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GlaxoSmithKline: Working capital management

With Accenture’s help, GlaxoSmithKline realized roughly £1.5 billion ($2.28 billion) in working capital benefits within 18 months.


GlaxoSmithKline believed it could improve its working capital management capabilities and, in the process, release cash for strategic investments across the business. With Accenture’s help, the company launched a comprehensive program that focused on improving working capital in trade payables, trade receivables and inventory in all businesses and all geographies.

Within 18 months, GlaxoSmithKline realized roughly £1.5 billion ($2.28 billion) in working capital benefits and was also able to build the internal capabilities necessary to drive working capital improvements at scale and on an ongoing basis.

As part of a program of change, GlaxoSmithKline wanted to make improvements in its £7 billion (approximately $10.6 billion) trading working capital to release cash for investment elsewhere within the business. GlaxoSmithKline’s objective for the Working Capital Program set by the CEO was to deliver more than £1 billion (approximately $1.51 billion) in working capital improvements in 2009. For help in realizing this ambitious goal, the company turned to Accenture for its deep skills and proven experience in delivering working capital improvements.


Accenture, which was engaged from the start of the Working Capital Program, worked closely with GlaxoSmithKline to:

  • Shape, plan, structure and help drive the program.

  • Develop a customized, Web-based working capital toolkit, as well as a monthly scorecard to track key metrics.

  • Assist with the introduction of an effective incentive program that kept the business focused on program delivery in an environment with many competing priorities.

  • Conduct a detailed, top-down benchmarking of GlaxoSmithKline versus peer groups and, from this assessment, establish appropriate targets for working capital improvements across the business.

  • Wave 1 implementations: To support the implementation of the recommendations across the major geographies of the business, which would ultimately deliver approximately 80 percent of the benefits.

  • Wave 2 implementations: To support the implementation of the recommendations across the remaining areas of the business and capture the remaining benefits.

  • Conduct a bottom-up assessment of opportunities from a qualitative and quantitative perspective, as well as root cause issues. Based on these findings, the team structured a prioritized program of change.

  • Support pilots and quick wins to prove the initial hypotheses, build implementation momentum within the program and develop the internal working capital capability to enable GlaxoSmithKline to deploy the program on a scaled basis.


While GlaxoSmithKline continues the implementation of its improvement initiatives, the company’s Working Capital Program has already:

  • Delivered approximately £1.5 billion ($2.28 billion) in working capital benefits within 18 months, making it one of the world’s largest working capital programs ever delivered.

  • Reduced trade receivables through targeted initiatives that addressed overdue debt in key markets, selective factoring of debt and piloting longer term initiatives to improve terms.

  • Reduced inventory through initiatives in end-to-end inventory optimization, work-in-process optimization, end-market inventory and strategic stock holdings.

  • Increased trade payables in key markets through a structured program including payment process improvements that ensure invoices were paid only according to terms, reducing early payments to suppliers and extending contracted and non-contracted supplier terms, while achieving the prompt payment code that the company wanted.

  • Developed a Web-based working capital toolkit that could be used by GlaxoSmithKline to support ongoing deployment activities in the markets.

  • Developed a new working capital scorecard that served as a working capital management dashboard and allowed GlaxoSmithKline to track key metrics such as receivables, payables and inventory balances.