Supply Chain Blog

Santa & Opening Presents - Why S&OP is Invaluable at Christmas

Posted by Dave Jordan on Mon, Dec 06, 2010

“Dashing through the snow
In a one horse open sleigh…”

How many of you actually started to sing then? Yes, the festive period is fast approaching and the biggest and best Supply Chain in the world is almost ready to activate. There is no way Santa Claus could achieve his annual success without sticking rigidly to an S&OP process, i.e. Santa & Opening Presents.

The process starts every year on the 26th December just as all the children start to play with the empty packaging instead of their much sought after gifts. Their engorged parents lounge sleepily in front of the television watching The Great Escape – again! The loyal Elves are given their end of season bonus and packed off back to Eleveden Forest in Suffolk. Didn’t you know that is where they live for most of the year?

Before January is over those lovely people who design toys and games quickly introduce new and more exiting models which will become must-haves for countless girls and boys. Toy shops are visited and millions of children quietly note those presents they would like Santa to bring them this year. The demand slowly builds until it is time to bring the Elves back from Suffolk on the eleventh day of the eleventh month – no coincidence there! The first job for the Elves is to get the factory ready to run once again.

S&OP Planning Cycle

In parallel with this, millions of children around the world unzip their pencil cases with a purpose. Using their best handwriting they tell Santa they have all been well behaved this year and then they list all the presents they would like to receive. This accumulated demand allows the Elf factory to start making production plans to meet a deadline that is set in stone.

Money does not grow on trees so “Santa” has to quickly check what can be afforded from the budget. Remember, the wish lists are always too long and you do not want 100% Customer Service  – keep “em hungry” I say. The Pre-S&OP takes place with all stake holders involved to ensure everything is ready to go. You want to avoid stock-outs just as much as you need to avoid expensive write-offs.

After necessary adjustments are made to the planned volumes by sku the final S&OP takes place. Santa is fully dressed in his best uniform and takes his seat. If Pre-S&OP actions have not been carried out then there is unlikely to be much “yo ho ho-ing”. Everyone is in agreement and the final set of child and present numbers is rubber-stamped. Everyone involved in the Christmas S&OP must operate on the same set of numbers or somebody will be disappointed.

The big day comes and Rudolph leads the reindeers in pulling the sleigh across the world. Santa makes sure all the presents are delivered on time before little heads lift from pillows to wake parents at 4am! (Well, I did.)

And before you know it there we are again on 26th December and the same robust and reliable S&OP cycle starts all over again. See you next year Santa.

“Dashing through the snow
In a one horse open sleigh
O'er the fields we go
Laughing all the way
Bells on bob tails ring
Making spirits bright
What fun it is to laugh and sing
A sleighing song tonight”

In this series:

Other seasonal posts:

Oscar Supply Chain Blog

Tagss: Customer service, SKU, Christmas, Dave Jordan, S&OP, Forecasting & Demand Planning