Supply Chain Management: Q&A With Santa's CIO
Hermey Elfin's difficult supply chain implementation almost became a nightmare before Christmas. The inside story of how it all went down is finally revealed.
CIO — You think you have supply chain headaches? Try being Hermey Elfin for a day.
As CIO of Santa Claus LLC's North Pole operations, Elfin manages a supply chain encompassing trillions of toys, games, dolls and various other children's products that must be delivered to his boss's 2 billion customers between bedtime and dawn on Dec. 25. His sole means of delivery to all 24 time zones? Nine flying reindeer. (To see exclusive excerpts from Santa Claus's RFP for a fully integrated ERP system, see "North Pole Confidential: Seeking the Mother of All ERP Systems.")
CIO.com Senior Editor Thomas Wailgum recently sat down with Elfin as he was putting the finishing touches on the new systems that were helping to ensure a smooth Christmas 2003.
CIO.com: How do you manage all of this?
Hermey Elfin: Well, up until about a year ago, we were operating in a complete legacy environment, so it wasn't easy. We had elves faxing handwritten orders to all of our suppliers—Playskool, Fisher-Price, the Island of Misfit Toys, you name it. We finally decided to implement an SCM system, though getting an integrator up here to the North Pole wasn't easy. At first, the vendors thought our RFP was a joke.
CIO.com: Which vendor's system did you end up going with?
Elfin: We went with Oracle's product. We really hammered their sales guy on pricing and licensing discounts. After our CEO [Santa Claus] requested a personal meeting with [Oracle CEO Larry] Ellison, we got the price concessions we were looking for—about 99 percent off list price.
CIO.com: Wow. What was the rollout like?
Elfin: Bumpy. Two months before the go-live date, Claus wanted to pull the plug because the integrators and elves couldn't agree on some specs. We almost lost Christmas 2001. We had to lock everyone in a conference room for one weekend and hammer out the requirements. It got pretty ugly.
CIO.com: Was the new Oracle system immediately accepted by the line workers and elves?
Elfin: No. The elves on the shop floor were very resistant to the new ways of handling orders, inputting data and keeping track of inventory. But I identified some super-user elves, and I showed them how it could improve their ability to schedule better, track products and set up delivery windows. Now everyone seems real excited. The warehouse supervisor, Yukon Cornelius, says that it was like we struck gold with this supply chain system.
CIO.com: I seem to remember that you said you always wanted to be a dentist. What happened to that?
Elfin: Turns out I was much better with 1s and 0s than I was with crowns and molars.
