XEROX - THE BENCHMARKING STORY
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The case examines the benchmarking initiatives taken by Xerox, one of the world 's leading copier companies, as a part of its 'Leadership through Quality ' program during the early 1980s. The case discusses in detail the benchmarking concept and its implementation in various processes at Xerox. It also explores the positive impact of benchmarking practices on Xerox.
"Benchmarking at Xerox is still very much a matter of competitive advantage. It is used to keep Xerox 's edge razor-sharp, to discover where something is being done with less time, lower cost, fewer resources and better technology."
- Warren
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Between 1980 and 1984, Xerox 's profits decreased from $ 1.15 billion to $ 290 million (Refer Exhibit I).
In 1982, David T. Kearns (Kearns) took over as the CEO. He discovered that the average manufacturing cost of copiers in Japanese companies was 40-50% of that of Xerox. As a result, Japanese companies were able to undercut Xerox 's prices effortlessly. Kearns quickly began emphasizing reduction of manufacturing costs and gave new thrust to quality control by launching a program that was popularly referred to as 'Leadership Through Quality. ' As part of this quality program, Xerox implemented the benchmarking program. These initiatives played a major role in pulling Xerox out of trouble in the years to come. The company even went on to become one of the best examples of the successful implementation of benchmarking.
ABOUT BENCHMARKING
Benchmarking can be defined as a process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results. The main emphasis of benchmarking is on improving a given business operation or a process by exploiting 'best practices, ' not on 'best performance. ' Simply put, benchmarking means comparing one 's organization or a part of it with that of the other companies. Companies can adopt one or more of the following types of benchmarking -
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The Performance Measurement is a way to either measure or give a understandable value to what has been done compared to what was supposed to be done. It applies to all aspects in the working environment, such as procedures, critical activities and processes. In other words, first you set pre-defined goals and give away tasks and responsibilities to other workers, then at the deadline you can compare the achieved results to what the original goal was at the beginning. It is also useful to evaluate not only the final result, but even all the actions taken to get that particular results and the way the actions have been taken as well.
Avie can assess the effectiveness of this strategy by using the benchmarking. Benchmarking involves comparing Avie Products’ processes and practices with the competition. This will allow Avie to measure how fast and how far they have progressed with their strategic plan. The metrics used are human capital metrics which assesses aspects of the workforce and HR metrics which assesses the performance of the HR function.
To evaluate the Performance in any organization would simply mean to understand the goals and objectives of the company and how the goals/ objectives are achieved are the means of measurement. Different organization will have different objectives. For some it would mean high revenue, managing resources, customer satisfaction, and strong governance, building
Benchmarking, when used, improves the performances in companies by looking, identifying and applying the best demonstrated practices to operations and sales.
The fourth key to benchmarking is systematic external benchmarking. Once management has realized the importance of internal business processes and world-best practices, it is their responsibility to combine these two themes. Management must systematically examine its internal practices and performance in comparison to external benchmarks. The last key is benchmarking as a survival technique. It may effectively save a business from declaring bankruptcy. However, benchmarking should be used in organizations regardless of financial or economic status.
Senior leadership must determine and direct the level of quality that is acceptable within the organization. Leadership should prioritize areas of quality and use data based on benchmarks from other facilities. (Dlugacz, 2006). In addition the author states there are some important areas that must be monitored for quality. Compliance must be followed by leaders and all
Measuring performance means when a business will measure the quality of the activities that are passing and the quality of the services provided to the customers by employees. It involves creating a simple, but effective, system for determining whether organizations meet objectives. It’s also a process of collecting and reporting information regarding the performance of an individual, group or organizations. It can
The information gained from such a comparison allows firms to determine how well they perform in comparison with the “best” and, in turn, develop new and better strategies to work towards making improvements or adopting certain best practices. Benchmarking is usually an ongoing process in which companies continuously seek the improvement of their practices. (Debitoor, 2017)
Benchmarking can be a successful tool to determine root causes and potential solutions to a problem. Benchmarking allows for an organization to compare themselves to others in the same field and gauge what works and hasn’t work for others. (Suttle, n.d.) One tool that can
Performance management is a tool that managers use to ensure that their companies remain at the top of their competitive edge. The Chartered Institute for Personnel Development (CIPD, 2008), defines performance management as a method by which individuals and teams are managed in a way that achieves high performance at an organisational level. The individuals within the organisation share an understanding of the achievement goals of the organisation. In order to achieve this, a general strategy is created, with each individual within the organisation understanding his or her role and requirements within such a strategy
As the CEO of Xerox Ursula Burns demonstrates many strengths and weakness, some of which stand out more than others. Ms. Burns is very innovative not only in her leadership style, but also in the products and services the company now offers. Last year in 2012,
Fifer, R. M. (1989). Cost benchmarking functions in the value chain. Strategy & Leadership, 17(3),
The President Ralph Larsen has realized that Wengart has some major problems with the quality however he is focusing on the profitability instead of the longevity of the company. He needs to have the team focus on improving the quality problem or the company’s profits will continue to decrease. Larsen in the effort to improve the quality has decided to seek out help from an OD practitioner who suggests to Ralph to implement Top Quality Management (TQM). Larsen feels that this should be easy to implement and hands it off to Kent Kelly the Vice President. He feels that the TQM program was a matter of common sense (Brown, 2011, p. 365).
Financial Research – The Xerox and to make the current profit targets meet with Wall Street's expectations. In addition, Xerox specifically adopted the measures of "return on equity" and "profits standardized" to
Major advantage with this option is the fact that Xerox operates in the market it fully knows, dominates and controls. As a market leader, having gained clear edge over main competitor IBM, Xerox can consolidate its position with the introduction of innovative new product "Book-In-Time solution" that could significantly reduce the publishing costs.