BPR

SUBMITED BY: GROUP Mukund Madhav Agrawal Anshul Gupta Kartikeya Rai

Issues at Xerox

In 1979, Xerox losing market share in copier business Lower priced high quality Japenese competitors were squeezing Xerox out of industry It ignored new entrants (Canon, Ricoh and Sevin) The companies operating cost (and therefore the prices of its products) was high and its products were of relatively of inferior quality in comparison to its competitors Between 1980-84, Xerox profits decrease from 1.15 billion to 290 million dollars Avg manufacturing cost of copiers in Japanese companies was 40 to 50 % of that of Xerox.

Rationale of Benchmarking

Promotes a thorough understanding of companys own process Saves time and money Identify non value added activities Focuses on performance measures and processes and not on products It provides a basis for training human resource

BENCHMARKING
Process of improving performance by constantly identifying, understanding and adapting best practices and processes. Comparing one's organization or a part of it with that of the other companies.

TYPES OF BENCHMARKING
Strategic benchmarking Process benchmarking Functional Benchmarking Internal benchmarking External benchmarking
compare their positions with respect to the performance characteristics of their key products and services Comparing with companies from the same sector improves specific key processes and operations with the help of best practice co. involved in performing similar work or offering similar services.

Comparing with co. with different business sector but with similar process or function Benchmarking against its own units or branches Comparison of same product or services provided by direct market competitors Involves benchmarking against companies outside the country

International benchmarking

STAGES IN A BENCHMARKING
Planning: Identifying, establishing and documenting specific study focus areas. The best-practice companies are identified and appropriate data collection tools are selected. Data collection: Information is mainly collected through questionnaires administered to all best practice companies. Data analysis & Report: Involves the critical evaluation of practices followed, and the identification of practices that help and deter superior performance. Adaptation

Benchmarking at Xerox
Benchmarking against Japanese: Xerox found that, -They take twice as long as its Japanese competitors. -Five times number of engineers. - Four times the number of design change. - Three times the design cost.

Company found that Japanese could produce, ship and sell units for about the same amount that it cost Xerox to manufacture them. Xeroxs products had over 30,000 defective parts per millionabout 30 times more than its competitors.

Benchmarking Model at Xerox

Planning: Determining the subject to be benchmarked, identify the relevant

best practice and develop most appropriate data collection technique. Analysis: Assess the strengths of competitors and compare Xeroxs performance with competitors. Integration: Establish necessary goals and integrate these goals into the companys formal planning processes. Action: Implement action plans established and assess them periodically to determine whether the company is achieving its objectives.

Maturity: Determine whether the company has attained a superior performance level.

Supplier Management System

Japanese Companies
It has 1000 suppliers They trained Vendors Employee in Quality Control , manufacturing automation. Just-in-time i.e. Delivery in small quantities, as per customers production Schedule.

Xerox
Reduced the vendors from 5000 to 400. Created a Vendor Certification Process in which suppliers were offered training & told their areas of improvement. Vendors were consulted for better Designs & Improved Customer service.

Inventory Management
Inventory holding Time reduction Xerox asked Branch managers to match the Stocking Policy with Customers installation Orders . As a result CCP ( Capital Cycle Period) was cut by 70% which leads to savings of $ 200 million. Minimize Inventory Carrying Cost was to delay the assembly of product into the final Configuration.

Manufacturing System
Managers were encouraged to identify its : Internal Customers ( i.e. Assembly Line Workers) & External Customers ( i.e. End users who load the papers) in order to meet their needs.

Marketing
Company sent 55,000 questionnaires to monthly to customers to measure customer Satisfaction & record Competitors performance. Those Competitors who have scored higher, Xerox benchmark itself against it.

Quality
As a part of Leadership Through Quality program, Xerox started providing its customers( External & Internal) innovative products & services. Total Quality Management Team consists of Senior managers & Consultants from McKinsey help to make TQM. Under which New three SBUs were introduced: Enterprise Service Business Office Copiers Home Copiers All these have autonomy in Engineering, marketing & pricing.

Reaping The Benefits

Number of defects reduced by 78 per 100 machines.

Service response time reduced by 27%.

Inspection of incoming components reduced to below 5%.

Defects in incoming parts reduced to 150ppm.

Inventory costs reduced by two-thirds.

Marketing productivity increased by one-third.

Distribution productivity increased by 8-10%.

 Increased product reliability on account of 40% reduction in unscheduled maintenance. Errors in billing reduced from 8.3% to 3.5% percent.

Became the leader in the high-volume copier-duplicator market segment.

Country units improved sales from 152% to 328%. Xerox went to be only company to win three prestigious quality awards- Malcolm Baldridge National award, Deming award ,and European quality award . During 1990s, Xerox, along with companies like Ford, AT&T, IBM, Motorola created the International Benchmarking Clearinghouse (IBC) to promote Benchmarking and guide companies across the world in benchmarking efforts.

Benchmarking Guidelines

Benchmarks [compare with smarts]

Data + Experience

Best Practices [borrow with creativity]

Qualitative, narrative descriptions of processes

that explain why the benchmarks are, in fact, targets to shoot for

Implementation Initiatives [implement with passion]

motivation, path and resources