00:00:08 Discussing crazy claims of software vendors and sorting fact from fiction.
00:00:43 Supply chain optimization and the difficulty of debunking claims.
00:02:22 The concept of good lies and their ethical considerations.
00:05:31 The fine line between good lies and bad lies in the software vendor industry.
00:07:01 The importance of expertise and rationality in the software supply chain world.
00:08:01 Discussing the issue of buzzwords and fear of missing out in supply chain technology.
00:11:02 Importance of in-depth understanding and education to differentiate good and bad vendors.
00:13:50 Identifying the potential falsehoods in case studies and marketing claims by software vendors.
00:14:42 The lack of consequences for vendors making false claims and the need for better regulation.
00:15:49 Call for companies to be more accountable and truthful in their marketing claims.
00:17:06 Developing immunity to intellectual fraud.
00:18:17 The problem of paid-for analysis in supply chain industry.
00:19:52 The role of market analysts before the internet.
00:20:48 The pay-to-play nature of market analysis reports.
00:22:01 Evolution of the tech vendor market and its impact on market analysts.
00:22:45 What the supply chain industry can learn from the software industry.
00:24:11 Importance of rationality, transparency, and open discussions in improving supply chains.
00:25:30 Encouraging standing up for ideas and fostering healthy debates in the supply chain industry.
00:27:17 Conclusion and invitation for feedback on the discussion.


In the interview, Kieran Chandler and Joannes Vermorel discuss the challenges in the supply chain optimization industry, focusing on the need to scrutinize software vendors’ claims and the importance of transparency. Vermorel emphasizes the critical role of education and understanding technology concepts to differentiate between genuine expertise and marketing gimmicks. He advocates for a more intelligent approach to identifying intellectual fraud and fostering a culture of open debate, similar to that found in software engineering forums. This will allow superior ideas to emerge and help improve the supply chain industry as a whole.

Extended Summary

In this interview, host Kieran Chandler and Joannes Vermorel, founder of Lokad, discuss the challenges of distinguishing between fact and fiction in the claims made by software vendors, particularly in the supply chain optimization industry. Vermorel jokes that the only way his company could compete with the exaggerated claims of competitors is by saying they’re curing cancer in addition to optimizing supply chains.

Vermorel explains that supply chain optimization is an area where claims can easily become outlandish due to the complexity of supply chains and the difficulty in attributing responsibility for specific problems. In this environment, vendors are often tempted to use superlatives and exaggerations. This leads to ethical considerations and the question of where the line should be drawn between acceptable and unacceptable claims.

Vermorel refers to the concept of “bonus dolus” in Roman law, which means “good lie.” It is acceptable to make exaggerated claims in certain contexts, such as a market vendor claiming their chicken will be the best meal of your life. These claims are not taken literally and are understood to be a way to attract attention. This concept can also be seen in consumer advertising, where phrases like “whiter than white” or “cleaner than clean” are used.

However, there is a fine line between acceptable exaggeration and misleading claims. Vermorel cites a court case in France where a lottery advertisement claimed that 100% of winners bought a ticket, which was misunderstood by some as 100% of ticket buyers would win. Although the claim was mathematically accurate, the court ruled it was misleading.

Vermorel believes the line is crossed when expertise is brought into the picture. It is one thing for a market vendor to make exaggerated claims about their products, but it is another for an expert to endorse such claims after supposedly conducting extensive research. In the context of supply chain software, this distinction is important when evaluating the validity of vendors’ claims and their ethical implications.

Vermorel expresses concern about the prevalence of buzzwords such as demand sensing, blockchain, AI, and cloud computing, which can give the appearance of scientific credibility but may lack substance.

Vermorel acknowledges that the fear of missing out (FOMO) on the latest trends can drive companies to adopt these buzzwords. However, he warns that relying on buzzwords without understanding their true implications can lead to intellectual fraud. He emphasizes the importance of in-depth understanding and emphasizes that companies cannot delegate common sense or a basic grasp of supply chain problems.

He suggests that education is a key part of the solution to this issue, and that Lokad’s approach is to focus on highlighting the complex problems within the supply chain that deserve attention, rather than simply promoting their product. By exploring diverse angles and challenging mainstream viewpoints, Lokad aims to provide a more nuanced understanding of supply chain issues.

Vermorel cautions against relying on arguments of authority and encourages businesses to develop a solid understanding of the technology and concepts they’re using. He cites the example of vendors claiming to use AI without being able to explain the specifics, which should be seen as a red flag. In summary, the discussion highlights the need for businesses to prioritize education and understanding in order to differentiate between genuine supply chain expertise and marketing gimmicks.

They discussed about the challenges and issues faced in the software industry, particularly in the supply chain optimization domain. Vermorel emphasizes the importance of understanding the technical aspects of buzzwords and being able to critically analyze vendors’ claims. He notes that it is not uncommon for companies to fabricate case studies to promote their products.

Chandler then asks about the verification of software vendors’ claims and the potential for dishonesty in the industry. Vermorel highlights the problem of companies making outrageous claims without any consequences, and suggests that the community should develop “antibodies” to detect and counteract these lies. He calls for a more intelligent approach to identifying intellectual fraud and being proactive in pointing it out.

The conversation shifts to the issue of paid analysis in the supply chain industry, where companies pay for positive coverage or reviews. Vermorel identifies this as a massive problem, particularly in light of the decline of professional press and the rise of market analysts. He explains that the original value of market analysts was to bring transparency to opaque businesses, but with the advent of the internet, this information has become more accessible. Despite this, market analysts have continued to grow, with some companies becoming more prominent over the past decade.

The interview focuses on the importance of scrutinizing software vendors’ claims, the need for the community to develop mechanisms for detecting and countering lies, and the issue of paid analysis in the supply chain industry. Vermorel advocates for a more critical and intelligent approach in dealing with these challenges.

Vermorel explains how market analysts have grown significantly in the tech industry over the last decade, becoming a primary marketing channel for technology vendors. This growth has occurred primarily because the willingness to pay for their services is much higher among vendors than clients.

Vermorel then compares the software industry with supply chain management, highlighting the transparency and high level of rationality in software engineering, particularly in the open source movement. He argues that this transparency is a key factor in producing better software and that Microsoft’s embrace of open source, for instance, has made them more profitable than ever.

By contrast, supply chains are more opaque, with few people discussing the things that don’t work. In software engineering forums, there is often vigorous debate, which helps superior ideas emerge. Vermorel believes this level of critical discourse should also be present in the supply chain industry, where people are often too quiet and reluctant to speak out against flawed ideas.

To improve the supply chain industry, Vermorel suggests embracing transparency and rationality, as well as fostering an environment in which people feel comfortable standing up for their beliefs and challenging others. He acknowledges his own hesitance to critique a certain post about “inclusive” forecasting technology, fearing backlash, but ultimately, he argues that such discussions are necessary for growth and improvement in the industry.

Full Transcript

Kieran Chandler: Hey, it can be said that the pursuit of truth often makes progress tick. However, in the world of software vendors, truth can be difficult to come by when the latest technology does not fit in with the design of your product. As such, today we’re going to discuss some of the crazy claims of software vendors and, in particular, how you can sort between fact and fiction. So, Joannes, there’s a lot of conflict out there in the supply chain world. What’s your initial overview?

Joannes Vermorel: The long-standing joke at Lokad has been that the only way we could compete with the claims of our competitors was by saying we are curing cancer too. So, you know, we are not only making your supply chain better, but we are also saving lives. We have to – this is the level of claims that we have to challenge. More seriously though, when it comes to supply chain performance, not just asset management, things can get really insane on the supply chain optimization side. There are plenty of reasons for this – supply chains are complex with many moving parts, and it’s very difficult to attribute responsibility or find the root cause of a problem. In this environment, if you’re a vendor, it’s very tempting to go full-blown on superlatives, and that’s literally the state of affairs in the supply chain world.

Kieran Chandler: Yeah, and it brings up a lot of ethical considerations, doesn’t it? Are there any unwritten rules out there or lines that vendors shouldn’t cross?

Joannes Vermorel: Yes, and the funny thing is that Romans 2,000 years ago had already figured that out. They had engineered, as part of the Roman law, the idea of “bonus dolus” or “the good lie.” What does that mean? It means that if you’re on a market, and there will be somebody screaming “best chicken,” “best chicken,” “this will be the meal of your life,” “it will make all your family happy,” “buy my chicken,” etcetera – these are the things that you will find. The Romans were asking the question, “Is it reprehensible to lie like that?” because obviously, what are the odds that this specific chicken is going to be the meal of your life? Maybe, maybe not. Obviously, this is a dubious claim. And yet, from the Roman law perspective, they said no, it’s a bonus dolus, a good lie. It’s a lie that is just the habit of people on the market, and nobody really believes them.

Kieran Chandler: So, it’s agreed upon that it’s mostly, you know, that you should not take this claim literally. It’s just a way to attract your attention, you know, and the guy is not really lying because, you know, it’s not true in the first place. So it’s okay, just… just… and you have plenty of things in that, I would say, in consumer advertising where you’re washing whiter than white, you’re cleaner than clean, or, you know, these sort of things. It’s a… it’s literally you’re playing on that. And um, there is like the idiotic perception they say, “Oh, those brands are thinking that consumers are idiots.” No, because brands they knew that customer customers aren’t idiots, they know that it should not be taken too literally. But, by the way, there is a fine line and you have to make really sure that when you’re lying, people really understand that it should not be interpreted literally. And, uh…

Joannes Vermorel: And, for example, in there was a court ruling in France, um, I think two decades ago, where basically there was an advertising for the lottery, where the advertising went “100% of the winners bought a ticket.” So, should you… and technically, it was actually a very completely valid claim, but people were misunderstanding as 100% of the people who buy a ticket are going to win. And so, it was ruled out that although this claim was mathematically provably completely correct, it was ruled out as being a lie because it was actually, you know, playing on the bonus dollars on the other side to basically misguide people, although, you know, it was correct. So, again, the idea is the sort of client, the fine lines. If I’m to wrap it up, it’s, uh, brands said it’s okay to lie if it’s a convention, and everybody knows that you lie, then it’s fine. If you’re actually trying to convince people of that, that’s very, very wrong and that’s reprehensible. Okay, so that’s some of the maybe kind of good lies, so to speak. Um, but the line’s certainly quite fuzzy.

Kieran Chandler: So, when would you say that software vendors kind of cross that line and sort of head into the battle eyes territory?

Joannes Vermorel: I believe that there is a line to be crossed when you are bringing expertise, you know, and here, imagine you have the guy on the market that is screaming “best fish, precious fish.” He’s not a worldwide expert in fish freshness, you know, he doesn’t really claim. He’s just a guy on a, you know, sitting there and selling his stuff. But, if suddenly on the same market, you set up a podium and you bring professors that say that after decades of studies, I see that this vendor has really the freshest fish, and that numerous studies are proving that this is the freshest, and that will give you, you know, the highest degree of provable happiness and whatnot, then that’s a completely different story. And here, I believe that the line is obviously, you know, if you’re serious about pieces of supplies intact, you should have expertise and some rationality behind it, and maybe let’s call it science. Yes, but is it, and you really need to challenge whether what you’re doing is just um, you know, fancy marketing disguised science, or actual science, and an actual video with actual rationality taking place. And where I think that the line for the supply software supply chain world is

Kieran Chandler: So, there are all the attributes of good science, like numbers, formulas, incomprehensible jargon, and keywords that you don’t understand. You can go and do the supply chain bingo with demand sensing, blockchain, AI, and cloud computing. Bingo, bingo, bingo, and all the juggle. It’s well established and proven, but is it ethically replicable?

Joannes Vermorel: Very frequently, there is nothing to back those claims. It’s literally theater. But everyone’s kind of desperate to be involved in the latest crazes, and particularly with those kind of buzzwords. Would you say there’s almost kind of a bit of FOMO of people wanting to be involved in them and adding them to their website?

Kieran Chandler: Yeah, I mean, as a supply chain vendor, you’re facing this situation where most companies are in this space, not innovative at all. So the problem is that you’re selling a product that has zero differentiation whatsoever from the guy next door. I don’t believe it’s the case for Lokad, but I can say that I’m very severely biased in my opinion with regards to that. But my casual observation is that the differentiation is just minimal across dozens of software products. And then you have some psychological tricks. You want to hook people on things like, oh, there is this massive turn. If you don’t take it, it’s going to be so bad. So please, you have to take the turn. And so you have to instill fear so that it brings attention to your business.

Joannes Vermorel: And one way to instill fears is basically to have a constant stream of concepts that look so important for your career so that you’re going to go the way of the dodo if you don’t get this point 10 years down the road. You’re obsolete. You can play on the fear of people. And by the way, I’m doing you a favor in educating you so that you’re not obsolete. That’s a very powerful message in the corporate world. It’s a tiny, dumb psychological trick, but even if you’re aware, there is a certain asymmetry of risk.

Kieran Chandler: So, on one hand, you’re most likely about to waste one hour with a vendor doing crazy claims. You’re going to waste one hour of your life. On the other hand, if by any chance, this vendor is right, that can save you a dramatic or turn off your career that you didn’t take and put you on a very, very bad track accidentally. And if you just look a couple of decades behind, there have been such turns and with the internet, with a series of things where people who didn’t take the train were really left on the side. So, yes, the problem is real, and as a vendor, you can play on this fear, which is a valid concern. But if you’re only playing on the field with no substance whatsoever to back your claim, then basically, this is fraud. This is intellectual fraud, but you could argue.

Kieran Chandler: There are a lot of people out there trying to influence your views, and us at Lokad, doing weekly editions on the latest subjects, we’re kind of one of them. So how can you actually analyze the market and sort between what is good and what is bad?

Joannes Vermorel: At some point, there is no substitute for in-depth understanding of what’s going on. You can’t delegate common sense or a vague understanding of the supply chain problem at hand. And by the way, I believe that’s what we are trying to do here. I’m not usually trying to convince people, at least not too much, that Lokad is such a great product, but rather that there are a series of problems that deserve attention. These problems can be looked at from a very diverse set of angles and usually, there is more to the mainstream way of looking at the problem. That’s what we did, for example, in the episode for the SKU. A SKU is simplistic, but there are so many angles of how you can look at the SKUs. Sometimes, you have many mainstream and misguided viewpoints, like ABC analysis, safety stock, and service level.

Education is a big part of the solution. Whenever a vendor resorts to an argument of authority, especially when they say, “trust us,” it should be a red flag. You really want to have a good solid understanding of what’s going on. For example, another red flag is when people say they are using AI, but whenever you ask questions about it, they have no clue. If you’re making a claim about a big buzzword, you should be able to give a three-hour lecture on all the technicalities associated with it; otherwise, you don’t know what you’re selling. You need to go deep with those vendors to probe their claims, not through things that can be completely fake, like case studies with made-up numbers, quotes, clients, and everything. You would think that people would not dare to lie completely in making up case studies, but it’s actually not that difficult to do that.

Kieran Chandler: So there’s obviously a lot of money to be made by making these claims. What’s to stop software vendors from really just lying? I mean, are there people discussing these things in forums? You mentioned case studies, can we have testimonies from existing clients? How can we ensure they’re telling the truth?

Joannes Vermorel: First, there is very little that actually stops anybody from making outrageous claims nowadays. It’s very funny because, obviously, if you’re saying positive things or dispatching anybody on the internet, especially on things like race, the world is going to get at you.

Kieran Chandler: And rightly so, but if you do the opposite where you say something good instead of saying something bad, it’s just as much a lie and as nonsensical. On one side, you’re very negative against something or someone; on the other side, you make a massive lie, but you’re just on the positive side. We have this enormous asymmetry where we recognize that saying something that is attractively bad about somebody is quite bad and reprehensible. If you say something that is completely wrong but very positive about something, then it’s completely okay.

Joannes Vermorel: No, it’s not even close. Nowadays, I would say most companies get away with insane lies. When I was looking at my LinkedIn feed, I got a lot of invites from people working for competitors, and I have all the sales teams of my competitors who have invited me so that they can see within my network and whatnot. I can enjoy all the corporate communication of most of my competitors. For example, the claim of the day from one competitor was that they had forecasting technologies that were more inclusive. They have engineered inclusiveness in their forecasting technology, and I was thinking, how can I challenge that claim? That’s such a level of nonsense. I’m all for inclusiveness, but let’s be real: a forecasting technology has nothing to do with inclusiveness and diversity. Those qualifiers just do not apply to a statistical recipe.

First, I think the community needs to develop antibodies. Tolerance is not about anything goes. It’s not that we live in a post-truth world where you have my truth, their truth, and as many truths as there are people. Science is not that. You need to have intellectual integrity and stand up to point out when it’s fraud.

Kieran Chandler: We often get approached on a weekly basis by companies that want to analyze Lokad, and when you dig a little bit deeper, you realize that this analysis is actually paid for. How much of an issue would you say that is for the supply chain industry and for people who don’t realize that a lot of that analysis is paid for?

Joannes Vermorel: That’s a massive problem. One of the issues we’ve had is the disappearance of the professional press, which has dwindled next to nothing due to the internet. What we are left with is either Google, where you have to dig through mountains of information, or market analysts that have grown bigger and bigger. If we look at the market analyst companies, it’s very funny. Ten years ago, I would have thought that those people…

Kieran Chandler: Should have you know disappeared after what is the point their their value of those market analysts?

Joannes Vermorel: The value of market analysts was to bring transparency to fairly opaque businesses because it was hard to know which suppliers existed. For the generation of my parents, if you wanted to know which supplier existed in Mexico, for example, it was fairly opaque. You could take the local yellow pages and try to figure it out for yourself, but that was pretty much it. It was exceedingly hard to get any knowledge. So, you could go to trade shows, which was one option. The other option was to go to market analysts that would at least give you the list of relevant players. But with the internet, the list of relevant players is at the fingertips. You just query “demand forecasting software enterprise” on Google, and you will get the list of the 50 companies doing that worldwide within minutes. So, what is the point of those market analysts?

Kieran Chandler: And what has happened to these market analysts?

Joannes Vermorel: I think those market analysts would have disappeared for a lack of interest, but it turned out that they have grown massively. If you look at the last decade, they have done a 5 to 10x growth over the last decade. As the CEO of a software company, twice a week, they have representatives of those companies who are knocking on my door, and they say, “if you just pay, we will list your report in a positive note.” It’s what I call “pay-to-play.” If you pay a little, we are just saying that you’re a modest player. If you go for a higher subscription rate, you can be a cool vendor. If you go for the higher subscription, then you can be a thought leader. If you pay even more, you can be a market leader, and if you really pay top-notch money, you can be an innovation leader and whatnot. There is like a grid of all these things. What is interesting is that if you are a startup event or you have a real problem, it’s very difficult to reach your clients because you can’t buy mass media because it’s not focused enough. You can’t buy TV ads; there are plenty of things that you can’t do because they are not suitable for B2B markets. Trade shows have dwindled almost next to nothing. With the internet, there are so many people trying to reach so many people; it’s very difficult. So, market analysts became literally one of the prime marketing channels of tech vendors in general. That explains during the last five to ten years why they have grown so much. So, who are these market analysts? Who are you selling to?

Kieran Chandler: And who are you selling to?

Joannes Vermorel: You’re not selling to clients, obviously. I mean, the end clients have Google, and Google has solved the problem for them. So, you’re selling to the vendors. And it turned out that the willingness to pay is an order of magnitude greater on the vendor side than it ever was on the client side when it comes to this vendor-client relationship for tech and software.

Kieran Chandler: If we start bringing everything together now, what can the supply chain industry do as a whole, looking forward?

Kieran Chandler: To begin with, what can we do to ensure that the best players and the most honest solutions emerge in the software industry?

Joannes Vermorel: I think the software industry, including software engineering, is a good illustration of correct intellectual practices done right. There is a very high degree of transparency. If you look at the ethos of the open source movement, it’s very interesting. One of the reasons why Microsoft is embracing open source is that they realized this high degree of transparency was one of the keys to producing better software. It was not a problem of licensing fees. Microsoft has embraced open source and they are more profitable than ever. What open source really did for the software industry was to bring a higher level of rationality, transparency, and ethics in the way people approach problems.

When I look at supply chains nowadays, it’s still fairly opaque. Very few people are discussing in depth all the things that do not work. If you look at the discussions that happen on software engineering forums, the amount of negativity is very high. People often fight harshly on the problems, and it may feel uncivilized. But this is what rationality is about; there’s a lot of infighting on ideas, and superior solutions emerge.

I’m not saying that you need to become an insufferable person like some hackers. The core message is that you have to learn to stand up for things, which also means standing against things. It’s not all positive. If you really believe in something to be true, then when somebody promotes the exact opposite, you have to stand up and say, “I politely but firmly disagree.” This sort of discussion happens very naturally on software engineering forums, but on the supply chain side, people are usually very quiet and afraid to speak out.

For example, I didn’t have the courage to make a sarcastic comment about a post on forecasting technology that was more inclusive. I was afraid of the backlash, but it has to be done.

Kieran Chandler: Okay, we’ll have to wrap it up there, but I think you’re inviting a bit more debate on the topic now.

Joannes Vermorel: Yes.

Kieran Chandler: That’s everything for this week. Thanks very much for tuning in, and we’ll see you again in the next episode. Bye for now.