A Q&A with Santa's CIO

From CIO.com we have an amusing and brief interview with a key member of Santa's team, Hermey Elfin.

You think you have supply chain headaches? Try being Hermey Elfin for a day. As CIO of Santa Claus LLC's North Pole operations, Elfin manages a supply chain encompassing billions of toys, games, dolls and various other children's products that must be delivered to his boss's 2 billion customers between bedtime and dawn on Dec. 25. His sole means of delivery to all 24 time zones? Nine flying reindeer. CIO recently sat down with Elfin as he was putting the finishing touches on the systems behind Christmas 2002.

For the interview itself, please visit…
http://www.cio.com/archive/010103/tl_holiday.html

The World's Greatest Supply Chain

While originally published in 2004, the "Santa's Supply Chain" case study is still fairly current — and a fun read. Here's an excerpt…

Santa Industries has taken supplier collaboration seriously. The SSN (Santa Supplier Network) is a Web-based portal that provides a variety of information and functionality to suppliers. The SSN allows suppliers to receive and acknowledge purchase orders on-line, view Santa Industries’ production schedules and component and raw material inventory requirements, and actually see all the way through to end user demand. Suppliers update their own inventories for Santa buyers to see, and generate bar coded shipments with carton level ASNs for all shipments. When a supplier shipment is about ready, the supplier uses the SSN to request inbound transportation information, and within four hours receives routing details. The system enables NPDS to use multi-stop truckload and inbound pools, dramatically reducing inbound freight costs.

The entire RFQ and sourcing process has also been put on-line, and Santa Industries regularly meets to decide which goods can be sourced using on-line auctions and which should be sourced more collaboratively. For the later items, Santa Industry engineers, manufacturing personnel and buyers meet regularly with suppliers to design products and components collaboratively, with a focus on lowest total supply chain costs, not just lowest component costs. Amazingly, Santa Industries has found that suppliers often have good ideas.

For the full story, please visit SupplyChainDigest News at…
http://www.scdigest.com/2004/12/north-poles-turbo-supply-chain.htm

RFID Strategy -- Santa's Little Radio-Frequency Helpers

On a more serious note, Paul Faber for IndustryWeek comments in this article about how RFID can be better integrated into the retail supply chain.

I was interested in buying an item from a major on-line supplier of musical instruments and other musician supplies. When I checked their website [sic] on Black Friday, they indicated that the item I wanted was out of stock, with more on the way by November 30. I checked back on that day, and found a new expected in-stock date of 12/1. The date continued to slip for each of the five subsequent days until I gave up checking the website [sic]. The result for that retailer was a lost sale. In fact, their inability to predict an accurate in-stock date made me nervous that the item would not arrive in time for Christmas delivery.

As a logistics professional, I can guess the problem that this on-line retailer faced. I know that the item I was looking to purchase is an Asian import. I would further assume that the expected delivery date listed on the website was generated by the item's vendor. Delays in their logistics chain could be caused by events at one or all transportation elements of ocean freighter, customs clearance, distribution center, or ground transportation. The inability to get real-time data from the logistics chain then drives uncertainty in predicting the arrival of merchandise at the retailer.

It's definitely a worthwhile read, available in its entirety at…
http://www.industryweek.com/ReadArticle.aspx?ArticleID=11143

Best Santa Supply Chain Article of the Year

Alan J. Fein, President of Pembrooke Consulting, authored a fascinating, funny, and brilliantly realistic article called "Santa's Supply Chain Keeps Pace, Despite Changes." According to Pembrooke, the piece is reprinted from The Wall Street Jovial.

"Mrs. C and I started the toy manufacturing workshop because we couldn't locate reliable suppliers," recalls Claus. "The elves worked for berries or pieces of bark, so we could keep costs low. I handled deliveries and the Mrs. managed operations.

Beginning in 1664, Claus began acquiring local competitors that had sprung up, a strategy he termed a "wrap-up consolidation." When the dust settled 250 years later, Claus had acquired more than 500 Christmas-delivery operations and formed Kris Kringle & Co., which controlled 60 percent of the market at the time.

This one's a must-read, available as a PDF at…
http://www.pembrokeconsulting.com/SantaSupplyChain.pdf

We wish you all a Merry Christmas and, to be safe, Happy Holidays!