The Foundations of Supply Chain - Lecture 1.1

Supply 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.

Supply chain isn’t often seen as “attractive” to young, brilliant minds, especially when compared to other industries, which can’t simply be explained away by saying that supply chain is “niche”. There are a number of niche industries that manage to hire their fair share of talents. With these lectures, we hope to inform as well as making supply chain that much more attractive as a concept.

We go into more detail in what supply chain is in reality and what we can do to obtain a better end-to-end supply chain performance; we also discuss the nuances of what “better” really means in practice. Sometimes, it can be easy to master technological tools, but is what you’re doing of actual benefit to your company?

We outline our definition and scope when it comes to supply chain, which differs from many of the classical theories, and underline the quantitative vision of this definition. From confusing jargon to concepts that simply don’t work in the real world, the mainstream, classic supply chain theory is riddled with issues.

To wrap up the lecture, Lokad’s CEO, Joannès Vermorel, answers challenging questions that viewers asked during the live lecture, covering topics from the relationship between pricing and demand to how to implement a solution when a company’s supply chain knowledge is weak.

Timestamps

00:08 Introduction

00:54 Observational definition

02:44 The short definition

04:51 Why and How

08:00 Scope and non-scope

11:07 Skin in the game + conflict of interest

14:53 Mainstream supply chain theory

21:53 Confusing jargon

25:42 Nature of the challenge

37:57 The method behind the madness

49:54 In conclusion: two IYI pitfalls

54:02 Questions from the audience