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Retail's Supply Chain Leader Pulls Further Ahead with

Accenture Training Program


Wal-Mart Stores, Inc., is the world's largest discount retailer, with an enormous
network of stores, distribution centers and suppliers. Throughout its 40-year
history, the company has grown rapidly, while evolving from a traditional
discount chain to include grocery, international and warehouse outlets.
Across more than a dozen countries, some 1.3 million Wal-Mart associates
serve about 300 million customers every year.
" Many of the features of It's tough to count all the ways that Wal-Mart has To remedy the problem, Gary Maxwell, Wal-Mart's
Accenture's inventory elevated supply chain management to a science. senior vice president of merchandise replenishment,
management program Transportation and delivery, supplier relationship set out to locate a retail equivalent of the inventory-
for manufacturers could management and strategic pricing are just some of management—training programs developed by
the company's areas of expertise. In 2004, however, manufacturing-oriented organizations such as the
be transformed for use in
Wal-Mart executives determined that company-wide Association for Operations Management. Maxwell
a retail setting. And with
skills in replenishment were less advanced than those came up empty handed; no such program existed.
thousands of highly in other areas. Inconsistent processes across regions But then Maxwell struck up a conversation with
experienced retail and were common. Leading practices were usually Accenture—inquiring about whether the latter's widely
supply chain manage- identified through trial and error. And the analytical respected Supply Chain Academy (SCA) might be able
ment professionals, proficiencies needed to make superior stocking to develop a certification program for retail inventory
Accenture was the decisions were often unavailable. Perhaps most management. The response was positive: Many of the
optimal partner to help important, optimal replenishment practices had not features of Accenture's inventory management
make it happen.” been established across stores and departments: program for manufacturers could be transformed for
Excellence in, say, housewares was no guarantee that use in a retail setting. And with thousands of highly
similar levels of performance were achievable in, say, experienced retail and supply chain management
Gary Maxwell,
sporting goods. professionals, Accenture was the optimal partner to
Wal-Mart's
help make it happen.
Senior Vice President
Wal-Mart execs also determined that these
of Merchandise
shortcomings were costly—that significantly lower
Replenishment inventory levels (achieved without compromising in-
stock performance) might be attained by raising
replenishment skills company-wide.
How Accenture helped High performance delivered Another important training breakthrough was
By January, 2005, Accenture, Wal-Mart and Accenture's Retail Supply Chain Certification giving Wal-Mart the skills and tools to
the Retail Industry Leaders Association program represents a new level of calculate the cost of raising in-stock levels.
(RILA) completed an online Retail Supply professional excellence in retail inventory Merchants often approach the company
Chain Certification (RSCC) program for roll- management, as well as a consistent, suggesting that inventories be increased.
out to Wal-Mart suppliers and in-house repeatable process for retailers and retail Wal-Mart professionals now know how to
professionals. The program—more than 50 suppliers. According to the Retail Industry calculate the safety stock levels required to
hours of content representing the best Leaders Association, "no other [training] achieve a desired service level, and they can
thinking of experts from Accenture, program offers such broad content with such recognize when adding safety stocks is cost-
Wal-Mart, more than a dozen universities, extensive depth and global reach." On the prohibitive.
and RILA and several other professional supplier side, for example, Wal-Mart vendors
organizations—is the first of its kind. are better positioned to hire and train good Lastly, SCA education has helped Wal-Mart
It consists of 27 courses categorized by: people—a capability that benefits Wal-Mart, isolate trouble spots, such as a large bulk-
the supplier and other customers served by consumable category for which in-stocks
• Supply Chain Fundamentals. the supplier. According to one supplier: were varying by up to 13 percentage points.
• Statistics & Probability. "I was able to take what I learned about the Formerly, Wal-Mart was less adept at
• Forecasting & Planning (e.g., Measuring symptoms of poor inventory management isolating the specific variables needed to
Forecast Error and Variability; Demand and immediately apply them to our business identify the root cause of the problem.
Planning; and Forecasting Simulation.) to make improvements." However, with its new SCA-derived "root
• Inventory Management (e.g., Calculating cause analysis" skills, Wal-Mart quickly
Safety Stock; Inventory Management And since internal performance metrics and identified two distribution centers with
Simulation and Modeling; and Retail quantification are part of the curriculum, it supplier-delivery problems. It then was able
Cross Docking.) is not surprising that Wal-Mart-specific to work with the supplier to raise forecast
• Performance Metrics. benefits have been significant and visible: accuracy and shipping performance, and thus
• Collaborative Planning, Forecasting & hike in-stocks to between 95 percent and
Replenishment (CPFR1.) • Improved ability to put the right product 99 percent.
in the right place at the right time
The complete curriculum was designed (making better decisions that result in The net effect is that Supply Chain Academy
to be covered in six to twelve months by lower inventories and/or higher in-stock has helped Wal-Mart build better, more
Wal-Mart professionals and select positions.) sophisticated supplier relationships, make
professionals from among Wal-Mart's • Improved ability to put the right employee better decisions and identify even more ways
numerous suppliers. The program also in the right job at the right time. for leveraging supply chain excellence to
includes an extensive, four-hour • More-advanced technology skills for increase growth, profitability and competitive
certification exam. supporting replenishment (e.g., to measure differentiation. These skills are the essence of
forecast error, calculate safety stocks and high performance in supply chain manage-
Accenture, Wal-Mart and RILA then piloted determine per-channel costs.) ment and Wal-Mart already is the ultimate
the RSCC with a group of 20 Wal-Mart • Greater consistency in training and skills practitioner. However, with new inroads for
associates from different disciplines (e.g., assessment—both in-house and among building exceptional replenishment
Replenishment, Information Services and suppliers. capabilities, yet another plank has been
International.) Several suppliers also • Increased career-enhancement potential, added: an exceptionally-well-trained
participated in this effort. Each entity job satisfaction and workforce retention. workforce aligned with a similarly sharp
provided feedback about the program's • Better metrics for evaluating store- and network of suppliers.
effectiveness and suggested ways that it company-wide replenishment performance.
could be improved further. The next step • Opportunity to use inventory/replenish- About Accenture
was a full-curriculum launch with about ment/forecasting competencies as market Accenture is a global management consulting,
100 Wal-Mart supply chain associates at differentiators. technology services and outsourcing company.
the company's Bentonville, AR, headquarters Committed to delivering innovation, Accenture
and select locations overseas. From this A good example of these skills is calculating collaborates with its clients to help them
group, 80 associates were certified. order point and safety stock inventories. become high-performance businesses and
Immediate plans call for another 300 cross- Systems at Wal-Mart and its suppliers had governments. With deep industry and business
functional and cross-divisional employees to been doing this with a high degree of process expertise, broad global resources and
follow suit. Supply chain decision makers at accuracy, but neither side's staff understood a proven track record, Accenture can mobilize
Wal-Mart also hope to involve staff from how answers were derived. SCA training the right people, skills and technologies to
200 more suppliers, and to work with helped both understand the "why behind the help clients improve their performance. With
Accenture on a second, more-advanced how," thus giving them the ability to spot approximately 140,000 people in 48 countries,
level of certification. These missions will be errors more quickly and make better the company generated net revenues of
key to helping the company move forward decisions about calculating and adjusting US$16.65 billion for the fiscal year ended
with new CPFR1 initiatives. service levels. August 31, 2006. Its home page is
www.accenture.com.

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