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 enor-
mous network of stores, distribution centers and suppliers. Throughout its
46-year history, the company has grown rapidly, while evolving from a tradi-
tional discount chain to include grocery, international and warehouse outlets.
Across 14 countries including the U.S., some 2 million Wal-Mart associates
serve about 200 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 international supply chain,
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
be transformed for use in the company’s areas of expertise. In 2004, however, manufacturing-oriented organizations such as the
a retail setting. And with Wal-Mart executives determined that company- Association for Operations Management. Maxwell
thousands of highly wide skills in replenishment were less advanced came up empty handed; no such program existed.
experienced retail and than those in other areas. Inconsistent processes But then Maxwell struck up a conversation with
supply chain manage- across regions were common. Leading practices were Accenture—inquiring about whether the latter’s widely
ment professionals, usually identified through trial and error. And the respected Supply Chain Academy (SCA) might be able
Accenture was the analytical proficiencies needed to make superior to develop a certification program for retail inventory
optimal partner to help stocking decisions were often unavailable. Perhaps management. The response was positive: Many of
make it happen.” most important, optimal replenishment practices had the features of Accenture’s inventory management
not been established across stores and departments: program for manufacturers could be transformed for
Gary Maxwell, Excellence in, say, housewares was no guarantee that use in a retail setting. And with thousands of highly
Wal-Mart’s similar levels of performance were achievable in, say, experienced retail and supply chain management
Senior Vice President sporting goods. professionals, Accenture was the optimal partner to
International Supply help make it happen.
Chain Wal-Mart execs also determined that these
shortcomings were costly—that significantly lower
inventory levels (achieved without compromising
in-stock performance) might be attained by raising
replenishment skills company-wide.
How Accenture helped Retail Industry Leaders Association, “no other Lastly, SCA education has helped Wal-Mart
[training] program offers such broad content isolate trouble spots, such as a large bulk-
By January 2005, Accenture, Wal-Mart
with such extensive depth and global reach.” consumable category for which in-stocks
and the Retail Industry Leaders Association
On the supplier side, for example, Wal-Mart were varying by up to 13 percentage
(RILA) completed an online Retail Supply
vendors are better positioned to hire and train points. Formerly, Wal-Mart was less adept
Chain Certification (RSCC) program for roll-
good people—a capability that benefits Wal- at isolating the specific variables needed
out to Wal-Mart suppliers and in-house
Mart, the supplier and other customers served to identify the root cause of the problem.
professionals. The program—more than
by the supplier. According to one supplier: However, with its new SCA-derived “root
50 hours of content representing the best
“I was able to take what I learned about the cause analysis” skills, Wal-Mart quickly
thinking of experts from Accenture,
symptoms of poor inventory management and identified two distribution centers with
Wal-Mart, more than a dozen universities,
immediately apply them to our business to supplier-delivery problems. It then was able
and RILA and several other professional
make improvements.” to work with the supplier to raise forecast
organizations—is the first of its kind.
accuracy and shipping performance, and thus
It consists of 27 courses categorized by: And since internal performance metrics and
hike in-stocks to between 95 percent and
• Supply Chain Fundamentals. quantification are part of the curriculum, it is
99 percent.
• Statistics & Probability. not surprising that Wal-Mart-specific benefits
• Forecasting & Planning (e.g., Measuring have been significant and visible:
The net effect is that Supply Chain Academy
Forecast Error and Variability; Demand • Improved ability to put the right product has helped Wal-Mart build better, more
Planning; and Forecasting Simulation.) in the right place at the right time sophisticated supplier relationships, make
• Inventory Management (e.g., Calculating (making better decisions that result in better decisions and identify even more ways
Safety Stock; Inventory Management lower inventories and/or higher in-stock for leveraging supply chain excellence to
Simulation and Modeling; and Retail positions.) increase growth, profitability and competitive
Cross Docking.) • Improved ability to put the right employee differentiation. These skills are the essence of
• Performance Metrics. in the right job at the right time. high performance in supply chain manage-
• Collaborative Planning, Forecasting & • More-advanced technology skills for ment and Wal-Mart already is the ultimate
Replenishment (CPFR1.) supporting replenishment (e.g., to measure practitioner. However, with new inroads
forecast error, calculate safety stocks and for building exceptional replenishment
The complete curriculum was designed determine per-channel costs.) capabilities, yet another plank has been
to be covered in six to twelve months by • Greater consistency in training and skills added: an exceptionally-well-trained
Wal-Mart professionals and select assessment—both in-house and among workforce aligned with a similarly sharp
professionals from among Wal-Mart’s suppliers. network of suppliers.
numerous suppliers. The program also includes • Increased career-enhancement potential,
an extensive, four-hour certification exam. job satisfaction and workforce retention. About Accenture
• Better metrics for evaluating store- and Accenture is a global management consulting,
Accenture, Wal-Mart and RILA then company-wide replenishment performance. technology services and outsourcing
piloted the RSCC with a group of 20 Wal- • Opportunity to use inventory/replenish- company. Combining unparalleled experience,
Mart associates from different disciplines ment/forecasting competencies as market comprehensive capabilities across all
(e.g., Replenishment, Information Services differentiators. industries and business functions, and
and International.) Several suppliers also extensive research on the world’s most
participated in this effort. Each entity A good example of these skills is calculating
successful companies, Accenture collaborates
provided feedback about the program’s order point and safety stock inventories.
with clients to help them become high-
effectiveness and suggested ways that it Systems at Wal-Mart and its suppliers
performance businesses and governments.
could be improved further. The next step had been doing this with a high degree of
With more than 180,000 people in 49
was a full-curriculum launch with about accuracy, but neither side’s staff understood
countries, the company generated net
100 Wal-Mart supply chain associates at the how answers were derived. SCA training
revenues of US$19.70 billion for the fiscal
company’s Bentonville, AR, headquarters and helped both understand the “why behind the
year ended August 31, 2007. Its home page is
select locations overseas. From this group, 80 how,” thus giving them the ability to spot
www.accenture.com.
associates were certified. In addition, supply errors more quickly and make better decisions
chain decision makers at Wal-Mart involved about calculating and adjusting service levels.
additional staff from suppliers. To date, over
200 Wal-Mart associates and over 350 Wal- Another important training breakthrough
Mart suppliers have been certified. was giving Wal-Mart the skills and tools to
calculate the cost of raising in-stock levels.
High performance delivered Merchants often approach the company
suggesting that inventories be increased.
Accenture’s Retail Supply Chain Certification Wal-Mart professionals now know how to
program represents a new level of professional calculate the safety stock levels required to Copyright © 2008 Accenture
All rights reserved.
excellence in retail inventory management, achieve a desired service level, and they can
as well as a consistent, repeatable process for recognize when adding safety stocks is cost- Accenture, its logo, and
retailers and retail suppliers. According to the prohibitive. High Performance Delivered
are trademarks of Accenture.