Our Seasonal Case Study as Market-Informed Sourcing Saves Christmas…

Let’s come back to our recent case study, looking at how a very special client was able to use advanced optimisation software to sort out a tricky seasonal problem. This CPO had faced a difficult issue that at worst could put their whole business at risk, and they needed help in terms of running an incredibly complicated tender for global distribution services – much of the requirement concentrated on one particular evening, just to make matters worse.

Yes, we’re talking Santa, and how he coped with his reindeer going down with Reindeer flu recently. Here’s another excerpt from the case study we wrote, available now free (you don’t even have to register) from the Trade Extensions Christmas site. We take up the story as Santa is running his sourcing exercise on the Trade Extensions platform to find alternative distribution providers. 

Capacity is never an issue

Along with the proposals came millions of data points: some suppliers wanted to do all the work, others just bits of it; some wanted to do North America while another bid for just one village in Latvia. Some bidders wanted to deliver by road, some by sea and some by air. Some wanted to do the night of the 24th and others wanted only the 5th January, for the more orthodox Christians celebrating on the 12th night.

Some offered lower prices on a conditional basis - if for example they won the work in two adjacent countries. The permutations were endless. “I was really worried about how we could possibly make sense of all that data,” said Mr C, “but because submissions were made directly into the system, we didn’t even have to think about it. Apparently it’s something they call a SaaS-based system, which until now I thought meant Santa-as-a-Service, but it means it’s all carried out somewhere up in the clouds. The benefit of course is that I didn’t have to install loads of computers in my workshop and yet the capacity was almost endless.”

The responses came from many thousands of suppliers, from private magic reindeer operators to DHL and major freight and shipping firms. On first entering all of the data, and running the first optimisation, the system came up with an optimal solution that involved over 1,000 suppliers from 150 different countries. Three delivery access methods were identified for the parcels: traditional chimney, the magic key outside the back door, and a method used by certain large distribution companies, (which Mr C certainly would not consider using and so had to be factored out of the equation straightaway) - ring the bell, throw the parcel in the bushes and run away.

"We didn't think we could cope with managing quite so many distribution partners, so the system let us enter new constraints...  Numerous scenarios were analysed very quickly,” said Mr C. “We got some answers that involved non-terrestrial suppliers, so we were even able to put a constraint on the type of organisation. For instance, we decided we didn't want more than a handful of goblin-run companies – you can’t always trust those goblins. But we did want to encourage more SMEs into the market. Those Scandinavian Magic Elves are diligent, experienced, and the oldest, most wise and respected suppliers in the world. So the ability to carve the operation into manageable and smaller contracts where appropriate means small and innovative organisations have a better chance to compete.”

"... Finding the best combination of providers and services to meet our criteria was made simple. It’s incredibly sophisticated and incredibly quick. It’s just like magic really, so we felt very much at home with it. We press a button and in no time at all we had the suggested optimal solution.”

Download the whole case study here!



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