bpr case 1-xerox group 13

7/28/2019 BPR Case 1-Xerox Group 13

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BPR

SUBMITED BY:GROUP

Mukund Madhav

Agrawal

Anshul GuptaKartikeya Rai


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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 itsproducts) 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 companieswas 40 to 50 % of that of Xerox.


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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 andnot on products

It provides a basis for training human resource


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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.


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TYPES OF BENCHMARKING

compare their positions with respect to theperformance characteristics of their key productsand services

Comparing with companies from the same sector

Strategicbenchmarking

improves specific key processes and operationswith the help of best practice co. involved inperforming similar work or offering similar services.

Processbenchmarking

Comparing with co. with different businesssector but with similar process or functionFunctionalBenchmarking

Benchmarking against its own units orbranches

Internalbenchmarking

Comparison of same product or servicesprovided by direct market competitors

Externalbenchmarking

Involves benchmarking against companies

outside the country

Internationalbenchmarking


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STAGES IN A BENCHMARKING

Planning:

Identifying, establishing and documenting specific studyfocus 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, andthe identification of practices that help and deter superior

performance.

Adaptation


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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.


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Benchmarking Model at Xerox

Planning: Determining the subject to be benchmarked, identify the relevantbest 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.


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Supplier Management System

Japanese CompaniesIt 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.


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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.


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Manufacturing SystemManagers 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.

MarketingCompany 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.

QualityAs 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 makeTQM.

Under which New three SBUs were introduced:

Enterprise Service Business

Office Copiers

Home CopiersAll these have autonomy in Engineering, marketing & pricing.


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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%.


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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.


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Benchmarking Guidelines

Benchmarks [compare with smarts]

Data + Experience

Best Practices [borrow with creativity]

Qualitative, narrative descriptions of processesthat explain why the benchmarks are, in fact,

targets to shoot for

Implementation Initiatives [implement

with passion] motivation, path and resources


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bpr case 1-xerox group 13

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