The Role of Scarcity in Supply Chain - Ep 151

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