1938-Chester Carlson made the first xerographic image in US He struggled for over 5 years to sell the invention 1944-Battelle Memorial Institute contracted with Carls lso on and refi fin ned his new process calle led d ¶Electro photography· The Halo loiid compa pan ny obta taiined licen ense se from Battelle to make photocopying machines based on Carlson·s technology 1948-Haloid obtained all rights from Carlson and registered ¶XEROX· trademark 1958-Haloid changed to Haloid Xerox Inc
Xerox was listed on NY stock exchange 1961,Chicago stock exchange in 1990
in
Xerox·s products led their revenues to soar from $37 million in 1960 to $268 million in 1965 1960-acquired University Microfilms, Micro-Systems, Electro-Optical Systems, Basic Systems &Ginn 1970-Diversified into IT business by acquiring Scientific Data Systems, Daconics and Vesetec 1969-Set up corporate R&D 1970-Focussed on introducing efficient models
new
and
1980-Intense competition from US & Japan
more
Failure of Strategic direction lead to high operating cost and inferior quality products Between 1980 & 1984-Profit decreased from $1.15 billion to $290 million 1982-David T. Kearns took over as the CEO He found that the average manufacturing cost of Japanese companies was 40-50% of that of Xerox Leadership Through Quality Implemented Benchmarking Program Became one of the best examples of successful implementation of benchmarking
Improving performance by constantly identifying, understanding and adopting best practices and processes followed inside and outside the company and implementing the results Main emphasis of benchmarking is on improving a given business operation or a process by exploiting ¶best practices', not on ¶best performance· Simply Benchmarking means comparing one·s organization or a part of it with that of the other companies
STRATEGIC BENCHMARKING
imed at improving performance
A
company·s
overall
COMPETITIVE BENCHMARKING
Used by companies to compare their positions with respect to the performance
PROCESS BENCHMARKING
Used by companies to improve specific key processes
FUNCTIONAL BENCHMARKING
Used by companies to improve their processes or activities
INTERNAL BENCHMARKING
This involves benchmarking against its own units
EXTERNAL BENCHMARKING
Used by companies to seek the help of organizations
INTERNATIONAL BENCHMARKING
Involves benchmarking outside the country
against
companies
IDENTIFY PROBLEM AREAS
Benchmarking can be applied to any business process or function, a range of research techniques may be required informal conversations with Includes: customers, employees, or suppliers
IDENTIFY OTHER INDUSTRIES THAT HAVE SIMILAR PROCESSES
For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges
IDENTIFY ORGANIZATIONS THAT ARE LEADERS IN THESE AREAS
Look for the very best in any industry and in any country customers, suppliers, financial Consult analysts, trade associations, and magazines to determine which companies are worthy of study
SURVEY COMPANIES FOR MEASURES AND PRACTICES
Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies Surveys are typically masked to protect confidential data by neutral associations and consultants
VISIT THE "BEST PRACTICE" COMPANIES TO IDENTIFY LEADING EDGE PRACTICES
Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group
IMPLEMENT NEW AND IMPROVED BUSINESS PRACTICES
Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process
Planning Data collection Data analysis Reporting and adaptation
Leadership Through Quality Benchmarking against Japanese competitors 30,000 defective parts per million Xerox developed its own benchmarking model
PLANNING
Determine the subject to be benchmarked
ANALYSIS
ssess the strengths of competitors
A
INTEGRATION
Establish necessary goals
ACTION
Implement action plans
MATURITY
Determine whether the company has attained a superior performance level
Key processes of best practice companies Identified 10 key factors related to marketing It includes customer marketing, customer engagement, order fulfillment, product maintenance, billing and collection, financial management, asset management, business management, human resource management and information technology 10 key factors were further divided into 67 sub-processes
Xerox began by implementing competitive benchmarking which was inadequate The company then adopted functional benchmarking It was initiated with the study of the warehousing and inventory management system of L.L. Bean Bean developed a computer program that made order filling very efficient The company was convinced with Bean·s management system
SUPPLIER MANAGEMENT SYSTEM
Xerox had 5000 suppliers whereas Japanese companies had only 1000 Standardization Trained vendor employees Just-in-time production scheduling Reduction of vendors from 5000 to 400 Vendor certification process Vendor participation
INVENTOR Y MANAGEMENT
spare parts management
Sophisticated information system
Replicated the system in the US
Stocking policy
Working capital cycle time was cut by 70% leading to savings of about $200 million
Revamped manufacturing techniques
This lead to improved operational efficiency
MARKETING
Introduced customer satisfaction measurement system Sent out 55,000 questionnaires to its customers Benchmarked against competitors Used vast amount of information gathered by the system
Q UALITY
Leadership Through Quality Organizational restructuring exercise Formed transition team
Increase in the number of satisfied customers Number of defects were 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 Notable decrease in labor costs Errors in billing reduced from 8.3% to 3.5% Became the leader in the high-volume copierduplicator market segment Country units improved sales from 152% to 328% It became the only company worldwide to win the three prestigious quality awards
The success of benchmarking at Xerox motivated many companies to adopt benchmarking 1990-Hundreds of companies implemented benchmarking It includes Ford, AT&T, IBM, GE, Motorola and Citicorp Xerox along with Ford, AT&T, Motorola and IBM created the International Benchmarking Clearinghouse(IBC)