The festive period is fast approaching and the biggest and best supply chain in the world is almost ready to be activated. There is no way Santa Claus could achieve his annual success without sticking rigidly to an S&OP/IBP process also referred to as Santa and Opening Presents.
The process starts every year on the 26th December just as children start to play with the empty boxes rather than their much sought after gifts. Their 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 Yorkshire.
Before January is over new and more exciting toys and games are introduced which will become must-haves for countless children. Toy shops are visited and millions of children quietly note the presents they would like from Santa. The demand slowly builds until it is time to bring the Elves back from Yorkshire, their first job getting the huge Christmas factory ready to run once again.
In parallel millions of children around the world tell Santa they have all been good this year and list all the presents they would like. This accumulated unconstrained demand allows the Elf factory to start fixing production plans to meet a deadline that is set in stone.
“Santa” must quickly check what can be afforded from the budget as the wish lists are always too long. The Pre-S&OP/IBP meeting takes place with all stakeholders involved to ensure everything is ready to go. No working in silos here. 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/IBP meeting takes place. If Pre-S&OP/IBP actions have not been carried out, then there is unlikely to be much festive cheer. Fortunately, everyone is in agreement and the final set of child and associated gift numbers is rubber-stamped. Everyone involved 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 delivery sleigh across the world in a complex logistical challenge. Santa makes sure all the presents are delivered on time before little heads lift from pillows to wake their parents
Before you know it we are again on 26th December and the same robust and reliable S&OP/IBP cycle starts once more.
Could all this have been done without technology? Very Doubtful.