Santa's Checklist For A Difficult Task

[george]

Santa's checklist for a difficult task

Supply chain management at the North Pole

Santa is a wonder. Every single year, he pulls off a truly first-class performance. When you think about his supply chain management challenges, the rest of us have it pretty easy. How on earth (or is it?) does he organise everything? Well, we all know that he is a list maker, the first list being the one with everyone's wishes on it. We figure that he must have a second one as well.

What would be on his checklist, we wonder? To imagine that, let's first get clear about his supply chain:

uConsumers _ that's us! The trouble is, we only make one demand each year and they're all at the same time. Overnight delivery, no less.

Distributor _ that's him! As far as we understand, he still hasn't outsourced his distribution function. Storage of finished goods, especially late in the year, must be quite a challenge.

Manufacturer _ that's him, too. We understand that the elves take care of most of this operation, but Santa obviously is the managing director equivalent, taking direct care of most of the customer-oriented responsibilities.

Suppliers _ we also understand that Santa's manufacturing is significantly backward integrated, but there would surely still be a fair bit of supplier management to perform. A big part of this would be the staged deliveries of raw materials, probably ramped up over the year to a peak in November followed by a sudden break in December.

Do you think that he is still doing things the same way as he always did? Or do you think that he has a strategy to improve things in the future? The first section in his checklist must be all the things that he and the gang need to do on a regular basis about developing the strategy itself. The strategy must have a pretty long track record by now, but he would certainly maintain a rolling horizon of several years over which he keeps an outlook on and then updates it each year. Probably soon after Christmas, while he and everyone else can still remember the busy season and will still have those niggling problems fresh in their minds.

He surely involves everyone in the strategic planning process and really focuses on what the kids want as well as what the elves need. There is no question in our minds that every one of

the elves would know what the ``business'' is about and who they are there to serve: the children. We don't really know what kind of a manager that Santa is, but since he is so successful, he must know how to delegate.

So, what about the elves? The next section of his checklist would likely be all the things that he needs to consider about his elves and how they work together. It only goes with our image of Santa's workshop that values and behaviours like trust, teamwork, mutual respect, open communications, and a high degree of employment security would be at the forefront. All of those stories we've read give us the idea that the elves work really effectively in a formalised team structure. Of course, all of the elves have confidence in Santa as the ``boss'' and are happy to work for him in his workshop.

Because there is such a focus on taking better care of the children, no one from Santa on down is content with how things are done, both within the workshop as well as across the Supply Chain. They just naturally look for better ways, continuously. It is a way of life for all of the elves. And, because of their culture and their way of doing things, most suppliers do this, too, we bet.

Next: product development. How ever do they manage that? All of the children get their ideas for their wish lists from what they see in the commercial world and then Santa and the elves have to replicate all of those toys. Or do they? Maybe there is such a well-developed product development process that involves many of the suppliers that, in fact, all of that advertising is just test marketing for Santa's own process. How else could they derive what it is that the kids want? Santa and the elves certainly are not in direct contact with them.

And Santa, of all people, would know that product requirements must be derived from customer needs. Our guess is that one of the areas that he has really kept up with the times is that new toys are developed in much shorter time periods than in the past, involving suppliers more so that they are an active part of the development process.

Then comes planning and control processes. Who needs top-notch planning and control more than Santa? Talk about tight time frames and high quality expectations. It is boggling to think about how they stage their production so that every single thing is ready at the right time.

Who has better customer satisfaction than Santa? How does he do it? It's got to be in the execution.

Forward-looking Strategy. Elves working in teams. Integrated product development. Effective Planning and control. That all sounds familiar.

Merry Christmas to you all!

---------------------------------------------------------------------------------------------

Weekly Link, by Barry Elliott of Oliver Wight Asia Pacific, and Kanute Niruntasukkarut of Logistics Bureau Asia, is an interactive forum for industry professionals. We welcome and will credit input, question and news. Contact: [email protected]

[email protected]