Thursday, April 21, 2011
Sunday, April 10, 2011
The Truth About Santa
As everyone know Santa Claus is a plump, jolly, white-bearded man wearing a red coat with white collar and cuffs, white-cuffed red trousers, and black leather belt and boots. He lives at the North Pole, with a large number of magical elves, and at least eight or nine flying reindeer. He is also said to make a list of children throughout the world, categorizing them according to their behavior ("naughty" or "nice") and that he delivers presents, including toys, candy, and other gifts to all of the good boys and girls in the world, and sometimes coal to the naughty children, on the single night of Christmas Eve. He accomplishes this feat with the aid of the elves who make the toys in the workshop and the reindeer who pull his sleigh. -wiki
But i bet you don't know, he has a degree in supply chain management. I mean how else can he be in control of a bunch of elves, supervising them into making toys to a bunch of kids all around the world. He has to make a lists of naughty and nice children. He has to deliver them on Christmas and not be late on it. So basically he has to have delivery on-time and send out accuracy of 100%. How many company can do that? Most also have a picking efficiency of 98%. Santa can't afford to make a mistake. Let's take a look to its system.
Supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. How does it all apply to Santa, you ask? It does.
Santa and elves are the organizations. You may not know it, but North Pole is really high on technology, if not how can they grant 12 years old boys their x-box 360. The North Pole is buzzed with activities, making of toys, creating Christmas. Don't believe? Just watch any Santa movie that show you the different version of what is going on in the North Pole. Information flow in and out with lists and lists of names and addresses. And all in all, it is just to get product (present) from supplier (Santa) to customer (children).
So basically, there is a few process that need to be address. Let's take a look at it shall we.
But i bet you don't know, he has a degree in supply chain management. I mean how else can he be in control of a bunch of elves, supervising them into making toys to a bunch of kids all around the world. He has to make a lists of naughty and nice children. He has to deliver them on Christmas and not be late on it. So basically he has to have delivery on-time and send out accuracy of 100%. How many company can do that? Most also have a picking efficiency of 98%. Santa can't afford to make a mistake. Let's take a look to its system.
Supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. How does it all apply to Santa, you ask? It does.
Santa and elves are the organizations. You may not know it, but North Pole is really high on technology, if not how can they grant 12 years old boys their x-box 360. The North Pole is buzzed with activities, making of toys, creating Christmas. Don't believe? Just watch any Santa movie that show you the different version of what is going on in the North Pole. Information flow in and out with lists and lists of names and addresses. And all in all, it is just to get product (present) from supplier (Santa) to customer (children).
So basically, there is a few process that need to be address. Let's take a look at it shall we.
- Customer service management
- Procurement
- Product development and commercialization
- Manufacturing flow management/support
- Physical distribution
- Outsourcing/partnerships
- Performance measurement
Customer service management
Which children ever say they hate Santa? You rarely hear a kid who hate Santa. In fact, if Santa really do exist, parents will love Santa even more. So, Santa has no problem with customer service as they are excellent! As Customer Relationship Management concerns the relationship between the organization and its customers. Santa has great relationship!
Procurement
From the 15 weeks of boring procurement lesson in school, you can be sure Santa has everything under control. Now i wonder how he managed to get degree. Anyway, usually great communication need to be made, so, while company uses EDI, Santa has better communication system. The elves are small and pretty fast. They remember everything. So basically no data will be lost, so it will be a better system than EDI, as technology can be faulty, but with elves, they wont be. They are also not human, so there wont be human error.
Activities such as negotiation, order placement, inbound transportation, storage, handling and quality assurance, the responsibility to coordinate with suppliers on matters of scheduling. None of these will matter. North Pole has the best storage room. As money is not an issue, thus the storage room is huge. Handling, quality assurance and scheduling will be a sure thing. Schedule products delivery is only once a year. All the handling and QC (quality control) will be done by the best. Nothing will go amiss.
Product development and commercialization
Well, new toys are invented all the time, and thanks to TV ads and magazines, newspaper, anything, it will be commercialize. So, in the case of North Pole, every design is planned carefully and they will go through all the steps necessary to make a product happen.Well, you know what i mean.
Manufacturing flow management/support
Just like in any factory, a toy factory will go through all the steps needed to make a full proper toy. So, this process is done.
Physical distribution
Reindeer does not stuck in traffic. They have excellent navigating system imprinted in them. The sleigh has a top notch GPS system that can track Santa anywhere around the world. So, if Santa make a detour, the elf in charge will know of Santa whereabout. Plus Mrs Claus will know too, so he cant cheat on his wife. For an old dude Santa is pretty fit. With a little bit of magic, he can go through those tiny dirty chimney. So, no problem on this process. Next.
Outsourcing/partnerships
This is where, all the Toys'r'us and all the other toys store came in. This is a secret that not many know. Santa uses 3PL. And we all know, using 3PL has its advantages and disadvantages. Santa has to share some information with these companies. So bo bian, they took advantage and open the store for 365 days yearly. But ya, parents act as partner. As often, it is impossible to travel to all the part of the world, visiting houses that do not have chimney. So, parents will be doing their job too.
Performance measurement
It is said that experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. So, if Santa has a market share, it will be doing fairly fine. Is Santa making lots of profit? Well, i guess you can say so. Even without any sort of payment, North Pole still can function. The toys production is working 24/7. The elves (workers) are happy. Information of naughty and nice kids are delivered accurately. So for internal measure, everything is good. For external measure, you can always benchmark. And sure enough Santa will be the at the top.
In term of monetary value, North Pole worth a lot. Till now, no company can take over Santa's. Plus they have been in business since 1820, so that makes them one of the oldest most successful company in the world today. They would not have trouble with green peace as they are not doing anything to harm the environment. Santa do not use petrol to fly around. Toys are made in North Pole which function in their own little world which will do not use up the world's natural resources.
I guess the only thing you can accuse Santa of is corruption. He ate the cookies and milk left at the fireplace. Now, that is what some people call bribing. But, there is no lawsuit against it, so there is nothing else to say on that topic.
I guess the other thing you can say in short is using the SCOR model.
Plan: All the plan is made.
Source: North Pole is very resourceful.
Make: What else can the elves do?
Deliver: It is after all is Santa job to deliver. Plus Santa practices JIT (just in time).
Return: So far no one return their goods. The only return he ever gotten are letters saying thanks for the lovely gifts.
What else?
Bullwhip effect? Not so much.
Inventory management? No problem.
No such thing as picking error. Well, not many. Elves are fantastic. During delivery, Santa has magic thus he will not make any mistake.
Forecasting? Not a problem. Santa has a list.
Reverse logistic is kept to a minimal, almost zero. Naughty kids, will just throw away their coal.
Order fulfillment. Children will send in their order through letters (PO, purchasing order) written to Santa with specific details on what they want. In the olden days, it is mostly MTS (make-to-stock) but now, it will be BTO (build-to-order) as children now have so many ideas on their mind. Then there will be those special kids who want ETO (engineer-to-order) but these orders are only made specially for those super nice children.
Well, i guess that's about it. Do i miss anything else?
Activities such as negotiation, order placement, inbound transportation, storage, handling and quality assurance, the responsibility to coordinate with suppliers on matters of scheduling. None of these will matter. North Pole has the best storage room. As money is not an issue, thus the storage room is huge. Handling, quality assurance and scheduling will be a sure thing. Schedule products delivery is only once a year. All the handling and QC (quality control) will be done by the best. Nothing will go amiss.
Product development and commercialization
Well, new toys are invented all the time, and thanks to TV ads and magazines, newspaper, anything, it will be commercialize. So, in the case of North Pole, every design is planned carefully and they will go through all the steps necessary to make a product happen.Well, you know what i mean.
Manufacturing flow management/support
Just like in any factory, a toy factory will go through all the steps needed to make a full proper toy. So, this process is done.
Physical distribution
Reindeer does not stuck in traffic. They have excellent navigating system imprinted in them. The sleigh has a top notch GPS system that can track Santa anywhere around the world. So, if Santa make a detour, the elf in charge will know of Santa whereabout. Plus Mrs Claus will know too, so he cant cheat on his wife. For an old dude Santa is pretty fit. With a little bit of magic, he can go through those tiny dirty chimney. So, no problem on this process. Next.
Outsourcing/partnerships
This is where, all the Toys'r'us and all the other toys store came in. This is a secret that not many know. Santa uses 3PL. And we all know, using 3PL has its advantages and disadvantages. Santa has to share some information with these companies. So bo bian, they took advantage and open the store for 365 days yearly. But ya, parents act as partner. As often, it is impossible to travel to all the part of the world, visiting houses that do not have chimney. So, parents will be doing their job too.
Performance measurement
It is said that experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. So, if Santa has a market share, it will be doing fairly fine. Is Santa making lots of profit? Well, i guess you can say so. Even without any sort of payment, North Pole still can function. The toys production is working 24/7. The elves (workers) are happy. Information of naughty and nice kids are delivered accurately. So for internal measure, everything is good. For external measure, you can always benchmark. And sure enough Santa will be the at the top.
In term of monetary value, North Pole worth a lot. Till now, no company can take over Santa's. Plus they have been in business since 1820, so that makes them one of the oldest most successful company in the world today. They would not have trouble with green peace as they are not doing anything to harm the environment. Santa do not use petrol to fly around. Toys are made in North Pole which function in their own little world which will do not use up the world's natural resources.
I guess the only thing you can accuse Santa of is corruption. He ate the cookies and milk left at the fireplace. Now, that is what some people call bribing. But, there is no lawsuit against it, so there is nothing else to say on that topic.
I guess the other thing you can say in short is using the SCOR model.
Plan: All the plan is made.
Source: North Pole is very resourceful.
Make: What else can the elves do?
Deliver: It is after all is Santa job to deliver. Plus Santa practices JIT (just in time).
Return: So far no one return their goods. The only return he ever gotten are letters saying thanks for the lovely gifts.
What else?
Bullwhip effect? Not so much.
Inventory management? No problem.
No such thing as picking error. Well, not many. Elves are fantastic. During delivery, Santa has magic thus he will not make any mistake.
Forecasting? Not a problem. Santa has a list.
Reverse logistic is kept to a minimal, almost zero. Naughty kids, will just throw away their coal.
Order fulfillment. Children will send in their order through letters (PO, purchasing order) written to Santa with specific details on what they want. In the olden days, it is mostly MTS (make-to-stock) but now, it will be BTO (build-to-order) as children now have so many ideas on their mind. Then there will be those special kids who want ETO (engineer-to-order) but these orders are only made specially for those super nice children.
Well, i guess that's about it. Do i miss anything else?
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