Tuesday, February 18, 2014

Santa with Internet of Things

Speaking of the world’s most efficient supply chains and distribution networks, what comes to my mind is Santa Claus!

Santa and his elves spend all year making toys in his factory at the North Pole for all the children of the world and somehow he manages to deliver all of these presents on the night of 24th December every year without fail. How amazing is its supply chain and distribution networks.  

Over the years, Santa and elves processed all the presents by low-efficient paper forms. Though little elves were fairly proficient at making toys, there were some presents, such as game consoles, which were easier to order from manufacturers. In the past, elves would send paper orders, but now, they are trying to do it more electronically and efficiently.

As a result, Santa has committed to join the world of “Internet of Things” since 2008.

The new IT related buzzwords---The Internet of Things (IoT), also known as The Internet of Everything and the Industrial Internet, is essentially used to describe machine to machine (M2M) connectivity across the Internet.  The IoT relies on any machine or device being connected, via fixed wire or wireless communications links to the Internet and then being able to transmit information in one form or another.

The business benefit of IoT includes increasing operational efficiency, improving customer service, and facilitating better collaboration within firms. International Data Corporation (IDC) predicts that there will be 212 billion “things” connected to the Internet by 2020. Though IoT is in its infancy, wired connected devices have been in use for many years. IoT relies on web-enabling virtually any type of product or piece of equipment so that data about the object can be captured and communicated. Once captured, the information would be transferred from the remote device and then processed via some form and middleware to an integration platform. Ideally, all connected devices would be connected to the same integration platform to allow working seamlessly with back office business environments such as SCM and ERP platforms.

McKinsey & Company said in a report that the manufacturing sector is likely to see the most benefits from IoT and they predicts that we are about to enter the fourth industrial revolution, or Industry 4.0. The industrial Internet will see the world of manufacturing become more and more networked until everything is interlinked with everything else.

So how Santa works with the IoT?

2008: Santa Enterprises signed a Managed Services contract with GXS to implement his new B2B platform. GXS helped Santa to connect his global Present Distribution Hubs to a single B2B platform hosted on GXS Trading Grid, which allows present ordering and delivery information to be transmitted electronically to Santa’s HQ at the North Pole. With the new platform, children all over the world can place their present lists via an online web portal and Santa can monitor the distribution process and inventory level.

2009: Santa started to embrace social media tools such as Twitter so that he could get a better awareness of key trends in the toy industry and get an insight into which toys were likely to be popular in demand for the next holiday season. Santa also registered a LinkedIn account to maintain key contacts in the global toy industry.

2010: Cloud computing started to get on the agenda and Santa was keen to learn more about cloud computing benefits. With the world’s largest cloud integration platform, Trading Grid, Santa is on the right track. Besides, Santa started to speed up on the hottest electronics devices, such as Apple Ipad, to integrate them with his existing business.

2011, GXS implemented RollStream, a collaborative environment for supplier management, to allow Santa to improve the way in which he worked with his many toy contract manufacturers around the world. At this year, Santa won the B2B Hero Award by GXS.

2012, Santa begins to evaluate the information flowing across SantaNet and implements a Big Data strategy. Santa quickly realised that if he could somehow connect his digital and physical supply chains together then he would obtain even greater operational efficiencies.

The benefit of IoT for Santa’s present business:
      1.     Every piece of warehouse and logistics equipment within Santa’s global network of Present Distribution Hubs is now connected to the Internet.
      2.     The closed loop processes, which sense the inventory, allow the automatic ordering of toy parts.
      3.     Santa has a huge amount of data available to him which helps to make improved and better informed management decisions.
      4.     The Internet of Things presented Santa with an opportunity to monitor energy levels across his facilities and take corrective action to improve the energy efficiency of these operations.

What’s more, following the implementation of IoT, Santa also upgraded SantaPAD, a mobile app that was developed last year to help him keep track of his operations whilst he was delivering presents around the world.  SantaPAD v2.1 now provides details of every device connected to IoT, through a machine to machine equivalent of Facebook, and this means that Santa can effectively monitor the ‘pulse’ of his operations from anywhere in the world by simply using his iPad app.


How can Santa accurately get toy trend information from social media and predict the demands? How quickly can Santa respond to the unexpected highly demanded chic goods?

The remote devices used in IoT is one-way communicating which means there is no way for the remote to talk about what state they are in and they only take commands, how can this be further developed to better serve the IoT? How to control the proper function of unified remote devices?

The IoT embeds computing into device hardware, which is with vulnerabilities and security issues, though the companies keep updating their software but it's hard to get all their customers update to the newest version. And Internet of Things put computing into all sorts of consumer devices, hence it's hard for industries producing these devices to fix the embedded computers' problems, then the security problems of IoT are enlarged. So in further development, how to better deal with this problem?

1. How the Internet of Things will impact B2B and global supply chains? Retrieved from http://www.gxsblogs.com/morleym/2013/10/how-the-internet-of-things-will-impact-b2b-and-global-supply-chains.html
2. Santa deploys the Internet of Things across his north pole operations, Retrieved from http://www.gxsblogs.com/morleym/2013/12/santa-deploys-the-internet-of-things-across-his-north-pole-operations.html
3. Everything about Santa B2B environment and logistics operation is big including data flowing across them, Retrieved from http://www.gxsblogs.com/morleym/2012/12/everything-about-santas-b2b-environment-and-logistics-operation-is-big-including-the-data-flowing-across-them.html
4. The Internet of Things is wildly insecure- and often unpatchable, Retrieved from

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