Working with uncertain futures

The future is uncertain. Yet, nearly all predictive supply chain solutions make the opposite assumption: they assume that their forecasts are correct, and hence roll out their simulations based on those forecasts. Implicitly, the future is assumed to be certain and complications ensue. From a historical perspective, software engineers were not making those assumptions without a reason: a deterministic future was the only option that the early - and not so early - computers could process at best.

WinZip and 7z file formats now supported

File formats are staggeringly diverse. At Lokad, our ambition is to support all the (reasonable) tabular file formats. We were already supporting CSV (comma-separated values) files with all their variants - which can involve varying separators or varying line returns. However, tabular files can become very large, and in order to make the file transfer to Lokad faster, these files can be compressed. Lossless compression of flat text files works very well, frequently yielding a compression ratio below 10%, i.

Forecasting 4.0 with Probabilistic Forecasts

A little over one year ago, we unveiled quantile grids as our 3.0 forecasting technology. More than ever, Lokad remains committed to delivering the best forecasts that technology can produce, and today, our 4th generation of forecasting technology, namely our probabilistic forecasting engine, is live and available in production for all clients. This new engine consists of a complete rewrite of our forecasting technology stack, and addresses many long-standing challenges that we were facing.

Autocomplete file paths with Envision

When data scientists work with Envision, our domain-specific language tailored for quantitative optimization for commerce, we want to ensure that they are as productive as possible. Indeed, data scientists don’t grow on trees, and when you happen to have one available, you want to make the most of his time. A data analysis begins by loading input data, which happens to be stored as flat files within Lokad. Therefore, an Envision script always starts with a few statements such as:

Proofs of concept don’t work in quantitative supply chain optimization

Proofs of concept are one of the most frequent requests we get from our prospect clients looking to try out our supply chain optimization service. Yet, we frequently decline such requests; first because they hurt client’s company itself, and second because they also hurt Lokad in the process. Since POCs – or proofs-of-concept – are so widespread in B2B software, it is usually hard to grasp why they can be downright harmful in the specific case of quantitative supply chain optimization (1).

Q&A about inventory optimization software

Under the supervision of Prof. Dr. Stefan Minner, Leander Zimmermann and Patrick Menzel are writing a thesis at the Technical University of Munich. The goal of this study is to compare inventory optimization software. Lokad did receive their questionnaire, and with the permission of the authors, we are publishing here both their questions and our answers. 1. When did you introduce your optimization software to the market? Lokad was launched in 2008, but as a pure demand forecasting solution at the time.

Uploading very large files through the web

The web was not really intended to transfer giganormous files. In order to do that, there are other (older) protocols like FTP (the File Transfer Protocol) or its secure alternative FTPS and SFTP. Lokad was already supporting many file receiving options, including web uploads. However, until today, our web uploads were restricted to files weighing less than 200MB. Today, we have released a new version of our web upload features, and it’s now possible to upload arbitrarily large files through your favorite web browser into Lokad.

Joining tables with Envision

When it comes to supply chain optimization, it’s important to accommodate the challenges while minimizing the amount of reality distortion that get introduced in the process. The tools should embrace the challenge as it stands instead of distorting the challenge to make it fit within the tools. Two years ago, we introduced Envision, a domain-specific language, precisely intended as a way to accommodate the incredibly diverse range of situations found in supply chain.

Insights on the Lokad tech evolution

The technology of Lokad has evolved so much that people who have had the chance to trial Lokad even two years ago would barely recognize the app as it stands today. The “old” Lokad was completely centered around our forecasting engine - i.e. what you can see as a forecasting project in your Lokad account today. As a result, our forecasting engine gradually gained tons of features not even remotely related to statistics.

Stitch Labs Integrated by Lokad

The online, multichannel inventory management software Stitch Labs is our latest integration. By combining Lokad and Stitch Labs, retailers can easily manage all the steps of inventory management - from controlling the stock levels and minimizing the stock-outs to inventory forecasting and automating the reordering process. By connecting Lokad to Stitch Labs, all of your sales and product data can automatically be imported into Lokad. If you are already using Stitch Labs, all you need to do is to create a Lokad account and you can get started in minutes.

Full automation ahead

Lokad uses advanced forecasting methods in order to produce the most accurate forecasts possible, and while that accuracy is greater than with classic methods, many large reports can’t be computed instantly in real time. Executing multiple operations in a specific order and retrieving data from other apps can sometimes be time consuming, therefore, Lokad now provides an automation feature which allows the full control of all the operations needed to produce the numbers your company needs.

Solving the general MOQ problem

Minimal Order Quantities (MOQs) are ubiquitous in supply chain. At a fundamental level, MOQs represent a simple way for the supplier to indicate that there are savings to be made when products are ordered in batches rather than being ordered unit by unit. From the buyer’s perspective, however, dealing with MOQs is far from being a trivial matter. The goal is not merely to satisfy the MOQs - which is easy, just order more - but to satisfy the MOQs while maximizing the ROI.

The Stock Reward Function

The classic way of thinking about replenishment consists of establishing one target quantity per SKU. This target quantity typically takes the form of a reorder point which is dynamically adjusted based on the demand forecast for the SKU. However, over the years at Lokad, we have realized that this approach was very weak in practice, no matter how good the (classic) forecasts. Savvy supply chain practitioners usually tend to outperform this (classic) approach with a simple trick: instead at looking at SKUs in isolation, they would step back and look at the bigger picture, while taking into consideration the fact that all SKUs compete for the same budget.

Hiring a software engineer with taste for compilers and big data

Lokad is growing, we are hiring again. At Lokad we use Envision, our in-house programming language, to write data analysis scripts and adapt our forecasts to the business constraints of our customers, processing hundreds of gigabytes of data each day. Envision is a modern, strongly typed, high-performance relational language with inspiration from SQL, Python, R and the Excel approach to column data. Its state-of-the-art compiler performs type and table inference to minimize the need for annotations and uses static analysis to optimize the execution plan and reuse cached data from previous runs, generating scripts in an intermediate language that is compiled down to CIL and allows the injection of custom C# code.

Optimizing container shipments

Supply chain management has long gone global: even small businesses are now importing goods from overseas whenever they identify the right business opportunities. However, while supply chain data can flow back and forth across the globe at a fraction of the speed of light, physical goods are still mostly freighted via containers with lead times counted in weeks, if not months. On top of that, containers further complicate the task of supply chain practitioners by imposing both volume and weight constraints.

Retail pricing strategies

Pricing strategies are an essential part of demand forecasting as prices directly influence demand. All too often companies settle for benchmarking prices, when they actually should benchmark pricing strategies. Therefore, we have extended our knowledge base with a new collection of articles about the most popular pricing methods used in retail. Pricing concepts At Lokad we believe in optimizing pricing strategies instead of raw prices. By ‘pricing strategies’, we are referring here to the method of computing optimized prices given the available data and the market conditions.

Price elasticity is a poor angle for looking at demand planning

Lokad regularly gets asked to leverage an approach based on the price elasticity of demand for demand planning purposes; most notably to handle promotions. Unfortunately, statistical forecasting is counter-intuitive, and while leveraging demand elasticity might feel like a “good” approach, our extensive experience with promotions indicates that this approach is misguided and nearly always does more harm than good. Let’s briefly review what goes wrong with price elasticity. A local indicator Price elasticity is fundamentally a local indicator - in a mathematical sense.

Streetlight effect and forecasting

A policeman sees a drunk man searching for something under a streetlight and asks what the drunk has lost. He says he lost his keys and they both look under the streetlight together. After a few minutes the policeman asks if he is sure he lost them here, and the drunk replies, no, and that he lost them in the park. The policeman asks why he is searching here, and the drunk replies, “this is where the light is.

Magento in beta at Lokad

Just a few days ago we announced Lokad’s integration with Shopify. Today, it’s the turn of another vastly popular content management system for e-commerce to become natively supported by Lokad as the native integration of Magento is now live in beta at Lokad. This integration relies on Magento’s REST API which has been supported since the version 1.7 which was released back in April 2012. The authentication relies on OAuth. The set-up requires a bit of configuration on the admin panel within Magento to grant access to a third-party app like Lokad.

Shopify integrated by Lokad

The retail platform Shopify is our latest integration. Now, Shopify-powered merchants can get advance inventory forecasts and powerfull commerce analytics in just a few clicks. Check-out the Lokad app in the Shopify appstore. Through the Shopify API, Lokad retrieves all the product and sales data that contribute to your inventory optimization and your pricing optimization. Don’t let the competition outservice your business. As usual, the Lokad team is here to help.