00:00:29 Introduction of Bruno Saraiva - Worten’s Head of Stock and Space Management.
00:01:00 Bruno’s role and responsibilities in managing stock and space at Worten.
00:02:46 The challenges of allocating stock and space in an omnichannel retail environment.
00:04:24 Exploring technological advancements and innovations in the retail industry.
00:08:01 Impact of market complexity on supply chain management.
00:09:22 The importance of a financially-driven perspective in supply chain.
00:11:56 Walmart’s strategy and inventory management for financial success.
00:14:07 Financial imperatives as a means to manage supply chain complexity.
00:16:30 Balancing competing goals and resources in large corporations.
00:18:14 Addressing the need for supply chain reinvention.
00:19:45 Benefits of adopting a personalized approach in retail.
00:21:37 Traditional Cartesian approach versus an iterative problem-solving method.
00:23:51 Importance of embracing uncertainty and acknowledging limitations.
00:26:01 Updating company culture to adapt to new methodologies.
00:29:46 Embracing uncertainty in supply chain management.
00:30:57 The importance of exposure and control in retail.
00:32:53 Probabilistic forecasts and adjusting expectations.
00:36:00 Importance of data and technology in inventory management.
00:37:56 The difference between service level and quality of service.
00:42:18 The attraction of Excel for managing chaos and the need for better technology.
00:44:36 Worten’s core values and working with Lokad.
00:45:50 Building trust between Worten and Lokad.


Bruno Saraiva, Head of Stock and Space Management at Worten, joins Joannes and Conor in studio to discuss the challenges of retail stock allocation and Worten’s collaboration with Lokad. Bruno also shares his experience in the retail industry and the crucial role of supply chain management in customer satisfaction.

Saraiva shares his experience working with Lokad, noting that the company’s approach has helped Worten make better inventory management decisions while still allowing employees the freedom to challenge and question recommendations. He believes that trust and collaboration between teams are crucial for a successful supply chain management strategy.

Saraiva emphasizes the importance of supply chains and inventory management in today’s retail industry, as customers have little patience for not finding what they want. He notes that having a successful inventory management system can make a significant difference in attracting and retaining customers, as well as ensuring a competitive edge. Additionally, Saraiva suggests that companies need to focus on data-driven decision-making and embrace technology to stay ahead in the industry.

Vermorel highlights the importance of giving up on certainties in supply chain optimization, as there is a need to discover financial drivers and consider probabilistic forecasts. He explains that this approach requires companies to be open to change and embrace the chaos that comes with supply chain management.

Both Vermorel and Saraiva agree on the importance of incorporating local knowledge and expertise in supply chain management, rather than relying solely on top-down technology solutions. They suggest that technology should be used to support and enhance the insights and knowledge of supply chain professionals, rather than replace them.

Extended summary

In this interview, Conor Doherty, the host, is joined by Joannes Vermorel, the founder of Lokad, and Bruno Saraiva, Head of Stock and Space Management at Worten. The main topic of discussion is retail stock allocation, specifically addressing the challenges faced by Worten in managing their stock and space across their 300 stores, as well as the ongoing collaboration beteween both companies.

Bruno explains that his responsibilities at Worten include managing the entire supply chain from procuring products from suppliers to getting them into the hands of clients. He also oversees the layout and design of the stores, ensuring the proper distribution of products and the visual merchandising rules.

One of the challenges Bruno highlights is the need for the company to be omnichannel, meaning they have to make sure their products are available everywhere for their customers. With more than 10,000 products in their stores and millions of products from their suppliers, it is a difficult task to keep track of everything and ensure that items are available when and where customers need them.

To address these logistical challenges, Worten has gone through several stages of technological solutions. They started with Excel spreadsheets and then moved on to Access databases, SQL-based systems, and other tools to manage the complex stock allocation process. However, these technologies had limitations, which led them to search for new solutions, such as Lokad.

Joannes Vermorel provides some insight into the retail industry, emphasizing that it is incredibly competitive. Retailers must constantly innovate and stay at the cutting edge of technology and practices to maintain their competitive edge. He points out that innovations can take many forms, not just in software or digital technology, but also in store layout, economies of scale, and other aspects of the business.

Over the last few decades, the retail landscape has grown increasingly complex to meet customer needs and expectations, and this has made the use of digital technologies more important than ever. Vermorel explains that the complexity of retail is due to the diverse range of products and the need for better customer service. The shift to omnichannel retailing has placed the burden of managing this complexity on the retailer.

Going back to the discussion about using Excel for stock allocation, Vermorel states that it might have been suitable for simpler times when stores had a smaller assortment of products. However, with the growth of data, increased product assortment, and the need to manage supply chains more efficiently, more sophisticated algorithms and technologies are required.

Joannes further explains that the availability of data and the affordability of modern computing hardware have greatly increased the opportunity cost associated with not utilizing these resources for supply chain optimization. He also emphasizes that a financially driven perspective can help manage the complexity of the supply chain, as it is ultimately aimed at delivering excellent service to clients and keeping them happy and loyal.

Bruno Saraiva describes how adopting a financial perspective on supply chain management can bring significant gains to a company. He cites the example of Walmart, which strategically manages its inventory and pay terms to generate free cash flow, enabling the company to invest in other areas such as last-mile delivery and maintaining low prices for customers. Saraiva also stresses that the financial aspect of supply chain management is crucial in today’s competitive retail environment, with companies needing to ensure that their inventory is constantly rotating and generating revenue.

Saraiva further explains that in order to effectively manage the financial aspects of supply chain management, a company must employ quantitative analysis to monitor and optimize the performance of its products. This involves determining the optimal order points for each item, taking into account factors such as inventory costs, margins, and customer demand. He highlights that Lokad’s approach to this problem is unique, as it acknowledges that there is no single “perfect” order point but rather multiple order points that serve different functions.

Joannes Vermorel adds that the financial perspective is not about being greedy, but rather about managing the complexity of the supply chain and staying focused on the core vision of delivering excellent service to clients. He argues that the financial aspect serves as a tool for making decisions about resource allocation within a company, which ultimately helps to maintain a balance between competing goals such as providing the best service, maintaining low prices, and minimizing waste.

Bruno Saraiva shares his positive experience with Lokad’s quantitative analysis and notes that it has helped Worten make more informed decisions about its inventory management. He is excited about the potential for Lokad’s approach to bring about game-changing results for the company, particularly in terms of personalizing the management of each item in each store.

Joannes Vermorel explains that traditional techniques are not as important as the underlying methodology for addressing supply chain optimization. Classic Cartesian approaches, which involve a top-down reasoning and clear problem statement, often fail to address the complex and unpredictable nature of supply chains. Vermorel argues that a more flexible and iterative approach is needed, with an acknowledgment of the unknowns and uncertainties in the process. This approach involves engineering a quick, naive solution and iterating based on anecdotal observations of the most pressing issues.

Vermorel further explains that the biggest problems in supply chain optimization are often mundane and unrelated to the sophisticated algorithms found in literature. For example, understanding that negative order values represent returns is more important than tweaking learning rates. He emphasizes that the key to rapid results is prioritizing the most urgent issues and acknowledging the unknowns in the process.

Bruno Saraiva discusses the cultural shift required for a successful supply chain optimization project. He explains that Worten is an execution-focused company with a culture of resilience and growth. The introduction of Lokad’s approach to supply chain optimization was met with excitement and open-mindedness.The company’s employees embraced the new system as it allowed them to evolve from administrative roles to more managerial positions.

Saraiva also highlights the importance of feedback and collaboration in the optimization process. Employees were eager to challenge the new system and provide insights that helped improve it. This openness to change and improvement is a driving force behind the success of the project at Worten.

Joannes notes that many companies struggle with quality of service and service levels, and highlights the limitations of traditional approaches to measuring and optimizing these factors. He also discusses the challenges faced by companies attempting to replace local knowledge with top-down technology solutions, and suggests that a better approach is to develop technology that allows people to express their insights and knowledge in ways that align with the long-term interests of the company.

Bruno emphasizes the importance of trust between people and technology in making effective decisions, and praises the way Lokad listens to its clients and incorporates their feedback into its algorithms. He believes that this collaborative approach is key to building trust and driving positive results.

Full Transcript

Conor Doherty: Welcome back to Lokad TV. I’m your host, Conor, and as always, I’m joined by Lokad founder Joannes Vermorel. Today, joining us in the studio is the Head of Stock and Space Management at Worten, Bruno Saraiva. He’s going to talk to us about retail stock allocation. Bruno, it’s great to have you here.

Bruno Saraiva: Thank you for having me.

Conor Doherty: Today is a historic day, in fact. It’s my first interview with a guest in the studio, so thank you for coming. So, what exactly do you do at Worten?

Bruno Saraiva: As you said, I’m responsible for stock and space management at Worten. That means we are responsible for the upstream and downstream of stock procurement and allocation. We buy from suppliers, do the forecast with them, and are responsible for the entire supply chain until the product reaches the client’s hands. We need to ensure the right amount of stock is allocated to the right store without surplus or shortage.

Conor Doherty: And this is for around 300 stores, right?

Bruno Saraiva: Yes, that’s correct.

Conor Doherty: That sounds like an enormous task. What challenges do you face in terms of stock allocation?

Bruno Saraiva: As an omnichannel company, everything needs to be available for the client at all times. If a product isn’t in stock at one store, it should be available within a couple of hours at another location. Stock must be available and in perfect condition for purchase. This process occurs every second for more than 10,000 products in our stores and millions of products from our suppliers.

Conor Doherty: What methods have you tried in the past to address these logistical challenges?

Bruno Saraiva: We started with Excel, moved on to Access databases, and then switched to SQL-based systems. At some point, technology becomes a limiting factor, and you need to find different solutions or paradigm shifts. That’s when we turned to Lokad.

Conor Doherty: Joannes, could you elaborate on the technological difficulties of solving the problems Bruno described using tools like Excel?

Joannes Vermorel: Retail may seem simple, but it is incredibly competitive. Maintaining a competitive edge requires staying at the forefront of industry practices and techniques. Innovations can take many forms, not just software-based technologies. Customers expect a diverse range of products and quality service. The digital technologies available today help meet these expectations. However, the market has become increasingly complex over the last few decades, which has made managing stock allocation more challenging.

Conor Doherty: A quality of service seems to require the sort of benefits that digital technologies bring. Over the last couple of decades, markets have become very complex for various reasons, and this complexity is not accidental; it suits the customers better. E-commerce is a way to take care of the last mile on behalf of the clients, bringing value for them but shifting the entire burden of complexity to the retailer. Now retailers are not just e-commerce or brick and mortar; they are both and more. So maybe, if we go back a few decades, simpler technologies were suitable, but nowadays, the amount of data available about the supply chain landscape has grown enormously, presenting new opportunities. How do you see this emerging landscape, Joannes?

Joannes Vermorel: From our perspective at Lokad, we aim to make the most of the data available and the modern computing hardware, which is cheaper than ever for supply chain purposes. This aligns with our financially driven perspective. The amount of information we have about the state of the supply chain has grown tremendously, and thus the opportunity cost associated with not using this data has also grown.

Conor Doherty: Thank you for sharing your insights, Joannes. Now, Bruno, considering all the constraints Joannes has just described, what led you to adopt a purely financially driven perspective on supply chain management in an omni-channel retail space?

Bruno Saraiva: Looking at supply chain management from a financial perspective offers a lot of gains. In the past, supply chain management was seen as something that needed to be done for the commercial team to sell products. Today, inventory management is crucial for having a good free cash flow to invest in other aspects of the business, like last-mile delivery or aligning prices with the market. Our responsibility is to ensure items are rotating, coverage days are low, and pay terms are optimized, freeing up cash to invest in other areas. To achieve this, we need to perform large-scale quantitative analysis to identify underperforming products and manage inventory levels effectively while still meeting customer demands.

Joannes Vermorel: I’d like to add that the financial perspective is not just about greed or getting rich; it’s an instrument to manage the complexity of the supply chain. Our ultimate goal is to deliver excellent service, making clients happy and loyal. The financial imperative allows us to navigate the conflicting goals in supply chain management, such as balancing price, service, and sustainability, while minimizing waste and unsold inventory. Problems, you know, you have one store that maybe needs an investment because they need some sort of renovation, and this sort of money competes with things that are completely different, such as should we actually buy more trucks or should we invest in a new piece of software? Those concerns are completely unrelated, but they are still connected in the sense that they all compete for the same sort of resources in the company. The financial perspective, the way I see it, is to be more truthful to your true core vision, your grand ambition. It looks like on the surface, you’re just a greedy business chasing Euros, but the reality is that if you do not do that, it means that you get distracted by one of the topics, and then suddenly you’re doing a lesser job at your core focus, at your mission.

Conor Doherty: Bruno, with the skin in the game here, on that note, how is the quantitative analysis going, the implementation?

Bruno Saraiva: It’s going really well. We are in a phase where we are finally developing everything that goes into place for all the logistics faults that we need to be on live. We are anxious to start using it because we are going through a revolutionary legacy system, so we are trying to put many pieces into place in terms of technology and Lokad. One of the successful ones, I remember when we did the POC in the beginning with you guys, in one month we had great results, some things that we had never even seen before with that time length. And I say that with all the modesty because we are a very evolved company in terms of supply chain and stock inventory. We already have many great achievements in that area, but what you need to do is gather all those years of knowledge, put your brains into it, and then reinvent this process to get those results. We started looking for many tools in the market and saw all those traditional approaches like, if you want the perfect order point, all you need to do is this, this, and that, and that’s like everything you do in the last 10 years is trying to find the holy grail, the perfect order point, and that does not exist. One of the things that I’ve heard when I talked to Lokad, one of the things they first taught me was, “We don’t tell you what is the perfect order point because that does not exist. We tell you there are multiple order points. Some have some functions, and some have other functions. You have to decide which way you want to go.” As Joannes was saying, sometimes you need to go with the ones that are more financially driven and optimized. If you have 300 cables that are all 150 and a half, well, if you don’t have one, the other one will do for the client. Other times, you have to go for what is really important for the client, what needs to be there despite its costs. I think that’s the essence that Lokad will bring to the table. It will tell exactly what you need to do in each situation with a lot of complex quantitative algorithms, basically a heuristic approach, applying that to each situation, and learning from that as you go. That is something that you really need to do and put a financial driver on it to say, well, you have reached the maturity of this item, so if you go further along, you just have more inventory, more cost, and less financial return. Or the margin of this article doesn’t depend on that, so don’t go that way, don’t do that thing on that location specifically, but on the other one, yeah, you have to do that. So that kind of personalized approach for each item in each store, that is something that’s game-changing. We are very enthusiastic to see it through.

Conor Doherty: Joannes, I mean, this is obviously your area of expertise. You have a full lecture on retail stock allocation. Could you fill in the technical aspects or the recipe?

Joannes Vermorel: I think the techniques are not so important compared to the underlying methodology. The classic Cartesian approach would say, “I’m going to state the problem clearly and then, based on this clear statement, I’m going to devise and engineer the solution, and then we will be able to apply the solution to the problem and it is solved.” There are many endeavors in our civilization where this sort of thing works. If you want to have a better transformer, you can do that in the lab. You have a very specific problem, which is how to go from, let’s say, 5,000 volts to 230 volts with maximum efficiency and eventually maximum efficiency under a certain budget. But in a retail chain, it’s a gigantic mess. There is nothing well-defined. The problem is that you don’t know what you don’t know, and there are so many things that can go wrong in all sorts of ways. You can’t even see the supply chain. What you see are the electronic records collected through some sort of haphazard applicative landscape, where some parts are 40 years old. The people who engineered those parts are retired or possibly dead. This top-down, Cartesian approach works very poorly in this context. One of the reasons why Lokad delivers results quickly is that we take a different approach. We engineer something that is possibly a good solution, and then iterate not based on some grand top-down understanding, but quite the contrary, based on super anecdotal observations of what is dysfunctioning the most. We throw a naive recipe at the problem and then let people who have experience tell us what are the most insane parts of the recommendations generated by this recipe. This lets us prioritize our efforts on the stuff that needs attention most urgently. Very frequently, those things have nothing to do with what you will see in the literature. It’s not about tweaking learning rates or other sophisticated problems. It’s much more mundane, like understanding that negative order values represent returns. This kind of issue is all over the place, and that’s how we end up having rapid results through this intense prioritization. It’s not so much a technology as much as the acknowledgment that we don’t know, and thus we should not initiate the process by putting an enormous set of complexity before we even had the chance to be challenged about what is it that we are even trying to solve.

Conor Doherty: This sounds like a cultural shift, as opposed to trying to find the precise value. It’s more, as you said, accepting that we don’t know, embracing uncertainty. And if I can just return to Bruno, it seems to me that a key element of any successful project, certainly one like this which involves such a cutting-edge approach to things, requires updating the culture. How have you and Worten handled that?

Bruno Saraiva: One thing that defines Worten is our restless culture. We are a very execution-savvy company, focused on our goals and very resilient. We are a Portuguese company, so we are at the tail of Europe. We need to strive to make it because we have a large customer base in our country. This need to grow and get bigger always challenges our culture. As we said before, you start thinking on the Excel, then we start thinking on the access. Why are we doing this? Because we need to, and how you need to do that is what makes us very uneasy. What’s interesting is that when you bring the Lokad program to Worten, everybody was really excited about it. Afraid, of course, because it will change a lot of things, but also very excited about it because it means, first, we have the investment to bring something new and different to the company. Second, that you are doing that to uphold and improve the conditions of how you manage things, so you stop doing files and you start making decisions and taking approaches that you didn’t take before. And third, because people evolve with it; they stop being administrative, something that was mainly about signature, putting something on a shelf, to being managers and to start having that managing mentality to how and why they do things, and what financial benefits they are retrieving from it, and how their clients are benefiting from it. So, that unrest in an uneasy way of seeing things is also something that is part of the culture. But saying this, of course, is very beautiful, but there are always people who will think, “Well, now I have to deal with another problem; we have to learn all about it again.” And that’s part of the culture shift and change. But the thing is that people embrace that with open arms and are willing to change and improve on that. It’s making it a lot easier.For example, we are testing out a lot of categories with a lot of stock managers, and those people already grasped it, and they were saying things like, “This is returns, and this is seasonal, so you cannot take into account this kind of data here because otherwise, you’re going to have a problem.” That kind of feedback is almost immediate because people want to be proven right for what we are doing and Lokad coming to challenge that. So people are trying to challenge that new system that comes into place, and when they see that, in fact, it brings improvement and involvement from them, then they accept it. And that’s something that really drives us about this, to be honest.

Joannes Vermorel: I can certainly understand the fear factor because, for most problems outside supply chains, you want to approach the problem with a high dose of certainty. For example, in retail, you want to have a barcode printer that is almost perfectly reliable. Why would you settle for anything but a perfectly reliable printer to print those barcodes? And for most of the things that are part of our modern civilization, this approach of engineering something into perfectly reliable results works fine and great, actually. The fear aspect of Lokad, and what makes supply chain so different, is that there is so much mass and complexity that this approach of wanting to engineer the certainty of the outcome backfires. You want to control things that are, to a large extent, beyond your control. That’s what makes supply chain different from what happens within a factory. Within the factory, you have complete control of what is happening. But in supply chains, you have trucks that might face closed roads or unsuitable weather conditions for driving. In a store, what does it even mean to have a perfectly managed inventory? Are you going to protect your inventory so much that people can’t even touch it? When you do retail, you have to expose yourself to a degree of chaos. Otherwise, everything would be sealed away, and that would minimize chaos at the expense of perception and appeal of the store. So, the way I see that is, look at where the fear factor is. Part of the Lokad recipe is to give up on many certainties. You have to give up on the idea of knowing what you want to optimize. We say that we have to optimize those financial drivers. The weirdest thing is that we don’t even know those financial drivers at the very beginning. We kind of discover them with the client. On the forecasting side, we have those probabilistic forecasts, which is a way to say, well, we acknowledge that our forecasts are not perfect, so we are just going to give you a spread of possibilities. When people look at those probabilistic forecasts, they say, “If I understand what Lokad is saying right, you say that whatever happens, Lokad will never be proven wrong because there was always a probability for this thing to happen,” which is another way to look at it, and it is very disconcerting. I think that’s an emerging culture that is not suitable for all problems, but it takes companies that are really willing to change themselves. To many people, it looks like playing with fire. Why would you settle for anything that is not a certain outcome? Well, the recipe is that if you settle only for certain outcomes in supply chain, you get very poor results because you dismiss all this ambient chaos instead of embracing it.

Conor Doherty: Actually, perfect segue, which I’ve ruined by acknowledging, but Bruno, what advice would you give to other, maybe not your competitors, but other actors in the retail space who are struggling to embrace the kind of uncertainty that Joannes just described and that you described as well?

Bruno Saraiva: Well, yesterday I was talking about this. In most companies in the supply chain, stock inventory, and procurement, we have a very closed mind still because we are managing like in the 80s or 90s. They’re still trying to find the holy grail, trying to be the smartest person in the room, and it cannot be like that for two main reasons. The first one is that supply chains and inventory have a very crucial role in today’s retail. It’s important not just for the last mile but also for the simple fact that people have very little patience to not find what they want, and that’s what’s driving e-commerce. E-commerce is a centralized unit that centralizes inventory for the majority of people, so they send it from one place only. People go to a physical store because it’s on their way home, it’s easier for them, and they want that human touch to see if that is really the best item they’re hoping for. If you go to that store and you have all that, but you don’t have the item there, that’s a big letdown. So, inventory plays a crucial role in terms of client satisfaction and in terms of making the difference between having a physical store and being online only.The second reason is that if we perceive ourselves as the lesser men in the room, we are never going to change because no one will invest in something seen as lesser. So, that is a mindset that you have to combat. You have to put data on that, prove that you’re right, and prove others that you are right. That’s what drives change. Most great companies that did something of themselves in the past started to understand that inventory played a key role. Walmart did it, JD Sports did it; they always perceived that the way inventory is managed, how it’s presented to the client, how it’s available or not to the client, and what other options clients have in order to get to that inventory at low prices are the main factors to keep bringing clients to the stores and offering them loyalty benefits and everything else on top of that. Clients know that they have a place where they can find what they want, and they can find it at a better place than other competitors. They also have some benefits to go there and buy there. So, the major roles in terms of supply chain, inventory, and procurement in those big companies need to start having this in mind. They need to see that they have to be someone or something that speaks in the room, that makes a change and a difference in making improvements in the matter. They also need to start being more digital and technology-driven because many of those companies are very intuitive-driven. They rely on their sensibility for certain things, and that doesn’t bring things aboard like good instincts. Like Joannes was saying, you have to embrace the complexity, embrace the chaos, and use data in order to make the best outcome possible and make good decisions. This is a mindset that needs to be adopted in this industry. If not, other competitors will find it out because I’m not revealing all the secrets.

Joannes Vermorel: Playing devil’s advocate, since I’ve met with many of my own competitors, some of them were founded in the 70s. So, those problems have been around for a long time. Retailers have acknowledged these sorts of problems for a very long time, but why is it that management ceases, for whatever reason, to pay attention to things that broadly speaking fall under the umbrella of supply chain? Here again, playing devil’s advocate, I believe that the vendors, the people who are selling solutions, have a part of the blame. The problem is that, on one side, you have the problem, like improving the quality of service in the store, which seems well-defined enough. But on the other hand, how are you even understanding the problem? Let me illustrate: if you rephrase this problem as “let’s improve the service levels,” is it really the same thing as the quality of service? I would argue not at all. Service level is a measurement that has one key thing in favor: the ease of measurement. It’s something that is easy to measure but is not perceived as very relevant by customers. Customers have substitutions; they don’t necessarily come into the store thinking, “I really need this barcode.” They have preferences, and if they find something with the right price, capabilities, or look and feel, that will suit their needs just as well. They don’t really care about whether this barcode is present or not. In retail, people often don’t buy just one thing; they buy several things. So it’s not actually the availability individually, but more like the package of the items, whether it makes sense as a combination. If you have to visit five stores to get five things that you could get all in one place, that’s a hassle. Now, in the 70s, there were those techniques which, to a large extent, backfired. When people see that Excel is so backward, I would say yes, but not necessarily so much because of what you don’t see. Companies that went out of their way to get rid of Excel, like Target Canada, went bankrupt. Even more recently, in Europe, Lidl wasted half a billion euros on a project to get rid of Excel. The way I see it, if the solutions proposed by the market keep backfiring, then even if Excel looks crude, there might be some wisdom in it. There is some wisdom in the sense that Worten still exists while Target Canada does not. Some people went the way of the dodo due to that. So, playing The Devil’s Advocate, I’m saying that the people who, for whatever reasons, decided to not go along the path of competitors of Lokad, not embrace those sort of things, survive better than the ones who did. Now, I think that the way Lokad approached that is to try to embrace what makes Excel so attractive. I think that’s one of the things that makes it so attractive is that Excel is an excellent way to manage chaos. People can tweak their things and maybe they are not going to apply the optimal formulas as devised by very highly recognized university professors. They’re maybe going to do something that is going to be looked at as some sort of numerical duct tape, a hasty fix, but if it works, you know, there is this saying that if it looks stupid and it works, then maybe it’s not stupid. The takeaway for me is that we need to have whatever sort of technologies are pushed, we need to make sure that we preserve the essence of what makes companies that went for those crude methods like Excel, that didn’t go bankrupt like Target Canada, work and what makes them tick. I think it is not about replacing the sort of very local knowledge with some sort of top-down technology; it is more like, what if we had the technology that could let those people express their insight and knowledge in ways that are more aligned with the long-term interest and more scalable with regard to the internal interest of the company? That’s a completely different take, as opposed to having some technology that presents itself as a replacement of these expertise.

Conor Doherty: Well, I don’t really have any other questions, but it is customary at Lokad to give the final word to the guests. So, Bruno, to draw to a close my historic interview with you, what are your thoughts?

Bruno Saraiva: For us, it’s quite simple. We are very invested in people’s capabilities, and some of the best tools that we have are born from people. One day, someone gets tired of doing the same thing all over again and starts doing something different to manage something better. That’s one of our main core values, and people always have that liberty. But one thing people cannot do today is make a massive amount of decisions because there is a bigger assortment, larger stores, and more items. They cannot manage that; they need help to do that. I think what Lokad is doing for us is helping us make those decisions. At the end of the day, they are recommendations for products and what we should purchase and why. People have the liberty to look at that and still challenge it, saying, “No, this doesn’t make sense from a point of managing the category.” Or they can say, “I’m very aligned with this result.” What we are learning with Lokad is that you’re really listening to that, and you’re incorporating it into the complexity of the algorithms and the things you develop. That’s very interesting and brings more confidence to the people. When people see the results changing and shifting to something they would acknowledge as right, and that really brings results, people start trusting more. I think trust is the keyword here. We really need to trust each other as we do with the teams right now. They are speaking in one true voice, trusting each other to make the best of it, and that’s why I think it’s a winning formula. We are very happy with it right now, so thank you, guys, for that. It’s been a pleasure working with you so far, and I’m sure it will continue to be.

Conor Doherty: Well, I love flattery. I don’t know about Joannes, but I can’t get enough.

Bruno Saraiva: It’s not flattery if it’s true!

Conor Doherty: Thank you both very much for joining us in the studio.

Bruno Saraiva: Thank you for the invitation. It’s always a pleasure.

Conor Doherty: You’re welcome back anytime, of course. Thank you, Bruno. And Joannes, thank you as always for your time. And thank you for watching. We’ll see you next time.