BPR Case 1-Xerox Group 13
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Transcript of 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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