Supply chains are complex systems made of many moving parts: goods, people, machines. POCs (Proofs of Concept) routinely fail when attempting Quantitative Supply Chain initiatives because problems get displaced instead of getting solved.
Proofs 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.
00:35 What are the industries where POCs actually work?
02:22 What characterizes POCs as an open problem?
03:23 POCs don’t work just for the quantitative supply chain, or for the supply chain industry as a whole?
06:54 For how long should you persevere with a POC before seeing a result?
08:50 Why is gathering data so difficult?
12:20 Why doesn’t backtesting really work?
15:10 What are some of the key problems that you have experienced when doing POCs?
17:34 What are the alternatives to POCs?
20:23 Can you really envisage a time when POCs are not part of normal business?
22:06 What is the key message of today’s episode?