Santa’s Supply Chain: Time to Go Digital?

With a rapidly changing world and over two billion home deliveries to make in 24 hours, Santa’s legacy supply chain management systems are struggling to cope.

Using its Supply Chain Performance Improvement assessment, supply chain and mobility specialist, Rocket Consulting, prioritised the six key challenges that Santa faces:

• Rising Elf labour costs must be offset by an increase in operating efficiency
• Reliability issues due to ageing reindeer and sleigh fleet
• Increasingly high final mile delivery slot expectations of demanding parents
• Demand must be managed as millennials take to social media, rather than using the post, to send their Christmas lists
• A 47% increase in reindeer fuel costs in the last decade
• Transport routes are dynamic due to external factors such as no-fly zones, adverse weather patterns, aircraft and chimney fires

Rocket helps customers to innovate and create high-efficiency digital businesses through supply chain, mobility, Internet of Things (IoT), cloud, SAP HANA and real-time insight and analytics software and technology. Creating a digitisation transformation roadmap for Santa, Rocket suggests the following to ensure there are no disappointed customers on Christmas Day:

• SAP Extended Warehouse Management at Lapland Distribution Centre to optimise inventory management, reduce Elf workforce costs through mobile/voice and RFID enablement of pick, value added services (wrapping and labelling), pack and loading
• SAP Transportation Management to optimise sleigh package building and loading, route planning, including seven international inventory staging transit warehouses
• LogiScope Mobile Logistics Management to carry out pre-delivery reindeer and sleigh checks, provide real-time sleigh tracking and parent delivery time confirmation, sleigh and reindeer telematics from retrofitted IoT sensors
• SAP HANA as the operating platform to handle processing and optimisation runs of over four billion items in 24 hours
• SAP Logistics Hub for real-time visibility and management of external global events, avoiding sleigh delays and significantly reducing risk of Santa and sleigh damage from adverse weather and hostile nations.
• SAP Control Tower (Part of Integrated Business Planning) to provide centralised KPI reporting and analytics, including data feeds from external outsourced elf subcontractors and suppliers
• SAP HANA Cloud Platform:
◦ IoT services, event stream processing, predictive maintenance and reindeer feeding to ensure 99.98% operational capacity
◦ Demand Sensing and Sentiment Analysis to derive Christmas lists from unstructured social media data sources

If Santa digitises his supply chain, Rocket is confident he will realise the following benefits:

• 30% reduction in elf labour costs from improved inventory management efficiency
• 25% increase in sleigh and reindeer operating up-time to 99.98% from preventative maintenance and feeding
• 400% increase in adherence to home delivery window from better transport planning and real-time logistics management (up from 60%)
• 12% reduction in reindeer feed cost through sleigh routing optimisation
• Reduction to zero of transport disruptions from external events through real-time event management, IoT monitoring such as sleigh location, weather data and news