Accenture Federal Services: Rethinking the Federal Supply Chain

Applying leading business practices to federal supply chain design to achieve high performance

All federal agencies are being challenged to “do more with less”—less money, less manpower, fewer resources, but more public to serve and mission to undertake. Taking on the challenge of improving supply chain design—finding better ways to identify what is needed, where, and how it can be delivered quickly—is a sterling example of how to accomplish more with less.

Many federal agencies play a role in humanitarian, disaster and emergency relief missions: The Federal Emergency Management Agency has to move people, equipment and supplies anywhere in the country on short notice, while US-AID has similar requirements on an international basis.

Other agencies play complex roles in supporting federal programs—for example, the State Department has to supply its network of embassies and consulates around the world with a mix of standardized and locally purchased goods and services; the Department of Interior's national parks system is widely scattered, and each park has some unique supply needs; the Defense Department has its military role but also provides support to civilian agencies at all levels (federal, state, local, tribal), often on short notice.

The key to attaining optimized cost and performance outcomes within these multiple supply chains is to strategically align processes within each organization, and to identify ways to align across organizations.

The biggest design improvement challenges rest in the sheer complexity and scale of the supply chain network, especially since each agency creates its own.

• Scope—Agencies are geographically dispersed, with offices scattered around the country, and frequently including international locations.
  
  
• Assets—At a generic level, every agency needs common items, such as office supplies, furniture, and equipment; each agency then has requirements for goods and services specific to its operation.
  
  
• Policies—Each agency has its own mission, with purchasing, delivery and use policies intended to support that mission.
  
  
• Response time—Some agencies have responsibility for emergency situations, which means their supply chains must accommodate a mix of regular schedules and priority deliveries.
  
  

Accenture’s distribution network optimization framework combines leading practices from the private sector with our deep understanding of federal agency logistics. The framework creates an iterative process that involves three phases:

1. Network optimization. Analysis begins by creating a network flow model to minimize the total cost of moving product through the network (the throughput cost), taking performance and capacity constraints into consideration. Throughput costs include fixed and variable costs at each distribution facility and transportation costs by mode and lane. The flow model does not consider inventory posture or product movement at an individual item level. Scenario modeling and sensitivity analysis are performed to assess risk and validate assumptions.
   
   
2. Inventory optimization. Once the network is optimized, the next step is studying the effects on inventory positioning and performance. After the capacity requirements are known, detailed analysis helps determine how to best meet demand. This leads to a deeper, item-level analysis, including decisions on how much inventory and mix to hold where and what transportation policy changes to implement.
   
   
3. Simulation. Performing simulation analysis is a critical step to validate outcomes and ensure that customer performance requirements are met. This process of refining the supply chain design is iterative, as findings from one phase can spur the need to revisit a prior phase with new data and understanding. For this reason, supply chain design needs to be actively managed and conducted at appropriate intervals to deliver high performance and sustained value.
   
   

Accenture conducts supply chain design with analytics tools and software that meet each organization’s unique needs. We bring an experienced team that knows how to make the most out of the software and the framework. We also help implement change across people, processes, technologies and organizational cultures necessary to realize and sustain supply chain design improvements.