Santa’s Report

TO OUR SHAREHOLDERS, CUSTOMERS, PARTNERS AND EMPLOYEES:

As all of us here at the North Pole bask in the successful completion of another Christmas, I wanted to take this opportunity to give you a quick recap of our efforts.

We are proud of our strong results in this, our 203rd year of operation. As always, once the workshop has been cleaned up and all of the Elves return from a well-earned vacation, we will conduct our annual After-Action Review to determine in detail what went well, what did not and steps for continuous improvement as we prepare for Christmas 2013.

But here is what I can share about this year’s operation:

  • I visited 842,033,012 homes on Christmas Eve, and delivered 7,060,919,100 gifts. The scope of this one-night effort can be fully appreciated when one considers that there are 3,000,000,000 packages shipped in the United States…in one year.
  • 98.76% of those gifts were delivered before Christmas morning, which compares favorably to the on-time percentages of both FedEx (88%) and UPS (91%).

While there is always room for improvement, several operational upgrades we made since 2011 paid dividends:

  • Our ERP system, though still not completely implemented, is already providing efficiencies. Our primary vendor and consultants assure me that it will be 100% up and running by no later than mid-year, a scant 6 years since we began implementation. I am told this compares very favorably with typical ERP implementations.
  • Supplying each Elf with an iPad has streamlined both the manufacturing and sleigh loading processes. We expect that once the ERP/iPad Excellence Integration Operation (E-I-E-I-O) is fully realized, we will have a world-class Build/Fulfill system.
  • Utilizing an on-board iPad for navigation, gift allocation and tracking was also a qualified success. Though Apple Maps was not perfect, downloading the new Google Maps app allowed me to double-check home locations.
  • The use of Value Stream Mapping and other quality tools has resulted in a 3% reduction in waste, and an 11% improvement in average Warehouse-to-Sleigh times. We now have 17 Elves who are certified Six Sigma Black Belts, and plan to add more in the coming months.

As I look to the future, I am excited at the changes that you’ll be seeing in 2013:

  • Our “Red ‘n Green” initiative to reduce our carbon footprint, including the replacement of coal with a more eco-friendly alternative to stocking fillers for non-Nice children.
  • The “Horn-to-Hoof” Wellness program for the reindeer.
  • An upgrade to our Performance Dashboard to include real-time monitoring of Naughty/Nice behaviors and instant updating of “The Big List”.
  • With the cooperation of Local 1 of the Union of Workshop Elves and Reindeer Handlers (UWERH), we will be testing a “Fresh Eyes Approach”, assigning elves to different tasks throughout the year to improve our ability to find process improvement opportunities.

Our future is bright, both for the year ahead and for the long-term. I couldn’t be more proud of our achievements this year. We have once again upheld our glorious tradition, but rest assured that we will not be resting on our laurels. The best is yet to come.

As always, thank you for your support.

Sanford C. “Santa” Claus, III

Chief Executive Officer, North Pole Enterprises, Inc.

December 31, 2012

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Today’s Fact Cetera

There are more than 2,700 languages in the world. Santa is fluent in all of them. In addition, he speaks a secret Elf language.

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