BENCHMARKING AT XEROX

Presented BySejal Bhodia (68) Chhavi Sonkar (115) Meghana Patil (43) Priya Shah (104)

Background
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Chester Carlson, US, 1938 Haloid company acquired license, 1947 Xerox Corporation, 1961 Listed in more than 8 stock exchanges
Market share 86%, 1974 Revenues - $4.4 billion, 1976 Profits - $404 million, 1977

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Problems

Management layers increased, 1970s Ignored new entrants (Ricoh, Canon, Sevin) High operating costs Products inferior Market share 17%, 1984 Profits - $290 million

David T. Kearns, CEO, 1982 Japanese Manufacturing costs, 40-50% less Leadership through quality

Benchmarking at XEROX
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Time

Twice - Time to market, Five times Engineers Four times Design changes, Three times Design costs Produce / Ship / Sell = Manufacture

Cost
Defects

30,000 parts per million 30 times more

Growth

18% - five consecutive years

Benchmarking Process
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Planning

Maturity

Analysis

Action

Integration

Best Practice Companies

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American Express (billing and collection) Cummins Engines and Ford (factory floor layout) Florida Power and Light (quality improvement) Honda (supplier development) Toyota (quality management) Hewlett-Packard (research and product development) Saturn Fuji Xerox (manufacturing operations) DuPont (manufacturing safety)

Supplier Management System

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Japanese companies together had 1000 suppliers Xerox had 5000 suppliers alone Japanese companies standardized its components

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Japanese companies worked closely with their suppliers Vendors employees training in Quality control, Manufacturing and other key areas This led to JIT production scheduling

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By using the best practices Xerox reduced its suppliers from 5000 to 400 only Xerox started vendor certification process Vendors were consulted for both innovative design and customer satisfaction

Inventory Management System

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Xerox drew inspiration from their spare parts management practices of its European operations

Initially the spare parts inventory was decided by the technical representative

Without knowing the actual usage pattern of spare parts

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Sophisticated information system were developed to determine the inventory level Xerox replicated this system in US and saved 10 million dollars in this process Initially inventory carried the finished goods stock

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Xerox changed it policy and did assembly at the final stage Xerox made different machines for both Canadian and US market Also redesigned its manufacturing process so as to make its components similar It helped Xerox to minimize their unit stock holding location

Marketing
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Introduced Customer Satisfaction Measurement System 55,000 questionnaires sent on a monthly basis Then benchmarked with the competitors Use of vast amount of information

Reaping the benefits

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Increase in the number of satisfied customers Customer complaints reduced by 60%

Customer satisfaction with the processes increased by

Sales

processes by 40% Service processes by 18% Administrative processes by 21%

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No. of defects reduced by 78 per 100 machines

Service response time reduced by 27%

Inspection of incoming components reduced to below 5% Inventory costs reduced by two-thirds Distribution productivity increased by 8-10%

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Increased product reliability

Decrease in labor costs and billing errors Xerox became the leader in high-volume copierduplicator market segment Improved sales from 152% to 328% Xerox won 3 quality awards

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THANK YOU