Summary
Vinicius Tuppy, Material Planning Manager at Azul, explains how the company struggled with complex Excel-based tools and classical statistical models that lacked clarity and failed to properly balance cost efficiency and operational risks. During the supply chain crisis, these limitations became more visible, leading to overstock on some parts and shortages on others. After partnering with Lokad, Azul gained better visibility, detailed risk assessment, and a coherent, cost-driven decision framework supported by supply chain scientists. Although still in the early stages, the collaboration has already improved decision-making, team engagement, and alignment with Azul’s strategic focus on cost efficiency.
Full Transcript
Luciano Lisiotti: Hello everyone, we are here at Azul offices in São Paulo. Today I’m here with Tuppy. Vinicius Tuppy, he’s one of the leaders of the project at Lokad, and we’re going to discuss a little bit about how it’s working with Lokad, the project, and which is the outcome that he’s expecting for this. So please, introduce us a little bit about yourself, what you’re doing here.
Vinicius Tuppy: I’m Vinicius Tuppy, material planning manager here at Azul. What we do is optimize our inventory levels. Our goal is to make sure that we have all the material needed to do aircraft maintenance, both heavy and line maintenance, in the most cost-efficient way.
Luciano Lisiotti: Okay, great. So how was it before we started working together? How was working at Azul before Lokad arrived? How was it?
Vinicius Tuppy: Well, we had a few problems right? First of all, we had basically an Excel sheet with a lot of information in it, which was really hard to understand and it was really complex. It was developed by a lot of people, some who are not part of our team anymore. So the way we felt was like nobody fully understood what we were doing with the optimization of inventory.
We used classical probabilistic statistical models. So we knew where we should be, but we didn’t know the best way to go there. We wanted to go there at one time, and basically, it’s not possible because you need to have the best way to go there.
When the supply chain crisis came, we felt this problem even more because you have conditions, problems that you don’t fully know the impact they can cause on your operations. That’s when we felt more that we needed something new, something that can drive our decisions in a better way.
At that moment, what I identified was on one side the visibility of the supply chain, and then the coherent numerical recipe that understands how all things are linked in the operation. For example, the AOG problems or the purchases that you were doing.
Luciano Lisiotti: How was that moment?
Vinicius Tuppy: We’ve had two big moments here at Azul. One, when we started, all of our decisions were fully operational driven. We purchased almost everything that could cause an AOG because our biggest concern was to have the operation running, leaving cost efficiency behind. It caused a lot of overstock.
Even with an excess stock for a lot of part numbers, we’ve seen part numbers that we don’t have enough of, and we didn’t know the risks or the impact it can cause and what the right decision is to do with that. We had overstock and we had operational impacts because of the lack of some specific part numbers.
Luciano Lisiotti: Did you try any other solution or, for example, not only predictive analytics, but which other solutions were implemented before that tried to attack the problem but failed to do it?
Vinicius Tuppy: Basically what we did was trying to improve our Excel tools to have more information to help us understand the impact or what to prioritize. We tried to be more efficient with less stock. The problem was, as we kept improving our Excel tool, we started to understand less and less what it was saying.
At some point, we realized that we didn’t know the impacts of the changes we were doing, so we went back and redid it repeatedly. We didn’t get the tool we wanted because there’s a limitation of where classical statistics can go and where Excel can go.
Luciano Lisiotti: So, I believe that is the moment that Lokad appeared. How did you find out about Lokad? How was it?
Vinicius Tuppy: Actually Lokad found us. You found us, and we had a quick call. After our conversation, the philosophy of supply chain quality sparked interest in us. We went to the Lokad website, there was a lot of content, and it made sense. It can help us; we can drive our decisions better.
That’s why we insisted a lot on making this partnership with Lokad. The philosophy behind it made us believe that that’s the solution we needed. It wasn’t just the software; it was the philosophy behind it that was really aligned with what we were looking for.
Luciano Lisiotti: Okay, good. I think the philosophy for me is the passion that I always share with the customers and clients. For you, which is the one thing or two things that you get from Lokad which make you prefer Lokad rather than other possibilities? Why Lokad?
Vinicius Tuppy: When we spoke with Lokad, we understood that this philosophy is not only in the software but also in the service, right? So with Lokad, we are not only developing the software but also the philosophy in our analytics.
Now, with Lokad, we see it as a big change. I believe that’s also why almost everybody in my team wants to work with Lokad because they see that working with Lokad is developing this new philosophy. It really makes us better.
Luciano Lisiotti: There are two points that come out from your answer. From one side, the supply chain sciences and the other, change management. So let’s go for the first one, supply chain science. For me, one of the key values is the people that work in the team.
I can name Marin, Eran, Miguel, Archibald. For you, how important do you see the supply chain sciences image in the project?
Vinicius Tuppy: They’re essential. That’s a bigger difference between Lokad and other solutions. Most of what we have seen are consultants or tools that are already done and will be just addressed for our business rules.
But with Lokad, the supply chain scientists are consultants that will understand our process and then translate it to the software. And I think a good point is, basically, there’s no step between the process and the development of the software, so you skip one possible communication problem.
We usually talk to developers; it’s not easy for us who aren’t developers. The supply chain scientists do it very well.
Luciano Lisiotti: What was it before? How is working with Lokad? What are the results you have seen working with Lokad?
Vinicius Tuppy: We are still on go-live for a consumable batch, but we have already seen some results. What I see as the main result is that now we know where we are. Previously, maybe we didn’t really know where we were or the risks we were taking, or the overstock we had. We had a big picture but not the detail.
Now we have the detail, and we are already starting to act on our problems and processes to avoid some risks or problems we created in the past. We are making some actions to improve our future.
This is a quick result that we are already having. We feel more comfortable making purchases because now we know what we are doing. We know what is driving our decisions, and it’s really good because it increases the team’s engagement. They understand what they’re doing, so they are comfortable doing it.
Luciano Lisiotti: Besides the numeric results, I see the result of the evolution of your team. They understand, they have a vision, and everybody’s engaged in one direction. I think it’s quite important.
As you said, we’re going live with consumables. We have some results; what is the next development that you want to see at Lokad?
Vinicius Tuppy: The complexity is bigger, but also the opportunity is bigger. We are really anxious for the results and this development because, during the consumables development, we’ve seen some gaps in our processes that we were adjusting during the software development.
We’re looking now to understand the complex supply chain of rotables, giving us more control of what’s happening in the rotables process. We want to take the best decisions and find opportunities. It’s not straightforward, so any wrong decision or good decision will make the difference on our inventory levels and service levels.
Luciano Lisiotti: I was thinking about the previous answer that you gave about the evolution of your team. A good impact of Lokad is not only bringing insights to your team. In these last days, we’ve been talking with people on the financial side. We’re speaking with people in roles in the pool side. Why do you think it’s so impactful? Why are senior people saying, “Hey, I like this idea and I’m on board with it”?
Vinicius Tuppy: We are in a moment here at Azul where we are looking for cost efficiency everywhere. We know the fuel rates, and the fuel cost is increasing. The relation between real and dollar is crazy, and it’s not helping us, so we need to find opportunities everywhere we look.
Lokad is basically cost-driven decisions, so it’s completely aligned with the moment we are facing now. Everybody we speak with really likes it because it’s aligned with one of our main goals here at Azul for this year, which is cost efficiency.
Luciano Lisiotti: It’s really exciting. For these kind words, I think it’s one of the first and hopefully many more conversations we have. Hopefully one in Paris soon. Thanks so much and I hope we can see you next time.
Vinicius Tuppy: Thank you. It’s a pleasure to share our supply chain journey with Lokad and see the progress. Thank you so much from me.
