Is there any supply chain in the world as large and complex as the one headed up by Santa Claus? In the midst of the holidays (perhaps a bit tempered this pandemic year), many of us eagerly await the arrival of Saint Nick and the goodies he promises. But consider the following:
- Just over 25% of the world’s population are children (0-14), which equals roughly 1.9 billion children across the globe;
- About 31% of children are raised in Christian families, which means nearly 600 million kids are expecting to see a surprise under their Christmas tree every year. We will assume all are on the “Nice” list;
- If the average gift received per child is 2 pounds, Santa has to ship 600,000 tons of presents across the world;
- If Santa would consider using human help, he would need approximately 30,000 trucks or 17,000 airplanes;
- Santa has only one night (22 hours to be exact) which means he has to deliver nearly half a million gifts per minute with no room to fail;
- All this happens in one mega multi-stop sleighload. We won’t even consider HOS (I think buried in the rules is an exemption for Mr. Kringle) or refueling of his reindeer.
So how does this mega-feat of logistics and transportation happen? Father Christmas has nearly a year to develop his transportation strategy for the upcoming season. Some considerations:
- What is the desired end state? Happy Children.
- Has the customer demand profile changed, and how? Bicycles, baby dolls, or xBoxes.
- Are there emerging geographies to plan? Demographics shift constantly.
- Does my existing technology and associated process allow me to achieve the organizational goals for the year? If not, what are my options? Upgrade or replace.
Then comes execution of the strategy. Though he is hundreds of years old, I have on good authority that Santa is quite progressive in use of technology. He has to have implemented a leading ERP application. But suppose his Transportation Management System (TMS) is not up to jolly standards. He needs options and he needs help.
An operation of this scale likely requires a trusted partner (elves are a bit lacking in supply chain and IT skills) that is willing to work at the North Pole or adjust virtual schedules. That partner is going to help implement the right solution and ensure it meets his specific needs. Failure is not an option.
The big night comes and the teams need to be sure they have anticipated requirements to ensure success. These may include:
- Are all delivery points known and loaded with correct address information?
- Do I have adequate processes in place to meet expected, and last minute, demand?
- Have I right-sized my fleet (okay, that one’s kind of a given)?
- Do I have visibility of these precious packages from departure to final delivery?
- What is the returns policy?
- And of course, 100% OTIF is a given.
After some time to recover from this epic event, Santa does not just sit on his hands waiting for the process to begin again in a year. The progressive thinker he is and has kept him in business so long evaluates his performance and looks for ways to improve.
- Should I consider outsourcing some of my operations?
- Would pool points or forward inventory depots improve service?
- Should I regionalize fleet operations?
- Can my route be better optimized to reduce total miles?
- How else can I use the tools at my disposal to maximize the customer experience?
You see, Santa is a progressive logistics leader. He plans. He recognizes the power of technology and strives to improve every day, every year. He leads by example. He seeks advice from experts.
Now, if we could figure out how he also makes so many personal appearances during peak season….
Dennis Heppner is a Principal at JBF Consulting. Dennis’ expertise in transportation, logistics and supply chain operations, and third-party providers spans 25+ years. His experience is broad-based, spanning entire supply chains, including business process redesign, sourcing, distribution network design, transportation management, distribution operations, outsourcing selection, and business strategy for major manufacturers, distributors, retailers including eCommerce, and service organizations.
About JBF Consulting
Founded in 2003, JBF Consulting is a supply chain execution strategy and systems integrator to logistics-intensive companies of every size and any industry. Our background and deep experience in the field of commercial logistics technology implementation positions us as industry leaders whose craftsmanship exceeds our client expectations. We expedite the transformation of supply chains through logistics & technology strategy, commercial & bespoke software implementation, and analytics & optimization.