Santa’s Supply Chain Goes Digital
Originally published on Huffington Post
It’s no secret that Santa is the greatest supply chain success story of all time. Not only does Santa have a laser focus on his target market — children of all ages — but he has a near perfect order rating, a global distribution channel that spans the world in 24 hours, door to chimney delivery, and low turnover rates amongst the elves. Still not convinced? Santa’s supply chain was the very first to run “in the cloud.”
Today, preparing for the holidays is an easy feat for many, not just Santa and his network of helpers. That’s thanks in part to efficient supply chain and logistics processes that have held up to an increase in gift giving during this time of year. But for this to happen, retailers must have in-demand products on their shelves at precisely the time consumers are moving from the awareness stage to the decision stage in the purchase funnel.
In the spirit of the holidays, let’s take a closer look at Jolly St. Nick’s supply chain superiority in the context of the ghost of supply chain past, present and future.
Ghost of Supply Chain Past
Once upon a time, Santa’s supply chain consisted of a year-long production cycle. In fact, the minute he returned from his 24-hour journey around the world, Santa would go back to his workshop and begin planning for the following year. As you might imagine, Mrs. Claus was not thrilled with this process. Her home has become the largest single manufacturing plant in the world.
He had never heard of automation, or artificial intelligence to help his production, but had to rely on good old elbow grease and elf power to hand make his toys. When it came to delivery, he had no route optimization software or SatNav guidance system, but had to rely on a red nosed reindeer to show him the way. Santa had little idea if there were any weather issues on route or if his sleighs performance was suboptimal.
And he was 100% reliant on face to face demand sensing at his thousands of grottos around the world to get a true picture of demand. And I can only imagine the cost of employing all those “Elf’s on the Shelf” to keep track of who was on the naughty list and who was on the nice, a constantly changing dynamic in my house growing up.
Luckily for him and for Mrs. Claus, recent adjustments to the business process have paved the way for a more robust supply chain. Go ahead, get your milk and cookies (read: chocolate chip) ready. Santa is on his way to a chimney near you in a more efficient manner than ever before.
Ghost of Supply Chain Present
Santa’s ground work has brought us to the era of an on-demand, responsive supply chain. Today’s production for Christmas presents is a model in a state of perpetual flux. This readiness enables Santa to be nimble at every stage — from research and development to sourcing and assembly to distribution. Remember the child who moved from the naughty list to the nice list? Thanks to Santa’s expansive customer database — which consists of over seven billion records — these changes are more manageable because the database is “in the cloud.” Do we dare say that Santa is also one of today’s greatest big data success stories?
While Santa still takes a number of face-to-face meetings and receives purchase orders via the traditional letter to Santa, he now accepts orders online. That’s right boys and girls, you can “friend” Santa on Facebook. Just remember to be mindful of what you post. After all, he always “knows if you’ve been bad or good”. You can also follow him on Twitter @Santa or reach him via C2S (Child2Santa) at: firstname.lastname@example.org.
Let’s take a look at how each year, Santa completes his own Mission Impossible.
Focus on the customers (of all ages): Santa has a laser focus on customer centricity and always strives to deliver everything on everyone’s Christmas list. This year there is a big demand for individualized products such as those custom sneakers a child wants in his team color and number on. This is no supply chain “nightmare before Christmas” thanks to Santa new responsive manufacturing processes and the use of newly installed 3D printers.
Deck the halls with digitization: Thanks to his introduction of digital twin capabilities, Santa knows if last year’s toys are on the fritz. These digital copies of physical products give Santa visibility into how to best service and provide maintenance to “last years broken toys”. He now also has better visibility into the performance of his sleigh through predictive maintenance processes that leverage IOT sensors to track performance, temperature and calibration of key parts and components.
Securing Santas stocking and stocks: This year, Santa is starting a pilot project with blockchain to provide visibility into how his presents are being sources and delivered. If important parts get lost in route to the North Pole, Santa can now track and trace these items. Children across the world are also going to sleep at night, unknowingly thankful to blockchain enabled processes which helps Santa manage cross boarder shipments and proof of ownership. When it comes to customs documentation as presents cross the border – Santa is paper-free.
Intelligence is top of Santa’s wish list: Santa now leverages machine learning algorithms to better plan and manufacture presents in the most economical way. It shouldn’t come as a surprise. That he also has a route planning optimizer to enable a journey to every house around the world in 24 hours.
IoT enabled naughty list: The naughty or nice list is the best example of how Santa is using big data to fuel his operations. After all, he’s got to have a record of every child in the world. He is rumored to be thinking of leveraging smart sensors to make the job of gathering this data is a little bit easier.
Santa’s current supply chain operates like a well-oiled machine, but is it equipped to handle the challenges of tomorrow?
Ghost of Supply Chain Future
With the world’s population growing, and the choices and demands from customers increasing, Santa’s job isn’t going to get any easier. Santa seems to be taking digitization very seriously to keep up with changing business demands, and through the use of technology he is well positioned for the future.