Where is the world’s most famous supply chain? That’s right – the North Pole.
As a Quick Base solutions consultant, Peter Rifken’s role entails partnering with strategic sales teams to help potential customers imagine what’s possible in their organizations and implement those solutions with low-code. He is also Quick Base’s resident expert on the agile supply chain, and in the latest episode of the Age of Agility podcast, he shared his vast knowledge of the origin of Santa’s supply chain.
“We’ll compare how Santa has handled all different aspects of his operations,” he explained in a historian’s fashion, “including planning for the toy creation process, sourcing stuff, inventory management, and all the trends that are happening with the good kids around the world and how technology has shaped that.”
Hundreds of years ago, preparing for the holidays was a much simpler task for Santa and his elves. Populations were small, and children, for the most part, all wanted the same toy for their present: a wooden chariot. They requested these chariots through hand-written letters, which the elves would read and document. Then, they’d chop down a tree from the forest behind Santa’s workshop and make each chariot to order, chiseling them by hand.
This worked for Santa for a while, but as populations grew, Santa and his elves struggled to meet increasing demand for these wooden chariots. Santa recruited more elves to his toy-making operation and soon enough, he realized that some elves were getting really good at certain tasks, such as tree-chopping, toy-assembling, or packaging.
What Santa found, according to Rifken, is that “to be more efficient, you can give the elves specialties and make them break apart the kinds of work they did to improve both the quality and how fast you can pump out these wooden chariots.” And as the elves specialized into different functions and formed teams, they regained their ability to meet the demand of children from all over the world.
But things didn’t stay this way for long. As populations continued to grow, and holiday gift-giving became a global phenomenon. Children across the globe relied on Santa’s toys for their winter holiday. Rifken says that this put the entire toy-making operation in a tight spot: “When you’re being forced to make more and more with the same set of resources, you have to make changes to meet that demand.”
The elves figured out how create machines that built toy parts for them, and they set up assembly lines to boost efficiency. With automated assembly coming into play, “the elves could really focus on managing the install and the entire process.”
At the same time, Santa had to tackle the issue of delivery – all the toys had to get to children’s homes all over the world in just a 24-hour window. To do this, he needed to find a centralized location for his workshop that optimized access to children’s homes on every continent. After considerable trial and error, he and Mrs. Claus settled on the North Pole. They also bred a team of flying reindeer to spearhead package delivery. It took a few years to work out the kinks, but with time, they were able to optimize their delivery route to make all their rounds in the span of one day.
As technology advanced over the years, toys continued to grow in complexity. But the toys weren’t the only things that were changing.
“One of the big drivers in these changes is the children themselves,” Rifken shares, “And what we find from middle ages where we started to this kind of modern era is that there’s a lot of technology that has made it easier for children to both share with each other and adopt the newest trends more quickly.”
With the introduction of printed media, radio, television, and ultimately, the internet, children began wanting different toys. The demand for wooden chariots was replaced with demand for slinkies, walkie-talkies, and RC cars. And with more and more new toys hitting the market every year, keeping production fully in-house became nearly impossible for Santa and his elves – the North Pole workshop simply didn’t have the kind of technology to build complex devices like iPads and Alexas.
“It requires partnership,” Rifken explains, “It requires the elves to say, you know what, we’re really good at delivering smart devices to kids and getting the feedback from the letters and making sure it’s an amazing experience. But we need partners to help provide all the intricate components that are no longer as easy as going behind the workshop and chopping trees.”
This shift inherently transforms the nature of the elves’ jobs. They’re no longer handcrafting toys themselves but helped production in more of a project manager capacity, overseeing partnerships and mostly automated operations. And managing multiple shops and holding them each accountable presented a new level of complexity for the elves to address.
What does this mean for the future of Santa’s workshop? As demand continues to shift at an increasingly rapid pace, Santa and his elves face the seemingly impossible task of building high quality toys at high volumes with high efficiency – all while keeping up with the latest technological enhancements and children’s changing preferences.
Luckily for Santa, his team of elves are comprised of only the best of the best. And these elves are problem solvers at heart. Leveraging this skill may hold the secret to lasting success for Santa’s supply chain.
“What Santa is finding – and what other folks in this world are finding – is that giving the problem solvers the tools to solve their own problems and empowering them to make a process more efficient is at the heart of keeping up with this pace of change,” says Rifken.