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Santa’s Outsourcing adventure (aka The Nightmare before Christmas)

Posted by Hermey on December 08, 2016

I remember it like it was yesterday. It was February 23 2015, and Santa was holding the annual post-Christmas board meeting, where he reviews the year’s gift production and distribution. In attendance: Heat Miser, Snow Miser, Frosty (via conference call from outside), Mrs. Claus and me (representing the elves).

It was a challenging meeting. Many board members were voting to outsource a portion of the toy manufacturing to various groups that promised they could deliver the same quality we do at a much better cost. Normally, we do everything in-house: from raw materials to finished products, we are vertically integrated. However, Heat Miser says it’s a new world. So after much discussion and a few too many hot toddies, we decided test outsourcing on a few products. I told him that it was a bad idea, that our infrastructure wasn’t set up to provide visibility into what outsourced partners are doing, and that we would wind up with delivery and quality issues.

I don’t like to say I told you so, but that year, there was a shortage of blueish-green fabric in Greenland, which we didn’t know about until our expected shipment of Elsa Snow Glow dolls did not show up on December 24. We also didn’t know that hoverboards can spontaneously catch on fire because we were unable to monitor the hoverboard manufacturing facility in real time from the North Pole control center.

Fast forward to this year. We decided to continue using partners for the manufacturing of some of our products, but we now have the infrastructure necessary for total visibility of our supply chain. Our partners are connected in real-time, so we can see production and distribution status. Our field elves can use their mobile phones to conduct inspections at our manufacturing partners, regardless of their connectivity. Our raw material suppliers are now able to label each item exactly how we need it, so as we receive each toy, we can immediately put it away.

I am feeling much better about our supply chain this year. And there have been no more visits from the 60 Minutes crew asking Santa the sort of questions that we do not want to see trending on Twitter …

Happy Holidays from Everyone at Acsis!