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How Santa’s Elves Design an Optimized Supply Chain

By Jack Jolly  December 5, 2018

Get in the holiday spirit by reading a guest blog from one of Santa’s elves, Jack Jolly. For thousands of years, a group of dedicated elves have tried to optimize Santa’s supply chain with handwritten notes and excel sheets. In order to boost elf esteem, the elves at Claus Industries started using LLamasoft’s sophisticated supply chain design software to make sure everyone gets everything on their Christmas list at the precise time and location they demand it!

Hello, folks! My name is Jack Jolly, and I have been the North American Senior Supply Chain Director at Claus Industries for…well…let’s just say a LONG time. You may think that an elf’s only job is to build toys, but that’s not true. There is an entire team within Claus Industries that is dedicated to optimizing Santa’s supply chain. Basically, we make sure things run smoothly – everything from forecasting Santa’s demand to the speed in which Saint Nick must shimmy down the chimney.

We add a little elf-magic to data points and algorithms – making sure the night of Christmas Eve is a success. We have ONE night to deliver the correct presents all over the world to millions of demanding recipients. Missing the delivery window simply will not do. Keep in mind this is only a fraction of the toys and delivery routes we create to deliver toys to all the good boys and girls on Santa’s list!

Santa’s Demand

First of all, we need to forecast demand. Just to give you a preview, we wanted to focus on four products in North America (but obviously, there are thousands of books, toys, clothes, and more that end up on wish lists all over the world).

We used LLamasoft’s Demand Guru to determine how many watches, books, and laptops are needed for Santa’s nice list in the US. Sure, us elves read the wish lists that are sent to the North Pole, but the earlier we can predict demand – the better. We evaluate interest for each toy over the last 10 years by using data from Google Trends and blended that with demographics data based on zip code to determine how many items and toys we need.

Santa’s Festive Facilities Location (FFL) Planning

Most humans wait until December to get in the holiday spirit, but for us elves, we dream of sugarplums and supply chain logistics all year long. In addition to holiday cheer, we also spend a lot of time thinking about where to locate facilities for Santa to re-stock on toys and give the reindeer a much-needed break. A few years back, Dasher demanded there be an FFL within 500 miles of everyone on Santa’s list and that 95% of the demand be served within 300 miles of an FFL. This means we need a minimum of 14 FFLs in the U.S. alone.

Transportation Optimization for Santa’s Reindeer and Sleigh

Just to give you an idea of how much back-and-forth Santa and his reindeer do, here’s an example of one of his 14 distribution routes from an FFL. The tricky thing about planning these routes is that Santa can only carry 800 thousand gifts at a time and wants to complete the delivery as fast as he can.  This results in 26,770 miles in this one delivery plan alone to deliver gifts to all the good boys and girls in the area!

Santa’s Christmas Delivery Plan

There are many factors to consider when optimizing the Christmas Eve delivery plan for over 300 million gifts. Santa cannot rely on pure magic to make the night before Christmas a success. Here are a couple things he must consider to make sure he sleighs the delivery:

  • Leave the North Pole: December 25 at 12am
  • Maximum Sleigh Load: 800,000 gifts
  • Reindeer Speed: 25,000 miles per hour
  • End Time: December 25 at 8am

That’s a wrap (and a ribbon)! Now you have an idea of what goes into plans for Christmas. I wish I could tell you more, but it’s a busy time of year. Share this video to spread some holiday cheer, and have a Merry Christmas!

To learn more about the technology that goes into planning Santa’s supply chain, watch this video here and follow LLamasoft on LinkedIn and Twitter!