Friday, December 5, 2014

Purchasing Problems at the Pole

'Tis the season. When my daughter was young, I loved telling her stories. After a while, I got tired of the classic princes kisses frog and lives happily ever after kind of tale. If I had to make them up, why not make the sales guy the hero. For the next several years, my daughter heard a collection of tales where bad guys in business suits were fed to hungry dragons and purchasing types turned into frogs. This year we are determined to spin such a tale. Trust me, there will be a happy ending.

Talk about seasonal surges, Santa’s North Pole Enterprises experiences the largest single seasonal surge in any venture, anywhere. It calls for dedication, it demands expertise and it demands for some really fancy footwork during the last days of December. As President and CEO, Kris Kringle has seen some changes. Quoting him directly: “Back in the old days, most of the goodies we delivered to the good boys and girls were made of wood. We simply chopped down a few trees, brought in the elves and got busy. Our only problem came with dull knives and handling all the wood chips.” But things have changed.

The assortment of requests from today’s children runs the gamut of modern manufacturing technology. Christmas requests include everything from cute little dolls and toy soldiers, which are mostly hand crafted, to elaborate plastic works and electronics. The parts and pieces to make all of these grand presents come from literally all over the world. Kris and his Santa Enterprise team learned the value of working with distributors back when grandma and grandpa were kids. For decades, Santa Enterprises would select the very best distributor salespeople and magically pull them to the North Pole Headquarters to work on plans for making the big day go smoothly. That is until last year.

Allow us to relate the story.

Kris and Ms. Kringle were taking a few days off in January. To protect his privacy, we won’t disclose the exact location. Instead let’s just say, there are warm beaches and the natives often ask, “Would you like another taco Senor Santa?” Anyway, Kris and misses are out on the beach and when a slick talking guy with a shark skin suit and a B-School background approaches. After a few minutes, Kris is hearing the power of aggressive purchasing and getting an earful of cost savings data.

Quick as a wink, and without looking into a couple of decades old naughty and nice lists, Kris decides to bring in a new style of vendor management. Once onboard at the North Pole, the new Elf in charge of purchasing launches into massive cost analysis and sets up a new plan for buying supplies. Using a moto called “Hey, we’re helping Santa,” the North Pole goes on a cost cutting spree. Reverse auctions uncover a whole new rash of untested suppliers with low price and flimsy service. Banners wave at every North Pole workshop, each one carrying a bigger savings claim. But, the workers were noticing a change.

The elves at the woodshop got wood that wouldn’t carve. The doll shop reported cute little dollies with no eyes and two left hands. They held meetings, the big shot elf in purchasing spouted larger savings and the new suppliers promised they would get better. For a while even Kris was nodding along with all the propaganda.

Then the cold winds of winter started whipping through the North Pole. The countdown to Christmas Eve had hit twenty days. Santa Enterprises was in a pinch. The shipments from the new batch of suppliers were running a “little late.” Looking over the situation, Kris realized a little late would have him delivering toys sometime in mid-January. Christmas Eve really could turn into a “Silent Night.” The Santa reputation for delivering the goodies to nice girls and boys would be gone, gone, gone; price savings or not.

Kris was hot. And, when a jolly guy like him is upset, people pay close attention.

Stay tuned…

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