The 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. The supply chain theory is there to help us deliver an application that steers the company toward supply chain performance, while being compatible with all the constraints that the production entails.
Enterprise software products can sometimes be seen as somewhat Lovecraftian in nature when it comes to finding out what goes on “under the hood”. The old adage says that “ignorance is bliss” and this ignorance is what often protects us. Much like a character in a video game, delving too deep into enterprise software can result in you losing “sanity points”. But this can ultimately be said for anything that brings added value to a company.
In supply chain, there has been a steady reduction in raw manpower requirements over the last few decades, resulting in less blue collar jobs. Most supply chains are already being driven by software, and for well over 20 years, so just what is the role of humans in these software systems? Mainly firefighting, i.e. taking care of exceptional situations that fall outside of the framework, as well as making all the mundane decisions that need to be made on a daily basis (how much to buy, where to stock? etc.). This means that your supply chain is a cost centre.
What Lokad advises is to instead transform your supply chain into a strategic asset, through a software product that allows the human element to act as strategists and the computers to produce those mundane supply chain decisions. Ultimately, computers should do the work and people should do the thinking.
What should this software product do? The answer is very simple - make good, sound decisions for your supply chain. We go into more detail about the diseconomies of scale related with software; we also tackle the topic of ransomwares, the evolution of Excel, as well as the role of good core IT within a company.
To wrap up the lecture, Joannès answers questions from the audience, ranging from how software can make decisions related to suppliers, how Envision (Lokad’s own domain specific programming language) compares to Python and how to convince clients that their ERPs aren’t actually optimizing anything.
02:40 Why a product? Because capitalism
08:18 What should the product do?
10:05 Software diseconomies of scale
12:43 Let’s buy a SCO product off the shelf
21:58 SCM vs SCO
28:21 SCO is not your average software product
33:26 Software Ingredients for SCO
42:49 Yet spreadsheets are not the endgame
46:51 Python is not the endgame either
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