What is the real secret behind Santa's super supply chain?

Posted by Martin Verwijmeren on Dec 24, 2014 6:46:00 PM

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At the end of year, many top lists get published including rankings of top performers in Supply Chain Management.

Again, it seems the best supply chain of all has been overlooked: Santa Claus!

Let’s examine the super performance of Santa’s supply chain: 

  • 100% On time delivery - children always receive their presents in time
  • 100% Complete fulfiment - families precisely get what they asked for
  • 100% Cloud based service - the first supply chain literally running 'in the cloud'

Not convinced yet?

Scalable Manufacturing Capacity

The manufacturing sites needs to produce over millions of presents every day of the year. As a result, inventory of billions of products is stacking up towards Christmas Eve creating the ultimate warehouse management challenge. Santa also has complete control of his manufacturing and achieves tremendous economies of scale in production by having a single manufacturing facility (Santa’s Workshop).

Excellent Customer Service

Exceeding customer’s expectations (usually receiving more and bigger presents than shown on the wish list) has boosted Santa’s image. In addition to the unparallelled on time delivery performance, Santa Claus provides inpeccable customer service.

Multi-Channel Order Processing

Orders come from all directions. As nobody knows what Santa’s real age is, it is safe to say that order intake has drastically changed over time. Traditionally, Santa takes orders personally usually by customer meetings whilst sitting on his knee. Or from letters delivered via the traditioal mail system. Santa is quickly transforming into the internet age and now accepts orders electronically through social networks.

Supplier Network Collaboration

There is no official count of how many suppliers Santa actually deals with. Just imagine the level of information Santa requires to orchestrate purchase orders, shipment notificatios, on-site and in-transit inventory levels, of raw materials, components and finished products. And on top the optimization of the transportation network to get all his supplies up to the North Pole on time.

Supply Chain Planning

Demand forecasting by Santa must have him pulling of his hat when trying to synchronize supply to demand. He needs to manage millions of SKU’s all peaking at exactly the same time (Christmas Eve). He also has to deal with extremely short planning cycles requiring a very responsive planning system for balancing push and pull control policies.

Fulfilment, Logistics and Transportation

The fulfilment, logistics and transport challenge for Santa is overwhelming. He has to visit every customer in a 24 hour period. This is all done through his own logistics fleet of “a miniature sleigh, and eight tiny reindeer” according to the original poem 'The Night Before Christmas'.

Integral Inventory Management

Santa also seems to have the perfect Inventory Optimization and safety stock planning. Did you ever hear of a “Santa Sale” on December 26th? This superior inventory management makes his competitors pull their hair out for hundreds of years!

Global Tracking and Tracing

In the pas years Santa has taken advantage of GPS tracking devices so that his customers can track and trace his movements and current location in real time. The defense service NORAD says it uses the heat signature from Rudolph's nose to "track" Santa over spots ranging from Australia to Africa.

What do you think? Indeed, Santa Claus runs the best supply chain in the world!

Santa is not an MPO customer, however many of his supply chain partners are ...


Happy Holidays!

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