Full transcript available: www.lokad.com/...
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
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