Sounds like the lines between the art of selling and simply lying are kind of blurred? 0:17:30 - Has Lokad been copied in probabilistic forecasting? 0:19:00 - To produce probabilistic forecasts you need probabilistic algebra. Has that been included in the copy pasting? 0:19:31 - Isn’t the reason we leave out detail in the brochure simply because we don’t have to? 0:22:41 - Besides probabilistic forecasting, has anything else been copied from Lokad? 0:24:10 - Is the key of cloud computing that I can have an account on the cloud I can access at any time? 0:2...https://tube.lokad.com/videos/embed/86816b0c-fb54-4d1f-8f85-b944c2439265https://tube.lokad.com/videos/watch/b7f12a42-99f0-4b7a-8e4c-a8febda1a6b9https://tube.lokad.com/static/thumbnails/4e89cdd2-2563-498b-931d-263075176f15.jpgEstelle Vermorel’s interview with BFM BusinessLokad's Co-founder, Estelle Vermorel, was a guest on the "Focus PME" show hosted by Vincent TOURAINE on BFM Business.https://tube.lokad.com/videos/embed/b7f12a42-99f0-4b7a-8e4c-a8febda1a6b9https://tube.lokad.com/videos/watch/7d1bc7b2-82a9-4b15-add0-06ddd2f82a5ahttps://tube.lokad.com/static/thumbnails/d3ddc081-4a03-4eae-a4a3-0d614a4427a9.jpgUncertainty in Supply Chain, Lessons from the M5 CompetitionJoannes Vermorel outlines a short series of lessons to supply chain practitioners from the M5 Forecasting Competition. The M5 did offer a unique opportunity to do a reality check on the claims of the majority of the supply chain software vendors. This talk was given as part of the M5 Conference. The competition ran from March 2nd to June 30th 2020 with several thousands of teams competing on two sales forecasting tasks over a Walmart dataset. ****** 0:00:07 - Introduction 0:01:23 - Lesson 1: Dolus Bonus is here to stay 0:04:38 - Lesson 2: Numerology is here to stay 0:07:06 - Lesson 3: Defeat the "unforcastable" 0:08:20 - Lesson 4: Embrace your uncertainty 0:10:07 - Lesson 5: Overfitting remains a disaster recipe 0:12:47 - Lesson 6: Scale and scalability still matter 0:14:44 - Conclusion ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/7d1bc7b2-82a9-4b15-add0-06ddd2f82a5ahttps://tube.lokad.com/videos/watch/7ec3585c-3f17-48f4-8aa8-2f6c2c3b956chttps://tube.lokad.com/static/thumbnails/e9e19f6c-1469-41c8-84fd-d492e82b266f.jpgCybersecurity for supply chain - Lecture 4.7Cybercrime is on the rise. Ransomware is a booming business. Due to their physically distributed nature, supply chains are particularly exposed. Moreover, ambient complexity is a fertile ground for computer security woes. Computer security is counterintuitive by design, because it’s precisely the angle adopted by attackers to find and exploit breaches. Depending on the flavors of numerical recipes involved in the supply chain optimization, the risk can be increased or decreased. ****** Time stamps: 0:00:02 - Introduction 0:02:12 - Cybercrime on the rise 0:05:59 - Competitive landscape 0:10:41 - The story so far 0:13:00 - 9 circles of hell 0:14:50 - Threat model (concepts 1/3) 0:20:54 - Attack surface (concepts 2/3) 0:25:14 - Black radius (concepts 3/3) 0:30:48 - Unsafe hardware (sins 1/3) 0:38:05 - Unsafe software (sins 2/3) 0:43:42 - Supply chain attacks (sins 3/3) 0:49:22 - Common wisdom (virtues 1/3) 0:57:23 - Security inversion (virtues 2/3) 1:03:28 - (In)Secure by design (virtues 3/3) 1:09:56 - Conclusion 1:12:10 - 4.7 Cybersecurity for supply chain - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/7ec3585c-3f17-48f4-8aa8-2f6c2c3b956chttps://tube.lokad.com/videos/watch/1d2f51ae-4412-41d6-82ba-210bf34de82chttps://tube.lokad.com/static/thumbnails/1f664e7b-5750-489e-bc87-0f0a504d4e99.jpgFashion - Supply Chain in 3 MinutesFashion is driven by novelty. It constitutes the core of fashion, as well as its key challenge. Fashion brands are continuously producing and designing new collections that are driven by current trends and the upcoming season. These brands need to make important supply chain decisions on what products to push. It needs to be done at the right time, price and with a stock quantity that will be just enough to satisfy market demand. But how do you estimate the demand for a product that has never existed before? Demand is in fact influenced by a number of factors and is notably created by the very products that a consumer can choose between. In addition to demand, we go into more detail on the particularities of seasonality within fashion and its impact on a fashion supply chain as a whole.https://tube.lokad.com/videos/embed/1d2f51ae-4412-41d6-82ba-210bf34de82chttps://tube.lokad.com/videos/watch/45a5d642-7f94-4915-9c99-115d86693ac2https://tube.lokad.com/static/thumbnails/5267832e-a19d-4d2a-8e1e-bc6a96b85c23.jpgNo1 at the SKU-level in the M5 forecasting competition - Lecture 5.0In 2020, a team at Lokad achieved No5 over 909 competing teams at the M5, a worldwide forecasting competition. However, at the SKU aggregation level, those forecasts landed No1. Demand forecasting is of primary importance for supply chain. The approach adopted in this competition proved to be atypical, and unlike the other methods adopted by the other top 50 contenders. There are multiple lessons to be learned from this achievement as a prelude to tackle further predictive challenges for supply chain. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/45a5d642-7f94-4915-9c99-115d86693ac2https://tube.lokad.com/videos/watch/6ffe1690-c0ce-4c7a-9f34-1593b199bfadhttps://tube.lokad.com/static/thumbnails/c0dfb18d-64b9-4622-8fc3-4ee8e661a7c0.jpgSpare Parts - Supply chain in 3 minutesThe main goal in the spare parts industry is to minimize the downtime of your valuable assets such as: aircrafts, vessels, oil rigs, wind turbines, generators, manufacturing equipment and heavy machinery. Whenever an asset needs repair or maintenance, the piece of machinery undergoes a full stop which is a highly costly scenario. As spare parts are characterized by a highly erratic, infrequent demand with a high degree of randomness, the classic time-series approach of forecasting falls short. The average consumption over a given period will produce nonsensical results. Most of the time, you have no demand for a part, but on random occasions there is an urgent demand for a particular part that is critical to have. Another complexity is introduced when a breakage of an asset needs replacement of multiple parts. This means that if you have any of those parts missing, the repair cannot be done. Thus, the quality of service is not conditioned by having one particular part, but rather whether you can fulfill the whole BOM that is needed to complete a repair. How do you cope with this degree of inconsistency? In spare parts, the client is not a human, but the valuable asset itself. It is crucial to have an understanding of the probability of every part being needed in the next lead time window before calculating the financial impact of keeping a part in stock by comparing to the consequence of downtime if there is a stock out if that part. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/6ffe1690-c0ce-4c7a-9f34-1593b199bfadhttps://tube.lokad.com/videos/watch/9383f16e-dc0d-4962-a38b-2e1b7f7c3106https://tube.lokad.com/static/thumbnails/15711e6a-031e-4df1-9ab5-f31c9bb842ca.jpgDynamic Supply ChainsIn this episode we are joined by Dr. John Gattorna, one of the most respected supply chain thought leaders in the world and whose work has influenced many of today’s leading corporations. We discuss the importance of a supply chain strategy that aligns with a ‘customer first’ approach, the evolution (or devolution) of supply chains in the last century, and whether software advancements that were designed to speed up internal processes have also contributed to slowing them down. We have seen the exponential rise in complexity and sophistication with software. However, software has also in many cases also added fuel to the fire of properly managing efficiency. Perhaps counterintuitively, data movement and data processing has become one of the major bottlenecks in production capacities and warehouse expansion. It can take a few ways to move warehouses with proper manpower, yet months to make the necessary IT changes and data migrations. Complexity has also increased with companies expanding their production locations across the globe rather than limiting to one country, allowing themselves more options and flexibility on their production and transportation of goods. However, the vast majority of supply chain practitioners are still stuck with doing very mundane tasks and efficiency is suffering. Robotization will significantly transform this problem. How have supply chains evolved in the last decades, and what factors have contributed the most to that? What is a successful strategy to excel in your supply chain performance? We thank Dr. John Gattorna for sharing his expertise and valuable insights on these key questions in this episode. ****** Time stamps: 0:00:00 - Introduction 0:00:31 - How important is it that the company’s strategy fully overlaps with their supply chain strategy? 0:08:48 - Do companies need to look at their customer first and build their strategy around their consumers, rather than the opposite ‘inside out’ approach? 0:3...https://tube.lokad.com/videos/embed/9383f16e-dc0d-4962-a38b-2e1b7f7c3106https://tube.lokad.com/videos/watch/470a00aa-8055-4df1-af70-5f82028be889https://tube.lokad.com/static/thumbnails/092d2170-cbd5-4a4a-9e53-3f6da7da3796.jpgHard luxury - Supply chain in 3 minutesThe supply chain for hard luxury (high end jewellery and watches) is defined by unique challenges. Unlike how most products are otherwise generally mass produced, each piece of hard luxury is either unique or part of a limited collection. Even though these luxury goods are timeless in their value and appreciation, there is still an expectation of novelty from the customer. This sparse demand, combined with a continuous push for novelty, are the main challenges in the supply chain in hard luxury. Despite a growing online presence and the rise of e-commerce across all industries, the vast majority of hard luxury purchases are still made in store. Demand is generated by the display presented before the customer .The catalog for a company selling hard luxury can include thousands of references, yet most stores are often limited to only a few hundred items on display, sometimes just a few dozen. If after 3 to 6 months the pieces haven’t been sold, they are rotated to other stores. The best stores tend to get the best and latest goods, and the remaining stores are left with leftovers, often preventing them from realizing their true potential. As the demand in hard luxury is extremely erratic with a high degree of uncertainty and inventory rotates very slowly, a probabilistic forecasting approach is needed to have a thorough understanding of anticipated demand and assess the performance of various assortments. https://tube.lokad.com/videos/embed/470a00aa-8055-4df1-af70-5f82028be889https://tube.lokad.com/videos/watch/10ba2972-8b0a-4677-9dff-6c8a657b1934https://tube.lokad.com/static/thumbnails/44e81785-84ab-4a34-8b0b-3034ada67cc8.jpgERP - Supply chain in 3 minutesERP (Enterprise Resource Planning) refers to a class of enterprise software that supports and keeps track of the routine operations for a company, and tracks its resources, such as cash flow, raw materials, work in progress, end products, client orders, purchase orders, and payroll. Any action of transactional nature, internally or externally, involves a significant amount of paperwork. An ERP system takes care of these mundane tasks and automates all basic workflows that need to happen. The challenge with ERP is coping with the immense diversity of the assets a company has to keep track of and thus the broad variety of workflows. Most ERP companies implement a module-based pricing strategy, such as dividing the software into parts sold as modules designed for a specific workflow that needs to be automated for core business functions. However, as businesses are incredibly diverse and complex, there is often a need for further customization than the generic solution already built. It is common practice to outsource these final developments to third party companies specialized in further business-specific customization - the so-called integrators. These integrators also typically take care of data migration when upgrading ERP systems. To summarize, ERP systems are designed to keep track of routine operations of transactional nature, but are not designed for any analytical work such as forecasting. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#news ******https://tube.lokad.com/videos/embed/10ba2972-8b0a-4677-9dff-6c8a657b1934https://tube.lokad.com/videos/watch/e150bbd5-0d14-45f6-bb3b-ae722c6b01dahttps://tube.lokad.com/static/thumbnails/50efa3b0-9102-4d75-accd-9c4d839899ac.jpgStructured predictive modeling for Supply Chain - Lecture 5.1Differentiable Programming (DP) is a generative paradigm used to engineer a broad class of statistical models, which happen to be excellently suited for predictive supply chain challenges. DP supersedes almost all the “classic” forecasting literature based on parametric models. DP is also superior to “classic” machine learning algorithms - up to the late 2010s - in virtually every dimension that matters for a practical usage for supply chain purposes, including ease of adoption by practitioners. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/e150bbd5-0d14-45f6-bb3b-ae722c6b01dahttps://tube.lokad.com/videos/watch/8bc5040f-fbd8-4d41-adc5-6725dace2f11https://tube.lokad.com/static/thumbnails/dc58a451-2adb-4ebb-a993-8617394de426.jpgTime series forecasting - Supply chain in 3 minutesTime series are one of the most basic and versatile mathematical tools used in business ​​to support statistical models and consist of a series of data points linked to a particular point in time. Time series are frequently used to model anything from the evolution of a company’s sales, product prices and lead times on a yearly, monthly, daily or even hourly basis. Within the terminology of a time series forecast, there is a primary level called the baseline, a long-term evolution called the trend, cyclical or periodic variations called seasonality, and other random variations we call noise. This allows data variations linked to regular cycles to be distinguished from an underlying decreasing or increasing trend. However, as time series are a very simplified depiction of reality, there are frequent misinterpretations of data. For example, a calendar month is a somewhat arbitrary way of sectioning time and one shouldn’t be under the illusion that our months are homogeneous from a business perspective. Unequal numbers of days and weekends in a month can provide an explanation for what could first appear as discrepancies in the data. Knowing how data is collected, and being aware of the limitation of time series forecasts is essential when choosing the right forecasting method.https://tube.lokad.com/videos/embed/8bc5040f-fbd8-4d41-adc5-6725dace2f11https://tube.lokad.com/videos/watch/5c78c750-bdf7-4de9-817b-d4d5dee8b3c1https://tube.lokad.com/static/thumbnails/b0d9d3ec-1a75-4673-ba67-ef1ac7d8733d.jpgStarting a Career in Supply Chain (with Lora Cecere) - Episode 125In this episode, we are honored to welcome Lora Cecere, the founder of Supply Chain Insights and expert industry analyst with over 35 years of diverse experience in the field to discuss Starting a Career in Supply Chain and the attractive opportunities it brings. Cecere shares her expertise and valuable advice about the desired skill set and right mindset needed to deal with challenges in the Supply Chain industry. We discuss the importance of Excel and programming skills, how to choose the right company to work for, what opportunities to look out for, and what typical problems supply chain practitioners are dealing with on a daily basis. ****** Time stamps: 0:00:08 - Introduction 0:01:25 - Why is a career in Supply Chain an attractive opportunity? 0:04:09 - Is supply chain not as popular as it should be, as people don’t realize how impactful it is? 0:05:39 - For young professionals, fresh out of college, who are considering starting a career in this Supply Chain, what would be your advice to them? 0:08:59 - Besides curiosity, are there other skills that would help an individual to excel in this field? To what degree are these skilled trained or are there some you are just born with? 0:10:43 - Is it leadership skills that are key to bring people together and drive the team forward? 0:15:44 - What is more important to have for a supply chain practitioner, excel skills or programming skills? 0:21:50 - What are the typical problems supply chain practitioners are dealing with every day? 0:26:55 - How important is the supply chain performance for a business? How involved should the CEO/founder be? 0:27:52 - How do you choose the right company to work for? 0:35:42 - What would be your advice to people watching, and what would you have done differently in your career? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blo...https://tube.lokad.com/videos/embed/5c78c750-bdf7-4de9-817b-d4d5dee8b3c1https://tube.lokad.com/videos/watch/3d78634a-20d6-45b0-bb33-48a074681f84https://tube.lokad.com/static/thumbnails/53c3d5ed-fddd-4c42-97fe-f8d50a03d121.jpgCross-Docking - Supply chain in 3 minutesCross-docking, is a logistics method of having goods enter and exit the facility without ever being put in storage. Whilst this method removes loading and pick up operations from warehousing staff, it does so at the expense of the flexibility offered by having the goods stored at the warehouse. Not holding stock certainly comes with many attractive advantages, but also drawbacks such as worse deals with suppliers and a reduction of service to the customers. The major advantage with cross-docking is that customers shopping on e-commerce sites can be served their physical goods without the companies they buy from holding any inventory risk. In addition, the costs such as warehousing, capital, insurance, hardware, manpower are drastically reduced. Handling goods is also reduced, which would be especially beneficial for fragile or perishable items. However, there are significant advantages to placing large bulk orders to suppliers as most have MOQ, MOV and price breaks. Suppliers are often granting discounts and lower prices per unit when certain volumes are reached. It is much harder to reach MOQs or price breaks where cross-docking is involved. In addition, by holding your own stock, you can deliver products to your customer faster, unlimited by the quality of service from your suppliers. It is necessary to weigh the pros and cons of cross-docking depending on the context, the type of products and available suppliers in order to choose the right logistics method. The answer will depend a lot on customers and suppliers’ geography, on the costs related to carrying inventory and the complexity of the products sold.https://tube.lokad.com/videos/embed/3d78634a-20d6-45b0-bb33-48a074681f84https://tube.lokad.com/videos/watch/96541348-52f2-4354-b62b-7a414dc4ef03https://tube.lokad.com/static/thumbnails/02bc9670-7125-4218-bfcc-22e2e3ba17fc.jpgLean Supply Chain - Supply chain in 3 minutesWhat does it mean for a supply chain to be lean? In manufacturing, lean describes the method that maximizes productivity while simultaneously minimizing waste. A lean Supply Chain also aims to eliminate waste through better inventory control and streamlining all supply chain processes, although supply chains are by nature very complex and frequently see conflicting incentives and points of view. For example, a warehouse manager may aim at reducing inventory to cut costs, whilst a store manager would rather focus on avoiding stock-outs and stock up instead. Making things smoother for the store manager could jeopardize the performance of the warehouse manager. In manufacturing, making step A leaner, followed by B, then C, tends to make the whole production leaner as a whole. In supply chains however, a leaner step in A could create problems for step B. Aligning incentives would eliminate this issue, but how do we measure how much waste has been reduced? The financial impact of every decision is key to measure supply chain performance. The return on investment of every action should be compared, weighted and then prioritized accordingly. The higher the return on investment - the leaner the supply chain as a whole.https://tube.lokad.com/videos/embed/96541348-52f2-4354-b62b-7a414dc4ef03https://tube.lokad.com/videos/watch/b3434bfe-b88b-4d14-956c-94681dc87cfehttps://tube.lokad.com/static/thumbnails/62e5087e-50c1-4828-9f83-d8027035f5f8.jpgFMCG - Supply chain in 3 minutesThe FMCG industry is one of the oldest in our civilization. Packaging and processing technologies have continuously been evolving, but other supply chain practices such as optimizing recipe composition, are still managed through trial and error at best. A Bill of Material is a fine grained composition of components needed to produce a finished product. For FMCG, it usually includes a list of ingredients and packaging materials that are required to meet certain quality attributes for a particular food item. However, raw materials frequently vary in their chemical composition and properties. To combat this, ingredients have the flexibility to be interchanged between others that share similar properties. The proportion of each ingredient is adjusted accordingly based on what substitutions were made. Today, on-the-spot adjustment of recipes is still very manual and often causes to one of the main bottlenecks in food production. These decisions need to be automated with a design of numerical recipes to gain a higher level of agility and a better financial performance for the Supply Chain.https://tube.lokad.com/videos/embed/b3434bfe-b88b-4d14-956c-94681dc87cfehttps://tube.lokad.com/videos/watch/6a7af650-eee4-48fe-a590-aea68fa07e3bhttps://tube.lokad.com/static/thumbnails/1c60271d-bcbb-4017-a5a9-c39b3b14c0a2.jpgData Aggregation - Episode 126When it comes to demand forecasting, there is an incredible diversity of methods and levels of data aggregation that are used. Some companies forecast on a daily basis whilst others on weekly, monthly, quarterly or yearly basis. Some forecast at the SKU level whilst others at the category level. How does one choose the right level of data aggregation? Level of aggregation is directly linked to time-series forecasts which add their own sets of limitations such as having to adhere to a specified equispaced timeline. As most data is found at the most granular level, in theory, it should be possible to reconstruct any granularity level by summing the most granular level available to the desired level. Perhaps counterintuitive, that proves to give more unstable and inaccurate results. What becomes evident, is that one should always be as granular as the decisions taken in the supply chain. However, as data becomes steadier the higher the level of data aggregation, it is tempting to opt for that option to make forecasts look nicer and easier to work with. However, this perceived increase of accuracy is only an accuracy in percentages, not dollars, and does not represent how the supply chain is actually performing. ****** Time stamps: 0:00:00 - Introduction 0:00:40 - What are the different types of granularities to choose from in demand forecasting? 0:01:50 - What kind of forecast are we using when we’re choosing the granularities to use? 0:03:02 - What is the timeline in these forecasts, are they all equispaced? 0:03:54 - In a monthly forecast, will the different numbers of weekends in a month be the cause of data disturbance? For example, if there are spikes in sales on Fridays? 0:05:25 - Can we choose the most disaggregated level, say SKU/day, and then reconstruct any needed level of aggregation we want from that? 0:08:30 - Can you give us an example of the edge cases when it comes to the level of aggregation? 0:10:43 - Can you in theory just sum u...https://tube.lokad.com/videos/embed/6a7af650-eee4-48fe-a590-aea68fa07e3bhttps://tube.lokad.com/videos/watch/bae75abb-9cfa-45da-8f02-97cd369952f8https://tube.lokad.com/static/thumbnails/4ed0f040-e4f1-4b7d-9450-d8e9fee43d2e.jpgShipping Containers - Supply chain in 3 minutesThe global use of containers for transportation has resulted in major cost reductions, boosting supply chain efficiency. One of the container’s key advantages is its global ‘Standardization’ of its dimensions regardless of location. Cargo is shipped in containers that are either exactly the same or a multiple of the standard unit of size. Standardization ensures that different types of cargo can be transported via the same transport system. This means that boats, trains or trucks specifically designed for cold products, raw materials or goods with uncommon dimensions are no longer needed by the supply chain. What prevails instead is a wide range of container types adapted to the type of cargo - for example a refrigerated container to transport fresh goods, often called a Reefer. Furthermore, before the standardization of containers, cargo had to be handled by dockers between different modes of transport. Today, this job is replaced by a crane, which has additionally lowered the cost of insurance against deterioration and theft.https://tube.lokad.com/videos/embed/bae75abb-9cfa-45da-8f02-97cd369952f8https://tube.lokad.com/videos/watch/7b0f6609-b7ce-47ee-ae9f-46d2b776f4fahttps://tube.lokad.com/static/thumbnails/d4b7ab46-01e3-4227-9010-5103855085fd.jpgProbabilistic Forecasting for Supply Chain - Lecture 5.2A forecast is said to be probabilistic, instead of deterministic, if it contains a set of probabilities associated with all possible future outcomes, instead of pinpointing one particular outcome as “the” forecast. Probabilistic forecasts are important whenever uncertainty is irreducible, which is nearly always the case whenever complex systems are concerned. For supply chains, probabilistic forecasts are essential to produce robust decisions against uncertain future conditions. ****** Time stamps: 0:00:02 - Introduction 0:02:18 - The modern forecast 0:06:37 - Going postal probabilistic 0:11:58 - The story so far 0:15:10 - Probable plan for today 0:17:18 - Bestiary of predictions 0:28:10 - Metrics - CRPS - 1/2 0:33:21 - Metrics - CRPS - 2/2 0:37:20 - Metrics - Monge-Kantorovich 0:42:07 - Metrics - likelihood - 1/3 0:47:23 - Metrics - likelihood - 2/3 0:51:45 - Metrics - likelihood - 3/3 0:55:03 - 1D distributions - 1/4 1:01:13 - 1D distributions - 2/4 1:06:43 - 1D distributions - 3/4 1:15:39 - 1D distributions - 4/4 1:18:23 - Generators - 1/3 1:24:00 - Generators - 2/3 1:29:23 - Generators - 3/3 1:37:56 - Please wait while we ignore you 1:40:39 - Conclusion 1:43:50 - 5.2 Probabilistic forecasting for supply chain - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/7b0f6609-b7ce-47ee-ae9f-46d2b776f4fahttps://tube.lokad.com/videos/watch/2cb59514-8e23-433c-b81c-406c4926435chttps://tube.lokad.com/static/thumbnails/8a5a6856-a2d3-4780-a952-28e41be72508.jpgRetail Channel Promotions - Supply chain in 3 minutesA promotion is an activity where a type of marketing communication is used to inform a target audience of a particular product or service, for example that it now has a discounted price. Companies engage in promotions to boost sales and revenue, but also to disrupt customer behavior in their favor. When a company runs a promotion, communication must put that forward to the target audience to ensure the desired uplift in demand for that product or their store. Promotions also generate a change in market shares. The idea is to permanently disrupt the behavior of the customer, typically for products that are bought routinely. The promotion pushes the customer to try something new, ideally changing their preferences so they will come back to buy the same product later. A promotion is essentially a negotiation between the retail channel and the brand of the product being promoted. Often, it’s a joint effort between the two to lower the price for the customer, and to advertise about the promotion. The retailers benefit from having more people drawn to their stores and hopefully become loyal shoppers, whilst the brands are getting an increased market share of their brand. In conclusion, retail channel promotions aim to disrupt customer behavior to their own benefit and brands seek to increase their market share by promoting their product.https://tube.lokad.com/videos/embed/2cb59514-8e23-433c-b81c-406c4926435chttps://tube.lokad.com/videos/watch/66022503-4d60-4f5c-96fb-e201e476a672https://tube.lokad.com/static/thumbnails/7db02e79-7752-4a25-8c5f-99cd00c275ae.jpgPricing Strategies - Supply chain in 3 minutesPrices represent a trade-off between short-term and long-term strategies, profitability and market share as well as levels of cash flow. A company sets its prices with different objectives in mind, such as profitability, cash flow or growth. A high price maximizes short-term profit but will result in a loss of market share, hence negatively impacting the long-term profit. A low price maximizes long-term profit because it is generally more attractive to customers, resulting in gained market share. The overall marketing strategy of a firm is a function of four main fields: costs, competition and market specificity, company objectives, target market and brand. Every brand is associated with a certain brand image and the pricing must respect this brand image. Luxury brands avoid discounts or low prices because they damage the perceived value of their goods. Generally, prices associated with any brand must be coherent with the overall brand image, so all products are priced in accordance with each other. Pricing strategies depend of the goal one wants to reach. If a company needs to increase its cash flow, it can do so by increasing its price.The immediate effect of the price raise results in higher margins and therefore higher profits, but the demand will slowly decrease as customers move on to buying from competitors. In the long term, the firm will reach a new equilibrium by losing some market share and gaining less profit. If a company wishes to adopt a growth strategy, it will be required to decrease its price. The immediate effect of price reductions results in lower margins and lower profits, but a gain in market share over time. A growth strategy relies on the expectation that the short-term losses would be offset by the long-term profit. Keep in mind the lifetime value of a client when setting a pricing strategy for your business.https://tube.lokad.com/videos/embed/66022503-4d60-4f5c-96fb-e201e476a672https://tube.lokad.com/videos/watch/c27dc6b4-f499-40e1-9b17-ce55e33aceb3https://tube.lokad.com/static/thumbnails/f0fdc46d-f0e6-449a-bea0-e7eeaf64e77b.jpgCompetitive Pricing - Supply chain in 3 minutesA competitive pricing strategy focuses on matching your price with your competitors based on the assumption that the market has already defined the right price for a product. By setting the same price as your competitors, a newly-launched firm can avoid the trial and error costs of finding the right price. When products are identical or highly similar, it is often easier to copy competitors’ prices rather than implementing another pricing strategy. This way, the cost of finding the optimum price has been left with the competitors. The main drawback with the competitive pricing method is that it fails to account for differences in products and costs between companies and therefore be inefficient by leading to reduced profits. If the products are only somewhat similar, the price is hardly transferable. According to classical economics, two products are congruent if a consumer can replace a quantity of one product by a quantity of another product without experiencing any loss in product utility. In reality, it can be quite difficult for a retailer to define congruence when comparing its products with those of its competitors. Are the different brands of smartphones congruent? When defining a pricing strategy, one must define the competitors carefully, analyze congruency between competing products, and keep in mind that price, in itself, is a signal about a product's quality.https://tube.lokad.com/videos/embed/c27dc6b4-f499-40e1-9b17-ce55e33aceb3https://tube.lokad.com/videos/watch/89b23d9a-e279-4d4d-9bc1-ebc33e260b6dhttps://tube.lokad.com/static/thumbnails/b84b531b-5304-43c5-a585-865a529c9497.jpgFeedback Loops and Machine Learning in Supply ChainFeedback Loops and Machine Learning in Supply Chainhttps://tube.lokad.com/videos/embed/89b23d9a-e279-4d4d-9bc1-ebc33e260b6dhttps://tube.lokad.com/videos/watch/4e7ca868-e149-4066-9ec5-267d94ed8a8ehttps://tube.lokad.com/static/thumbnails/f775126a-5e05-4d7a-b5c6-90e3c1f8b8b7.jpgPricing at Mister AutoWhile it’s true that all supply chains are unique, it’s fair to assume that the automotive aftermarket presents a more than abundant set of complexities. Since its early days, French car parts distributor Mister Auto quickly understood the importance of high service level as a means to build a loyal customer base. Obtaining sufficient stock availability might seem trivial for some businesses, but it’s much more challenging when dealing with hundreds of thousands of references for an ever-changing vehicle fleet. Demand may become extremely erratic for parts belonging to less common vehicles and due to constraints such as MOQs, it’s unimaginable for car parts distributors to keep them all in stock, hence the need for cross docking and the segmentation of supply chains. Furthermore, distributors such as Mister Auto are operating in a fiercely competitive market where pricing is paramount to customers. Said pricing is obviously dependent on operational effectiveness, which is the reason why Mister Auto chose Lokad as to optimize both its pricing and procurement decisions.https://tube.lokad.com/videos/embed/4e7ca868-e149-4066-9ec5-267d94ed8a8ehttps://tube.lokad.com/videos/watch/3acf0e04-53e8-4d1b-bee8-4c7842a2cde8https://tube.lokad.com/static/thumbnails/bcd3bb91-5dd6-406a-ae51-33d252571556.jpgAction reward, a framework for inventory optimizationThe action reward is a vast generalization of the newsvendor problem featuring: nonstationary demand, incoming purchase orders, lead times, halfway through stockouts, future decisions and more. ****** Timestamps: 0:00:05 - Introduction 0:00:23 - The inventory control problem 0:00:54 - An uncertain demand 0:01:44 - Choosing a model and a reward function 0:03:20 - Single-period inventory control 0:04:09 - Quantifying the order decisions 1/2 0:06:23 - Quantifying the order decisions 2/2 0:07:39 - Multi-period inventory control 0:10:55 - Quantifying the order decisions 1/4 0:12:05 - Quantifying the order decisions 2/4 0:13:22 - Quantifying the order decisions 3/4 0:14:41 - Quantifying the order decisions 4/4 0:15:21 - Action reward implementation in Envision 0:16:37 - Envision plot of the action reward 0:17:12 - Limited budget: Optimizing ROI 0:19:47 - Envision code example 0:20:23 - Prioritized purchase list 0:21:20 - Conclusionhttps://tube.lokad.com/videos/embed/3acf0e04-53e8-4d1b-bee8-4c7842a2cde8https://tube.lokad.com/videos/watch/980a5f71-f108-4db3-9b58-7ea812dd2f9bhttps://tube.lokad.com/static/thumbnails/b689e101-eef9-4d6e-9ff7-e1e715041586.jpgDigital TwinDigital twin has become a buzzword in the supply chain industry, and refers to a virtual representation of a physical process. A supply chain’s digital twin is a simulation of that supply chain as a whole. In this episode, we challenge the claims that digital twins are delivering on their promise of conducting accurate simulation and what-if modeling to immediately see the impact of various supply chain decisions. If the idea of having your supply chain condensed into a computer screen, gamified with the ability to accurately predict the consequences of your actions sounds too good to be true - indeed because it is. Unfortunately, this future foreseeing crystal ball is shattered when it comes to matching a simulator to reality. “A real life supply chain simulator” is shiny wrapping paper on a software whose technology is far more simple than that. A series of vendors are repackaging decades old concepts for simulators. The only thing that has changed is that the processing power has become cheaper. ****** 0:00:34 - What does a digital twin look like for the user? 0:2:55 - Are there any hard core innovations within digital twins? 0:03:30 - Vendors who sell digital twins phrasing it as a supply chain simulator. Would you say that it’s supposed to be similar? 0:03:54 - What is a virtual supply chain? 0:05:54 - Are fancy descriptions nothing but a way to package a software? 0:08:16 - What are the supposed benefits of digital twins? 0:08:56 - Some of the claims of a digital twin is being able to project all different types of scenarios and see the impact of that. Is that similar to what we do at Lokad? 0:11:47 - Is your opinion that a digital twin is a forecast packaged inside a digital twin label? 0:17:59 - How does a digital twin blend with a classic ERP system? 0:22:03 - One of the claims from vendors is that a digital twin has an intuitive dashboard that can show the output of what-if scenarios. What is your criticism of that and equally what ben...https://tube.lokad.com/videos/embed/980a5f71-f108-4db3-9b58-7ea812dd2f9bhttps://tube.lokad.com/videos/watch/87e82775-c734-4d92-b8c6-afca382aaac5https://tube.lokad.com/static/thumbnails/a48bf848-48f5-4037-be38-065ab52e7196.jpgDecision making, retail inventory dispatch with probabilistic forecasting - Lecture 6.1Every single day, thousands of supply chain decisions (millions in large companies) are to be made as part of the daily routine of the company’s operations. Each decision comes with alternatives. The supply chain optimization’s goal is to pick the options that turn out most profitable while facing future uncertain conditions. This process presents two keys challenges that we haven’t addressed yet: first, the quantitative assessment of the profitability of any decision, second, the roll-out of the numerical optimization recipes suitable for supply chain problems. ****** Time stamps: 0:00:02 - Introduction 0:02:23 - Decisions vs Artifacts 0:10:07 - Experimental optimization 0:13:51 - The story so far 0:17:01 - Today's decisions 0:19:36 - The manifesto of the quantitative supply chain 0:21:01 - The retail stock allocation problem 0:24:49 - Economic forces on the store SKU 0:29:35 - Reifying the futures 0:32:41 - Reifying the options - 1/3 0:38:25 - Reifying the options - 2/3 0:43:02 - Reifying the options - 3/3 0:44:44 - Stock reward function - 1/2 0:51:41 - Stock reward function - 2/2 0:56:19 - Prioritized stock allocations - 1/4 0:59:59 - Prioritized stock allocations - 2/4 1:03:39 - Prioritized stock allocations - 3/4 1:06:34 - Prioritized stock allocations - 4/4 1:12:58 - Smoothing the warehouse flow - 1/2 1:16:48 - Smoothing the warehouse flow - 2/2 1:22:12 - Action reward function 1:25:02 - The real world is messy 1:27:38 - Conclusion 1:30:00 - 6.1 Retail stock allocations with prob. forecasts - Questions ? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/87e82775-c734-4d92-b8c6-afca382aaac5https://tube.lokad.com/videos/watch/da79cf5d-aceb-44a3-b345-0d7bdd3ef7c6https://tube.lokad.com/static/thumbnails/1cc0a8b7-0be3-4bf0-95c8-8c68cb33aabb.jpgStyling Prices for Retail - Supply chain in 3 minutesBetter price tag design can significantly manipulate demand to increase the company’s profit. The price should be displayed in small size, on the bottom left of the label for best results as that makes the price seem as small as possible to the consumer. The font chosen should minimize the length of the price line. The experiment of Coulter & Coulter in 2005 emphasized that “size does matter”. The human brain associates magnitude with quantity, which causes the same price to be perceived very differently depending on font size. We are also most familiar with number sequences that increase from left to right. Interestingly enough, experience shows that a price placed on the right side of the label is perceived to be higher than if placed on the left. The same logic applies when displaying the price at the bottom rather than at the top of the label. Many e-commerces and retailers display their prices along with the initial pre-promotional reference price. Research carried out by Urbany et al. demonstrated that consumers are significantly more likely to buy when the initial pre-promotional price is higher to highlight the apparent savings generated from the purchase. The incentive for buying is simple - consumers feel that they are making a worthy purchase.https://tube.lokad.com/videos/embed/da79cf5d-aceb-44a3-b345-0d7bdd3ef7c6https://tube.lokad.com/videos/watch/7afa80f7-cb50-4e79-8ca8-2bab8938652fhttps://tube.lokad.com/static/thumbnails/99158d90-56a5-433b-90dc-d83b8f422093.jpgStockouts - Supply chain in 3 minutesA stockout happens when the inventory is exhausted. Stockouts are usually treated as problems to be fixed, and many inventory methods, such as safety stocks, have been devised to control the frequency associated with those events. When stocks are expected to be present, a stockout usually introduces a detrimental disruption in the supply chain. The financial impact of a stockout is typically twofold: first, the immediate opportunity loss associated with fewer transactions, second, the delayed market response as a form of aversion for unreliable providers. In most situations, the later impact is dwarfing the former. There are numerous traditional practices for avoiding a stock out, such as: increasing stock levels, reducing lead times, improving forecasting, and increasing price to dampen demand. Modern approaches, however, focus on supply chain decisions and their economic outcomes. The difference might seem small, but in practice decisions optimized against economic drivers end up vastly superior because they are more closely aligned with the nuances of the quality of service as perceived by the customer.https://tube.lokad.com/videos/embed/7afa80f7-cb50-4e79-8ca8-2bab8938652fhttps://tube.lokad.com/videos/watch/da803b6b-e7ef-47b9-8b2c-4b02bd83f4f3https://tube.lokad.com/static/thumbnails/59c8dbf8-6cc1-47dc-9950-c6172421fa54.jpgWhat Went Wrong at Peloton - Supply Chain in FocusIn an economy stricken by a pandemic, Peloton quickly found itself rising to the top of the connected-fitness food chain. Two years later, thousands of employees are getting fired and Peloton is considering a potential sale to other corporations. What went wrong and how did supply chain play such a significant role in all their troubles? While trying to deal with tremendous growth, Peloton may have failed to account for different versions of the future, such as a downward trend in demand following post-pandemic gym reopenings. This led to a dramatic case of “The Bullwhip Effect” reinforced by Peloton’s long-term decisions of vertical integration. Today we'll explore any lessons for supply chain managers there are to learn from Pelotons example, and any practices (probabilistic forecasts, for example) that may help in dealing with these sorts of situations.https://tube.lokad.com/videos/embed/da803b6b-e7ef-47b9-8b2c-4b02bd83f4f3https://tube.lokad.com/videos/watch/404f724b-dba8-436b-b6db-4eb82523e958https://tube.lokad.com/static/thumbnails/37973150-5144-47b3-a16f-dd54697271ca.jpgKPIs - Supply chain in 3 minutesKPIs stands for Key Performance Indicators and are extensively used in supply chain management to measure how a business is performing in a specific area to indicate how effectively the company is achieving its business targets. Even though KPIs are used extensively, thay can often be misleading. What a KPI should be varies from business to business and from industry to industry. They should all, however, have 3 core characteristics: 1. KPIs should be in monetary amounts (for example dollars) - not percentages. Percentages, such as service level, is not actually a clear indicator of how well the stock is being managed. Furthermore, when KPIs are in absolute terms, you can compare all of your KPIs across the board. Second, is that the KPIs you chose to represent your business performance should not be redundant and conclude the same thing. For example, a KPI of sales before tax and a KPI of sales after tax are a variant of the same thing and are taking up unnecessary space instead of other KPIs. An example of non-redundant KPIs is the total working capital, the non-quality generating costs month, and the gross margin per month. Lastly, the KPI should be a call-to-action. Is it worth the time of a human to be read and monitored every day? If not, it should not be considered a KPI, but rather as a simple PI (performance indicator).https://tube.lokad.com/videos/embed/404f724b-dba8-436b-b6db-4eb82523e958https://tube.lokad.com/videos/watch/21843faf-f39b-4cbe-a66b-1eeff99da0cahttps://tube.lokad.com/static/thumbnails/805fd472-68c2-4b39-a1d9-560482c4e179.jpgEmerging algorithmic paradigms for supply chain optimization (with David Simchi-Levi)Forbes describes that a shift in paradigm has led supply chain planning systems to become more intelligent by learning to adapt to ever changing circumstances by sensing and analyzing data. Where the decision making process is more and more handled by machines than humans. In this episode we are discussing paradigms that are now emerging for optimization and learning in Supply Chain, and we are joined by Prof. David Simchi-Levi, author of over 300 publications, in which a common topic is algorithmic paradigms for supply chain. We discuss concepts such as trends in technology, laws of physics in supply chains, the constant balance between flexibility and service level, and how to find that ideal balance. The pandemic showed us that the future is here and its disruptions will be felt for years to come. One cannot make decisions about the future anymore based on what one’s used to due to the new normal. Furthermore, the idea that relocating manufacturing closer to market demand will guarantee resilience is a misguided concept. The key to succeeding in this game of supply chain poker is the ability to integrate machine learning and optimization to make better decisions - through a combination of online and offline learning. ****** Time stamps: 0:00:07 - Introduction 0:02:35 - Prof. Simchi-Levi, you recently launched a course on Supply Chain and Demand Analytics where you mention digitization, analytics and automation. Why are these concepts so popular right now? 0:05:20 - Joannes, what do you think about the compromise between resilience and efficiency? 0:16:00 - The idea that we can predict or supposedly predict what is going to happen in our supply chain 6-7 weeks from now is interesting. At Lokad we embrace the uncertainty and look at the likelihood of various futures. How exactly can you predict the future, and do you then only look at one output? 0:25:35 - Prof., you mentioned the laws of Physics in your course. What do you mean by laws of physic...https://tube.lokad.com/videos/embed/21843faf-f39b-4cbe-a66b-1eeff99da0cahttps://tube.lokad.com/videos/watch/1087c4de-a91e-4578-8f82-2ccc37c735d0https://tube.lokad.com/static/thumbnails/16ffaae4-8085-4ebf-a084-860193be2f0b.jpgEOQ - Supply Chain in 3 minutesThe economic order quantity is essentially a trade-off between the ordering cost and inventory holding cost. If the company’s ordering costs or product demand increases, the order quantity increases. Similarly, if the holding cost increases, the order quantity decreases. Although the economic order quantity formula dating for 1913 is extremely well-known, we advise against using such a formula in any modern supply chain environment. The underlying mathematical assumptions behind this formula are no longer applicable. The historical formula assumes that the cost of the act of ordering is the one key business driver. It certainly was an important factor back in 1913 when an army of clerks was required to manually keep track of the books, but with inventory management software, this factor is usually insignificant. Probabilistic demand forecasts associated with the assessment of the marginal economic contribution of every single extra unit of stock, is a far more impactful approach. https://tube.lokad.com/videos/embed/1087c4de-a91e-4578-8f82-2ccc37c735d0https://tube.lokad.com/videos/watch/829558e3-9501-4ff0-bcf8-a629f6970c16https://tube.lokad.com/static/thumbnails/1aa22cfa-b0b1-40a4-9ee2-d88bea07418c.jpgCo-packing - Supply Chain in 3 minutesCo-packing is the process of packing products together to create a shelf-ready product for the retailer to sell.Services from specialized co-packing providers can be quite extensive, from designing the packaging (whether that be blister packs, shrink wrapping, liquid dispensing packaging, etc.), to laminating, folding flyers, printing and attaching labels or barcodes to products, dry/liquid filling, or kitting. Co-packing is a useful tool not only to increase product and brand visibility for existing products, but can also help to push a new product forward.Hypermarkets selling general merchandise are the biggest consumers of co-packing , but co-packing is also widely used in many verticals such as beauty and cosmetics, medical and pharmaceutical, and the food and beverages industries. It is a good reason for the use of co-packing, but it is a mixed blessing as far as the supply chain is concerned. While it does have its benefits, it also creates analytical difficulties related to inventory replenishment, both at the store level and at the warehouse level. Ideally, co-packing should be balanced so that all the products go out of stock around the same time, and the copack structure can be removed from the store at the end of the sale or season. If managed properly, co-packing can lead to significant cost savings for a company.https://tube.lokad.com/videos/embed/829558e3-9501-4ff0-bcf8-a629f6970c16https://tube.lokad.com/videos/watch/ecde1b53-2a19-4839-98c7-1d0494b2b32chttps://tube.lokad.com/static/thumbnails/44667d74-17c6-4005-98e9-fe8186f74cdc.jpgOdd pricing - Supply Chain in 3 minutesOdd pricing is a pricing method aimed at maximizing profit by making micro-adjustments in pricing structure, relying on the assumption that consumers are calculation-averse and will only read the first digits of a price. The odd pricing strategy relies on the fact that consumers highly value their time when evaluating prices. There is an increasing time cost associated with examining each additional digit within any given number, which means that when examining a price, the first digits carry far more weight than the last ones. Empirical evidence demonstrates that a better purchasing signal is achieved with “.99” prices. Products whose prices end in “.99” are often perceived as promotional or cheap items. If, however, the estimated product quality has an impact on the demand, then a perceived decrease in quality associated with “.99” prices results in lower demand and therefore lower profits. The odd pricing method focuses on capturing demand for a product by creating micro adjustments of the price in a way that alters the psychological perception of the consumer to their benefit, creating a trap we all fall into in our daily lives.https://tube.lokad.com/videos/embed/ecde1b53-2a19-4839-98c7-1d0494b2b32chttps://tube.lokad.com/videos/watch/7695567e-14b1-4762-b512-f866aa1bb688https://tube.lokad.com/static/thumbnails/305f2fc4-ca6c-409a-8093-0c972a9bf23e.jpgGetting started with a quantitative supply chain initiative - Lecture 7.1Conducting a successful predictive optimization of a supply chain is a mix of soft and hard problems Unfortunately, it is not possible to take those aspects apart. The soft and hard facets are deeply entangled. Usually, this entanglement collides frontally with the division of work as defined by the organigram of the company. We observe that, when supply chain initiatives fail, the root causes of the failure are usually mistakes made at the earliest stages of the project. Furthermore, early mistakes tend to shape the entire initiative, making them near impossible to fix ex post. We present our key findings to avoid those mistakes. ****** Time stamps: 0:00:02 - Introduction 0:02:37 - Failure root causes in the wild 0:07:26 - Deliverable: a numerical recipe 1/2 0:09:37 - Deliverable: a numerical recipe 2/2 0:13:07 - The story so far 0:15:03 - Getting things done today 0:16:05 - Timeline of the initiative 0:21:54 - Scope: applicative landscape 1/2 0:24:30 - Scope: applicative landscape 2/2 0:27:18 - Scope: system effects 1/2 0:29:27 - Scope: system effects 2/2 0:32:18 - Roles: 1/2 0:37:37 - Roles: 2/2 0:41:56 - Data pipeline - How 0:44:19 - A word on transactional systems 0:49:19 - A word on data lake 0:53:05 - A word on analytical systems 0:58:02 - Data health: low-level 1:02:29 - Data health: high-level 1:06:30 - Data inspectors 1:08:59 - Conclusion 1:10:38 - 7.1 Crafting a vision, a scope, and a data pipeline - Questions ? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/https://tube.lokad.com/videos/embed/7695567e-14b1-4762-b512-f866aa1bb688https://tube.lokad.com/videos/watch/1b49579d-c8a6-48f3-9f1f-4f236d3586f0https://tube.lokad.com/static/thumbnails/c0bb62f9-2c98-4029-ad1d-d7e4cab5c658.jpgMicro fullfilment - Supply Chain in 3 minutesMicro fulfillment is a strategy used by retailers to improve the efficiency of the e-commerce order-fulfillment process. The objective is to stock the fast-moving SKUs in multiple small storage facilities situated close to the end customer. Micro fulfillment facilities make use of secondary real estate, i.e. lesser quality facilities that are cheaper and smaller in size with a layout optimized for pick and pack operations. There are two main considerations with regards to micro fulfillment, namely optimizing cash flow and minimizing stock-outs. If an out of stock does occur, the product can be replenished quickly from the corresponding MFC. Retailers need to know their stock levels at each location and where the demand is. Moving products from one location to another, at the correct time, and choosing the most economically viable route can be challenging. Doing micro-fulfillment is trivial, doing it in a cost-effective manner is very difficult. Managing this concept requires ongoing predictive optimization to ensure the process is profitable. The complexity and diversity is contingent on a wide variety of local situations and on the digital bridge between the retailer and the micro-fulfillment player.https://tube.lokad.com/videos/embed/1b49579d-c8a6-48f3-9f1f-4f236d3586f0https://tube.lokad.com/videos/watch/8ede794e-01fa-45c1-ae50-877138895c37https://tube.lokad.com/static/thumbnails/8df87b36-6766-450b-8cba-175ce7ce2462.jpgPrioritized Ordering - Supply Chain in 3 minutesSupply chain literature most often focuses on ordering policies where each separate item is treated in complete isolation to all the other items: the decision to order more units of item A is strictly independent from the decision to order more units of item B. In contrast, the prioritized ordering policy emphasizes multi-item decisions, where each item competes for capital allocation with all the other items. Inventory is optimized only when the capital allocation for inventory maximizes the market potential of the company while taking all inventory risks into account. Within this capital allocation, all items are in constant competition with each other for every marginal investment. Each item should be assessed against its expected returns and its expected costs for the next additional unit to be ordered. At Lokad, we have observed that when a probabilistic forecasting technology is available, approaches that rely on the purchase priority list systematically demonstrate superior inventory performance. https://tube.lokad.com/videos/embed/8ede794e-01fa-45c1-ae50-877138895c37https://tube.lokad.com/videos/watch/46d754f4-43d6-45de-9ab5-5cb64daa378fhttps://tube.lokad.com/static/thumbnails/b373af2d-03b9-4bdd-9a69-049caa6de63b.jpgLa Redoute x Lokad - Optimisation Prédictive via l'Intelligence ArtificielleLa Redoute, the second largest women's clothing retailer, chose Lokad to drive transformation around predictive optimization. The goal of this collaboration was to use artificial intelligence to better manage the match between pricing, sales performance, and inventory. Pricing optimization is not just about maximizing margins under the constraint of available inventory. Pricing is a way to communicate with customers and support the company's strategy. This initiative provided La Redoute with a suitable framework for future projects in the field of artificial intelligence, which relies heavily on focusing on business insights and challenges.https://tube.lokad.com/videos/embed/46d754f4-43d6-45de-9ab5-5cb64daa378fhttps://tube.lokad.com/videos/watch/0434ebc5-2394-4b07-82fd-c4b39991d3e7https://tube.lokad.com/static/thumbnails/8404e498-c8fa-46ba-8ad4-eaaf136dcb09.jpgThe Strategy-driven Supply Chain (with Bram Desmet)In this episode, we are honored to welcome Bram Desmet, professor, keynote speaker and founder of the Strategy-Driven Supply Chain Institute to discuss the profound link between supply chain and a company’s strategy. After a short career in IT, Bram found himself interested supply chain and sought to answer seemingly simplistic problems such as “How much inventory does a company really need?”. His key finding was that such question entails more than just supply chain. Finance should be concerned with inventory (inventory is working capital or cash) and strategy should also be (e.g a company that wants to focus on a smaller assortment will inevitably carry less inventory). In practice, finance, strategy and supply chain are rarely connected as much as they should in order to improve the success of a company. Making a supply chain more strategy-driven is paramount and pragmatically explained in Bram’s second and latest book. ****** Time stamps: 0:00:07 – Introduction 0:00:41 – What led you to write the book The Strategy-driven Supply Chain? 0:03:26 – Could you give a quick summary about the triangle of service, cost and cash? 0:06:30 – Why should supply chain be independent from the S&OP process? 0:12:02 – Joannes what do you think the role of S&OP should be? 0:19:14 – What is the kind of knowledge that you think is lacking in the executive room? 0:23:21 – Joannes, why do you think companies in times of growth struggle to find balance in the triangle? 0:32:59 – Bram, why do you think companies don’t go bankrupt because of loss but rather the lack of cash? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/https://tube.lokad.com/videos/embed/0434ebc5-2394-4b07-82fd-c4b39991d3e7https://tube.lokad.com/videos/watch/cb574566-6e65-4d67-b71a-933038e8fb24https://tube.lokad.com/static/thumbnails/15167ae3-d5ee-43e6-aa64-3ffba10c9db1.jpgBureaucracies in Supply Chains - Supply Chain in 3 minutesAt the core, there are two fundamental problems that, almost without exception, lead to the undoing of supply chain optimization initiatives: first, a misguided thirst for control; second, bureaucracy taking precedence over reality. The most common form of misguided thirst for control is the ambition to set up a Grand Plan with details of everything that is about to happen so that supply chain execution can be reduced to a simple matter of pure orchestration. Nonetheless, the grand plan is terminally flawed when it comes to the irreducible uncertainty of the future. Production decisions, inventory allocations, price moves established based on the Grand Plan consistently turn fragile whenever the market forces end up deviating from the plan, no matter how accurate the underlying forecasts may be. The larger the company, the more tempting it is to “play it safe” rather than real. The political forces at play in a large company punish failure more strongly than they reward success. Unfortunately, by avoiding chances of failure, chances of success are eliminated as well. If the worst that can happen is very little, then at best, success will be inconsequential as well.https://tube.lokad.com/videos/embed/cb574566-6e65-4d67-b71a-933038e8fb24https://tube.lokad.com/videos/watch/c28c4279-e0d5-4840-931d-6e7271bea2eehttps://tube.lokad.com/static/thumbnails/aa766ede-214b-4f6b-9bea-855ffd7a48cc.jpgProblem- vs Solution-oriented Software Design - Supply Chain in 3 minutesEvery single SKU calls for mundane daily decisions, such as moving in more stock or changing the underlying price tag. Naturally, sticking to a fully manual process for those decisions is labor intensive and companies have been adopting varied software-based automation solutions. However, most software vendors, and most in-house initiatives as well, remain stuck in the perspective of replicating the existing practice, which itself emerged by mimicking the original fully manual process. Most companies still distinguish the planning team, the people who establish the demand forecast for each product, from the supply team, the people who pass the purchase orders based on the demand forecast. This approach fails to appreciate that future demand isn’t independent from present decisions. The solutions - originally designed to replicate a purely manual process - have been in place for so long that people have lost sight of the more fundamental aspects of the problem they are trying to solve. The intimate understanding of the problem to be solved is key to figure out whether the existing solution is worth preserving, or whether it should be simplified for newer software capabilities that call for a simpler, more direct, resolution of the problem.https://tube.lokad.com/videos/embed/c28c4279-e0d5-4840-931d-6e7271bea2eehttps://tube.lokad.com/videos/watch/9b1945dc-425b-40b9-85b9-ff40216d5dcchttps://tube.lokad.com/static/thumbnails/c83e44d5-0009-45b0-a61c-c32762fb5037.jpgLogistics and Supply Chain at La RedoutePatrice Fitzner decided a decade ago to translate his knowledge from the automotive industry to La Redoute, the second largest women’s clothing retailer. Patrice has been a major contributor in the creation and success of La Redoute’s ultra-modern logistics platform called “Quai 30”. In this episode, we investigate the ambitions that led to the construction of this platform and the reasoning behind the choice of technology and processes put in place to meet the initial requirements.https://tube.lokad.com/videos/embed/9b1945dc-425b-40b9-85b9-ff40216d5dcchttps://tube.lokad.com/videos/watch/1300de41-8c85-4435-8e1d-059f6c28a09dhttps://tube.lokad.com/static/thumbnails/978ba4e0-6379-4094-9a66-a8abf416851f.jpgFashion Segment Supply Chain Challenges at La RedouteAs the second largest women’s clothing retailer, La Redoute’s teams manage a grand total of 18,000 references with a renewal rate of 70% to 80%. Pricing being the number one concern for online customers, the task of managing pricing policies for the entire catalog while maximizing margin is immensely complex if you factor in the evolution of legislation and promotional pressure. Pricing for fashion is far from being straightforward and even the most advanced artificial intelligence models will invariably fail at remaining relevant in such a fast paced environment. For that reason the goal of this partnership was to boost the human intelligence at hands with the right tools in order to maximize customer satisfaction and margins. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/1300de41-8c85-4435-8e1d-059f6c28a09dhttps://tube.lokad.com/videos/watch/f74d5fd4-f64b-440e-8d33-70c1eac816bfhttps://tube.lokad.com/static/thumbnails/371acf31-8905-4648-a999-368449db503f.jpgHome Segment Supply Chain Challenges at La Redoute (with Sandrine Guichard)The home segment represents a major and growing part of La Redoute’s business as a European leader in ecommerce. While pricing and promotions sound as straightforward as offering the best price and maximizing margins, the equation becomes tremendously more difficult when factoring in the enormous size of the catalog, its diversity and seasonality. A human expertise is needed but not sufficient when facing such complexity and must be assisted through the use of tools such as Lokad, automating mundane decisions for employees to focus on what really matters.https://tube.lokad.com/videos/embed/f74d5fd4-f64b-440e-8d33-70c1eac816bfhttps://tube.lokad.com/videos/watch/49f39e56-b48e-4edd-8fe6-48730a312c3bhttps://tube.lokad.com/static/thumbnails/b08d607d-8ade-4ae6-a7bc-98c22dc8dd5c.jpgPiloting promotions with the help of Lokad at La RedouteExclusive interviews with Mary Leitao and Ludovic Bidault, Heads of Purchase Management at La Redoute, who graciously took the time to discuss La Redoute’s predictive optimization partnership with Lokad. La Redoute, the second largest women’s clothing retailer, chose Lokad to drive transformation around predictive optimization. The goal of this collaboration was to use artificial intelligence to better manage the match between pricing, sales performance, and inventory. Throughout this initiative, more and more rules were added to the algorithm as to replicate the expertise of employees setting the prices. Consequently, pricing decisions for thousands of products are now automated, allowing La Redoute to focus on exceptions and the overall strategy with the help of relevant reporting also provided by Lokad.https://tube.lokad.com/videos/embed/49f39e56-b48e-4edd-8fe6-48730a312c3bhttps://tube.lokad.com/videos/watch/e9df9193-b215-4253-915b-afa83701a457https://tube.lokad.com/static/thumbnails/c0e43c20-e613-4bf5-81dc-8afd46b70bf2.jpgVisit of Quai 30 / What does a modern warehouse look likeAs a European leader in ecommerce with a catalog of humongous size and diversity, La Redoute needed a state-of-the-art logistics platform that could handle 300,000 stocked products and process more than 3,500 orders per hour. Spanning over 42,000 square metres, this warehouse is equipped with the very best of what exists today in terms of technological advances (automated shuttling, independent means of storage, pocket sorters, etc.) allowing an incredible level of automation throughout the entire facility.https://tube.lokad.com/videos/embed/e9df9193-b215-4253-915b-afa83701a457https://tube.lokad.com/videos/watch/c97ee8f8-647e-4eeb-8339-228f89ce119ehttps://tube.lokad.com/static/thumbnails/fa0f56c0-d6b2-4c1d-8cc2-25517dc1a351.jpgSupply Chain Triangle - Supply Chain in 3 minutesThe supply chain triangle refers to the correlation between cost, cast and service in a supply chain. A business provides its customers with a certain type of service that requires both cash to produce and deliver and has a cost associated with it. Service is measured as the probability of not hitting a stock-out of a given product on demand, and is shaped by a company’s fillrate, product portfolio, flexibility of order and the lead time on the product deliveries. When it comes to cost, it is the costs associated with providing the services to the customer. Warehouse expenses and shipping are a typical example, but so are the cost of the goods themselves. If you are a producer, the manufacturing expenses will also be a key cost component. Finally, cash is the working capital and accounts for the operating activities for the company. You may wish to lower your costs by shipping in large batches from the cheapest producers in Asia with long lead times. However, that will force more cash to be tied up in inventory. You may want to better the service by offering a larger variety of products and faster deliveries, but that will require that you store more products in warehouses located closer to the customer. If you want to free up more cash you may lower your inventory levels, but at the expense of worsening the service for your customers. It is crucial to remember that the supply chain is not composed of things in isolation. An improvement in A does not mean an improvement in B, and in fact, often leads to worsening the situation in B. Balancing the triangle correctly is therefore as challenging as it is essential for the success of your supply chain. The supply chain triangle of cost, cash and service has been popularized by Bram Desmet in mid 2010's. The book 'Supply Chain Strategy and Financial Metrics: The Supply Chain Triangle Of Service, Cost And Cash', also by Bram DeSmet, was later published in 2018 as a more comprehensive perspective on the su...https://tube.lokad.com/videos/embed/c97ee8f8-647e-4eeb-8339-228f89ce119ehttps://tube.lokad.com/videos/watch/77f70ae6-c27e-44fb-8970-138bc654f858https://tube.lokad.com/static/thumbnails/c5fad270-02e7-4ab5-a8fb-e5c64d6141eb.jpgProfit from the Source (with Christian Schuh)Christian SCHUH is a Managing Director and Senior Partner at Boston Consulting Group. With his 27-year career in procurement consulting for the automotive, engineering and defense industries, he believes that the most important factor in the success of a business now and in the future is the close relationship between a company and its suppliers. In his new book, “Profit from the Source”, he also points out the role of the CPO (Chief Procurement Officer), who should have responsibility for the entire product lifecycle and guide the process from the birth of the product idea. In the recent crisis, companies should have learned that partnering with their suppliers is the added guarantee of their life span. Putting suppliers at the core of the business generates cost savings, innovation, quality, sustainability, speed and risk reduction, whereas playing hard-ball does not guarantee a lasting and trustworthy partnership. https://tube.lokad.com/videos/embed/77f70ae6-c27e-44fb-8970-138bc654f858https://tube.lokad.com/videos/watch/3db0c4b0-1f6a-40a1-9143-bc6988e08936https://tube.lokad.com/static/thumbnails/65b4d308-7f4d-4852-819a-953639e84483.jpgFresh Food for Supply Chains (with Richard Lubienski)****** 00:00 Introduction and Richard’s background 01:28 How does one find the balance between rotating stock levels, perishability, and minimizing stock waste? 04:00 Do mainstream supply software tools miss important granularity when it comes to perishable items? 06:52 Discussion of National Retail Federation (NRF) tradeshow 09:48 Does data on freshness influence willingness to buy and willingness to pay? 11:42 What is the biggest challenge when trying to optimize a network of grocery stores? 15:47 How does one manage the various forces of randomness (e.g., weather affecting harvests, in-store promotions causing sales fluctuations)? 18:33 What is Richard’s overarching vision with All Futures? 23:26 What value is there in dedicating resources and staff to investigating supply chains in this manner? 27:29 What are the benefits of employing a supply chain network that focuses on well-aggregated decisions (rather than pursuing the illusion of perfect forecasting)? 31:41 How can one implement a forecast that factors in multiple optimization considerations across several departments (e.g., transport, pricing, etc.)? 35:44 How do you see the food retail market changing in the future? ****** How do the principles of supply chain forecasting apply to a business dealing with perishable stock? Are there unique supply chain challenges for companies in this space? What additional layers of complexity and randomness must this sector contend with when forecasting stock levels? In this conversation with Joannes, Richard Lubienski - Managing Director of All Futures - outlines his insights on the crucial variables, methods and considerations for companies in this space. Their thoughts on the role perishability plays in a company’s forecasting model is especially interesting. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ...https://tube.lokad.com/videos/embed/3db0c4b0-1f6a-40a1-9143-bc6988e08936https://tube.lokad.com/videos/watch/05b52f16-63bf-4627-b084-67554d204eb3https://tube.lokad.com/static/thumbnails/bdf0626b-d712-41f5-b60c-594e1a898f18.jpgSupply Chain news on news.lokadThe world of Supply Chain is exceedingly opaque and there are very few places on internet nowadays where you can learn anything of value about it. While Reddit targets a young category of users and Wikipedia is bound to contain old and somewhat deprecated information, LinkedIn remains one of the only trustworthy source of information in the field, due to the experience of the professionals that are sharing their experiences. However, this information does not remain easily accessible after a while. Therefore, it would be interesting to have a place to discuss the specifics of the Supply Chain field. For this purpose, Lokad has launched a new page called https://news.lokad.com/, an aggregator that consolidates interesting links to various Supply Chain topics and where the community can discuss and submit their own subjects. The final goal is to share links of interest for Supply Chain-minded people, giving them the chance to debate and contribute to further achievements in the field. ****** Time stamps: 0.00.37 - What is the current state of information flow in the supply chain industry ? 0.01.40 - What is the most popular online forum at the moment? 0.02.13 - Who are the people who spend time on the Reddit forum? 0.04.05 - The actual informative knowledge is very diluted you would say? 0.06.40 - Is it because classical theory is not applicable in real life? 0.07.19 - They are lacking behind the software that we currently have? 0.09.16 - Speaking of the space, what is the https://news.lokad.com/ that we launch? 0.12.15 - It is a form that encourages discussions on the topic? 0.14.38 - How does https://news.lokad.com/ compare to the SubReddit for the Supply Chain? 0.16.06 - Reddit prefers to have only internal links basically? 0.17.49 - What is your main goal with the launch of the new website https://news.lokad.com/? What do you hope to achieve? 0.21.10 - Can you give some examples of the latest posts on the forum? 0.22.35...https://tube.lokad.com/videos/embed/05b52f16-63bf-4627-b084-67554d204eb3https://tube.lokad.com/videos/watch/5bdcf64e-06dd-40dd-a770-81b696f6b64bhttps://tube.lokad.com/static/thumbnails/6b6ab36a-835f-4424-ae1d-efedc90c2304.jpgBringing automated supply chain decisions to production - Lecture 7.2We seek a numerical recipe to drive an entire class of mundane decisions, such as stock replenishments. Automation is essential to make supply chain a capitalistic endeavor. However, it carries substantial risks of doing damage at scale if the numerical recipe is defective. Fail fast and break things is not the proper mindset to green-light a numerical recipe for production. However, many alternatives, such as the waterfall model, are even worse as they usually give an illusion of rationality and control. A highly iterative process is the key to design the numerical recipe that proves to be production grade. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ https://tube.lokad.com/videos/embed/5bdcf64e-06dd-40dd-a770-81b696f6b64bhttps://tube.lokad.com/videos/watch/cb466a67-2391-4bdc-97c7-ad24fbb29c54https://tube.lokad.com/static/thumbnails/3f75b100-14b4-43ea-9cab-4639c7d3eef9.jpgSupply Chain Persona: Stuttgart, an automotive aftermarket company - Lecture 3.4Stuttgart is a fictitious automotive aftermarket company. They operate a network of stores delivering car repairs, car parts and car accessories. In the early 2010s, Stuttgart also started two ecommerce channels, one to buy and sell car parts, and one to buy and sell used cars. Stuttgart attempts to deliver a high quality of service in the complex and competitive European automotive market that features tens of thousands of distinct vehicles and hundreds of thousands of distinct car parts. ****** Time stamps: 0:00:00 - Introduction 0:02:27 - Car longevity and car repairs 0:04:50 - The story so far 0:09:23 - Crafting a supply chain persona (recap) 0:11:26 - Stuttgart, automotive aftermarket 0:14:10 - Cars and parts 0:21:30 - Repair centers 0:33:55 - Car parts ecommerce 0:46:35 - Used cars ecommerce 0:55:38 - Revisiting cars and parts 1:01:21 - Conclusion 1:03:04 - 3.4 Stuttgart, automotive aftermarket persona - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ https://tube.lokad.com/videos/embed/cb466a67-2391-4bdc-97c7-ad24fbb29c54https://tube.lokad.com/videos/watch/b9c85fb7-b52b-460a-b99d-dd4dfd71fb3chttps://tube.lokad.com/static/thumbnails/01f30ae5-ec62-4b59-ad7e-70cb057767ee.jpgThe Real Beer Game (with Jes Bengtsson) - Ep 135A mainstay of supply chain tutorials since the 1960s, The Beer Game has taught students how to visualise the oftentimes tricky coordination of upstream and downstream supply chain processes. The central thesis is that uncoordinated supply chains inevitably beget a bullwhip effect - a single action producing an outsized consequence - such as when retailers make decisions on customer demand (based on faulty or entirely incorrect reasoning), and order more than they need (including a safety stock buffer). This behaviour is repeated by the wholesaler, who orders a little more from the distributor (who, in turn, orders a little more from the factory). In the end, there is often a significant asymmetry between supply and actual demand. In this discussion, Joannes picks Jes’ brain on how The Beer Game mirrors real-life supply chain complications for players in the beer space, as well as Jes’ thoughts on related topics, such as the challenges of coordinating a brewery’s supply chain, and how to cope with multiple sources of demand variance. ****** 00:00 Introduction and Jes Bengtsson’s background 01:36 How does the bullwhip effect - the central point of ‘The Beer Game’ - apply to real-life beer companies/breweries? 03:57 What are the characteristics of a well-organised beer supply chain? 06:16 How does one balance multiple sources of demand fluctuation with beer (such as surprise promotions)? 09:59 What changes have you noticed in the production of beer? 13:52 How do you account for the cannibalization effect when introducing new products into your assortment? 17:41 How does your extensive background in the supply chain industry translate to a consulting position at McKinsey? 22:25 Do you think supply chain optimization will become more of a primary concern for companies (instead of a logistical afterthought)? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our b...https://tube.lokad.com/videos/embed/b9c85fb7-b52b-460a-b99d-dd4dfd71fb3chttps://tube.lokad.com/videos/watch/e5f127c9-ec04-4e91-ad9c-78c5b06ea066https://tube.lokad.com/static/thumbnails/f7391b92-e826-4691-815f-dccbc6ff1953.jpgDebunking Supply Chain Terminology - Supply Chain in 3 minutesIn supply chains a sizable portion of supply chain terminology is inadequate. Good terminology should be as neutral and factual as possible, however this is far from the case in supply chain. We suggest changes to ABC analysis, service level, safety stock, seasonality, EOQ, BI and ERP, along with an explanation behind our proposed improvements: ABC analysis = Moving average segmentation Service level = Service rate Safety stock = Gaussian buffer Seasonality = Cyclicities EOQ = Flat bulk order BI = Cube reporting ERP = ERPM (Enterprise Resource Management)https://tube.lokad.com/videos/embed/e5f127c9-ec04-4e91-ad9c-78c5b06ea066https://tube.lokad.com/videos/watch/57ba3bcc-b931-46c1-9368-70e6f712c65ahttps://tube.lokad.com/static/thumbnails/194effa9-69fa-4ff2-8a42-8d5b8298f5ef.jpgBackorders - Supply Chain in 3 minutesBackorders are purchase orders made to the supplier for products that are already out of stock from a given location being served. Backordering is the process of selling inventory that the company doesn’t currently have on hand, and can therefore only take place when the demand is captured in a formal manner. It represents a specific challenge in terms of inventory optimization as backordered units are typically associated with a degree of urgency coming from the client. They are taking an upfront commitment for purchasing a product that is not readily available, and extended product unavailability is going to be perceived as a lack of good service provided by the distributor. From an inventory control viewpoint, backorders are typically represented as negative values within the available stock. The available stock should not be confused with the stock on hand which represents the quantity of stock physically present on the shelf. However, when MOQs (minimal order quantities) are large, it is not always a reasonable economic option to fulfill every backorder because satisfying the MOQ constraint may result in creating a lot of dead stock. Backorders are a complexity that must be carefully managed to capture a greater portion of customer demand without compromising service.https://tube.lokad.com/videos/embed/57ba3bcc-b931-46c1-9368-70e6f712c65ahttps://tube.lokad.com/videos/watch/bd08954c-7ca4-4f72-9852-9e7b66eff809https://tube.lokad.com/static/thumbnails/c4e9b8c4-bd47-4e34-861f-bd5115d779fb.jpgInventory Control - Supply Chain in 3 minutesInventory control encompasses all the processes that support the supply, the storage, and the accessibility of items in order to ensure their availability while minimizing inventory costs. It can be split into two major areas: the management of inventory and the optimization of inventory. When managing the inventory, the goal is to sustain a high productivity for all inventory operations. When it comes to its optimization, the focus is on maximizing the financial output for the company by attempting to minimize both carrying costs and stock-out costs, such as taking the best decisions that govern the inventory such as deciding when and how much to reorder, where to store an item in the facility, and which item needs to be counted and when. The primary challenge is the uncertainty associated with the future demand. Historically, ERPs have emerged as monolithic solutions to address both the inventory management and the inventory optimization problems. However, the specifications for a good inventory management software are very different from those required to make good inventory optimization software. As a result, we observe that companies that adopt a monolithic design nearly all suffer from either poor management or poor optimization. The problem is further accentuated by the pace of change within the software industry - once adopted, the cost of change is so great that it can take up to a decade to fully transition to an alternative solution for large companies. In contrast, the optimization part comes with much lower friction with regards to the cost of change. In fact, it is usually possible to have multiple systems, each generating its own set of proposals (ex: the list of items to be reordered) and then defining a process to establish which scope of authority should be given to each system.https://tube.lokad.com/videos/embed/bd08954c-7ca4-4f72-9852-9e7b66eff809https://tube.lokad.com/videos/watch/6e890dcc-568e-4a0c-bd29-0855ab5642b2https://tube.lokad.com/static/thumbnails/da8c2a53-a6c9-4f12-8c0c-ffd785474aad.jpgKanban - Supply Chain in 3 minutesThe Kanban method was initially implemented to improve manufacturing efficiency and reduce waste by providing a simple and visual material replenishment process so that every step of the production process would get just enough to operate smoothly without stockpiling raw materials or components. The principle is that the second a certain quantity of material is consumed,it becomes immediately visible as an empty box or an empty shelf, and a visual signal is sent to trigger replenishment for the same quantity. Traditionally, the production of goods is based on the anticipation of the demand. Goods are produced in advance and then pushed to the market. With pull, the system is demand-driven and goods are made to order. On the contrary, Kanban operates in a push system, meaning that production and replenishment only come when needed and not in anticipation of the demand. Beautiful in its simplicity and design, the Kanban has many advantages that can explain why the method became so widespread. It is up to each company to define its buckets and the logical steps that make sense within the organization. However, the size of the bins, boxes, buckets, or any space to be filled in a Kanban system is the product of a forecast in itself. It is directly related to the amount an organization chooses to use as a buffer or safety and therefore also supplier’s lead time. In situations where suppliers are not reliable, with fluctuating lead times and quality of materials, Kanban becomes tricky to put in place. The same holds true when demand varies over the year, as bin sizing should not remain constant. Applying Kanban usually reduces inventory, partly at the cost of flexibility and by introducing a stronger dependency to suppliers and their lead times. It makes it trickier to benefit from network effects or leverage supplier MOQs and price breaks.https://tube.lokad.com/videos/embed/6e890dcc-568e-4a0c-bd29-0855ab5642b2https://tube.lokad.com/videos/watch/0a64876a-1385-41a1-a5e2-9dbb23478b93https://tube.lokad.com/static/thumbnails/66610c96-5588-45e1-bc5d-a4f017f7c137.jpgWhy a digital aviation supply chain? Answers by Air France IndustriesExclusive interviews with Jacques Dauvergne (Senior VP Supply Chain); Fanny Kientz (VP Engine Supply Chain and Assets); Guillaume Adrien (VP Supply Chain Design and Performances); Olivier Pelloux-Prayer (VP Assets and Outsourced Repairs of Component Division); and Stephan Lise (Head of Prognos for Inventory). Recorded within their aircraft engine facilities in fall 2022, Air France Industries’ supply chain experts discuss the new digital approach to supply chain optimization they pioneered with Lokad five years agohttps://tube.lokad.com/videos/embed/0a64876a-1385-41a1-a5e2-9dbb23478b93https://tube.lokad.com/videos/watch/af687725-ee00-41d8-a32b-d237962c24e6https://tube.lokad.com/static/thumbnails/8ec861f3-44f2-4d36-ba42-08089313c9b1.jpgRevima X Lokad - Projet d'Optimisation des StocksInterviews exclusives avec Olivier Legrand (Président de Revima) ; Brice Arias (Responsable de la chaîne d'approvisionnement de Revima, APU & Landing gear MRO) ; Sebastien Honore (Revima LDG - Buyer & Planner) ; Thomas Niel (Revima Purchasing Group) ; et Simon Schalit (Directeur des opérations chez Lokad). Lors de la visite de Lokad dans les installations MRO de Revima en Normandie (France), les experts de la Supply Chain de Revima expliquent comment le partenariat avec Lokad les aide à relever leurs défis logistiques, y compris, entre autres, les ruptures d'approvisionnement au niveau mondial, le réapprovisionnement prioritaire des stocks et, surtout, l'identification des pièces qui doivent être mises au rebut. English Exclusive interviews with Olivier Legrand (Revima President); Brice Arias (Revima Supply Chain Manager, APU & Landing gear MRO); Sebastien Honore (Revima LDG - Buyer & Planner); Thomas Niel (Revima Purchasing Group); and Simon Schalit (Operations Director at Lokad). Recorded at their MRO facilities in Normandy, France, Revima’s supply chain experts explain how their collaboration with Lokad is helping them to tackle their logistical challenges; including, amongst others, global supply chain disruptions, prioritized inventory replenishment and, crucially, identifying parts that need to be scrapped. https://tube.lokad.com/videos/embed/af687725-ee00-41d8-a32b-d237962c24e6https://tube.lokad.com/videos/watch/41e1d33f-6949-45f2-b402-b49c30395c99https://tube.lokad.com/static/thumbnails/aacd6433-7dff-4e64-a4b7-26c129f39b64.jpgAircraft Engine Maintenance Repair and Overhaul at Air France Industries with Fanny KientzJoannès meets Fanny Kintz -the Vice-President of Engine Supply Chain and Assets at Air France Industries (AFI)- to discuss about the path of the maintenance/repair process and all the associated constraints. The challenges for aircraft supply chain are also talked through, with a focus on the balance between costs and operational efficiency or post-pandemic adaptation. Fanny highlights the important contribution of Lokad to release the potential from the data, allowing AFI to optimize the entire activity.https://tube.lokad.com/videos/embed/41e1d33f-6949-45f2-b402-b49c30395c99https://tube.lokad.com/videos/watch/8049d8a1-7cee-42f3-80e6-1ff457f6a7f9https://tube.lokad.com/static/thumbnails/24f4b4a6-60d0-453f-83fc-9eb0cd623e85.jpgOptimisation des Stocks chez Air France Industries avec Stephan Lise## Timestamps 00:00:00: Introduction et discussion avec Stephan de Air France Industries. 00:01:00: Discussion sur l'outil d'optimisation des stocks et gestion de stock. 00:03:04: Exploration de la complexité de l'activité aéronautique et l'impact du COVID-19. 00:04:09: Comparaison de prognos avec d'autres solutions existantes sur le marché. 00:05:12: Discussion sur le travail avec des équipes de data scientists. 00:07:01: Élaboration sur les facteurs de succès et défis de la numérisation. 00:08:27: Discussion sur la concurrence et la valeur unique de Prognos for Inventory. ## Summaries Enregistrée à l'automne 2022 dans les installations de réparation de moteurs d'avion d'Air France, l'interview voit Stéphan Lise et Joannes Vermorel discuter de "Prognos for Inventory", un outil collaboratif Lokad-Air France pour la gestion optimisée des stocks dans l'industrie aéronautique. Ils soulignent la complexité du secteur, notamment la prédiction des besoins en pièces coûteuses. L'outil s'est révélé crucial lors de la crise du COVID-19, en adaptant rapidement les opérations. M. Lise met en avant l'agilité de Prognos for Inventory par rapport aux autres solutions d'entreprise, soulignant sa capacité à s'adapter aux processus des utilisateurs tout en permettant une communication inter-processus efficace. Recorded in the autumn of 2022 at Air France's aircraft engine repair facilities, the interview features Stéphan Lise and Joannes Vermorel discussing "Prognos for Inventory", a collaborative tool between Lokad and Air France for optimized stock management in the aerospace industry. They emphasize the complexity of the sector, especially the prediction of needs for expensive parts. The tool proved crucial during the COVID-19 crisis, quickly adapting operations. Mr. Lise highlights the agility of Prognos for Inventory compared to other enterprise solutions, emphasizing its ability to adapt to user processes while allowing effective inter-process communication.https://tube.lokad.com/videos/embed/8049d8a1-7cee-42f3-80e6-1ff457f6a7f9https://tube.lokad.com/videos/watch/eb28e8a9-3689-4829-afe1-4e8981de85e2https://tube.lokad.com/static/thumbnails/dc320394-7203-4781-8bcf-ac6986515bf3.jpgRunning a Large Scale Aviation Supply Chain at Air France Industries with Jacques DauvergneBelieve it or not, more than 1000 flights from nearly 200 companies are able to take-off daily thanks to the repairs and maintenance carried out by Air France Industries. If you are curious to learn how such a complex supply chain program runs and how Lokad is coordinating efforts to optimize the process, Jacques Dauvergne- Senior Vice President Supply Chain at AFI- is happy to share all the aspects and insights of the story.https://tube.lokad.com/videos/embed/eb28e8a9-3689-4829-afe1-4e8981de85e2https://tube.lokad.com/videos/watch/1ed7f7f3-ecc3-4369-8090-0f16497f4b3chttps://tube.lokad.com/static/thumbnails/3c63ac86-ee1e-44f4-92fd-fa36000a1ae9.jpgSpare Part Optimization for Aircrafts at Air France Industries with Olivier Pelloux-PrayerAircraft components fail frequently and the costs of maintaining regular safety stock is prohibitive. What is the key to achieving the right balance between uninterrupted customer operations and having the right stock, at the right place at the right price? VP Assets and Outsourced Repairs of component division, Olivier Pelloux-Prayer, shares some advice on how to keep inventory at the best level while keeping customers satisfied. https://tube.lokad.com/videos/embed/1ed7f7f3-ecc3-4369-8090-0f16497f4b3chttps://tube.lokad.com/videos/watch/3d3d0149-dbf0-4844-8a59-2f157c4eaf05https://tube.lokad.com/static/thumbnails/fd81ebc3-2258-4ad5-9055-0e44c347652c.jpgThe Supply Chain of the Future at Air France Industries with Guillaume Adrien00:00:00 Introduction to Air France Industries facilities. 00:00:30 Adrien’s background before joining Air France Industries. 00:01:31 Current role at Air France and industry challenges. 00:02:52 Harmonization, standardization, and orchestration challenges in aviation. 00:04:37 The critical role of security in the aviation industry. 00:05:44 Strategies for improving efficiency in the aviation supply chain. 00:06:39 The future of supply chain at Air France Industries. 00:07:34 Upcoming technological projects at Air France Industries. 00:08:03 Discussing data analysis and metrics. 00:09:15 Understanding effective KPIs in information overload. 00:10:38 Importance of data analysts in handling data influx. 00:11:01 Role of predictive information in optimization. 00:14:20 Future of Air France supply chain. Summary: Guillaume Adrien, VP of Supply Chain Design and Performance at Air France Industries, and Joannes Vermorel, Lokad’s founder, discuss the complexities of aviation supply chain optimization. Adrien explains that the nature of the industry demands swift response to unpredictable circumstances, with safety being a top priority. The collaboration with Lokad and the use of predictive optimization technology has resulted in noticeable improvements in non-stock management and other supply chain areas. Emphasizing the ongoing transformation of Air France’s supply chain, Adrien highlights the need for adaptability, curiosity, data-driven mindsets, and innovation in aspiring engineers. The goal is to create a digital twin of the supply chain for potential optimizations.https://tube.lokad.com/videos/embed/3d3d0149-dbf0-4844-8a59-2f157c4eaf05https://tube.lokad.com/videos/watch/6f7a1527-8d53-4dcd-8c39-218bf11a7e1bhttps://tube.lokad.com/static/thumbnails/4ff5117e-cf83-4634-ba1f-2df81b6297f1.jpgHistories of the Future: A Discussion with Jonathon Karelse - Ep 136Histories of the Future: Milestones in the Last 100 Years of Business Forecasting, by Jonathon Karelse, charts the fascinating development of business forecasting tools, techniques and innovations over the last century. In this episode, we had the pleasure of hosting Jonathon and discussing several key themes from the book, including the best way to measure forecast quality, the subtle - though crucial - role of behavioral economics in demand analysis, and if AI (Artificial Intelligence) will replace humans in forecasting. Jonathon Karelse is co-founder and CEO of NorthFind Managerment, a graduate of MIT Sloan School of Management, a published researcher in unconscious bias, as well as a member of the Harvard Business Review’s Advisory Council. ****** Timestamps 00:00 Introduction 01:04 What was your inspiration for writing Histories of the Future? 05:12 How do you define “forecasting”? 10:00 Is forecast accuracy the best way to measure the success of a forecast? 21:04 How does behavioral economics influence forecasting? 27:28 Discussion on unconscious bias, including Jonathon’s research and Joannes’ experiences. 39:58 Joannes’ thoughts on naked forecasts and their limitations. 44:57 How exactly does a greater understanding of behavioral economics improve the forecasting process? 54:17 Will AI developments in forecasting aid people or replace them? 1:03:30 What ideas might you include in your next book? 1:04:32 Does specialist knowledge of behavioral economics help to persuade executives? 1:10:37 Closing thoughts and Jonathon’s advice for supply chain practitioners. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/6f7a1527-8d53-4dcd-8c39-218bf11a7e1bhttps://tube.lokad.com/videos/watch/4b9dba60-21ee-43d3-b279-859865be0ed7https://tube.lokad.com/static/thumbnails/ab79afea-91e5-47ec-bdef-9e009f029a3b.jpgLead-time forecasting - Lecture 5.3Lead times are a fundamental facet of most supply chain situations. Lead times can and should be forecast just like demand. Probabilistic forecasting models, dedicated to lead times, can be used. A series of techniques are presented to craft probabilistic lead time forecasts for supply chain purposes. Composing those forecasts, lead time and demand, is a cornerstone of predictive modeling in supply chain. ****** Time stamps: 0:00:00 - Introduction 0:02:55 - The case of lead times 0:09:25 - Real-world lead times (1/3) 0:12:13 - Real-world lead times (2/3) 0:13:44 - Real-world lead times (3/3) 0:16:12 - The story so far 0:19:31 - ETA: 1 hour from now 0:22:16 - CPRS (recap) (1/2) 0:23:44 - CPRS (recap) (2/2) 0:24:52 - Cross-validation (1/2) 0:27:00 - Cross-validation (2/2) 0:27:40 - Smoothing lead times (1/2) 0:31:29 - Smoothing lead times (2/2) 0:40:51 - Composing lead time (1/2) 0:44:19 - Composing lead time (2/2) 0:47:52 - Quasi-seasonal lead time 0:54:45 - Log-logistic lead time model (1/4) 0:57:03 - Log-logistic lead time model (2/4) 01:00:08 - Log-logistic lead time model (3/4) 01:03:22 - Log-logistic lead time model (4/4) 01:05:12 - Incomplete lead time model (1/4) 01:08:04 - Incomplete lead time model (2/4) 01:09:30 - Incomplete lead time model (3/4) 01:11:38 - Incomplete lead time model (4/4) 01:14:33 - Demand over the lead time (1/3) 01:17:35 - Demand over the lead time (2/3) 01:24:49 - Demand over the lead time (3/3) 01:28:27 - Modularity of predictive techniques 01:31:22 - Conclusion 01:32:52 - 5.3 Lead time forecasting - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/https://tube.lokad.com/videos/embed/4b9dba60-21ee-43d3-b279-859865be0ed7https://tube.lokad.com/videos/watch/c338d816-6efd-4e43-9983-3c1c9fb5a3edhttps://tube.lokad.com/static/thumbnails/7af2ee23-e345-4699-a131-87114cc401f8.jpgHow to implement a long-term oriented, resilient supply chain while firefighting (with Jay Koganti)Resilience is very much this decade’s supply chain cause célèbre (and with good reason). The intrusion of constant shocks - and the inevitable firefighting that follows - has tested the resilience (and exposed the fragility) of supply chains across the globe. Fortifying one’s supply chain from a shock, however, requires quite a bit of unpacking, as this discussion with Jay Koganti demonstrates. Vice President of Supply Chain at Estée Lauder’s Centre of Excellence, Jay shares his insights on the obstacles companies face, including selecting resilience time horizons, stress-testing initiatives, and measuring success. ****** Timestamps: 00:34 Introduction 01:16 Description of Estée Lauder’s Centre of Excellence 02:10 How do you explain “resilience” and “firefighting” to non-specialists? 06:43 What are the different classes of supply chain shocks and which ones should we be concerned about? 13:31 Discussion on how companies should approach their response to a shock. 21:25 Is it possible to measure the effectiveness of one’s resilience policies in the absence of a shock? 30:39 How can companies mimic systemic shocks to their supply chain? 37:00 How does one select an appropriate time horizon for a resilience strategy? 41:37 Will the innovations in supply chain resilience be human-led or software-driven? 43:15 How can one create the necessary company mentality for building resilience? 48:58 Conclusion and Jay’s resilience call to action. https://tube.lokad.com/videos/embed/c338d816-6efd-4e43-9983-3c1c9fb5a3edhttps://tube.lokad.com/videos/watch/ee3130a3-7197-47c0-ab20-e929c123cd39https://tube.lokad.com/static/thumbnails/29223b24-f2ed-4309-a6c2-f0627127b272.jpgGenerative AI in Supply Chain (ChatGPT and the Perils of Flimflam)Generative AI – ChatGPT, Stable Diffusion, or similar – has captured mainstream attention in a way few could have predicted. The fruits of this innovation can be found in practically every sector, from supply chain vendors to students at university. Some herald this as the beginning of a new era; one where artificial intelligence will work alongside humans, replacing many of the mundane tasks of modern business, work and study. Others are far more tentative, believing the merits of generative AI are grossly overstated, if not outright fraudulent. In this wide-reaching conversation, Joannes and Conor discuss the state of the generative AI landscape, the philosophy of knowledge, the supply chain perils presented by AI buzzwords, and whether ChatGPT is smarter than a cat. ****** 00:00 Introduction 00:25 What is Generative AI? What is its purpose? 05:36 Why did the recent versions of ChatGPT and Stable Diffusion catch the public’s attention? 13:44 Discussion on ChatGPT’s level of sophistication and overall intelligence. 21:07 How much progress would the fourth iteration of ChatGPT have to make to achieve anything resembling human intelligence? 31:05 Are there any valid applications of generative AI in supply chain? 40:39 Is generative AI a net negative or positive for supply chain? 45:54 Are vendors’ claims of AI in their supply chain solutions automatically bogus? 50:52 In theory, how might one properly integrate AI into one’s supply chain stack? 52:32 Overall, should businesses simply avoid AI (generative et al.)? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/ee3130a3-7197-47c0-ab20-e929c123cd39https://tube.lokad.com/videos/watch/066e4ebe-1180-45bb-9eab-8d63fcdd10aahttps://tube.lokad.com/static/thumbnails/5029c93a-3807-4315-9846-d5fdde520fc9.jpgSupply Chain Lessons from Financial Markets | A Conversation with Peter CottonProbabilistic forecasting might still be novel in supply chains, but it has been commonplace in financial markets for decades, helping savvy investors navigate the treacherous waters of securities trading. This early adoption brings critical insights for supply chain, and Peter Cotton was kind to join us and outline them. Senior VP and Chief Data Scientist at Intech Investment Management, Peter explains the roles of volatility and rationality in investment decision-making, as well as unpacking how some people manage to beat the stock market. The utility of forecasting competitions, such as the recent M6 (in which Peter placed in the top 10), is also explored, and Joannes shares valuable insights into the problems facing supply chain practitioners when it comes to the adoption of probabilistic forecasting. ***** timestamps: 00:32 Introduction and Peter’s background. 01:22 Peter’s performance at the recent M6 competition. 03:21 What was the theme of the M6? 04:42 What distinguished Peter’s entry? 08:10 Attitudes to volatility and uncertainty in financial markets and supply chain. 12:24 Buzzwords versus simplicity in forecasting. 18:06 Academic integrity in mathematical models (p-hacking). 23:26 Rationality and ruthless efficiency in financial markets. 28:25 Different mechanisms for discovering reliable future information. 32:23 Example of forecasting insanity in supply chains. 37:32 Discipline, gambling and feedback loops in predictive accuracy. 50:39 Cultural obstacles within supply chain. 56:30 Is it possible to beat the market? https://tube.lokad.com/videos/embed/066e4ebe-1180-45bb-9eab-8d63fcdd10aahttps://tube.lokad.com/videos/watch/cf447d72-20d0-454f-9eb7-c8fa256f8e3fhttps://tube.lokad.com/static/thumbnails/a4ab3bff-66c7-4600-95ec-ba0e9141c7ec.jpgThe Supply Chain Scientist - Lecture 7.3At the core of a Quantitative Supply Chain initiative, there is the Supply Chain Scientist (SCS) who executes the data preparation, the economic modeling and the KPI reporting. The smart automation of the supply chain decisions is the end-product of the work done by the SCS. The SCS takes ownership of the generated decisions. The SCS delivers human intelligence magnified through machine processing power. ****** Time stamps: 00:00 - Introduction 02:52 - Background and disclaimer 07:39 - Naïve rationalism 13:14 - The story so far 16:37 - Scientists, we need you! 18:25 - Human + Machine (the problem 1/4) 23:16 - The setup (the problem 2/4) 26:44 - The maintenance (the problem 3/4) 30:02 - The IT backlog (the problem 4/4) 32:56 - The mission (the job of the scientist 1/6) 35:58 - Terminology (the job of the scientist 2/6) 37:54 - Deliverables (the job of the scientist 3/6) 41:11 - The scope (the job of the scientist 4/6) 44:59 - Daily routine (the job of the scientist 5/6) 46:58 - Ownership (the job of the scientist 6/6) 49:25 - A supply chain position (HR 1/6) 51:13 - Hiring a scientist (HR 2/6) 53:58 - Training the scientist (HR 3/6) 55:43 - Reviewing the scientist (HR 4/6) 57:24 - Retaining the scientist (HR 5/6) 59:37 - From one scientist to the next (HR 6/6) 01:01:17 - On IT (corporate dynamics 1/3) 01:03:50 - On Finance (corporate dynamics 2/3) 01:05:42 - On Leadership (corporate dynamics 3/3) 01:09:18 - Old-school planning (modernization 1/5) 01:11:56 - End of S&OP (modernization 2/5) 01:13:31 - Old-school BI (modernization 3/5) 01:15:24 - Exit Data Science (modernization 4/5) 01:17:28 - A new deal for IT (modernization 5/5) 01:19:28 - Conclusion 01:22:05 - 7.3 The Supply Chain Scientist - Questions?https://tube.lokad.com/videos/embed/cf447d72-20d0-454f-9eb7-c8fa256f8e3fhttps://tube.lokad.com/videos/watch/01dc3a89-4031-4d1a-8366-f5b7bb065b29https://tube.lokad.com/static/thumbnails/93d161eb-e70e-4c27-8b83-46f605d799d9.jpgOptimizing Retail Stock Allocation at Worten (with Bruno Saraiva)Bruno Saraiva, Head of Stock and Space Management at Worten, joins Joannes and Conor in studio to discuss the challenges of retail stock allocation and Worten's collaboration with Lokad. Bruno also shares his experience in the retail industry and the crucial role of supply chain management in customer satisfaction. Saraiva shares his experience working with Lokad, noting that the company's approach has helped Worten make better inventory management decisions while still allowing employees the freedom to challenge and question recommendations. He believes that trust and collaboration between teams are crucial for a successful supply chain management strategy. Saraiva emphasizes the importance of supply chains and inventory management in today's retail industry, as customers have little patience for not finding what they want. He notes that having a successful inventory management system can make a significant difference in attracting and retaining customers, as well as ensuring a competitive edge. Additionally, Saraiva suggests that companies need to focus on data-driven decision-making and embrace technology to stay ahead in the industry. Vermorel highlights the importance of giving up on certainties in supply chain optimization, as there is a need to discover financial drivers and consider probabilistic forecasts. He explains that this approach requires companies to be open to change and embrace the chaos that comes with supply chain management. Both Vermorel and Saraiva agree on the importance of incorporating local knowledge and expertise in supply chain management, rather than relying solely on top-down technology solutions. They suggest that technology should be used to support and enhance the insights and knowledge of supply chain professionals, rather than replace them. ****** 00:00:29 - Introduction of Bruno Saraiva - Worten's Head of Stock and Space Management. 00:01:00 - Bruno's role and responsibilities in managing stock and space at W...https://tube.lokad.com/videos/embed/01dc3a89-4031-4d1a-8366-f5b7bb065b29https://tube.lokad.com/videos/watch/0d709735-90bd-4743-a2a4-96bd1a92eb77https://tube.lokad.com/static/thumbnails/e25a383f-9b1c-4b83-9427-d187d50c2a67.jpgThe End of Certainty (White-boxing Probabilistic Forecasting with Pierre Pinson) - Ep 143In an interview with Conor Doherty, Joannes Vermorel, founder of Lokad, and Pierre Pinson, Chair of Data-centric Design Engineering at Imperial College London, discuss probabilistic forecasting and its applications in various fields. They emphasize the importance of understanding uncertainty in forecasting and the need for ongoing education in the area. All three agree that innovation happens faster than people can embrace it, and they encourage staying updated on new developments in the field and being prepared for the advancements yet to come. ****** Timestamps 00:00:00: Introduction of Pierre Pinson 00:01:25: Pierre Pinson's background and his work in data-centric design engineering and forecasting. 00:02:20: How Pierre got into probabilistic forecasting and its applications in energy, logistics, and business analytics. 00:04:17: Assessing forecast quality, its importance in decision making, and how it connects with forecast value. 00:07:41: Initial reactions to probabilistic forecasting. 00:08:27: The problem of overconfidence. 00:10:00: Claude Bernard's criticism of statistics and probabilities. 00:13:00: Determinism vs. stochastic behaviors in the world. 00:14:37: Bridging meteorology and business with probabilistic forecasting. 00:15:11: The importance of weather forecasting and cultural implications. 00:16:46: Explaining probabilities and understanding forecasts. 00:18:58: Challenges of information overload and decision-making. 00:20:31: Transforming probabilities into risk assessments. 00:22:14: Balancing automated decision-making and user trust. 00:23:36: Importance of meteorological forecasts in business and logistics. 00:25:01: Wind forecasts and their significance in the energy sector. 00:26:00: Weather data usage in power demand forecasting and supply chain situations. 00:30:25: Differences in applying probabilistic forecasting in meteorology and logistics contexts. 00:32:46: Discussing the challenges of translating complex pr...https://tube.lokad.com/videos/embed/0d709735-90bd-4743-a2a4-96bd1a92eb77https://tube.lokad.com/videos/watch/1fd10de8-37cb-481c-8d20-19bddf6bc098https://tube.lokad.com/static/thumbnails/a96348cc-8698-4bdc-9254-f833f8420065.jpgQuantum Computing and Enterprise Software (with Olivier Ezratty)Quantum technology expert Olivier Ezratty discusses with Joannes Vermorel the potential of quantum computing, communication, and sensing. Quantum computing aims to harness quantum phenomena like superposition and entanglement to perform tasks beyond classical computers' capabilities. Quantum communication has applications beyond security, such as the quantum internet and distributed quantum computing. Quantum sensing can measure physical properties with unprecedented precision. Despite progress in the field, there is still a significant gap between theoretical knowledge and practical implementation. The timeline for widespread adoption remains uncertain, with experts estimating 10-15 years before quantum technology reaches its full potential. ***** Timestamps: 00:00:00: Introduction to quantum physics and its role in existing technologies. 00:01:03: Olivier Ezratty's journey into quantum computing and his extensive research. 00:04:16: Launch of the Quantum Energy Initiative for environmentally conscious quantum technology development. 00:06:11: Differences between quantum physics in current technologies and future quantum computing. 00:08:51: The non-existence of nothingness and vacuum fluctuations in quantum physics. 00:10:32: Vacuum and ether in quantum physics. 00:11:52: Enterprise software and mechanical sympathy. 00:14:16: Quantum advantage threshold and uncertain progress. 00:16:19: Importance of understanding quantum technologies. 00:18:43: Quantum technologies' potential applications. 00:20:24: Introduction to quantum sensing and its applications. 00:21:19: Quantum communications for security and power improvement. 00:24:01: Quantum sensing for precision measurements in various fields. 00:26:36: Positive usage of quantum gravity sensors in satellites for geodesic studies. 00:28:15: Importance of holistic perspectives in understanding quantum technology. 00:30:11: Discussing quantum supremacy and its limitations. 00:32:02: Explanation ...https://tube.lokad.com/videos/embed/1fd10de8-37cb-481c-8d20-19bddf6bc098https://tube.lokad.com/videos/watch/0daa42ee-65f6-4fd7-9aae-c022e9ceb34bhttps://tube.lokad.com/static/thumbnails/53d754da-ffda-4e2c-a90f-0aa49bbe8c26.jpgABC XYZ Analysis - Supply Chain in 3 minutesABC XYZ Analysis is a categorization tool aimed at identifying the best-performing products in one’s catalog. This information is often used to set service level and safety stock targets. Unlike ABC Analysis, which focuses exclusively on a single variable (typically revenue), ABC XYZ attempts to quantify a second dimension (variance). In this tutorial, Conor explores ABC XYZ and delivers his verdict. Key questions covered in this white-boxing: * Does ABC XYZ deliver the kinds of insights it promises? * Is its use of statistics sufficiently robust? * Is it sensitive enough to subtle demand patterns? Additional learning: https://www.lokad.com/abc-analysis-(inventory)-definition https://www.lokad.com/abc-xyz-analysis-inventory https://www.lokad.com/prioritized-inventory-replenishment-in-excel-with-probabilistic-forecastshttps://tube.lokad.com/videos/embed/0daa42ee-65f6-4fd7-9aae-c022e9ceb34bhttps://tube.lokad.com/videos/watch/ba065b3c-65fa-44da-a5cb-c1b38b0bad43https://tube.lokad.com/static/thumbnails/22b91d01-291e-4b58-9497-eb6fe98806a0.jpgAnalyzing ABC XYZConor Doherty and Joannes Vermorel investigate popular stock analysis tool ABC XYZ Analysis, arguing its oversimplification leads to information loss. Vermorel challenges conventional practices of managing service levels and safety stock separately. Vermorel advocates for technology-aided supply chain management, given the complexity of handling large quantities of products. He criticizes the ABC XYZ analysis for lacking dynamism and not considering customers' perspectives. Vermorel favors a probabilistic approach to supply chain management, which can offer a more nuanced understanding of risks and aid in inventory decision-making. ****** Timestamps: 00:00:07: Introduction and discussion of service level and safety stock targets in inventory management. 00:00:22: Joannes challenging the perception of service levels and safety stocks as simpler subproblems. 00:02:10: Advantages of viewing inventory management as tangible decisions rather than abstractions. 00:03:07: The complexities and limitations of service level measurements. 00:06:10: Joannes describing ABC XYZ analysis as an attention prioritization mechanism and its limitations. 00:10:31: Diving into the intricacies of inventory optimization and sidetracking to complicated tasks. 00:11:22: The complexity of designing a system that allows human verification. 00:12:15: Criticism of the ABC XYZ inventory method, exploring its roots in empirical psychology. 00:13:33: Unpacking ABC XYZ analysis and the influence of human cognition on problem decomposition. 00:16:12: A deeper dive into ABC XYZ and its potential pitfalls, emphasizing the value of computational ranking. 00:21:04: Discussing the nuances of inventory categorization and its calibration. 00:23:53: Introduction of the basket perspective and the challenges of right inventory allocation. 00:24:54: Tracing the history of service level perspective and its implications on inventory management. 00:26:55: The pitfalls of using service level as...https://tube.lokad.com/videos/embed/ba065b3c-65fa-44da-a5cb-c1b38b0bad43https://tube.lokad.com/videos/watch/c449e083-cab2-470f-a365-5ebaba975ddehttps://tube.lokad.com/static/thumbnails/baa13918-4a68-42db-9140-36fe85fe4069.jpgPricing Optimization for the Automotive Aftermarket - Lecture 6.2The balance of supply and demand very much depends on prices. Thus, pricing optimization belongs to the realm of supply chain, at least to a sizeable extent. We will present a series of techniques to optimize the prices of a fictitious automotive aftermarket company. Through this example, we will see the danger associated with abstract lines of reasoning that fail to see the proper context. Knowing what ought to be optimized is more important than the fine print of the optimization itself. ****** Time stamps: 00:00 - Introduction 02:49 - Demand, price and profit 09:35 - Competitive prices 15:23 - Wants vs needs 20:09 - The story so far 23:36 - Directions for today 25:17 - The unit of need 31:03 - Cars and parts (recap) 33:41 - Competitive intelligence 36:03 - Solving the alignment (1/4) 39:26 - Solving the alignment (2/4) 43:07 - Solving the alignment (3/4) 46:38 - Solving the alignment (4/4) 56:21 - Product ranges 59:43 - Unconstrained parts 01:02:44 - Controlling the margin 01:06:54 - Display ranks 01:08:29 - Fine-tuning the weights 01:12:45 - Fine-tuning compatibilities (1/2) 01:19:14 - Fine-tuning compatibilities (2/2) 01:30:41 - Counterintelligence (1/2) 01:35:25 - Counterintelligence (2/2) 01:40:49 - Overstocks and stockouts 01:45:45 - Shipping conditions 01:47:58 - Conclusion 01:50:33 - 6.2 Pricing Optimization for the Automotive Aftermarket - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/c449e083-cab2-470f-a365-5ebaba975ddehttps://tube.lokad.com/videos/watch/ca4f036c-b8f7-4cd0-bf76-db1609fe8a7chttps://tube.lokad.com/static/thumbnails/cab6086f-37e5-4dd3-aabb-89bc41da0217.jpgOn Knowledge, Time and Work for Supply Chains - Lecture 1.7Supply chains abide by the general economic principles. Yet, these principles are too little known and too frequently misrepresented. Popular supply chain practices and their theories often contradict what is generally agreed upon in economics. However, these practices are unlikely to ever prove basic economics to be wrong. Additionally, supply chains are complex. They are systems, a relatively modern concept that is also too little known and too frequently misrepresented. The goal of this lecture is to understand what both economics and systems bring to the table when tackling planning problems for a real-world supply chain. ****** Time stamps: 00:00 - Introduction 03:53 - Visions 07:49 - Values 10:53 - The story so far 13:51 - The stars have spoken 15:49 - Knowledge 20:08 - Processes (Knowledge 1/2) 24:32 - Division of labor (Knowledge 2/2) 28:49 - Time 33:23 - The Future (Time 1/4) 38:16 - Execution (Time 2/4) 42:48 - Complexity (Time 3/4) 47:47 - Planning (Time 4/4) 54:19 - Work 59:57 - Control (Work 1/2) 01:07:21 - Bottleneck (Work 2/2) 01:12:35 - Variety and validity 01:17:44 - Conclusion 01:20:23 - 1.7 On Knowledge, Time and Work for Supply Chains - Questions? ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Follow us on Twitter: https://twitter.com/lokad Read our blog: https://blog.lokad.com/ Sign-up for the Lokad newsletter: https://www.lokad.com/home#newshttps://tube.lokad.com/videos/embed/ca4f036c-b8f7-4cd0-bf76-db1609fe8a7chttps://tube.lokad.com/videos/watch/5c4241e3-0a0b-47ab-bbd4-30220f831645https://tube.lokad.com/static/thumbnails/955157d8-f5c2-4aaf-b1ca-66e68b11b2fa.jpgPilotage des stocks chez Celio avec Julie SchafPilotage des stocks chez Celio avec Julie Schafhttps://tube.lokad.com/videos/embed/5c4241e3-0a0b-47ab-bbd4-30220f831645https://tube.lokad.com/videos/watch/b1400fea-d1b7-4d75-ab3a-fa8b43593cbehttps://tube.lokad.com/static/thumbnails/6cfd6e05-9189-4efd-8e64-2ec16362f57e.jpgDiriger une Supply Chain fashion chez Celio Avec David TeboulDans cet entretien, Joannes Vermorel et David Teboul (Directeur général, en charge des opérations chez Celio) discutent du renouveau de Celio suite aux défis de 2020-2021. David souligne l'importance d'une approche centrée sur le consommateur "normal" pour transformer la marque. Lokad a soutenu cette transformation en aidant à optimiser la Supply Chain pour mieux répondre à la diversité des magasins et des offres. Malgré la complexité croissante et l'essor du commerce en ligne, David insiste sur l'agilité et le rôle essentiel des magasins physiques pour Celio, tout en cherchant à comprendre et à répondre aux besoins des clients à travers divers points de contact. English version In this interview, Joannes Vermorel and David Teboul (Managing Director of Operations at Celio) discuss the resurgence of Celio following the challenges of 2020-2021. David highlights the importance of a "normal" customer-focused approach in transforming the brand. Lokad supported this transformation by assisting in optimizing the supply chain to better cater to a diverse range of stores and offers. Despite increasing complexity and the rise of online commerce, David emphasizes the need for agility and the critical role of physical stores for Celio, while striving to understand and meet customer needs through various touchpoints. ****** Timestamps 00:00:00: Discussion sur l'équilibre entre le digital et les magasins physiques. 00:01:33: Discussion sur la transformation de la marque Celio. 00:03:27: Explication de la Supply Chain au sein de Celio. 00:05:28: Importance de l'équilibre entre le système et l'homme dans la gestion de la Supply Chain. 00:08:16: Discussion sur la complexité et la gestion des licences chez Celio. 00:09:46: Discussion sur les licences et les centres d'intérêt. 00:11:24: Évolution des logiciels et adaptation aux marchés. 00:13:01: Importance de l'agilité et de l'évolution du business model. 00:14:42: Explication de la création d'un magasin attiran...https://tube.lokad.com/videos/embed/b1400fea-d1b7-4d75-ab3a-fa8b43593cbehttps://tube.lokad.com/videos/watch/4c111702-90a5-4f76-9941-a9a66d8cbd4bhttps://tube.lokad.com/static/thumbnails/e15c87b2-f4e2-4ab0-b981-5fb362149c11.jpgMRO Complexity Explained (Paris Air Show 2023)## Summary Effective MRO (maintenance, repair and overhaul) requires meticulous management of up to several million parts per plane, where any unavailability can result in costly aircraft-on-ground (AOG) events. Traditional solutions to manage this complexity involve implementing safety stock formulas or maintaining excessive inventory, both of which have limitations and can be financially untenable. Lokad, through a probabilistic forecasting approach, focuses on forecasting the failure or repair needs of every individual part across the fleet and assessing the immediate and downstream financial impact of potential AOG events. This approach can even lead to seemingly counter-intuitive decisions, such as not stocking certain parts and instead paying a premium during actual need, which may, paradoxically, be more cost-effective than maintaining surplus inventory. Furthermore, Lokad's approach automates these decision-making processes, reducing squandered time and bandwidth and increasing operational efficiency. ## Transcript Simply put, an aircraft cannot fly unless it meets the highest possible safety standards. The problem is, if any single part on that plane fails to work properly or cannot be repaired in time, the aircraft is grounded. This adversity affects not only the flight schedule but also the travel plans of all the passengers. Depending on the size of the plane, there can be anywhere from 250,000 to several million individual pieces in a commercial plane. That means that there are potentially several million pieces, all of which have to be inspected, repaired, and/or changed on an ongoing basis. This gives you an indication of the overall supply chain complexity involved in maintenance, repair, and overhaul. Not only is the numerical complexity involved absolutely enormous, but so too are the financial consequences. As such, the goal for every MRO client is simple: avoiding Aircraft on Ground (AOG) events. The leading cause of an AOG even...https://tube.lokad.com/videos/embed/4c111702-90a5-4f76-9941-a9a66d8cbd4bhttps://tube.lokad.com/videos/watch/63e2c4a3-08b9-4295-86f3-8aa0b43df7d0https://tube.lokad.com/static/thumbnails/a2403fc4-df33-4e99-bd53-0f938737f4f1.jpgCustomizing Trek Bikes (Mastering Configurability with Dan Scharneck) - Ep 146In a dialogue moderated by Conor Doherty, Joannes Vermorel of Lokad and Dan Scharneck, the Director of Supply Chain at Trek Bicycle explored the intricacies of supply chain management for customizable products. Vermorel emphasized the combinatorial complexity of supply chains, noting that companies are using them as a differentiator for customer experience. Scharneck agreed, highlighting the importance of delivering custom products promptly and reliably. He acknowledged the challenges of managing inventory with traditional ERP systems, leading Trek to adopt Lokad's more adaptable solution. Vermorel explained that Lokad uses probabilistic forecasts to assess the risk of bottlenecks, providing a more powerful perspective on supply chain delays. Both agreed on the importance of managing supply chain complexity and the value configurability offers to customers. ***** Timestamps: 00:00:00: Introduction of Dan Scharneck, Supply Chain Director at Trek Bicycle 00:00:29: Trek Bicycle's mission and differentiation 00:01:50: Trek's custom bike business and configurability 00:03:33: Logistical complexity and parts of Trek bikes 00:04:51: Trek's collaboration with Lokad and combinatorial complexity 00:06:56: Shift to mass production for cost efficiency 00:08:10: E-commerce, supply chain, and customization in industries 00:10:41: Reliable delivery time and inventory level challenges 00:12:29: ERP limitations and forecasting with configurable products 00:15:20: Bottleneck issues and technological obsolescence in bike production 00:18:34: Introduction to probabilistic forecasts and bottleneck risks 00:20:26: Transition from traditional ERP to Lokad 00:21:59: Daily dealings with probabilistic forecasting and decision-making 00:23:44: Applying probabilistic forecasting to different tasks 00:26:03: Cost factor, supplier management, and inventory rebalancing 00:29:10: Incremental approach of probabilistic forecasts and recomputation 00:30:52: AI's role and long-...https://tube.lokad.com/videos/embed/63e2c4a3-08b9-4295-86f3-8aa0b43df7d0https://tube.lokad.com/videos/watch/caa4a7be-57bc-4234-b014-c1fd16158ccbhttps://tube.lokad.com/static/thumbnails/4f910acc-8173-4e40-bf2e-6a810f1a5523.jpgRisks in Supply Chain Management - Ep 149Conor Doherty, LokadTV host, and Joannes Vermorel, founder of Lokad, discuss the inherent risks in supply chain management. Vermorel emphasizes that the primary risk is the uncertainty of the future, which is irreducible and beyond control. He notes that every decision involves a trade-off between risk and reward, and that zero risk is unattainable. Vermorel also highlights the opportunities that can arise from these risks, such as capitalizing on market shortages. He advocates an agile and opportunistic mindset, and the use of probabilistic forecasting to mitigate risk. Vermorel and Doherty conclude by agreeing that even small companies can benefit from risk management, leading to increased margins and cash flow. ***** Timestamps: 00:00:00: Introduction and definition of terms 00:02:40: Uncertainty and cost of safeguarding in supply chain 00:03:54: Risk management and minimizing waste :00:05:30: Irreducible risk and opportunities in supply chain 00:07:37: Supply chain vs manufacturing perfection 00:09:35: Risks and opportunities in supply chain and competitors 00:14:09: Problems with static approach in supply chain 00:15:56: Predictable mistakes as business practice 00:18:46: Engineering agility in supply chain 00:21:20: Dollar value of risk and opportunities 00:23:36: Financial optimization of supply chain risks 00:26:37: Lokad's approach to probabilistic forecasting 00:29:53: Risk of massive disruption and regional disasters 00:31:59: Factoring risks into daily supply chain decisions 00:34:08: Risk of losing big clients and correlation of risks 00:37:03: Distortion in map projections and mathematical models 00:42:31: Building forecasts and time series risk 00:45:20: Stochastic optimization and probabilistic approach 00:48:36: Decomposing economic drivers for supply chain decisions 00:51:44: Companies often surprised by past events 00:57:00: Damaging forecasts and cross-entropy in forecasting 01:00:00: Importance of actionable risk ass...https://tube.lokad.com/videos/embed/caa4a7be-57bc-4234-b014-c1fd16158ccbhttps://tube.lokad.com/videos/watch/b8351b8b-6973-4d89-ace9-fab81827ac44https://tube.lokad.com/static/thumbnails/70393df1-cce1-497b-a724-eed534304cb8.jpgLa Formation Des Futurs Décideurs Supply Chain (avec Régis Bourbonnais)Uniqlo has just announced a 90% reduction of its employees by having completely automated one of its warehouses in Japan. One thing is certain:- supply chains are changing, becoming increasingly technology focused and demanding less manpower, therefore requiring a different, more engineer driven skillset from its employees than before. Thus in an environment that is evolving so rapidly, what can be done to prepare those who will go on to lead supply chains? On this episode of LokadTV, we welcome Régis Bourbonnais, renowned lecturer, head of the “International Supply Chain” Masters at Université Paris Dauphine and logistics consultant, to discuss these evolutions and how he shares his expertise with his students in more detail. We debate just what exactly is making the world of supply chains change so quickly, from customers that can be described as much more volatile - expecting higher service levels, a larger diversity of products than before and an ease of returning goods if they’re not satisfied -, to various social media influencers that can suddenly propulse a seemingly random product to great heights, without any prior warning for a business. With the rapid transformation of technology and new ways of managing data, supply chain is also a world adrift with empty technological buzzwords. How do we know which of those are actually of substance and which should be avoided as they’ll simply end up as a short-lived trend that’ll die out? We discuss how to differentiate between these various fads and genuine innovations. To conclude, we expand on how globalization has had such an impact on the domain of supply chain, and why this means that future supply chain leaders need to be ready to embrace different cultures.https://tube.lokad.com/videos/embed/b8351b8b-6973-4d89-ace9-fab81827ac44https://tube.lokad.com/videos/watch/9c7c750e-f103-430b-880f-557b4d0e462dhttps://tube.lokad.com/static/thumbnails/a210bae0-0a9b-4843-b858-1e93c1ddb356.jpgThe Morality, Humanity, and Weirdness of BitcoinIn this special episode, Matt Aaron, Manager of the Bitcoin.com Podcast, asks Joannès his thoughts on the fundamentals of Bitcoin - what it means for supply chains, Lokad and the world at large. They discuss the moral compass of Bitcoin and the economic freedom it can provide. For example, unlike other currencies, no law or regulation will force you to use Bitcoin; it is a free choice and an option. Joannès goes into more depth on what makes us human, and in his eyes it’s commerce, therefore currency and logistics. For example, there are plenty of other animals that use tools and even have a sense of humour, but it’s truly business that sets us apart. Cities were born from commerce and writing was invented not to record poetry, but to keep track of what people were buying and selling. Therefore, one can argue that Bitcoin has captured something of what it means to be fundamentally human. Many people consider commerce as cold, but in reality it can provide prosperity and bring people closer together. It stops us from an animalistic instinct of simply taking what we want, and instead inspires us to barter and trade. We can say that cash is a form of expression unique to homosapiens. To conclude, Joannès and Aaron explain why there should only be one Bitcoin and not multiple cryptocurrencies, as freedom is not cumulative in this way. Joannès illustrates this with the United States Constitution, explaining that if an amendment were to be repeated twice, that wouldn’t double the power of what it decrees.https://tube.lokad.com/videos/embed/9c7c750e-f103-430b-880f-557b4d0e462dhttps://tube.lokad.com/videos/watch/cb409380-9565-4393-ae59-5cbbaf00dff6https://tube.lokad.com/static/thumbnails/e12da7b9-be06-4af2-be68-5f77706156eb.jpgArtificial Intelligence and Supply ChainsFew domains are going to be changed as profoundly by Artificial Intelligence (AI) as supply chains. By 2050, it’s estimated that over 90% of the current supply chain workforce will be automated, and we believe it is not even the most extreme scenario. Not only are nearly all blue collar jobs on the verge of being automated, many white collar jobs will not remain unchallenged either. In this special episode of LokadTV, filmed live at the Franco-British Chamber of Commerce and Industry, Joannes Vermorel discusses why AI has become such a buzzword in the world of technology and explores how it can be applied to the realm of supply chains. We expand on how Artificial Intelligence actually came into being and made the leap from gaming to business. We list both its numerous advantages as well as its various limitations, as its certainly not a simple “fix all” solution and there is definitely room for progress. Artificial Intelligence has the potential to fundamentally change the way that businesses are structured in the future. Given the competitive edge it can give, companies are naturally very discreet about their involvement with AI and their understanding of the technology. We discuss why this is and how companies are currently making use of this technology, and others such as Deep Learning, to gain a solid competitive advantage. We talk more about how major leaders in these domains - like Amazon, Facebook and Google - are actually using this technology. We explore how through this businesses can improve their productivity and make best use of the capability of future technology. To conclude, we investigate what can be done proactively to ease the transition for teams to move towards these new AI methods and procedures, which can understandably often cause disruption and friction. In addition to this, Joannès answers a series of in-depth questions from the audience. You said that the main issue around productivity improvement lies in white collar sta...https://tube.lokad.com/videos/embed/cb409380-9565-4393-ae59-5cbbaf00dff6https://tube.lokad.com/videos/watch/dbb3bac0-cd7a-471e-8dad-2a9b0bf23b40https://tube.lokad.com/static/thumbnails/afbb447e-8395-42c9-a22b-a3560fb0662c.jpgFinancial Optimization for Supply Chains (avec Laurent Livolsi)We can all agree that for almost any business, optimizing your supply chain should factor amongst the major priorities; and to optimize you need to measure. But with so many factors and so much data that flows though any modern supply chain, what exactly should you be measuring and why? For this episode of LokadTV, we welcome Laurent Livolsi, co-author of “La Logistique une affaire d’Etat ?” (Logistics - a question for the State?) researcher and lecturer in Supply Chain Management at Aix-Marseille University, who also directs a department of France’s national rail systems (SNCF) in the restructuration of its logistics and supply chain. Along with Lokad’s CEO, Joannès Vermorel, he gives his opinion on this matter. Together we discuss in more detail the numerous facets that play a role in supply chain optimisation, for example the different types of stock and how best to optimize shipments and containers. What can be said is that a supply chain is in fact an entire map of decisions that have to be taken every day. However, what it all really boils down to is optimizing in euros, dollars - or whatever your currency is - for a company to remain profitable. With so many decisions to be made, how do you ensure that your decision will be the most profitable one? To conclude, we go into more detail about how the main obstacles blocking many businesses from having more effective supply chains are actually internal ones. For instance, having to try and go against company departments that are resistant to change and even fearful of the new technological tools that are available today. We try to investigate how change can sucessfully be introduced in such circumstances.https://tube.lokad.com/videos/embed/dbb3bac0-cd7a-471e-8dad-2a9b0bf23b40https://tube.lokad.com/videos/watch/eca525d2-071c-4f8e-b2d6-62161b0a9458https://tube.lokad.com/static/thumbnails/2e2d11ec-bc2f-4365-95cc-46ad953a671e.jpgThe Role of Scarcity in Supply ChainTimestamps 00:00:00: Introduction and definition of scarcity 00:01:33: Scarcity and alternative uses of resources 00:04:22: Critique of mainstream supply chain theory 00:07:37: Constraints and time dimension in supply chain 00:10:32: Evaluating inventory and alternative uses 00:13:21: Mainstream view's limitations and time series forecast 00:16:37: Manpower allocation and truck capacity issues 00:19:33: Time as a disposable asset in allocation 00:22:53: Pricing strategies and scarcity in supply chain 00:26:41: Scarcity in luxury brands and limited catalog capacity 00:29:27: Retail chains' struggle with reorder points 00:32:39: Flaws in KPIs and metrics in supply chain 00:35:41: USSR's poor planning and mainstream supply chain similarities 00:38:42: Absence of economic drivers in supply chain theory 00:42:37: Comparing supply chain to financial risk management 00:46:04: Post-WWII focus on production in supply chain 00:49:30: Paradigm shift in production and Lokad's approach 00:52:36: Modes of delivery and their impact on scarcity 00:55:40: Mainstream supply chain theory's limitations 00:58:11: Importance of financial assessment in supply chain In a dialogue with Conor Doherty, Joannes Vermorel, founder of Lokad, criticizes mainstream supply chain theory for overlooking resource scarcity and alternative uses. Joannes Vermorel argues that traditional theory assumes a known future, eliminating the need for resource allocation decisions. He emphasizes the importance of time in supply chain management, stating that no resource is truly scarce given enough time. Joannes Vermorel also criticizes the mainstream view for ignoring the complexities of allocation decisions and the importance of financial assessments. He suggests that supply chain optimization should involve probabilistic forecasting and stochastic optimization, assessing all possible futures and making decisions based on expected returns.https://tube.lokad.com/videos/embed/eca525d2-071c-4f8e-b2d6-62161b0a9458https://tube.lokad.com/videos/watch/0b9cdf9a-dbe8-4e61-8d52-a124627332b1https://tube.lokad.com/static/thumbnails/4c210cb5-290d-4dd0-9415-35cc0601f927.jpgForecast Value Added - Supply Chain in 3 minutesConor Doherty, Lokad's technical writer, discusses the Forecast Value Added (FVA) tool, a diagnostic tool for the forecasting process. FVA integrates insights from various departments to enhance forecasting precision. Doherty explains the steps of an FVA analysis and its effectiveness. He notes that while FVA can demonstrate the value of insights, it presumes that greater forecasting accuracy is always beneficial, which is not always the case. He suggests that the focus should be on reducing monetary error rather than pursuing greater accuracy. He concludes that FVA could be used as a competence test, but does not validate the routine use of non-specialists for forecasting input. ***** Timestamps: 00:00:00: Introduction to Forecast Value Added (FVA) 00:00:41: Explanation and steps of FVA analysis 00:01:59: Back testing and evaluating FVA accuracy 00:02:47: FVA's reliance and demonstration of interventions 00:03:56: FVA's presumption and conclusion on accuracy 00:04:37: FVA as a competence test for forecasting protocols ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/0b9cdf9a-dbe8-4e61-8d52-a124627332b1https://tube.lokad.com/videos/watch/79283bc5-d951-4b79-b0d8-d0447366269chttps://tube.lokad.com/static/thumbnails/a3a0782b-c646-4a43-b286-aff5a8756d79.jpgGuided Tutorial of Lokad's Demonstration AccountLokad optimizes supply chain decisions to maximize financial return using Quantitative Supply Chain principles. This financially-driven perspective focuses on reducing dollars (or euros) of error. Lokad’s recommendations, such as purchase or allocation lists, are balanced with respect to your specific supply chain needs and constraints - all of which is factored by our Supply Chain Scientists using probabilistic forecasting and Lokad’s domain-specific language (DSL) named Envision. This video tutorial demonstrates Lokad’s public demo account, whiteboxing the optimization process and showcasing the predictive power and flexibility of our solution. ***** Timestamps: 00:00:00: Introduction 00:02:16: How we prepare the data. 00:05:25: How we use probabilistic forecasting. 00:10:02: How we optimize supply chain.https://tube.lokad.com/videos/embed/79283bc5-d951-4b79-b0d8-d0447366269chttps://tube.lokad.com/videos/watch/30a4aa2a-2c6b-48a9-8493-c84237ac1d71https://tube.lokad.com/static/thumbnails/54e2c48f-8782-48bc-9925-e6865c7a0a7f.jpgSupply Chain Board Games (with Mathias Le Scaon) - Ep 148In a LokadTV interview, Lokad's Conor Doherty converses with Joannes Vermorel of Lokad and Mathias Le Scaon of Zensimu about the development and purpose of supply chain games. Zensimu creates online games to educate on supply chain topics, while Lokad has released a board game, SkuZ, to make supply chain practice more engaging. Both founders discuss the challenges of balancing realism, learning, and entertainment in game design. They also touch on the potential of AI in supply chain games, with Mathias expressing skepticism due to added complexity. Both commit to continuous improvement and innovation in their games. ****** Timestamps: 00:00:00: Introduction to the interview 00:01:27: Zensimu's purpose and supply chain focus 00:02:19: Beer game's influence and supply chain software 00:05:45: Lokad's approach to supply chain and SkuZ game 00:07:53: Zensimu's game variants and industry relatability 00:10:17: Balancing realism, fun, and complexity in game design 00:12:35: Feedback and fine-tuning of SkuZ game 00:15:04: Lokad's resources, competition approach, and creativity 00:17:03: Supply chain competition and Lokad's unique approach 00:18:07: Introduction and benefits of Zensimu's lean game 00:20:09: Lean game's educational impact and improvement results 00:22:07: Lifecycle and timeline of game design 00:24:01: Differences in games and AI's role in them 00:27:59: Reflections on SkuZ game and importance of exploration 00:32:08: Zensimu's projects and focus on game enhancement 00:33:30: Physicality of games and printing challenges 00:35:27: Physical lean games and digital game benefits 00:37:15: Final words from Mathias and game type selection 00:38:33: Invitation to learn more about Zensimu and closinghttps://tube.lokad.com/videos/embed/30a4aa2a-2c6b-48a9-8493-c84237ac1d71https://tube.lokad.com/videos/watch/b727c8b0-fbec-47a3-b140-f56e837f4c1ahttps://tube.lokad.com/static/thumbnails/911fb642-c389-4507-b9df-a3efcbec904a.jpgDoes forecast accuracy even matter? - Ep 146"What is your forecast accuracy?" The question every demand planner and vendor has heard a thousand times and hesitated to answer. Lokad's response: "Does forecast accuracy even matter?" Join us for a live discussion on the role of accuracy in forecasting. You are encouraged to submit questions throughout the stream and there will be 45 mins dedicated to answering them.https://tube.lokad.com/videos/embed/b727c8b0-fbec-47a3-b140-f56e837f4c1ahttps://tube.lokad.com/videos/watch/8bc98a78-a93a-4626-b3da-8811a2436bd1https://tube.lokad.com/static/thumbnails/171f65af-cfeb-449f-82c0-5682e69ae1cd.jpgLarge Language Models in Supply Chain (with Rinat Abdullin)Full transcript available: https://www.lokad.com/tv/2023/12/13/large-language-models-in-supply-chain In a recent dialogue, Conor Doherty of Lokad conversed with Joannes Vermorel and Rinat Abdullin about generative AI's impact on supply chains. Vermorel, Lokad's CEO, and Abdullin, a technical consultant, discussed the evolution from time series forecasting to leveraging Large Language Models (LLMs) like ChatGPT. They explored LLMs' potential to automate tasks, enhance productivity, and assist in data analysis without displacing jobs. While Vermorel remained cautious about LLMs in planning, both acknowledged their utility in composing solutions. The interview underscored the transformative role of AI in supply chain management and the importance of integrating LLMs with specialized tools. ****** Timestamps: 00:00:00: Introduction to the interview 00:01:00: Rinat's Lokad journey and supply chain challenges 00:03:59: Lokad's evolution and simulation insights 00:07:07: Simulation complexities and agent-based decisions 00:09:15: Introducing LLMS and simulation optimizations 00:11:18: ChatGPT's impact and model categories 00:14:14: LLMs as cognitive tools in enterprises 00:17:10: LLMs enhancing customer interactions and listings 00:20:30: LLMs' limited role in supply chain calculations 00:23:07: LLMs improving communication in supply chains 00:27:49: ChatGPT's role in data analytics and insights 00:32:39: LLMs' text processing and quantitative data challenges 00:38:37: Refining enterprise search and closing AI insights ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/8bc98a78-a93a-4626-b3da-8811a2436bd1https://tube.lokad.com/videos/watch/df2eef2d-8690-403a-b759-fe7162a8bf67https://tube.lokad.com/static/thumbnails/7445cc6c-78da-4ac6-a7c2-9615d4f65705.jpgLokad Client Testimonials - french titlesLokad Client Testimonials - french titleshttps://tube.lokad.com/videos/embed/df2eef2d-8690-403a-b759-fe7162a8bf67https://tube.lokad.com/videos/watch/794252c3-ce2d-47c4-a3bb-3cc9f502377dhttps://tube.lokad.com/static/thumbnails/4dce6651-e663-40f4-ba15-6ab1e1071fe8.jpgMRO Holdings' Quantitative Supply Chain Revolution (with Ricardo Alvarez Henao)Full transcript available: https://www.lokad.com/tv/2023/11/29/mro-holdings-quantitative-supply-chain-revolution/ In a recent dialogue, Ricardo Alvarez Henao, Supply Chain Director at MRO Holdings, shared insights on the aviation MRO sector with Luciano Lisiotti of Lokad. Alvarez Henao emphasized the importance of anticipation and visibility in supply chain risk management, noting that inaccurate forecasts could lead to operational delays or surplus inventory. He also highlighted emerging trends in the MRO industry, including a post-pandemic bounce back, a trend towards partnerships, and the increasing complexity of demand. Alvarez Henao stressed the importance of embracing volatility and complexity, and the usefulness of probabilistic demand planning and forecasting. He concluded that while the MRO sector is more complex than the fast-moving consumer goods sector, the principles of leading a supply chain are similar. ****** Timestamps: 00:00:00: Introduction of speakers 00:00:26: Ricardo's role and MRO Holdings' operations 00:01:47: Supply chain challenges and MRO's vision 00:03:31: Risk management and demand forecasting 00:05:23: Emerging trends and MRO's approach 00:07:34: MRO types comparison 00:09:19: Memorial Holding's OPS and industry challenges 00:10:24: Ricardo's transition and Lokad's partnership 00:11:37: Sector comparison and quantitative benefits 00:13:05: Ricardo's hiring and leading supply chain 00:14:23: Common failures and leadership expertise 00:15:03: Closing remarks and gratitude to Lokadhttps://tube.lokad.com/videos/embed/794252c3-ce2d-47c4-a3bb-3cc9f502377dhttps://tube.lokad.com/videos/watch/f4c480fb-679d-4c40-b065-8ec30e7bd09ahttps://tube.lokad.com/static/thumbnails/484d239d-7957-4586-bc92-a252d12e5083.jpgThe Evolution of Supply Chain Education (with Paul Jan) - Ep 150Conor Doherty, host of Lokad TV, recently engaged in a discussion with Joannes Vermorel, founder of Lokad, and Paul Jan, a supply chain professor at the University of Toronto. The conversation centered on the evolving field of supply chain management, the role of data, and the importance of education. Vermorel introduced the concept of "wicked problems" in supply chain, highlighting the limitations of Excel and the need for tools like SQL Server. Jan shared his experience transitioning from Excel to more programmatic options, praising Lokad's tool, Envision. Both emphasized the need for industry disruption and the importance of education in supply chain management. ***** Timestamps: 00:00:00: Introduction to the interview 00:00:47: Paul Jan's background and teaching experience 00:02:16: Data's role in supply chain and teaching 00:04:00: Collaboration with Lokad and its impact 00:06:20: Real-world supply chain challenges and teaching hurdles 00:10:49: 'Wicked' problems in supply chain explained 00:14:37: Company messaging's impact on product perception 00:16:11: Continuous data analysis and Excel's limitations 00:19:11: Handling relational data and Excel's shortcomings 00:21:49: Transition to SQL for data processing 00:24:11: Benefits of introducing Lokad to students 00:26:33: Teaching cost considerations in supply chain 00:29:13: Use of Envision and critique of enterprise software 00:32:24: Solution thinking and tool limitations 00:35:16: Better tools for better supply chain solutions 00:37:57: Joannes Vermorel's teaching experience and philosophy 00:41:15: Fundamental data structures and forecasting limitations 00:45:31: Visual teaching methods and strong assumptions 00:48:32: Need for disruption in supply chain industry 00:51:12: Supply chain as a collection of wicked problems 00:54:24: Being approximately correct in supply chain 00:57:55: Teaching wickedness in supply chain 01:00:47: Final words and importance of private sector inves...https://tube.lokad.com/videos/embed/f4c480fb-679d-4c40-b065-8ec30e7bd09ahttps://tube.lokad.com/videos/watch/133be6d0-b6ce-4559-a25c-130a3fbe56cahttps://tube.lokad.com/static/thumbnails/a8af0e0a-4e9d-4f86-9560-2c9245d7bc4c.jpgRethinking S&OP (The Future of Supply Chain) - Ep 158In a recent interview, Lokad CEO Joannes Vermorel critiqued the Sales and Operation Planning (S&OP) process as outdated and inefficient for modern businesses. He argued that S&OP, designed for simpler times, struggles to keep pace with today's complex, fast-moving business environment. Vermorel criticized the process's slow refresh rate, its reliance on meetings and spreadsheets, and its focus on unified forecasts. He suggested that large companies should eliminate their S&OP divisions, likening them to obsolete fax machines. Instead, he proposed a shift towards improving access to information, transforming S&OP teams into data lake teams. 00:00:00: Introduction to the interview 00:01:49: S&OP: Quantitative alignment and decision making 00:04:08: S&OP for company-wide synchronization, not value alignment 00:06:56: S&OP: Team collaboration, unified forecast, and deliverables 00:09:36: Commitment agreements and bureaucratic challenges in S&OP 00:13:12: S&OP: Slow process, qualitative insights, and information flow 00:18:59: Evolution of companies, product complexity, and supply chains 00:23:19: S&OP: Costly, slow, outdated, and software-mediated 00:26:37: S&OP: Origins, formalization, and impact of technology 00:30:33: S&OP: Need for alignment, critique of meetings 00:33:30: S&OP: Comparison to cancer, forecast generation, and auditing 00:36:35: S&OP: Informational problem, data flow, and software necessity 00:40:52: Focus on unchanging fundamentals, critique of unified forecast 00:45:11: Consequences of stock out, repetition, and e-commerce questions 00:48:42: Difficulty of decision-making, critique of S&OP formalization 00:52:47: Value of qualitative analysis, critique of S&OP deliverables 00:56:43: Termination of S&OP division, removing unnecessary divisions 01:00:00: Upskilling, importance of accessible information, and data access 01:03:40: Converting S&OP team into data lake team 01:05:33: Conclusion of the interviewhttps://tube.lokad.com/videos/embed/133be6d0-b6ce-4559-a25c-130a3fbe56cahttps://tube.lokad.com/videos/watch/f270ec46-91a8-4076-9452-fce9dc1f43eahttps://tube.lokad.com/static/thumbnails/5db9cce4-b6ac-4805-94f9-c7e762de7733.jpgLokad Client Testimonials - english titlesLokad Client Testimonials - english titleshttps://tube.lokad.com/videos/embed/f270ec46-91a8-4076-9452-fce9dc1f43eahttps://tube.lokad.com/videos/watch/f1b06087-1988-4c55-bb4c-1390e76ad21dhttps://tube.lokad.com/static/thumbnails/0941c0c6-78bb-4925-9972-87680e4bb552.jpgResilience, Risk, and Effective Leadership (with Knut Alicke)00:00:00: (Re)Introduction of Knut 00:01:51: Knut Alicke's work on supply chain resilience 00:02:59: Companies' response to first lockdown 00:04:15: Joannes's perspective on supply chain changes 00:06:35: Defining risk and resilience in supply chain 00:10:06: Knut's key ingredients for resilient supply chains 00:13:09: Importance of end-to-end visibility 00:14:42: Importance of data interpretation 00:15:55: Case study: Pharmaceuticals 00:17:28: Software-driven supply chain disasters 00:19:28: Lokad's approach to machine learning tools 00:21:21: Sophisticated software making companies fragile 00:28:32: Complexity of supply chains 00:30:29: Benefits of probabilistic approach 00:33:08: Factoring in inflation risk 00:40:33: Supply chain resilience as insurance 00:44:32: Explanation of the CHAIN model 00:50:00: Example of B2B retailer service 00:52:12: Importance of dollar-based metrics 00:58:41: The effectiveness of automated systems in risk management 01:00:37: Example of aircraft maintenance narrative 01:04:11: Critical skills in supply chain 01:05:31: Importance of clear writing 01:08:16: Knut's call-to-action The pandemic has forced companies to reassess their supply chains, focusing on risk reduction and resilience. In this interview, Knut Alicke of McKinsey and Joannes Vermorel of Lokad discussed the need for systematic planning, digital tool utilization, and software automation. Alicke emphasized the importance of visibility and pre-warning systems to detect potential disruptions, while Vermorel highlighted the need for a digital culture to understand data nuances. Both agreed on the importance of scenario planning and a probabilistic approach to manage potential issues. They also stressed the need for strategic thinking, effective communication, and cultivating options in supply chain leadership—things Alicke covered in detail in his recent (co-authored) book, From Source to Sold. https://tube.lokad.com/videos/embed/f1b06087-1988-4c55-bb4c-1390e76ad21dhttps://tube.lokad.com/videos/watch/48ff0aeb-ce52-49ca-85d9-fdbf12a2c4b2https://tube.lokad.com/static/thumbnails/438ee0f1-5b05-462c-b9a4-7781bd5d5f9e.jpgRFP Madness - Ep 153Lokad's Conor Doherty (Head of Communications) and Joannes Vermorel (CEO) challenge the conventional wisdom of procurement processes, questioning the necessity of RFIs, RFPs, and RFQs. Vermorel argues these documents are more habitual than essential, suggesting that procurement involves both indispensable and arbitrary steps. Vermorel criticizes the RFP process for software procurement as fundamentally flawed, likening the selection of a software vendor to hiring a C-level executive, where nuanced judgment trumps checklist approaches. He observes a corporate culture of risk aversion, where documentation trumps critical thinking, leading to decisions that protect careers over company interests. Vermorel provocatively recommends eliminating the RFP process in favor of informed, independent judgment to better serve company needs. ****** Timestamps: 00:00:00: Doherty introduces RFPs, RFQs, and RFIs 00:02:15: Procurement documents and accidental policies 00:04:31: Impact of poor software vendor choices 00:09:00: Comparing software to hiring executives 00:12:53: Ineffectiveness and redundancy in RFPs 00:19:25: High stakes and decision justification 00:26:35: Critiques and improvements to RFPs 00:31:17: Leveraging technology and vendor responsibility 00:35:36: Call to action ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ https://tube.lokad.com/videos/embed/48ff0aeb-ce52-49ca-85d9-fdbf12a2c4b2https://tube.lokad.com/videos/watch/1b07fb1d-cddf-4494-82db-65d25c01bc31https://tube.lokad.com/static/thumbnails/26b0b1aa-80c8-4a37-8846-845e1e63f2bf.jpgStocks are not in your control - Ep 157In this LokadTV eposide, Conor Doherty interviewed Joannes Vermorel on inventory planning misconceptions. Vermorel dismantled the fallacy that stock levels are a direct lever for client satisfaction and profitability. He argued that companies should focus on serving clients profitably, not on the illusion of stock control. Vermorel criticized simplistic inventory policies like min-max, stressing that stock levels are influenced by myriad factors beyond direct control. He advocated for prioritizing quality supply chain decisions over stock level targets, which often fail to account for dynamic business realities. The conversation highlighted the need for a nuanced approach to supply chain management, emphasizing decision control over uncontrollable outcomes. 00:00:00: Introduction of the idea 00:02:20: Stock level challenges and min-max policy 00:06:09: Supply chain control and decision-making 00:10:07: Replenishment strategies and supplier constraints 00:14:51: Inventory tracking evolution and decision roots 00:22:34: Perishable stock issues and B2B dynamics 00:30:02: Traditional supply chain method limitations 00:36:35: Decision-making metrics and executive summaryhttps://tube.lokad.com/videos/embed/1b07fb1d-cddf-4494-82db-65d25c01bc31https://tube.lokad.com/videos/watch/60f4e0f9-5b75-4ec7-bc16-95708e90a62bhttps://tube.lokad.com/static/thumbnails/56f46d84-17d6-46eb-97bd-b260edb94721.jpgStochastic Optimization of Supply Chain Decisions - Ep 156In a discussion between Lokad's CEO, Joannes Vermorel, and Head of Communication, Conor Doherty, the importance of stochastic optimization and probabilistic forecasting in supply chain management is emphasized. Vermorel explains the concept of stochasticity, where the loss function is uncertain, a common occurrence in supply chain scenarios. He outlines the three ingredients of mathematical optimization':' variables, constraints, and the loss function, and explains that in stochastic optimization, the loss function is not deterministic but randomized. Vermorel also discusses the scalability issues of mathematical optimization techniques for supply chain, which have been a roadblock for four decades. He concludes by emphasizing that stochastic optimization is a crucial aspect often overlooked in supply chain textbooks. 00:00:00: Introduction to the interview 00:02:15: Probabilistic forecasting and supply chain optimization 00:04:31: Stochastic optimization and decision making 00:06:45: Ingredients for stochastic optimization: variables, constraints, loss function 00:09:00: Perspectives on modeling and optimization 00:11:15: Constraints and worst-case scenarios in optimization 00:13:30: Uncertainty, constraints and poor solutions 00:15:45: Deterministic optimization and varying scenarios 00:18:00: MRO space operations and inventory optimization 00:20:15: Uncertainty in lead times and repairable parts 00:22:30: Consequences of missing parts and classic approach limitations 00:24:45: Stochastic elements and human-based stochasticity in supply chain 00:27:00: Repairing an aircraft engine and sourcing parts 00:29:15: Inventory optimization and probabilistic bill of material 00:31:30: Policies for supply chain optimization and reactivity 00:33:45: Scalability issues and convex functions in supply chain 00:36:00: Problem relaxation and constraints in supply chain problems 00:38:15: Local search tools and feasible solution in supply chain 00:40:30: Me...https://tube.lokad.com/videos/embed/60f4e0f9-5b75-4ec7-bc16-95708e90a62bhttps://tube.lokad.com/videos/watch/6a581dd9-9c60-4658-8f53-fa8e8bc76548https://tube.lokad.com/static/thumbnails/9bba5c1b-5fd5-4f70-bd47-0da511ed6618.jpgTraditional Jobs vs AI in Supply Chain - Ep 155Join us for a special live episode of LokadTV (with audience Q&A) where Joannes Vermorel (Lokad CEO) will discuss the honest impact of AI on supply chain jobs. You can submit your questions at any point during the discussion! Just like sabermetrics signaled the demise of traditional baseball management, AI will automate an enormous amount of the tasks currently performed by humans in inventory management. As an early adopter of AI in supply chain, Lokad is in a unique position to comment on this important transition (and how to prepare for it).https://tube.lokad.com/videos/embed/6a581dd9-9c60-4658-8f53-fa8e8bc76548https://tube.lokad.com/videos/watch/86ea12cc-308d-4b20-8347-4356e6dda078https://tube.lokad.com/static/thumbnails/70af1cd6-a27c-43fa-ab92-aaa94e3ab356.jpgEssential Skills for Modern Supply Chain - Supply Chain in 3 minutesConor Doherty, Head of Communication at Lokad, emphasizes the evolution of supply chain management, highlighting three critical skills for future practitioners: technical writing, digital literacy, and financial awareness. Technical writing is crucial for documenting complex processes, ensuring knowledge is preserved and shared. Digital literacy, encompassing coding and data analytics, is vital for interpreting vast data streams and solving intricate supply chain challenges. Financial awareness enables practitioners to understand the economic impact of their decisions, ensuring fiscal responsibility. These skills are essential for navigating the complexities of modern supply chains and making informed, prudent decisions. Timestamps: 00:00:00: Introduction to essential supply chain skills 00:01:16: Technical writing and digital literacy importance 00:02:51: Financial awareness and resource allocation 00:03:52: Conclusion and advice for practitionershttps://tube.lokad.com/videos/embed/86ea12cc-308d-4b20-8347-4356e6dda078https://tube.lokad.com/videos/watch/ccd61e2e-83bb-401e-b1d2-64aa995349d5https://tube.lokad.com/static/thumbnails/aaced438-1c0c-4b23-9f2f-ef97826d98ce.jpgEffects of AI on Supply Chain Jobs - Supply Chain in 3 minutesConor Doherty of Lokad scrutinizes a Harvard study on AI's impact on white-collar jobs, revealing nuanced effects. The research, involving 758 consultants, assesses AI's role in enhancing productivity, particularly in supply chain management. It finds that AI boosts performance in certain tasks, especially with training, but may falter in complex scenarios. Doherty critiques the study's narrow view of AI as an adjunct to human labor, arguing for its potential to fully automate tasks, thus revolutionizing productivity and redefining white-collar work. He warns of overconfidence in job security, as AI's full capabilities could dramatically alter the employment landscape.https://tube.lokad.com/videos/embed/ccd61e2e-83bb-401e-b1d2-64aa995349d5https://tube.lokad.com/videos/watch/7d295337-41cb-4b80-af93-5c7d336bb3dahttps://tube.lokad.com/static/thumbnails/af1d6df4-4e49-476d-be28-c020d9af9437.jpgAI Pilots in Supply Chain - Ep 159In a dialogue between Lokad's CEO Joannes Vermorel and Head of Communication Conor Doherty, they discuss the impact of AI on supply chain management. Vermorel highlights the advancements in AI and large language models, which have revolutionized task automation. He introduces AI Pilots, a Lokad offering that automates decision-making and clerical tasks, facilitated by Lokad's proprietary programming language, Envision. Vermorel also discusses the potential of AI to automate tasks related to Master data and contrasts Lokad's approach with competitors. He predicts that AI Pilots will become the norm in supply chain management, leading to significant productivity improvements. The conversation concludes with a Q&A session. 00:00:00: Introduction to the interview 00:01:01: AI's impact on traditional jobs 00:04:36: AI automation in supply chain 00:09:08: Need for unified system in 2012 00:10:30: Re-injecting decisions into systems 00:13:08: Avoiding hallucination problem in AI 00:16:11: Impact and delays due to IT backlog 00:20:04: Comparing Lokad and other vendors' setups 00:23:06: Discussing LLM hallucinations and confabulations 00:30:38: Emphasizing progress over perfection in AI 00:33:00: Fetching missing information and order ETA 00:36:17: Quantitative tasks and LLMs in supply chain 00:38:28: Future of AI pilots in supply chain 00:41:18: Value of conversations and automating low-value tasks 00:44:57: Leveraging AI Pilots to reduce backlog 00:49:00: AI pilot vs copilot and lockdown scenario 00:53:36: Skepticism towards conversational AI and process analysis 00:57:18: Understanding business reality and AI replacing processes 01:00:12: Challenges of open sourcing Envision 01:06:21: AI's approach to bottlenecks and supply chain 01:09:17: Inefficiency of verbal commands and automating orders 01:14:12: Supply Chain Scientist as copilot for AI pilot 01:17:32: Checking data correctness and automating checks with LMS 01:20:15: Making Envision fri...https://tube.lokad.com/videos/embed/7d295337-41cb-4b80-af93-5c7d336bb3dahttps://tube.lokad.com/videos/watch/15ed3df2-3a5f-40c1-811b-7342058082ddhttps://tube.lokad.com/static/thumbnails/20f96c2f-0262-4856-ba1e-fbc622e6a27b.jpgQuality-Cost Dilemma in Supply Chain - Ep 160Full transcript available: https://www.lokad.com/tv/2024/4/24/quality-cost-dilemma-in-supply-chain/ In a dialogue with Lokad's Head of Communication, Conor Doherty, Lokad CEO Joannes Vermorel discusses the quality-cost ratio in supply chain management. Vermorel emphasizes that quality refers to decision-making, not product attributes, and that client-perceived quality may not align with optimal supply decisions due to cost. He criticizes traditional KPIs, arguing they don't reflect genuine quality. Vermorel also discusses the role of Large Language Models (LLMs) in supply chain management, noting they can lead to smarter decisions but can inflate IT budgets. He suggests the quality-cost dilemma is a meta game, requiring software engineering to solve supply chain problems and assess trade-offs. 00:00:00: Introduction 00:02:09: Quality vs cost in supply chain decisions 00:05:16: iPhone as a quality example 00:08:36: Decision-making and optionality in supply chain 00:11:47: KPIs for assessing supply chain performance 00:14:27: Service levels as performance measure 00:17:24: Importance of relevant quality in product design 00:20:42: Complexity beyond human mind in supply chain 00:24:11: Impact of AI and automation on supply chain 00:27:59: Use of large language models at Lokad 00:31:21: Speed of modern computers and AI cost 00:34:34: Sourcing analysis and AI's impact on cost 00:38:17: Cost trade-offs in supply chain 00:41:38: Deciding number of competitors to monitor 00:45:10: Comparing software sophistication to headcount 00:48:26: Investing in understanding supply chain drivers 00:51:43: Market situation cannot be extended into future 00:54:23: Profit as a measure of decision quality 00:58:12: Complexity of supply chains due to digitalization 01:00:52: Amazon's success and growth strategies 01:03:24: Encouragement against fearing supply chain complexity 01:06:01: Being approximately correct is better than exactly wrong ****** Check ou...https://tube.lokad.com/videos/embed/15ed3df2-3a5f-40c1-811b-7342058082ddhttps://tube.lokad.com/videos/watch/725ae171-bef7-46d9-9297-2c283e88c39fhttps://tube.lokad.com/static/thumbnails/26ecd59f-eb15-4afa-964d-ebc535e6b81b.jpgForecast Congruence and Supply Chain Decision-Making (with Nikolaos Kourentzes)00:00:00: Introduction of the interview 00:00:47: Nikos Kourentzes' background and work 00:03:25: Understanding forecasting congruence 00:04:44: Limitations of accuracy in forecasting 00:06:14: Congruence in time series forecasts 00:08:02: Supply chain inventory modeling considerations 00:09:03: Congruence and forecast consistency 00:10:29: Mathematical metrics in production 00:12:08: Luxury watchmaker inventory considerations 00:14:47: Upward fluctuation triggering production 00:16:03: Optimizing model for demand of one SKU 00:17:41: Research in shrinkage estimators and temporal hierarchies 00:19:05: Best models for all horizons 00:21:32: Controversy around forecast congruence 00:24:05: Calibrating inventory policies 00:26:27: Balancing accuracy and congruence 00:31:14: Tricks from temporal aggregation smooth out forecasts 00:32:54: Importance of gradients in optimization 00:35:28: Correlations in supply chain 00:38:10: Beyond time series forecasting 00:40:27: Honesty of probabilistic forecasting 00:42:32: Similarities between congruence and bull whip ratio 00:45:18: Importance of sequential decision making analysis 00:47:27: Benefits of keeping stages separate 00:49:34: Human interaction with models 00:52:05: Retaining human element in forecasting 00:54:35: Trust in experts and analysts 00:57:28: Realistic situation of managing millions of SKUs 01:00:01: High level model adjustments 01:02:13: Decisions steered by probability of rare events 01:04:44: Nikos' take on adjustments 01:07:14: Wasting time on minor adjustments 01:09:08: Against manual day-to-day adjustments 01:11:43: Company-wide benefits of code tweaking 01:13:33: Role of data science team 01:15:35: Probabilistic forecasts deter manual interference 01:18:12: The million-dollar question on AI 01:21:11: Importance of understanding AI models 01:24:35: Value and cost of AI models 01:26:02: Addressing problems in inventory ### Summary In a recent LokadTV intervi...https://tube.lokad.com/videos/embed/725ae171-bef7-46d9-9297-2c283e88c39fhttps://tube.lokad.com/videos/watch/d25da3d9-c0f4-4ea7-8aa3-9fb47698878ehttps://tube.lokad.com/static/thumbnails/c2a061d0-9e72-4964-8dda-6c5c4084021c.jpgDecision-making under Uncertainty in Supply Chain (with Dr. Meinolf Sellmann) - Ep 162Full transcript available: https://www.lokad.com/tv/2024/5/22/decision-making-under-uncertainty-in-supply-chain/ ### About the guest Dr. Meinolf Sellmann is founder and CTO at InsideOpt, a US-based startup that produces general-purpose software for automating decision-making under uncertainty. He is the former Director for Network Optimization at Shopify, Lab Director for the Machine Learning and Knowledge Representation Labs at General Electric's Global Research Center, Senior Manager for Cognitive Computing at IBM Research, and Assistant Professor for Computer Science at Brown University. Meinolf architected systems like the trade-settlement system of the ECB, which handles over 1 trillion Euros per night, has published over 80 articles in international conferences and journals, holds six patents, and has won over 22 first prizes at international programming competitions. ### Summary In a recent LokadTV interview, Conor Doherty, Joannes Vermorel, and guest Meinolf Sellmann discussed the role of stochastic optimization in supply chain management. They highlighted the importance of considering variability and uncertainty in decision-making processes. Traditional deterministic methods often fall short in real-world scenarios, leading to over-optimistic optimization plans. Both Vermorel and Sellmann criticized the "predict then optimize" approach, suggesting that companies can achieve better results by accounting for forecast variability during optimization. They emphasized the need for executable plans and measurable effectiveness in any optimization model. 00:00:00: Introduction of the interview 00:00:42: Meinolf Sellman's career and InsideOpt's decision-making 00:03:47: Disruptions and over-optimism in optimization 00:06:18: Vermorel's stochastic optimization discovery and influences 00:08:10: E-commerce fulfillment and supply chain forecasting 00:09:56: 'Predict then optimize' approach and consequences 00:11:41: Operational results improvement ...https://tube.lokad.com/videos/embed/d25da3d9-c0f4-4ea7-8aa3-9fb47698878ehttps://tube.lokad.com/videos/watch/f7dc0606-4805-4e8c-b1f8-bb6ad352354chttps://tube.lokad.com/static/thumbnails/d7630da4-599c-4896-ac92-cbdd80a3371d.jpgProbabilistic Forecasts & Sequential Decision-Making (with Warren Powell) - Ep 163Full transcript available: https://www.lokad.com/tv/2024/5/28/probabilistic-forecasts-sequential-decision-making/ ### About the guest Warren B Powell is Professor Emeritus at Princeton University, where he taught for 39 years, and is currently the Chief Innovation Officer at Optimal Dynamics. He was the founder and director of CASTLE Lab, which focused on stochastic optimization with applications to freight transportation, energy systems, health, e-commerce, finance and the laboratory sciences, supported by over $50 million in funding from government and industry. He has pioneered a new universal framework that can be used to model any sequential decision problem, including the identification of four classes of policies that spans every possible method for making decisions. This is documented in his latest book with John Wiley: Reinforcement Learning and Stochastic Optimization: A unified framework for sequential decisions. He published over 250 papers, five books, and produced over 60 graduate students and post-docs. He is the 2021 recipient of the Robert Herman Lifetime Achievement Award from the Society for Transportation Science and Logistics, the 2022 Saul Gass Expository Writing Award. He is a fellow of Informs, and the recipient of numerous other awards. ### Summary In a recent LokadTV interview, Conor Doherty, Joannes Vermorel, and guest Warren Powell discussed probabilistic forecasts and decision making in supply chains. Warren Powell, a retired Princeton professor and Chief Innovation Officer at Optimal Dynamics, shared his career journey and insights on planning under uncertainty. Joannes Vermorel, Lokad's CEO, discussed his transition from deterministic methods to probabilistic forecasting, criticizing academia's lack of real-world application. Both agreed on the superiority of probabilistic forecasting, despite its complexity and businesses' struggle to apply it. The conversation highlighted the need for a broader perspective and a unified ap...https://tube.lokad.com/videos/embed/f7dc0606-4805-4e8c-b1f8-bb6ad352354chttps://tube.lokad.com/videos/watch/64c4ca39-b8f4-4d93-906b-adb736a1d8b1https://tube.lokad.com/static/thumbnails/b758a789-a286-4e10-87ab-524a872b7f0a.jpgLokad: l’Intelligence Artificielle au Service de la Supply ChainGrâce à son expertise de pointe dans le domaine de la supply chain et à l’apport de technologies de dernière génération faisant appel à l’IA, la société Lokad aide les entreprises à améliorer l’efficacité de leur chaîne d’approvisionnement. Présentation. Une expertise Homme-machine pour optimiser la supply chain. À travers son activité, la société Lokad aide de nombreuses entreprises françaises et internationales à booster et optimiser leurs supply chains. Pour y parvenir, les équipes de l’entreprise s’appuient sur la combinaison de l’analyse des données permises par le differentiable programming — un descendant du deep learning —, le cloud computing, ainsi qu’un haut niveau d’expertise dans le domaine de la supply chain. Pour enrichir les analyses de données, Lokad a également recours aux dernières avancées dans le secteur de l’intelligence artificielle, notamment avec les LLM (grand modèle de langage). Chaque client bénéficie également d’un accompagnement complet de la part des experts de l’entreprise : les Supply Chain Scientist. « L’objectif est de proposer une réelle expertise Homme-machine pour permettre à nos clients d’optimiser leur supply chain, que ce soit pour gérer le dimensionnement de leur stock, pour le placement de mouvements de stock au sein de leur réseau, mais aussi pour affiner leur stratégie de prix et de promotion, ou pour leur production », explique à ce sujet Estelle Vermorel, co-fondatrice de l’entreprise. Aider les entreprises à prendre de meilleures décisions Lokad qui travaille aujourd’hui aux côtés de nombreux acteurs issus de secteurs d’activité divers et variés — aéronautique, e-commerce, grande distribution, etc. —, réalise au quotidien un travail d’innovation constant, afin de continuer à proposer des solutions technologiques de dernière génération au service de la supply chain. « Dans le secteur de la supply chain, le terme de résilience est très important. Toutes les décisions s’avèrent être des compromi...https://tube.lokad.com/videos/embed/64c4ca39-b8f4-4d93-906b-adb736a1d8b1https://tube.lokad.com/videos/watch/1cda6b87-5886-4980-ae1d-9a3f9daa35c3https://tube.lokad.com/static/thumbnails/771126ca-72c0-48ca-ae00-504bbacd16a5.jpgSupply Chain Debate - Is S&OP a net good for companies? (with Milos Vrzic)Full transcript available: https://www.lokad.com/tv/2024/6/19/is-sop-a-net-good-for-companies/ ### Summary In a debate hosted by Conor Doherty of Lokad, Milos Vrzic, former Head of Supply Chain at Galderma, and Joannes Vermorel, CEO of Lokad, discussed the value of S&OP for companies. Vermorel critiqued S&OP as simplistic and outdated, while Vrzic emphasized its role in tactical planning. The debate highlighted the complexities of S&OP and the need for a nuanced understanding of its role in business. 00:00:00: Introduction to the debate 00:02:15: Joannes Vermorel introduces himself 00:04:29: Definition of S&OP 00:08:09: Critique on S&OP's reliance on people 00:09:53: Advocacy for machine-led problem resolution 00:11:50: Milos Vrzic's opening remarks 00:14:08: S&OP focuses on volume, not product mix 00:16:46: S&OP helps CEOs make informed decisions 00:19:07: Counter-argument: Do we need humans in S&OP? 00:22:31: Granularity of decisions exceeds human capacity 00:24:39: S&OP needed until AI replaces CEO 00:27:36: Real-time decision making in S&OP 00:29:41: Fully automated supply chain execution 00:32:00: AI's impact on P&L 00:34:14: Milos explains his support for S&OP 00:36:42: Joannes counters Milos's argument 00:40:18: Milos shares his experience at Blancpain 00:42:46: Joannes Vermorel revisits the aircraft pilots example 00:46:42: Milos discusses automation and human involvement 00:49:06: Conor asks Milos about tactical decision-making 00:51:34: Joannes talks about mastery of optionality 00:54:57: Market's lack of established automation 00:58:20: AI already making capital intensive decisions 01:02:02: Free exchange between participants begins 01:04:14: Challenges in automating supply side 01:07:16: Automation and crisis management 01:09:59: Milos introduces topic of S&OP evolution 01:11:37: Joannes' closing thoughts on technological change 01:14:09: Milos expresses willingness to test software replacement 01:15:14: End of inte...https://tube.lokad.com/videos/embed/1cda6b87-5886-4980-ae1d-9a3f9daa35c3https://tube.lokad.com/videos/watch/2489c4f8-766a-4819-9a7a-8c554144cceehttps://tube.lokad.com/static/thumbnails/0f308676-1f02-4e03-a4e8-21ecabefbf1c.jpgOptimizing Omnichannel Purchase & Allocation at Worten (with Bruno Saraiva)Full transcript available: https://www.lokad.com/tv/2024/7/4/optimizing-omnichannel-purchase-and-allocation-at-worten/ ### Summary In a conversation emblematic of Thomas Sowell's analytical style, Conor Doherty of Lokad and Bruno Saraiva of Worten Portugal discuss their supply chain optimization partnership. Saraiva articulates the shift towards a customer-centric, decision-efficient inventory management system, highlighting the necessity in today's volatile retail market. Emphasizing the importance of modern, intelligent supply chains, he notes Worten's improved stock stability and customer satisfaction. The use of Lokad's predictive technology has enabled automated, daily decision-making, freeing Worten to focus on strategic growth and supplier relations. The dialogue underscores the continuous pursuit of operational excellence and innovation in retail. ### Timestamps 00:00:00: Introduction 00:00:50: Introducing Bruno, project overview, supply chain reinvention 00:02:53: Lokad's role, embracing uncertainty, positive outcomes 00:07:29: Measuring success, ensuring availability, decision-making volume 00:10:58: Automated decisions benefits, Worten's future optimization steps ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/2489c4f8-766a-4819-9a7a-8c554144cceehttps://tube.lokad.com/videos/watch/112c52d7-abd4-44cb-9d83-b01e00f9c5dfhttps://tube.lokad.com/static/thumbnails/53fc0759-0a74-41b6-8792-b105f25d5909.jpgISF2024 Panel: Demand Planning & Human Judgement in the World of AI### Panel background The panel was first proposed by Robert Fildes (Professor Emeritus, Lancaster University) in response to Conor's [article critiquing FVA](/forecast-value-added/). This article was republished in the Q2 2024 edition of Foresight (produced by The International Institute of Forecasters, the same organization running the symposium). The panel was subsequently expanded to include Sven Crone, Nicolas Vandeput, and Alexey Tikhonov, in order to provide a more balanced array of perspectives from both academia and industry. ###Timestamps 00:00:00: Opening remarks by Robert Fildes 00:01:08: Conor Doherty introduces the panel and topic 00:03:11: Nicolas Vandeput's perspective 00:06:16: Sven Crone's presentation 00:10:34: Alexey Tikhonov's perspective 00:15:01: Need for automation in decision making 00:20:13: Sharing information between humans is waste of time 00:25:29: Perspective on human intervention 00:30:23: Evaluating a forecast 00:35:18: Financial perspective and decision making 00:40:14: Cost of forecasting errors 00:45:43: Automation and trust 00:50:27: Augmented AI and its applications 00:55:03: Impact of AI on human translators 01:00:16: Importance of clear vision in AI implementation 01:06:00: Closing thoughts and future of demand planners 01:11:50: Audience question: forecasting for hospitals 01:15:38: Audience question: model and human bias reductionhttps://tube.lokad.com/videos/embed/112c52d7-abd4-44cb-9d83-b01e00f9c5dfhttps://tube.lokad.com/videos/watch/5d9d0bf7-3caa-4181-83e7-99973120840ehttps://tube.lokad.com/static/thumbnails/5390d538-7944-4681-8d0b-2b3305432fa0.jpgSupply Chain Debate on the Demand Driven Adaptive Enterprise Model (with Carol Ptak)In a debate moderated by Conor Doherty, the viability of the Demand Driven Adaptive Enterprise (DDAE) model in real-world supply chain decision-making was examined. Carol Ptak of the Demand Driven Institute supported the DDAE model, emphasizing its focus on decoupling, strategic inventory positions, and collaboration to manage variability and enhance responsiveness. Joannes Vermorel, CEO of Lokad, countered by questioning the model's practical application and its shift from traditional cost-focused approaches. Vermorel argued for a more nuanced approach tailored to individual organizational needs. The debate highlighted the complexities of supply chain management and the differing perspectives on effective strategies. 00:00:00: Introduction by Conor Doherty 00:01:23: Debate format explanation 00:03:26: Joannes Vermorel's opening remarks 00:10:16: Carol Ptak's opening remarks 00:17:33: Joannes Vermorel's rebuttal 00:22:39: Carol Ptak's rebuttal 00:27:41: Joannes Vermorel's concluding remarks 00:29:44: Carol Ptak's concluding remarks 00:31:52: Questions from the audience 00:32:28: Challenges of decision making 00:35:20: Thoughts on theory behind DDMRP 00:38:16: Demand Driven approach during the COVID 00:41:22: Lokad's take on handling disruptions 00:42:48: DDAE and probabilistic forecasting 00:49:41: DDMRP comparison with MRP 00:57:10: Minimal technology for optimization 00:59:13: DDMRP implementations in large retail networks 01:00:32: Meaning of the flow in DDMRP 01:01:39: Adaptability at a system level 01:03:54: Can case studies be compared 01:08:08: Managing uncertainty upon uncertainty 01:12:38: Main critique of the DDMRP model 01:19:30: When DDMRP is not enough 01:25:16: Perspective on push vs pull 01:27:06: Safety stock and high variability 01:29:53: Why Demand Driven approach isn't more widespreadhttps://tube.lokad.com/videos/embed/5d9d0bf7-3caa-4181-83e7-99973120840ehttps://tube.lokad.com/videos/watch/156f67e9-3229-4919-8d24-a39886960f7ehttps://tube.lokad.com/static/thumbnails/ad1b28b0-4c9a-47fa-8c5e-86160dc8b315.jpgSupply Chain != Logistics - Ep 166Full transcript available: https://www.lokad.com/tv/2024/10/30/supply-chain-is-not-logistics/ ### Summary Conor Doherty and Joannes Vermorel delve into the distinctions between supply chain and logistics. Joannes traces the historical evolution of these terms, noting that logistics, originally a military concept, focuses on execution, while supply chain management involves decision-making. The advent of software in the late 1970s further separated these roles, with logistics handling the implementation of decisions generated by supply chain algorithms. Joannes illustrates this with examples like route optimization and the traveling salesman problem, emphasizing that modern supply chain management relies on dynamic, real-time tools to enhance efficiency and responsiveness in operations. 00:00:00: Welcome & Housekeeping 00:01:30: Evolution of logistics and supply chain terms 00:03:31: Emergence of software in supply chain 00:05:30: Logistics execution vs. supply chain decisions 00:08:09: Modern logistics: software provides routes 00:10:25: Supply chain vs. operations distinction 00:18:08: Mainstream conception of supply chain vs. logistics 00:23:11: Companies failing to distinguish supply chain and logistics 00:25:57: Supply chain optimization and automation 00:28:50: Future automation of truck drivers 00:31:28: Air France example: large-scale automation investment 00:33:45: AI automation: misconceptions and realities 00:36:29: Logistics: cost reduction through automation 00:41:20: Aerospace example: financial opportunity in decisions 00:45:01: Potential conflict: logistics vs. supply chain excellence 00:47:21: Cost of downtimes in various sectors 00:52:05: Bill of resources: parts, people, tools 00:54:27: Importance of automation in supply chain 00:57:52: FIFO: not always financially optimized 01:03:55: Mechanization progress in logistics 01:05:20: Disappearance of blue collar jobs: distant future 01:08:39: E-commerce example: blue coll...https://tube.lokad.com/videos/embed/156f67e9-3229-4919-8d24-a39886960f7ehttps://tube.lokad.com/videos/watch/4ccbbe45-a5e5-42a4-a834-0372f5b74fa2https://tube.lokad.com/static/thumbnails/2eeaa781-2d92-4737-886d-bb707f8eaeac.jpgComputational Resources in Supply ChainFull transcript available: https://www.lokad.com/tv/2024/11/28/computational-resources-in-supply-chain/ ### Summary In a recent LokadTV episode, Conor Doherty, Head of Communication at Lokad, conversed with Joannes Vermorel, CEO of Lokad, about the critical role of computational resources in supply chain optimization. Vermorel emphasized the necessity of understanding both hardware and software to make informed supply chain decisions. He likened this foundational knowledge to basic geographical awareness, essential for preventing problems and ensuring effective decision-making. Vermorel highlighted that while computers are tools for mechanizing decisions, a grasp of their capabilities and limitations is crucial. This understanding extends to programming paradigms, ensuring practitioners can optimize resources and drive better outcomes. 00:00:00: Introduction to computational resources in supply chain 00:02:21: Importance of computational resources in supply chain 00:07:04: Mechanical sympathy in supply chain context 00:09:38: Decision making with computing hardware 00:12:42: Illusion of expertise without depth 00:13:59: Modern supply chain dependence on computing 00:18:32: Hardware speed impacts on decisions 00:21:40: Software inefficiencies increase costs 00:24:42: Properties and limitations of transactional databases 00:27:59: Rising cloud costs from inefficiency 00:30:09: Simpler and cheaper software recipes 00:32:40: Extreme waste in computing resources 00:36:14: Hardware advancements vs software lag 00:40:48: Importance of vendor selection knowledge 00:45:15: Theoretical vs practical knowledge 00:50:00: Orders of magnitude in computer efficiency 00:54:33: Performance considerations in inventory replenishment 00:56:18: Iterative process for result quality 00:58:50: Disruption requires reengineering 01:00:18: Next steps for practitioners 01:02:17: Paying for vendor inefficiencies 01:05:04: Financial impact of decisions 01:07:16: Co...https://tube.lokad.com/videos/embed/4ccbbe45-a5e5-42a4-a834-0372f5b74fa2https://tube.lokad.com/videos/watch/bd4bfcc8-f9d4-4d5c-982f-ae423e62c400https://tube.lokad.com/static/thumbnails/2e6f1d62-705a-4df3-9cb0-37ecc6670421.jpgPrévision-planification pour une Supply Chain moderne, avec Lokad, Maisons du Monde, IskayPetPrévision-planification pour une Supply Chain moderne, avec Lokad, Maisons du Monde, IskayPethttps://tube.lokad.com/videos/embed/bd4bfcc8-f9d4-4d5c-982f-ae423e62c400https://tube.lokad.com/videos/watch/eb7a0d76-bbeb-491c-8009-250024659ed5https://tube.lokad.com/static/thumbnails/c1ba74a2-3ca9-4b6a-bf84-af514c03b540.jpgTokic's AI journey - Trial & errors, then efficient predictive Supply Chain with Lokad (with Josip Kelava)Discover how Tokic, a leader in the Croatian automotive aftermarket, is transforming its operations with AI and data-driven strategies. In this exclusive interview from Athens, CTO Josip Kelava reveals how Tokic is leveraging Lokad’s expertise to tackle complex supply chain challenges and automate critical processes. By prioritizing clean, structured data and integrating a new ERP system, Tokic is paving the way for next-generation innovations, including predictive maintenance and seamless decision-making. With Lokad as a trusted partner, Tokic is not just keeping up with industry trends—it’s setting the standard for the future of the independent aftermarket.https://tube.lokad.com/videos/embed/eb7a0d76-bbeb-491c-8009-250024659ed5https://tube.lokad.com/videos/watch/d71e5a5c-53cc-4cae-a0c7-25de60e9ab08https://tube.lokad.com/static/thumbnails/37eb7942-9506-4598-bdbc-11f3819e5583.jpgSpairliners x Lokad x Total Aviation (at MRO Europe)Spairliners x Lokad x Total Aviation (at MRO Europe)https://tube.lokad.com/videos/embed/d71e5a5c-53cc-4cae-a0c7-25de60e9ab08https://tube.lokad.com/videos/watch/da2eae6b-9adb-4ec6-a43b-8277da97e139https://tube.lokad.com/static/thumbnails/9421c220-4a72-41b7-b46a-65cf128c9389.jpgLokad at Supply Chain Event 2024Recorded in November 2024 in Paris, Conor Doherty (Communications Director at Lokad) reports on Lokad's second appearance at Supply Chain Event. This yearly French-language event is a major gathering of solution-providers in the industry. This time, Lokad hosted a panel discussion with French retail giant Maisons du Monde to discuss the intricacies of their supply chain partnership.https://tube.lokad.com/videos/embed/da2eae6b-9adb-4ec6-a43b-8277da97e139https://tube.lokad.com/videos/watch/f7f38026-c2f2-4a1d-bc17-0e9a1e2f44a9https://tube.lokad.com/static/thumbnails/3c0dac22-f255-4268-9816-2544bd1b8504.jpgNatural Stupidity vs. Artificial Intelligence### Summary In a recent LokadTV episode, Conor Doherty and Joannes Vermorel discussed the inherent flaws in mainstream supply chain management, particularly the over-reliance on AI. Vermorel criticized longstanding practices like Requests for Proposals, time series forecasting, safety stock formulas, and service levels, arguing they are outdated and economically unsound. He emphasized that AI cannot rectify these deep-seated issues, as it is not yet at human-level intelligence. Vermorel suggested that practical, experience-based adjustments by practitioners often compensate for these flawed methods. The conversation concluded with a Q&A session, highlighting the challenge of removing entrenched processes in large companies. ### Timestamps 00:00:00: Introduction and clarification of the topic 00:02:55: Companies revisiting old approaches with AI 00:04:28: Failures of smart engineers in supply chain 00:05:44: Lokad's automated website translation with LLMs 00:09:15: The four key proofs for failures 00:12:24: Why RFPs are dysfunctional 00:21:28: Why time series are dysfunctional 00:32:47: Why safety stocks are dysfunctional 00:50:04: Why service levels are dysfunctional 01:09:59: Audience questions 01:32:15: Closing thoughtshttps://tube.lokad.com/videos/embed/f7f38026-c2f2-4a1d-bc17-0e9a1e2f44a9https://tube.lokad.com/videos/watch/9d13e730-0eb8-4b52-9094-992cb3b6daeahttps://tube.lokad.com/static/thumbnails/04604d67-aaed-4742-9608-6da5150c1c16.jpgAI-Powered Supply Chain optimization at Tokic groupAI-Powered Supply Chain optimization at Tokic grouphttps://tube.lokad.com/videos/embed/9d13e730-0eb8-4b52-9094-992cb3b6daeahttps://tube.lokad.com/videos/watch/992ed137-df96-4edb-8ff4-e9e37e6ecf26https://tube.lokad.com/static/thumbnails/c63f694f-4ee3-4700-a356-237e6710ac6d.jpgOptimizing Scheduling in Aerospace (with Simon Schalit)In a recent interview, Conor Doherty, Director of Communication at Lokad, and Simon Schalit, COO, discussed Lokad's breakthrough in scheduling optimization for aerospace, particularly in aircraft manufacturing and MRO operations. They highlighted the complexity of coordinating numerous interdependent parts, skills, and equipment, which traditional methods struggle to manage. Lokad's approach shifts from a Bill of Materials (BOM) to a Bill of Resources (BOR), considering all necessary resources and their variability. Utilizing computational algorithms, Lokad can quickly generate practical solutions, minimizing financial risk and downtime. This integration of automation and human strategic insights is crucial for efficient and effective scheduling in complex environments. ****** Timestamps 00:00:00: Introduction to scheduling complexities 00:02:30: Interdependence and service level challenges in aerospace 00:06:14: Discussing Bill of Materials and Resources 00:13:15: Daily scheduling challenges and human limitations 00:20:45: Introducing algorithms for efficient scheduling 00:28:30: Emergency measures and AOG pricing in aerospace 00:36:02: Mathematical perspective on scheduling impacts 00:43:47: Complexity and constraints in task scheduling 00:50:17: Leveraging computational power for scheduling optimization 00:57:39: Critiquing FIFO's limitations in MRO 01:04:15: Decision-making and automation in supply chainhttps://tube.lokad.com/videos/embed/992ed137-df96-4edb-8ff4-e9e37e6ecf26https://tube.lokad.com/videos/watch/112c6a4c-0119-4dbe-a63d-fde048a551edhttps://tube.lokad.com/static/thumbnails/c6b80ddd-5083-4f35-b72b-fdd8af1a203b.jpgWhat is a Supply Chain Scientist? (with Simon Schalit)In an interview, Conor Doherty of Lokad speaks with Simon Schalit, COO, about the crucial role of a Supply Chain Scientist at Lokad. Schalit explains that these scientists are not just data experts but also specialists in supply chain management, responsible for optimizing and automating decisions related to inventory and pricing. They build algorithms to ensure efficient purchasing and dispatch, aiming for maximum return on investment. Unlike typical data scientists, supply chain scientists immerse themselves in understanding business processes and strategies, translating them into optimization algorithms. This role involves data analysis, client interaction, and business acumen, making it essential for driving efficiency and profitability in businesses. ****** Timestamps 00:00:00: Introduction to Lokad and its mission 00:00:59: Roles and goals in supply chain improvement 00:02:59: Decision-making and automation 00:05:42: Impact of supply chain decisions on product lifecycle 00:08:10: Role of a supply chain scientist 00:10:56: Cost of being out of stock 00:13:30: Translating business understanding into equations 00:15:50: Pit crew analogy for supply chain optimizationhttps://tube.lokad.com/videos/embed/112c6a4c-0119-4dbe-a63d-fde048a551edhttps://tube.lokad.com/videos/watch/974150ea-90f5-4d41-a7cc-9f10702fa4c9https://tube.lokad.com/static/thumbnails/0ce157ea-2b84-49d7-977b-27a3ceaaa5d0.jpgBill of Materials vs Bill of ResourcesBill of Materials vs Bill of Resourceshttps://tube.lokad.com/videos/embed/974150ea-90f5-4d41-a7cc-9f10702fa4c9https://tube.lokad.com/videos/watch/f8cc05c9-15d3-497c-96e1-fd8dae3f665dhttps://tube.lokad.com/static/thumbnails/daa614f3-91f2-46bb-ab3c-3b6e9c5813e8.jpgOptimizing Aviation Pool Management at Spairliners (with Cyril Gaudard)### Full Transcript **Tristan Oualid**: To mark our 10-year anniversary of our partnership with Spairliners, Lokad has traveled to Hamburg to meet with some of the people who work so hard to make this project a success. I'm delighted to be joined by Cyril Gaudard. First of all, thank you Cyril for taking the time to talk with us. **Cyril Gaudard**: Good morning, it's a pleasure to be here. **Tristan Oualid**: Could you maybe start by introducing yourself and your position at Spairliners? **Cyril Gaudard**: Yes, I'm Cyril Gaudard, and I've been with Spairliners for six and a half years. Currently, I'm a team leader in the Asset Management Group. Essentially, asset management at Spairliners is about ensuring we have the right availability of components for our customers at the best cost possible. With Lokad's expertise, this is one of the main criteria we focus on in our daily operations. We use procurement, meaning we buy parts and source them on the market. We also engage in sales and divestments, and in those aspects, that's where we work together. **Tristan Oualid**: What are the specific problems that Lokad helps you with? **Cyril Gaudard**: Lokad helps us target our pool performance, which includes ensuring availability. One of the main outputs Lokad provides is defining how to reach this availability at the best cost possible. This means prioritizing purchases and investments in the pool for components, which will yield the most performance for the lowest cost. Lokad approaches this as the service level per dollar spent. Other challenges include pool balancing, as Spairliners has different warehouses across Europe and the world. Lokad assists us in understanding where to locate our inventory and offers modules for getting new customers, investment recommendations, and optimal pool sizing. **Tristan Oualid**: The concept of service level per dollar of inventory is very interesting. Can you explain a bit more how this works? **Cyril ...https://tube.lokad.com/videos/embed/f8cc05c9-15d3-497c-96e1-fd8dae3f665dhttps://tube.lokad.com/videos/watch/2f980bd1-cc4f-4631-8973-fe09c41d0e50https://tube.lokad.com/static/thumbnails/c4fded53-9aa1-4663-b19a-f7ccce456e4c.jpgAutomating Supply Chain Decisions at Spairliners (with Remi Quentin)Automating Supply Chain Decisions at Spairliners (with Remi Quentin)https://tube.lokad.com/videos/embed/2f980bd1-cc4f-4631-8973-fe09c41d0e50https://tube.lokad.com/videos/watch/7342251d-7686-4b46-9c13-5eb20ee8de2bhttps://tube.lokad.com/static/thumbnails/c81ca4df-d9ca-4740-9c63-cf200208216c.jpgDefining Optimal Onsite Stock at Spairliners (with Elizabeth Peters)Defining Optimal Onsite Stock at Spairliners (with Elizabeth Peters)https://tube.lokad.com/videos/embed/7342251d-7686-4b46-9c13-5eb20ee8de2bhttps://tube.lokad.com/videos/watch/909d6e22-35ee-410b-9858-0da5b9cab9c4https://tube.lokad.com/static/thumbnails/10e79a86-cbb0-4f52-82b6-bae28316935a.jpg10 Years of Success: Optimizing MRO Operations at Spairliners10 Years of Success: Optimizing MRO Operations at Spairlinershttps://tube.lokad.com/videos/embed/909d6e22-35ee-410b-9858-0da5b9cab9c4https://tube.lokad.com/videos/watch/13ac8ebc-18c1-4d8b-9f5c-1c2cdc463c8ehttps://tube.lokad.com/static/thumbnails/593ba209-91b1-405a-b0b8-b53519c17e35.jpgIn Defense of S&OP (with Eric Wilson)00:00:00: Introduction to the interview 00:02:08: S&OP book and debate 00:08:01: S&OP as a business process 00:13:25: Strategic decisions in aviation 00:18:12: S&OP's link to company maturity 00:23:51: Strategic briefs and Amazon's success 00:30:23: S&OP decision dilution and ownership 00:37:23: Software-centric information flow in S&OP 00:44:13: Executive reliance on system advice 00:50:11: S&OP meeting cycles and efficiency 00:55:33: Market share strategy and decision-making 01:01:46: S&OP as a journey of maturity 01:07:04: Costs and benefits of S&OP implementation 01:13:15: Overstaffing toxicity and lean teams 01:19:04: Microsoft's S&OP and innovation 01:24:47: S&OP's rigidity versus flexibility 01:30:22: S&OP's future and technology trajectory 01:36:36: Job evolution and digitalization's impact 01:43:28: Challenging traditional operations with S&OP ### Summary In a recent LokadTV interview, Conor Doherty hosted a discussion between Joannes Vermorel, CEO of Lokad, and Eric Wilson, Director of Thought Leadership at the Institute of Business Forecasting (IBF), focusing on Sales & Operations Planning (S&OP). Wilson, advocating for S&OP, highlighted its role in aligning company functions for coordinated decision-making and its benefits for mature companies. Vermorel critiqued S&OP as outdated, advocating for a software-centric approach to enhance efficiency and reduce human intervention. The debate covered the effectiveness of meetings, incremental versus radical changes, opportunity costs, and the future of S&OP, with both agreeing on the need for significant technological advancements.https://tube.lokad.com/videos/embed/13ac8ebc-18c1-4d8b-9f5c-1c2cdc463c8ehttps://tube.lokad.com/videos/watch/56f81118-80f0-4aee-bc31-32ea9589ea4ahttps://tube.lokad.com/static/thumbnails/8c3c6999-2d6c-4451-83f1-ec74e05c6974.jpgHeuristics in Supply ChainFull transcript available: https://www.lokad.com/tv/2025/2/12/heuristics-in-supply-chain 00:00:00: Introduction to heuristics in supply chain 00:01:14: Examples of heuristics: min-max inventory, FIFO, ABC analysis 00:03:15: Origins and informal use of heuristics in companies 00:06:28: Human vs. algorithmic approaches to problem-solving 00:09:58: Heuristics from a computer science perspective 00:13:27: The problem with layman perspectives on heuristics 00:17:22: Supply chain heuristics and the illusion of causality 00:22:00: The need for metrics to assess heuristic effectiveness 00:26:35: Difference between algorithms and heuristics in practice 00:30:26: Experimental validation and empirical optimization 00:36:33: Misleading intuition in supply chain decisions 00:41:27: Example of Airline boarding strategies and intuition 00:46:47: The absence of financial metrics in supply chain decisions 00:53:05: Human limitations in complex scheduling vs. algorithms 00:58:47: Closing thoughts and takeaways ### Summary In a recent LokadTV episode, Conor Doherty, Communication Director at Lokad, interviewed Joannes Vermorel, CEO of Lokad, about heuristics in supply chain management. They discussed the use of simple problem-solving tools like FIFO and ABC analysis, highlighting their limitations and the need for more robust mathematical approaches. Joannes explained that while heuristics offer straightforward solutions, they often lack consistency and empirical validation. He emphasized the importance of distinguishing between true heuristics and arbitrary numerical recipes, advocating for real-world assessments and experiments to validate supply chain practices. The conversation underscored the necessity of critical evaluation and empirical evidence in optimizing supply chain decisions. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/56f81118-80f0-4aee-bc31-32ea9589ea4ahttps://tube.lokad.com/videos/watch/ac85e4e4-e10d-48d1-8b2a-1bacbc8622aahttps://tube.lokad.com/static/thumbnails/dc99ca16-c772-4512-ab3d-09f4b0edc782.jpgSupply Chain Debate - Is Forecast Value Added (FVA) a best practice or time-waster (with Jeff Baker)Supply Chain Debate - Is Forecast Value Added (FVA) a best practice or time-waster (with Jeff Baker)https://tube.lokad.com/videos/embed/ac85e4e4-e10d-48d1-8b2a-1bacbc8622aahttps://tube.lokad.com/videos/watch/3ea47983-4b80-4cf8-b2c9-eb913cea88cehttps://tube.lokad.com/static/thumbnails/3feb4a61-2990-4648-a092-2466fa33740e.jpgA decade of auditing startups### Summary In a recent LokadTV episode, Conor Doherty interviewed Joannes Vermorel, CEO of Lokad, about his decade-long experience conducting technical audits of startups. Vermorel's "lightning tech audits" offer venture capitalists expert evaluations of technological stacks, diverging from traditional methods by focusing on dynamic, context-specific assessments. His process involves intensive, one-day evaluations, including interviews with CTOs and engineering teams to gauge code quality and team functionality. Vermorel emphasizes the importance of passion, clear documentation, and wise resource use in tech development. His insights reveal significant industry oversights and highlight best practices for both investors and tech entrepreneurs. ### Timestamps 00:00:00: Introduction to startup tech audits 00:01:42: How VCs led Joannes into tech audits 00:03:24: Tech audits as a revenue stream 00:05:08: Evaluating software in startups 00:06:36: Joannes’ experience in machine learning 00:08:50: Key aspects of a tech audit 00:10:02: Security vs. correctness trade-offs 00:11:46: Writing investor reports effectively 00:14:57: Evaluating startups beyond checklists 00:17:04: Adapting audits to business context 00:20:24: Interviewing CTOs and reviewing code live 00:24:12: Assessing developer familiarity and leadership 00:28:22: Judging developer competency 00:30:49: Red flags in code quality 00:33:47: Insights from commit history 00:37:03: Cloud cost sustainability 00:42:14: LLMs disrupting NLP startups 00:46:29: Finding lucrative software niches 00:50:32: Risks of technical debt 00:55:34: Over-investing in scalability 00:59:59: Clear writing signals good engineering 01:04:08: Why tech audits are rare in investments 01:07:12: Closing remarks ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/3ea47983-4b80-4cf8-b2c9-eb913cea88cehttps://tube.lokad.com/videos/watch/058fdd1d-005d-407c-bc70-87b747b02b90https://tube.lokad.com/static/thumbnails/d7a6c7dc-2e64-427b-869c-c8aa0e67031a.jpgNo Such Thing as an Optimal Solution (with Ian Wright)Full transcript available: https://www.lokad.com/tv/2025/2/20/no-such-thing-as-an-optimal-solution/ ### Summary 00:00:00: Introduction to the interview and the guest 00:01:41: Ian Wright’s early career and founding Logistics Sciences 00:05:33: The concept of optimality in supply chain 00:10:06: Optimization, uncertainty, and real-world disruptions 00:18:18: Traditional optimization limits and pandemic impact 00:25:27: Lokad’s response and adapting supply chains 00:32:45: Challenges of deterministic models and tradeoffs 00:41:09: Service levels, financial models, and sanity checks 00:50:48: Human expertise, heuristics, and iterative modeling 00:58:39: The cost of human intervention in supply chains 01:06:24: Strategy as engineering and decision automation 01:14:06: Walmart’s decentralized model and breaking silos 01:21:39: Feedback loops and continuous supply chain improvement 01:29:18: Achieving optimality and navigating vendor hype 01:35:42: Final thoughts on supply chain technology trends ### Summary In a recent LokadTV interview, Conor Doherty hosted Ian Wright, founder of Logistics Sciences, and Joannes Vermorel, CEO of Lokad, to discuss the notion that there are no optimal decisions in supply chain management. They challenged traditional views on efficiency, highlighting the complexities and uncertainties that defy textbook ideals. Ian and Joannes emphasized that different stakeholders have varying definitions of optimality, and practical solutions must align with business realities. They discussed the limitations of traditional optimization methods and the importance of human judgment in strategic decision-making. The conversation underscored the need for models that handle uncertainty and focus on true economic outcomes. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ Read our blog: https://blog.lokad.com/ ******https://tube.lokad.com/videos/embed/058fdd1d-005d-407c-bc70-87b747b02b90https://tube.lokad.com/videos/watch/247c0219-3537-49cd-ac9e-8b636bbf0b1ahttps://tube.lokad.com/static/thumbnails/1c1ea1d6-be19-459b-ad9b-cf8edc1f238a.jpgCollaborative Supply Chain00:00:00: Introduction to collaborative supply chain 00:01:37: Collaboration beyond client-vendor relationships 00:03:39: Tactical versus strategic collaboration 00:05:01: Challenges in smooth tactical collaboration 00:06:48: The role of data sharing in collaboration 00:08:08: Benefits of sales and stock data sharing 00:09:59 Market share insights for suppliers 00:11:44: Why data sharing is still rare 00:13:07: IT friction in data sharing 00:15:34: Supplier hesitation in adopting shared data 00:17:10: Lokad's solution for data sharing at no cost 00:19:43: How Lokad enables seamless data access and scalability 00:22:25: Suppliers' onboarding and user experience 00:24:20: Maintaining analytics and basic support 00:26:05: Addressing skepticism about its impact 00:27:51: The problem of IT friction in practice 00:29:15: Lokad’s affordability as a game changer ### Summary In a recent LokadTV episode, Conor Doherty and Joannes Vermorel discuss the transformative potential of collaborative supply chains. Vermorel emphasizes that true collaboration transcends basic transactional relationships, requiring strategic synchronization and real-time data sharing across companies. He highlights the challenges posed by traditional IT systems and the reluctance to invest in long-term strategies. Lokad's innovative platform offers a solution by enabling secure, efficient data sharing, reducing friction and enhancing decision-making. Vermorel argues that while the concept isn't new, Lokad's approach makes it practical and affordable, encouraging companies to adopt collaborative practices for more resilient supply chains.https://tube.lokad.com/videos/embed/247c0219-3537-49cd-ac9e-8b636bbf0b1ahttps://tube.lokad.com/videos/watch/bb769450-d3ae-4a10-824a-8a1b4c10aa3ehttps://tube.lokad.com/static/thumbnails/27bc147b-55cd-4024-8909-6b696b6bd56c.jpgBad Actors in Tech (with Anthony Miller)Bad Actors in Tech (with Anthony Miller)https://tube.lokad.com/videos/embed/bb769450-d3ae-4a10-824a-8a1b4c10aa3ehttps://tube.lokad.com/videos/watch/80bcff67-d03a-401d-91f5-dd65a7852751https://tube.lokad.com/static/thumbnails/4432ac43-3286-416f-aa61-8f4b4992f702.jpgMega Investment in AI00:00:00: Introduction to AI investments by governments 00:04:42: OpenAI's success with ChatGPT 00:06:29: Difficulty in deploying capital in software 00:07:22: Risk of predicting future AI models 00:12:35: DeepSeek's cost-effective AI model 00:14:22: Y Combinator's wide-spread investment approach 00:15:27: AI investment attracting non-AI companies 00:17:12: Overabundance of funds in AI market 00:18:29: SoftBank's hit or miss investment strategy 00:19:52: France's failed investment strategies 00:22:32: AI progress is geographically dispersed 00:23:53: Mega investments in AI are a distraction 00:25:02: Governments' lack of understanding in AI 00:27:00: Incremental progress in AI over 50 years 00:30:18: Control over AI may not grant superiority 00:31:40: Argument against super intelligence 00:33:54: Contributions come from diverse sources 00:39:26: Regulation prevents job creation 00:46:31: Innovation won't happen in government programs 00:50:50: Pay attention to domain-specific innovations ### Summary In this episode of LokadTV, Conor Doherty and Joannes Vermorel discuss the recent AI investments announced by governments, including the Trump Administration's $500 billion and the European Union's 200 billion Euro commitments. Vermorel critiques these large-scale investments, arguing they are often inefficient and wasteful, with taxpayers bearing the costs. He emphasizes that successful innovations typically arise from focused, independent efforts rather than bureaucratic consortiums. Vermorel also questions the vague objectives of these investments and their impact on job creation, particularly in countries with regulatory issues. He advises focusing on specific, actionable innovations rather than state-led initiatives.https://tube.lokad.com/videos/embed/80bcff67-d03a-401d-91f5-dd65a7852751https://tube.lokad.com/videos/watch/2e17bf6c-424b-4457-b85d-5b0e6344e3c9https://tube.lokad.com/static/thumbnails/aa2c70ad-f6a6-474c-b3e2-58eb78c5c657.jpgConference with Joannes Vermorel at CentraleSupélec (French)00:00:00: Lokad's founding story and early years 00:02:31: Misconceptions about Supply Chain optimization 00:04:31: Existing supply chain theories did not work 00:06:32: The paradox of forecasting failures 00:08:33: How "forecasting nothing" beat competitors 00:10:25: The challenge of rejecting established ideas 00:12:00: Pivoting to probabilistic forecasting 00:14:07: The importance of extreme demand scenarios 00:16:32: The complexity of enterprise data integration 00:20:55: Why supply chain models on paper fail 00:27:30: Engineering problems in enterprise AI adoption 00:35:00: The impact of COVID-19 on supply chains 00:42:49: LLMs are text-based, not mathematical 00:50:25: The financial industry's parallel evolution 01:09:00: Q&A and final remarks ### Summary Joannes Vermorel, CEO and Founder of Lokad, delivered a lecture in French, sharing his journey in Supply Chain management. Vermorel recounted founding Lokad after graduating from École Normale Supérieure and shifting focus from bioinformatics to Supply Chain challenges. He discussed the development of Envision, Lokad's programming language, and the company's evolution since 2007. Vermorel criticized traditional Supply Chain theories, likening them to astrology, and emphasized the importance of challenging consensus. He highlighted Lokad's success with probabilistic methods and the impact of COVID-19 on Supply Chain robotization. Vermorel predicted the obsolescence of traditional roles and encouraged students to drive the industry's revolution.https://tube.lokad.com/videos/embed/2e17bf6c-424b-4457-b85d-5b0e6344e3c9https://tube.lokad.com/videos/watch/c0cf416b-30ca-4ecf-a130-fc58fc7ecb9ahttps://tube.lokad.com/static/thumbnails/9e74904a-6d98-4218-9a1f-4f53bec39158.jpgLokad x Le Figaro _ Une Révolution dans la Supply Chain QuantitativeLokad x Le Figaro _ Une Révolution dans la Supply Chain Quantitativehttps://tube.lokad.com/videos/embed/c0cf416b-30ca-4ecf-a130-fc58fc7ecb9ahttps://tube.lokad.com/videos/watch/4f00edc5-84e8-4504-b4b8-583196f42111https://tube.lokad.com/static/thumbnails/7e94c59d-8139-44c0-bb15-8fcbef7dda79.jpgSupply chain market researchSupply chain market researchhttps://tube.lokad.com/videos/embed/4f00edc5-84e8-4504-b4b8-583196f42111https://tube.lokad.com/videos/watch/31d33d5e-1428-4da1-8596-b8ffa2b1e54bhttps://tube.lokad.com/static/thumbnails/b2998c9b-86f5-48b4-9f54-80ce4191425c.jpgAnalyzing Oil and Gas Supply Chain### Summary In a reflective dialogue, Conor Doherty and Joannes Vermorel delve into supply chain challenges in the oil and gas industry, likening them to managing a miniature city rather than straightforward enterprises. Vermorel critiques conventional methods focused on criticality, advocating for automation and numerical models to enhance efficiency. He addresses the financial impact of long-tail events, emphasizing streamlined inventory practices over stockpiling. Vermorel highlights the inadequacy of systems like ERPs in decision-making, advocating for systems of intelligence to navigate future uncertainties. The conversation underscores the industry's conservative nature, where agility and digital optimization are crucial for advancing supply chain strategies. 00:00:00: Introduction to oil and gas supply chain 00:05:02: High stakes and offshore logistics 00:08:20: Financial impacts of supply chain downtime 00:13:54: Complexity and automation in supply chains 00:16:15: Misunderstanding impacts planning 00:18:39: Inventory affects uptime 00:20:33: Oil price impacts profitability 00:23:00: Right inventory for efficient uptime 00:25:10: Optimization beyond spreadsheets 00:28:58: ERP's decision-making limitations 00:31:10: Excel as decision tool 00:33:15: Systems of records' importance 00:37:00: Approximate correctness in decisions 00:38:10: Decision focus under tariffs 00:40:30: Numerical recipes enhance focus 00:43:37: Engineering challenge distractions 00:46:10: Large scale reduces agility 00:51:30: Speed and advocacy for numerical recipes 00:53:00: Pricing's role in the supply chain 00:57:19: Oil as civilization's foundation 00:59:00: AI and clerical automationhttps://tube.lokad.com/videos/embed/31d33d5e-1428-4da1-8596-b8ffa2b1e54bhttps://tube.lokad.com/videos/watch/03f16850-d6c0-4bd2-aa2d-c90bac000bachttps://tube.lokad.com/static/thumbnails/5cbe3f98-bd43-42f1-bdb1-d138c72e6feb.jpgWhy Supply Chain Digital Transformations Fail (Eric Kimberling)### Summary In their discussion on supply chain digital transformations, Eric Kimberling and Joannes Vermorel highlight frequent failures due to vendor-driven pressures and misaligned priorities. Kimberling, guiding Third Stage Consulting Group, advocates for technology-agnostic strategies, emphasizing business needs over mere software upgrades. He warns against rushed decisions driven by vendors that often fail to deliver transformative outcomes. Vermorel underscores the importance of leveraging existing systems with innovative add-ons rather than disruptive replacements. Both leaders stress aligning transformation efforts with tangible business goals and underscore change management as vital for success. They advocate for gradual, mindful adoption of technology, ensuring objectives are defined and risk is managed. 00:00:00: Eric Kimberling and Third Stage introduction 00:04:31: Focus on people over tech in projects 00:06:14: Correctly framing digital transformations 00:08:08: Overcoming incrementalism in transformations 00:10:53: Vendor biases risk misguiding efforts 00:12:40: Challenges in forced cloud migrations 00:14:46: Low value in upgrading systems or records 00:19:26: System sensitivities and transformation impacts 00:21:38: Big company vulnerabilities in transformation 00:23:39: Leadership issues increase risk aversion 00:26:22: Lack of strategic perspective in transformations 00:29:42: Importance of mechanical sympathy in leadership 00:32:42: Data latency hampers distributed computing 00:35:42: High costs of terabyte data processing 00:38:38: Tech transformation risk analysis 00:41:43: Visionary strategies for digital transformations 00:44:25: Balancing project budgets with returns 00:47:42: Realistic cost expectations in transformations 00:50:58: Software feature overload hinders productivity 00:53:29: Focus on business processes over tech 00:56:39: Internal management of tech transformations 00:59:45: Bureaucracy in strateg...https://tube.lokad.com/videos/embed/03f16850-d6c0-4bd2-aa2d-c90bac000bachttps://tube.lokad.com/videos/watch/05eaafcd-8ecb-4b5e-9679-d87da8638360https://tube.lokad.com/static/thumbnails/81f37647-fb17-4a01-9a0b-6027b5187a0a.jpgWhy FIFO Fails - Supply Chain in 3 minutes### Full Transcript First in, first out, or FIFO, is one of the most common tools for prioritizing manufacturing and repair decisions. However, many are skeptical about how effective it truly is—and honestly, with good reason. So, today we’ll ask and answer three simple questions: One, what is FIFO? Two, what’s the problem with FIFO? And three, how can you do better? FIFO is a very simple tool for helping practitioners make decisions when presented with lots of complex options, typically in situations with significant uncertainty. By “complex,” we mean scenarios where the best feasible sequence of actions is very difficult to identify, but people still have to decide. For example, imagine you are the manager of a repair facility, and three engines are waiting to be repaired. With FIFO, you simply pick the engine that has been waiting the longest—the first one to arrive—and allocate resources to it. First in, first out. It really is that simple. The complexity in this scenario lies in trying to identify the best feasible repair sequence. With three engines, there are already six possible sequences. The more engines you have, the more potential combinations exist. Critically, each sequence carries a different projected financial impact. This leads us to the second question: what’s wrong with FIFO? The problem with FIFO is that it focuses exclusively on waiting time and ignores all other potential optimization factors. Many would argue, myself included, that potential financial impact far outweighs basic waiting time. For example, repairing engine C first might return a plane to circulation quickly, generating a higher financial return than repairing engines A or B first. That might be because engines A and B are missing critical parts, tools, or personnel—constraints that do not apply to engine C. In fact, choosing to repair engines A or B first can lead to two serious forms of financial waste. First, direct waste: starting repairs you cannot complet...https://tube.lokad.com/videos/embed/05eaafcd-8ecb-4b5e-9679-d87da8638360https://tube.lokad.com/videos/watch/56f0a99b-05d1-4131-9648-54b97b087763https://tube.lokad.com/static/thumbnails/06fe2f8f-c5d3-4c43-a5a5-e98cd4ac969d.jpgHas AI Replaced Consultants? - Ep 187In the world of consulting, Joannes Vermorel from Lokad exposes the superficiality behind the industry’s reliance on perceived expertise rather than substantive knowledge. Vermorel critiques the entrenched idea that consultants offer unmatched insight, suggesting that top executives seek validation over real expertise. He argues that AI, while not ready to supplant consultants entirely, challenges the myths around their expertise. With AI’s rise, especially models like GPT-4, the consulting role's reliance on symbolic prestige and psychological support rather than genuine insight becomes evident. This shift hints at AI-driven transformation, necessitating adaptability and re-skilling for future corporate landscapes. 00:00:00: Introduction: The reality of consulting experience. 00:05:41: Isolation felt in top management roles. 00:07:15: Difficulties attracting talent due to brand issues. 00:10:44: AI threatens consultants' perceived expertise. 00:13:13: AI won't displace most consultants. 00:17:35: AI mimics expert insights without real expertise. 00:20:03: Limits of AI in personal interactions. 00:21:00: AI challenges the misconception of consultant expertise. 00:22:40: Critique on Gen AI in supply chains. 00:29:49: Software issues dominate supply chain problems. 00:33:27: AI expedites market research processes. 00:38:02: Consultants often provide moral rather than expertise. 00:42:43: Demands of expertise translate into complex work. 00:44:11: Expertise facade exposed by AI advancements. 00:49:15: Consultancy future stable despite AI changes. 00:50:52: AI-driven automation alters supply chain dynamics. 00:57:11: Automating routine tasks poses existential risk. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ ******https://tube.lokad.com/videos/embed/56f0a99b-05d1-4131-9648-54b97b087763https://tube.lokad.com/videos/watch/a20af1d5-defc-420e-a327-27011a45b8a8https://tube.lokad.com/static/thumbnails/73fc5b24-2e78-4a98-886d-d231f4618b5d.jpgWhat Really Makes a Great Supply Chain Practitioner? (with Philip Auinger)00:00:00: What makes someone good at supply chain 00:00:42: Career Companion and gaps in soft skills 00:02:18: Theory vs. practice in supply chain education 00:06:29: Communication mistakes and reframing messages 00:09:55: Why formal education underdelivers in supply chain 00:15:48: LLMS, writing, and thinking in modern education 00:20:30: LLMs as research tools vs. shallow prompts 00:24:58: Teaching leadership through frustrating exercises 00:31:40: The Excel debate and importance of sense-checking 00:36:50: Must-have vs. nice-to-have supply-chain tools 00:42:40: Agentic AI and future digital fluency 00:45:55: AI-driven job disruption in analytical roles 00:48:40: From mechanization to collaboration with partners 00:52:00: Final thoughts: high-level thinking vs. automation 00:53:05: Lifelong curiosity and value of soft skills ### Summary In a dialogue hosted by Conor Doherty, Philip Auinger and Joannes Vermorel explore what makes a great supply chain practitioner. Philip, leveraging his supply chain experience, highlights the importance of bridging analytical prowess with interpersonal skills, a gap often seen in the industry. Founded in 2019, Philip's company, Career Companion, addresses this shortfall by offering interactive workshops to foster practical application of theories for corporate and academic audiences. Joannes critiques outdated academic models, underscoring the necessity of effective communication. They discuss AI's impact on education, asserting that core critical thinking remains vital amidst technological advancements. Both emphasize embracing interpersonal interactions in future supply chain roles. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ ******https://tube.lokad.com/videos/embed/a20af1d5-defc-420e-a327-27011a45b8a8https://tube.lokad.com/videos/watch/6742962b-9c48-4cc8-8a15-d40803edde11https://tube.lokad.com/static/thumbnails/b5ebf1dc-5cdc-4e87-a03c-d17c1cef5901.jpgExplaining Optimization to Executives (with Adam Dejans Jr & John Elam)00:00:00: Supply chain optimization overview and Toyota context 00:07:28: Communicating value to executives; decisions and money 00:12:45: Digital transformation: simplifying complexity at scale 00:17:49: Embracing modern supply chain methods and language 00:24:00: Unfiltered data and edge cases in production readiness 00:29:44: Improving decisions: objections, disruptions, and forecasting 00:34:05: Safe decisions and managing supplier risk 00:36:23: Toy problems and real-world uncertainty in supply chain 00:41:13: Empowering executives, scenario testing, and ROI 00:46:10: Business impact: moving beyond accuracy metrics 00:49:45: Demand is engineered: accessories, forecasts, and history 00:55:01: Co-authoring optimization and the value of relationships 01:00:51: Stakeholder alignment, culture, and management tactics 01:09:29: Driving digital transformation and changing KPIs 01:15:19: Software, incentives, and lessons from business giants 01:21:17: Audience, language, and effective communication; book advice ### Summary In an interview on LokadTV, hosted by Conor Doherty, supply chain optimization takes center stage with speakers Joannes Vermorel, CEO of Lokad, Adam Dejans Jr, and John Elam from Toyota. The dialogue explores decision-making in global supply chains, emphasizing cultural shifts and simplifying complex processes. Adam Dejans Jr stresses the necessity of systemic reconsideration, while John Elam focuses on the operational scale as a source of complexity and emphasizes aligning language with desired outcomes. The conversation stresses transparency and trust-building, urging gradual introduction of complexity. Insights are shared on the importance of simplifying communication for engaging executives, showcasing varied cultural approaches, and advocating continuous learning to transform legacy practices.https://tube.lokad.com/videos/embed/6742962b-9c48-4cc8-8a15-d40803edde11https://tube.lokad.com/videos/watch/e8716b12-8257-477b-bec4-03a1e6936d3ehttps://tube.lokad.com/static/thumbnails/1c183a23-f291-4859-85b2-27b21c1b4d6a.jpgA Decade of Success: STS Component Solutions & Lokad (With Timothy Russo) - Ep 18200:00:00: 10-year anniversary welcome and studio introduction 00:05:00: Early hurdles: manual workflows, data team creation, need for scalable tools 00:10:00: Choosing Lokad: people-focused partnership and long-term technological fit 00:15:00: Planning leap: from 7--21-day spreadsheets to nightly-refreshed dashboards {00:20:00: AirPro growth: doubling hose output, detailed planning amid supply-chain shocks 00:25:00: Firefighting vs. foresight: smoothing processes to free teams for innovation 00:30:00: KPIs under scrutiny: redefining metrics as strategy and data evolve 00:35:00: Resilience stories: COVID shutdown, restart, and AirPro 2.0 roadmap 00:40:00: Closing thoughts: results, advice, and looking ahead to the next decade ### Summary In the ever-evolving domain of aerospace business, the decade-long partnership between Lokad CEO Joannes Vermorel and STS Component Solutions CEO Timothy Russo exemplifies resilience and strategic foresight. Built on mutual respect and shared vision, the collaboration transformed STS from manual operations to a robust data-driven enterprise, integrating Lokad's advanced supply chain tools. Reflecting Thomas Sowell's insights on adaptability, this alliance underscores the significance of technological agility and nuanced solutions. Both leaders emphasize the importance of bespoke metrics over standardized ones to navigate market dynamics effectively. This enduring partnership stands as a testament to innovation, strategic alignment, and the power of collaborative progress.https://tube.lokad.com/videos/embed/e8716b12-8257-477b-bec4-03a1e6936d3ehttps://tube.lokad.com/videos/watch/4740f34f-c18d-4695-a839-8fc4dba29665https://tube.lokad.com/static/thumbnails/a774ba60-2aa3-4723-8014-110f2a0e79d1.jpgSupply Chain Scientist chez LokadSupply Chain Scientist chez Lokadhttps://tube.lokad.com/videos/embed/4740f34f-c18d-4695-a839-8fc4dba29665https://tube.lokad.com/videos/watch/8d175950-67d5-410f-944d-cacaf0c06d66https://tube.lokad.com/static/thumbnails/172ca06e-ff9a-4a12-a7dd-9d7a0b5ad8d8.jpgRethinking Product-Life-Cycle Management with AI (with Rupert Schiessl)Rethinking Product-Life-Cycle Management with AI (with Rupert Schiessl)https://tube.lokad.com/videos/embed/8d175950-67d5-410f-944d-cacaf0c06d66https://tube.lokad.com/videos/watch/9bc10eb6-80c7-4a32-8ecf-783fcb733f57https://tube.lokad.com/static/thumbnails/7fa385ca-78a1-4d1f-8d6f-c8475c703b4a.jpgHas Generative AI Changed Supply Chain? (with Knut Alicke)## Summary GenAI’s buzz exceeds balance sheets. Short-term gains are modest—clerical acceleration, smarter triage, meeting discipline—with humans in the loop. Long run could rival containerization, if incentives align. Bans merely push usage to phones; guardrails beat prohibitions. The “value gap” indicts procurement theater, not the tech; leaders need mechanical sympathy and proofs, not 600-question RFPs. LLMs don’t learn; context/RAG remain bottlenecks, so curation matters. Board case: mechanize intellectual work or be outpaced. Shop-floor case: less drudgery, better defaults. Optimists say five years; pessimists, twenty. Either way, today’s spreadsheet theater lives on borrowed time. ## Timestamps 00:00:00: Generative AI impact in supply chain 00:02:06: The reality of promotions in AI 00:03:35: Comparing gen AI's potential and hype 00:04:56: Positive outlook on AI's potential 00:06:54: Risks of premature tech adoption 00:08:21: Leveraging AI for curiosity-driven growth 00:10:14: Generative AI as modern smart Wikipedia 00:11:34: Language models offer process insights 00:13:39: Broadening client feedback via LLMs 00:15:37: Evolving user interfaces with natural language 00:17:38: Document generation via LLM analysis 00:19:43: LLMs seen as colleagues shift impact 00:21:37: Future decision-making with digital colleagues 00:26:46: Delegating tasks to AI agents wisely 00:29:02: Efficiency gains in demand planning 00:30:58: Insights on forecast-pricing dynamics 00:32:51: Demand review transcripts enhance maturity 00:35:08: Joannes explores AI's potential future 00:37:14: Linking meeting discussions challenging for LLMs 00:40:26: Demand review meetings boost performance 00:44:34: AI tools change meeting participation 00:48:49: Communication evolution highlights privacy issues 00:52:39: Tech impacts business secrecy practices 00:55:43: Generative AI explores perception shifts 00:57:00: AI's complex reality in algorithms vs. GenAI 00:58:10: ...https://tube.lokad.com/videos/embed/9bc10eb6-80c7-4a32-8ecf-783fcb733f57https://tube.lokad.com/videos/watch/f02b40d8-6c05-473c-ab7e-0985bd1d2fe0https://tube.lokad.com/static/thumbnails/4d85400f-fe7e-4a34-91ad-80f38ed338f0.jpgSupply Chain Breakdown: How Trump’s Tariffs Have Impacted Global TradeSupply Chain Breakdown: How Trump’s Tariffs Have Impacted Global Tradehttps://tube.lokad.com/videos/embed/f02b40d8-6c05-473c-ab7e-0985bd1d2fe0https://tube.lokad.com/videos/watch/6cd9a4b4-2b25-417d-b406-7d81d8d41ed3https://tube.lokad.com/static/thumbnails/0e6d7091-4444-4af6-964c-e823829b84e2.jpgSupply Chain Breakdown: Closing the Generative-AI Value GapSupply Chain Breakdown: Closing the Generative-AI Value Gaphttps://tube.lokad.com/videos/embed/6cd9a4b4-2b25-417d-b406-7d81d8d41ed3https://tube.lokad.com/videos/watch/4427a782-fd71-428c-bf09-1b3456bdc245https://tube.lokad.com/static/thumbnails/661c5b3f-2ab2-4522-8d78-ae60bc51de91.jpgSupply Chain Breakdown: Are Digital Twins Worth the Hype?Supply Chain Breakdown: Are Digital Twins Worth the Hype?https://tube.lokad.com/videos/embed/4427a782-fd71-428c-bf09-1b3456bdc245https://tube.lokad.com/videos/watch/05e5d7ad-fbd2-47fb-bdca-6c1e9b8ae7e8https://tube.lokad.com/static/thumbnails/182918d9-d3b2-49d7-84c1-535d2552abe6.jpgSupply Chain Breakdown: Supply Chain is CapEx, Not OpExSupply Chain Breakdown: Supply Chain is CapEx, Not OpExhttps://tube.lokad.com/videos/embed/05e5d7ad-fbd2-47fb-bdca-6c1e9b8ae7e8https://tube.lokad.com/videos/watch/98c97ab3-341e-45ad-b3c4-79cbc993874chttps://tube.lokad.com/static/thumbnails/862dfd42-9fb3-4997-bac6-b3c244f01020.jpgSupply Chain Breakdown: Forecasting Beyond DemandSupply Chain Breakdown: Forecasting Beyond Demandhttps://tube.lokad.com/videos/embed/98c97ab3-341e-45ad-b3c4-79cbc993874chttps://tube.lokad.com/videos/watch/48f527f0-ef8c-4d12-bf86-38544261277ehttps://tube.lokad.com/static/thumbnails/99f8de26-cb9a-4f76-aaa6-2cef69813702.jpgSupply Chain Breakdown: Data Science Has FailedSupply Chain Breakdown: Data Science Has Failedhttps://tube.lokad.com/videos/embed/48f527f0-ef8c-4d12-bf86-38544261277ehttps://tube.lokad.com/videos/watch/0827ab76-464f-45e9-922a-30f9a9a5c6adhttps://tube.lokad.com/static/thumbnails/a5bfd1ca-b112-40cf-a749-38bc18008b8e.jpgSupply Chain Breakdown: Your ERP is Too ExpensiveSupply Chain Breakdown: Your ERP is Too Expensivehttps://tube.lokad.com/videos/embed/0827ab76-464f-45e9-922a-30f9a9a5c6adhttps://tube.lokad.com/videos/watch/a52ebd44-1606-462f-9d3d-36f8849e2d41https://tube.lokad.com/static/thumbnails/eb650af5-13bf-49c7-9b2b-0f33720a1112.jpgBook Launch: Introduction to Supply ChainBook Launch: Introduction to Supply Chainhttps://tube.lokad.com/videos/embed/a52ebd44-1606-462f-9d3d-36f8849e2d41https://tube.lokad.com/videos/watch/421a825f-b3fe-493b-b429-169a1fc841dbhttps://tube.lokad.com/static/thumbnails/a3d05e7c-e9f1-4701-b747-5362e97fa079.jpgSAP Antitrust: Escape ERP Lock-InSAP Antitrust: Escape ERP Lock-Inhttps://tube.lokad.com/videos/embed/421a825f-b3fe-493b-b429-169a1fc841dbhttps://tube.lokad.com/videos/watch/3d3d01e2-e187-4b19-bafe-b2bce31164cbhttps://tube.lokad.com/static/thumbnails/62de4b0b-febe-4c6d-ba89-6f0a722c44a6.jpgLa précision à grande échelle, la transformation de la supply chain de SMCP avec LOKADLa précision à grande échelle, la transformation de la supply chain de SMCP avec LOKADhttps://tube.lokad.com/videos/embed/3d3d01e2-e187-4b19-bafe-b2bce31164cbhttps://tube.lokad.com/videos/watch/6f2afe46-8d19-4389-bcc5-2ba5b5ab1d54https://tube.lokad.com/static/thumbnails/e6dcba2d-1951-43d3-a3a6-899c696a0741.jpgThe Hidden Cost of Forecast AccuracyThe Hidden Cost of Forecast Accuracyhttps://tube.lokad.com/videos/embed/6f2afe46-8d19-4389-bcc5-2ba5b5ab1d54https://tube.lokad.com/videos/watch/2815f54e-2a0f-404e-9782-7fbb427832d3https://tube.lokad.com/static/thumbnails/9919c9b4-ccc4-46ef-8d47-5797b9cea4d5.jpgScheduling - Supply Chain in 3 minutesScheduling - Supply Chain in 3 minuteshttps://tube.lokad.com/videos/embed/2815f54e-2a0f-404e-9782-7fbb427832d3https://tube.lokad.com/videos/watch/5b783bbb-b142-4d42-a92c-ba3d72a8d5e7https://tube.lokad.com/static/thumbnails/3123f7f7-9e22-4e67-b385-bcea4e052c87.jpgSupply Chain Breakdown - KPIs that Actually MatterSupply Chain Breakdown - KPIs that Actually Matterhttps://tube.lokad.com/videos/embed/5b783bbb-b142-4d42-a92c-ba3d72a8d5e7https://tube.lokad.com/videos/watch/171aa1af-a7aa-4f2f-b5aa-02c6989d47c0https://tube.lokad.com/static/thumbnails/300d1411-df44-4daf-8a4c-1be6f71c0250.jpgSupply Chain Breakdown: Safety Stocks Aren't Safe🔴 LIVE | Safety Stocks Aren’t Safe 📅 Thursday, November 6 — 10h30 ET / 16h30 CET Everyone uses safety stock. But very few ask the following questions: 1. Do safety stocks cost more than stockouts? 2. Are there times when a stockout is actually good? Join us live as we present why safety stock formulas leave money on the table... (AND what you can do about it) 👥 Speakers: Joannes Vermorel (CEO & Founder, Lokad) • Conor E. Doherty (Communication Director, Lokad) ❓ Send us your questions ahead of time, via DMs, or in the live chat! You know we'll answer 🎯 For supply chain leaders, finance, and ops teams who want decisions that improve EBITDA. Supply Chain Breakdown: Real decisions. Real impact.https://tube.lokad.com/videos/embed/171aa1af-a7aa-4f2f-b5aa-02c6989d47c0https://tube.lokad.com/videos/watch/2014cc0b-c384-4b29-83df-34c520ad25e2https://tube.lokad.com/static/thumbnails/65e1e6d6-cc73-4599-b88b-25e39490c462.jpgSupply Chain Breakdown: Your Data is Better Than You Think🔴 LIVE | Your Data is Better Than You Think 📅 Thursday, November 20 — 10h30 ET / 16h30 CET “We'd like to adopt AI, but our data is too messy.” If that sounds familiar, this session is for you. Join us as we challenge the idea that “bad data” is a bottleneck. In reality, whatever you have is good enough to get started if you want better buys, better service, and better cash flow... (without wasting 3 years cleaning your data). We’ll discuss: - How bad is “bad data”? - The ways to navigate the problem of "messy, incomplete data". 👥 Speakers: Joannes Vermorel (CEO, Lokad) • Conor E. Doherty (Director of Communication, Lokad) Join us live and bring your Qs and comments! You know we'll answer them. ❓ Send your questions ahead via DM—or drop them in the live chat. We’ll tackle as many as we can. 🎯 For supply chain leaders, planners, logistics and ops teams, plus IT/data folks who are tired of hearing “we’re not ready” every time AI or optimization is mentioned. Supply Chain Breakdown: Real decisions. Real impact. Attend yourself and share it with your CIO / Head of Data. I'm sure they'll have questions!https://tube.lokad.com/videos/embed/2014cc0b-c384-4b29-83df-34c520ad25e2https://tube.lokad.com/videos/watch/91bfb5b0-fe16-4cc2-a99c-e4227c7a9250https://tube.lokad.com/static/thumbnails/0480439d-87e3-4433-9047-29d4667e9859.jpgSupply Chain Breakdown: The Hidden Cost of Integrated Business Planning (IBP)🔴 LIVE | The Hidden Cost of IBP 📅 Thursday, November 27 — 10h30 ET / 16h30 CET IBP promises a single, aligned “one plan” — but what’s the price you quietly pay for that "alignment"? In this session we’ll unpack how IBP can (often) provide the illusion of control, and subtly misallocate resources. We’ll answer: - Where does IBP genuinely help—and where does “one set of numbers” hurt decision quality? - Is it possible to align monthly governance meetings with advanced AI decision-making? - Does IBP have a place in a modern, economics-first supply chain? 👥 Speakers: Joannes Vermorel (CEO & Founder, Lokad) • Conor E. Doherty (Director of Communication, Lokad) ❓ Send your questions via DM or drop them in the live chat. 🎯 For supply chain leaders, finance, and ops teams running IBP today who suspect there’s more to performance than agreeing on a plan. Supply Chain Breakdown: Real decisions. Real impact.https://tube.lokad.com/videos/embed/91bfb5b0-fe16-4cc2-a99c-e4227c7a9250https://tube.lokad.com/videos/watch/64e9fa8d-2073-413b-ad01-59af2eb7feedhttps://tube.lokad.com/static/thumbnails/54217248-97c7-462c-89a2-8a78ab0b4626.jpgIntroduction to Supply Chain: Chapter One (Primer)00:00:00: Tabula rasa framing; intended audience question 00:05:07: Foundational lenses: time, information, computers 00:10:14: Supply chain as intent, not trucks 00:15:21: Textbook optimality fails; spreadsheets quietly win 00:20:28: What isn’t supply chain: branding, payment plumbing 00:25:35: Org charts misplace pricing and assortment 00:30:42: Variability as profit: parts shocks, fast sourcing 00:35:49: Profit beats plans; abandon guilt-driven planning 00:40:56: Mainstream is simplistic; demand is engineered 00:46:03: Self-taught planners expose discipline’s weak foundations 00:51:10: Institutional lore over formulas: fuzzy pattern recognition 00:56:17: Credentials matter only with reference materials 01:01:24: ‘Optimal’ means used; supply chain papers aren’t 01:06:31: Lokad’s failures forced a restart from scratch 01:11:36: Chemistry, not alchemy; future chapters teased Joannes Vermorel's book Introduction to Supply Chain begins by asking what most textbooks dodge: what is supply chain, and what is it for? He rejects catalogues of formulas and KPIs as trivia, arguing that supply chain is the mastery of options under uncertainty about physical flows. That pulls pricing, assortment, and merchandising into its scope, while leaving branding and legal plumbing out. Variability is treated not as a nuisance to be averaged away but as a source of profit. The real scandal, Vermorel argues, is not practice—but the theory that has misled it. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ ******https://tube.lokad.com/videos/embed/64e9fa8d-2073-413b-ad01-59af2eb7feedhttps://tube.lokad.com/videos/watch/d8d42f36-4253-49fb-ace4-090818c0a58ehttps://tube.lokad.com/static/thumbnails/c780476e-fc48-4d15-9bb7-f09f6db42dde.jpgIntroduction to Supply Chain: Chapter Two (History)00:00:00: Chapter two setup and reader perspective 00:04:30: Terminology drift and practitioner confusion 00:08:55: Why 'planning' in ERP misleads 00:13:25: Avoid ERP planning traps; Excel isn’t shameful 00:17:55: Buzzword critique and Lokad’s neologisms 00:22:25: Using flawed language without empty promises 00:26:55: Operations research became supply chain, then diverged 00:31:25: Pre-scientific supply chain and falsification standard 00:35:55: Stochastic decisions require repeated trials 00:40:25: Broken automation promises and shifting goalposts 00:44:55: Optimality claims fail when better methods appear 00:49:25: Historical evidence of decades-long stagnation 00:53:55: Why real breakthroughs spread; supply chain lags 00:58:25: Will blunt claims alienate practitioners? 01:02:55: Mud-theory critique: shapeless claims resist refutation 01:07:25: Practical science: judge methods by track record 01:11:10: Graph databases as cautionary hype example ### Summary Conor tests Joannes’s “History” chapter as a practical tool, not a detour. Joannes argues terminology is a battlefield: meanings drift, vendors exploit confusion, and bad labels misdirect budgets—ERP “planning” being the prime case. Conor challenges Lokad’s own jargon (“holimization”); Joannes says the difference is substance and transparency, not fashionable word-swapping. The bigger claim: mainstream supply chain theory is “pre-scientific” because it avoids falsification; decades of “optimal” papers aren’t adopted, so the theories don’t work. Practical rule: trust history, not hype. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ ******https://tube.lokad.com/videos/embed/d8d42f36-4253-49fb-ace4-090818c0a58ehttps://tube.lokad.com/videos/watch/8759698e-c130-4d25-8dd0-4632c606a423https://tube.lokad.com/static/thumbnails/a7ed1337-c1cc-4a7c-ad1c-faee61518a85.jpgIntroduction to Supply Chain: Chapter Three (Epistemology)00:00:00:Series premise: reader’s questions, chapter three 00:04:55: Supply chain learning means learning to think {00:09:50: Popper’s falsifiability: science risks contradiction 00:14:45: Einstein versus Marxism: attitudes toward refutation 00:19:40: Why theories can’t be proven true 00:24:35: Safety stock idea attacked, not stock levels 00:29:30: Fashion end-of-season: service levels backfire 00:34:25: Thought experiments as cheap falsification filter 00:39:20: Kuhn’s incommensurability: decisions versus plans 00:44:15: Adversarial incentives demand meta-analysis evidence 00:49:10: Why this book avoids vendor-centric case studies 00:54:05: Occam’s razor: one metric, not 300 00:59:00: Most firm success isn’t supply-chain driven 01:03:55: Amazon as supply-chain-led success exception 01:08:50: Case-study falsification: search for negative results 01:13:45: Vulnerable theories, minimal math, invites refutation 01:18:43: Takeaway: mental model to bootstrap practice ### Summary Chapter 3 argues that supply chain can’t be learned like a phone book of algorithms and templates; it must be learned as disciplined thinking. Vermorel borrows Popper’s falsifiability: real knowledge risks being proven wrong, unlike theories patched to avoid contradiction. He uses safety stock as an example—useful outcomes don’t vindicate a bad concept, like a broken clock being right twice a day—and offers thought experiments (fashion end-of-season) to show contradictions. Case studies, he says, are mostly infomercials, evidenced by the near-absence of negative ones despite high project failure rates. ****** Check out our website: https://www.lokad.com/ Follow us on LinkedIn: https://www.linkedin.com/company/lokad/ ******https://tube.lokad.com/videos/embed/8759698e-c130-4d25-8dd0-4632c606a423https://tube.lokad.com/videos/watch/472e7bd1-f075-46f9-a762-04e10afca087https://tube.lokad.com/static/thumbnails/7bd59a71-5014-46d6-bd6c-ec32e4559f0c.jpgIntroduction to Supply Chain: Chapter Four (Economics)00:00:00: Chapter four asks supply chain's true goal 00:04:45: Non-aggression frames voluntary, money-making cooperation 00:09:30: Regulation limits differ from forced transactions 00:14:10: Sustainability follows customer preferences, not separate goals 00:18:00: Economic laws explain supply chain boundaries 00:22:10: Dollars become atoms, then more dollars 00:27:10: Mainstream misses time-sensitive rate of return 00:32:10: Service levels fail as economic objectives 00:37:00: Aviation retrofits reveal proxy limitations 00:41:00: Aperiodic returns add operational time granularity 00:46:45: Spoon opportunity illustrates peak-return cutoff 00:51:45: Service levels ignore timing and opportunity buys 00:56:45: Proxies force waste and miss windfalls 01:00:10: Shadow valuations capture off-ledger future effects 01:05:10: Rare stockouts require thought experiments 01:10:20: Diapers, insulin, and customer lifetime losses 01:15:20: Four chapters now enable profitable reinvention 01:19:00: Double-entry accounting unlocked capitalism's scorekeeping ### Summary Supply chain, in this discussion, is not about hitting fashionable KPIs or moral posturing. It is about making money by allocating scarce resources better over time. Joannes argues that supply chain belongs to applied economics: firms exist within webs of specialization, and decisions should be judged by rate of return, not crude proxies like service levels. Time matters because a profit earned quickly is not the same as one earned slowly. He also defends “shadow valuations” as a way to account for future consequences—lost trust, customer attrition, strategic damage—that accounting ledgers do not capture directly.https://tube.lokad.com/videos/embed/472e7bd1-f075-46f9-a762-04e10afca087https://tube.lokad.com/videos/watch/5e5f6a19-045d-424b-9f9b-c94302a20ee7https://tube.lokad.com/static/thumbnails/0cda754e-ebe1-460e-a514-7b106311c7b0.jpgIntroduction to Supply Chain: Chapter Five (Information)00:00:00: Chapter five: decisions require informed bets 00:04:48: Shannon theory: information as computable quantity 00:09:36: Data equals bits; verbosity hides nothing 00:14:24: Knowledge converts information into profitable actions 00:19:12: Immutable past principle, ERP designs violate it 00:24:00: Stockout zeros rewritten, forecasts become biased 00:28:48: Economic pain: misallocated capital, lower returns 00:33:36 Bad data scapegoat masks architectural confusion 00:38:24: Historian analogy: fixed records, endless semantics 00:43:12: Systems split: records, reports, intelligence 00:48:00: Reports enforce compliance, not forward decisions 00:52:48: Intelligence generates allocations under uncertainty 00:57:36: Excel proves decision layers already hybrid 01:02:24: Records sold as magic, vendors profit 01:07:12: Litmus test: does software mutate past 01:12:00: Too-good-to-true claims, M5 reality check goodbye ### Summary Supply chain decisions are bets on an uncertain future, so clear thinking matters. The discussion draws hard lines between data, information, and knowledge, then argues that most supply chain software blurs them badly. Its sharpest point is that the past must remain immutable: once firms rewrite history to suit weak models, they corrupt the basis for good decisions. From there comes the practical distinction between systems of record, systems of report, and systems of intelligence. Companies overspend on glorified ledgers, underinvest in real decision engines, and then wonder why performance disappoints. Clear categories, not vendor mystique, are the beginning of competence.https://tube.lokad.com/videos/embed/5e5f6a19-045d-424b-9f9b-c94302a20ee7https://tube.lokad.com/videos/watch/48563bc5-f170-4770-8b43-cbc4781e7fb9https://tube.lokad.com/static/thumbnails/69198175-c377-4a73-bdcb-bafcc0da6c64.jpgSupply Chain Breakdown: Hidden Cost of Manual OverrideSupply Chain Breakdown: Hidden Cost of Manual Overridehttps://tube.lokad.com/videos/embed/48563bc5-f170-4770-8b43-cbc4781e7fb9https://tube.lokad.com/videos/watch/2531f081-dcf9-466b-a902-0d33973bee57https://tube.lokad.com/static/thumbnails/88894fd7-429c-4e1f-814e-4321c3b3e4ec.jpgSupply Chain Breakdown: Hidden Cost of Service LevelsSupply Chain Breakdown: Hidden Cost of Service Levelshttps://tube.lokad.com/videos/embed/2531f081-dcf9-466b-a902-0d33973bee57https://tube.lokad.com/videos/watch/87efd313-26af-4223-94df-aee13a951bf6https://tube.lokad.com/static/thumbnails/99878ba4-6b9e-430f-9260-3cf61c92d394.jpgSupply Chain Breakdown: The Decision Factory (Making Decisions Under Uncertainty)Supply Chain Breakdown: The Decision Factory (Making Decisions Under Uncertainty)https://tube.lokad.com/videos/embed/87efd313-26af-4223-94df-aee13a951bf6https://tube.lokad.com/videos/watch/6aea3800-ed92-45cb-a850-fdb1b6e7f172https://tube.lokad.com/static/thumbnails/3a4dbb29-2335-4448-abad-6238f5eb3ec7.jpgThe Hidden Cost of S&OPThe Hidden Cost of S&OPhttps://tube.lokad.com/videos/embed/6aea3800-ed92-45cb-a850-fdb1b6e7f172https://tube.lokad.com/video-channels/root_channelhttps://tube.lokad.com/video-channels/lokadtvhttps://tube.lokad.com/video-channels/nicollet_tvhttps://tube.lokad.com/video-channels/interviewshttps://tube.lokad.com/video-channels/3minuteshttps://tube.lokad.com/video-channels/lectureshttps://tube.lokad.com/video-channels/envisionhttps://tube.lokad.com/video-channels/specialhttps://tube.lokad.com/accounts/peertubehttps://tube.lokad.com/accounts/roothttps://tube.lokad.com/accounts/vermorelhttps://tube.lokad.com/accounts/nicollethttps://tube.lokad.com/accounts/lokad