Logistics of Santa Claus

The festive preparation towards the most wonderful time of the year began when Black Friday ended. In turn, businesses are now gearing up in the hopes of not only bringing joy to their customers but also increasing their profit.

“For both retailers and fulfillment companies, Christmas is the busiest time of the year.”

We’ve created an infographic on Santa’s supply chain in line with our Christmas spirit.

Santa’s supply chain

We thought to wonder, how would Santa’s supply chain work? Feeling festive, our logistics team decided to look into Santa’s preparations.

Santa and his elves work hard to prepare and deliver presents to children on the “nice” list.

At first sight, Santa’s manufacturing, and distribution facility (the North Pole) is not ideally located from a logistical perspective. However, he has total control of his production and achieves tremendous economies of scale in production by having a single manufacturing facility (Santa’s Workshop).

In addition, The North Pole location is also a brilliant financial strategy. Records show that it is excluded from all government regulations and taxes as being located in the Arctic Ocean. It is not owned by any country and is considered “international territory.”

Santa has the logistical and fulfillment challenge of visiting every customer/location combination in 24 hours. Actually, it is a period of 31 hours. This is all done through his own logistics fleet of “an eight tiny reindeer and sleigh.”

Retail Challenges in festive season 2021

Don’t think that consumers are shopping online less this holiday season than in years past. Online sales have reached $109 billion so far in 2021 – a significant increase from the $90 billion we were at this time last year.

Many retailers developed a proactive strategy to start pushing enticing deals to shoppers in October and early November instead of waiting until Black Friday and Cyber Week to help ensure products arrive in time for the holidays considering the supply chain crisis.

Before Christmas, communication between clients and fulfillment companies is essential in preventing product shortages and avoiding late deliveries.

Using data analysis, retailers can gather data consisting of past sales figures, which, when analyzed, can help brands anticipate the significant trends of the Christmas season.

However, forecasting consumers’ behavior can be somewhat unpredictable when the festive season is full swing. Best practice dictates that most retailers are expected to hold increased seasonal stock levels, focusing on their best-selling items. Maintaining high inventory accuracy means they don’t leave their customers empty-handed.

Companies must start to align priorities ahead of winter with each partner to prevent delays and anticipate and mitigate any possible unforeseen situations. These can include last-minute delays or disruptions, immediately affecting a Christmas fulfillment strategy.

The key to a successful Christmas is understanding what will be in demand and delivering it to the consumer. If the supply matches the need perfectly, companies can expect to achieve the desired profit for this peak season. Consumers will not be disappointed, and companies will achieve what they propose.