XEROX - The Benchmarking Story

<< Previous

Inventory Management Contd...

The process of benchmarking helped Xerox revamp its manufacturing techniques. Each 'family unit' (a manager and his direct subordinates) was encouraged to identify its internal as well as external customers and to meet their needs. For instance, the group that built paper trays identified its external customer as the end user who would load the paper. Its internal customers were the assembly-line workers, who would combine the paper tray with hundreds of other components to assemble the copiers. This process significantly improved the operational efficiency of the work groups. Marketing Xerox introduced a Customer Satisfaction Measurement System that integrated customer research and benchmarking activities. The company sent out over 55,000 questionnaires monthly to its customers to measure customer satisfaction and record competitors' performance. It then benchmarked against those competitors that had scored high marks on specific measures of customer satisfaction. Xerox also used the vast amount of information gathered by the system to develop business plans for improving quality and meeting customer needs.

Quality
As a part of its "Leadership Through Quality" program, Xerox reformulated its quality policy. The new policy supplemented the company's benchmarking efforts. Xerox's new quality policy stated, "Xerox is a quality company. Quality is the basic principle for Xerox. Quality means providing our external and internal customers with the innovative products and services that duly satisfy their requirements. Quality improvement is the job of every Xerox employee" (Refer Exhibit III for a comparison between new and old quality policies). Following this, the company embarked on a complete organizational restructuring exercise that focused on research and development, employee involvement and customer orientation.

Xerox also formed a transition team consisting of 24 senior managers and consultants from McKinsey & Co to help make Total Quality Management (TQM) a part of its organizational culture. The transition team took action at two levels. Firstly, it conveyed the message clearly to the world that Xerox was pursuing more widespread use of TQM, and secondly, it identified and addressed the obstacles that were likely to slow down the spread of TQM. These ranged from the corporation's function-dominated matrix structure to the need for new training programs. Consequently, the transition team also replaced the existing complex matrix by three Strategic Business Units (SBUs) - Enterprise Service Business, Office Copiers and Home Copiers. Each of these SBUs was given considerable autonomy in engineering, marketing and pricing.

Next >>