North Pole Inc. can be seen as model of efficiency, proficiency and cooperation in supply chain world. Let’s analyze five of major supply chain issues in North Pole Inc.
Nowadays it is very essential not only produce and distribute products but deliver a product with higher value at a lower cost. For the board games, North Pole Inc. used standard boards and boxes that are printed at the last minute based on the list demand requests. North Pole Inc. implemented postponement strategy that helped to reduce supply chain cost and exclude overlapping production.
Inventory deployment issue is crucial for supply chains because of the related cost and opportunities to increase efficiency. North Pole Inc. used technique to draw down inventories of slow movers and partner with other retailers to quickly get rid of inventory after the peak season. They also used hard push strategy when they overestimated the demand. Therefore, North Pole Inc. implemented flexible manufacturing and postponement strategy to meet the demand.
Technology can be viewed as an important facilitator of change to improve efficiency and effectiveness. However, it is crucial to correctly select the right technology and implement it accordingly. North Pole Inc. adopted important techniques such as Predictive Demand Planning and Demand Sensing, which helped them to forecast unpredictable toy demand for Christmas especially with the growing preference of electronic toys.
Transportation management is connecting all the aspects of supply chain model and helps it function. The objective is simply to deliver the right product at the right time at the right place. North Pole Inc.’s transportation system is efficient and effective. The fuel cost increased boosting the gain products price for reindeer. It will have an impact on transportation cost of seasonal products and products at all.
Most companies and organizations analyze and evaluate performance by specific tools or metrics. Measurement is very important to determine your efficiency and effectiveness. Supply chain network optimization is a core competency at North Pole Inc. In order to know when and where to apply outsourced production, the company used the program to evaluate global sourcing strategies for raw materials. Also North Pole Inc. adopted network optimization – robust List and Elf Operations Planning (L&EP) process.