Technology Innovation and Santa

Over the holidays I got from a couple of different sources a cartoon which showed kids in line to make a phone call to a Santa "outsourced" to Bangalore. Cute, but Santa knows better. All he has done is outsourced his sleigh to UPS and his elves to amazon.com

Amazing the logistics and technologies going in to the gift order taking and delivery business.

The core technology infrastructure at UPS is massive  - 14 mainframes representing over 30,000 MIPS, over 125,000 PCs, and over 80,000 DIADs (Delivery Information Acquisition Device the drivers carry). The UPS.com site gets over 145 million hits a day.  The infrastructure processes 20 million packages a day between Thanksgiving and Christmas - most of them gifts. As this interview with CIO David Barnes shows, UPS is big on package flow process improvement and relevant technology like finger scanners to make their drivers ever so efficient. As this interview shows the payback is impressive - reduction of 100 million miles just in the US (they could use hybrids!), or 14 million gallons of fuel, not to mention labor and overtime.

amazon.com has moved ways past books (it sold a $ 94,000 set of diamond earrings this year!) This BusinessWeek story and photo gallery shows the order tracking and fulfillment process.  Scanners, sorting machines - pretty efficient. Interesting that gift wrapping and shipping is still fairly manual.   But the company's Delight-O-Meter - a metric tracking holiday sales shows pretty lofty numbers- 108 million orders this year.

Of course, it is not just UPS - Santa also uses Fedex, DHL, USPS. And it's not just amazon - it's L.L. Bean and so many other e-tailers. And Santa is even becoming good about taking "lumps of coal" back. Returns and reverse logistics are starting to get quite a bit of attention.

UPS has been running commercials where this guy enters a room titled "Oracle" and tells the goddess she is no longer needed for logistics and has been re-assigned to accounting. Not sure if it is a swipe at our friends in Redwood Shores, but UPS can afford to feel pretty good about its technological prowess. Santa agrees.