. In the process of best practice benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compares the results and processes of those studied (the "targets") to one's own results and processes
Process change - change managment
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What is change Management???
• Change management is a systematic approach to
dealing with change, both from the perspective of an
organization and on the individual level.
• Three different aspects of CM :
adapting to change,
controlling change, and
Three important levels of change
• Portfolio change
• Process change
• Structural change
• These are the changes in an organization
which are implemented in order to improve
efficiency or effectiveness of organizational
• The goal of process-oriented change is to improve
• Process-oriented change affects the way in which an
organization delivers services, produces products, or
handles current business practices.
• As the environmental factors of an organization
change, the need for process-oriented change
Levels of PROCESS CHANGE
• Process re-engineering
• Process redesign
• Process improvement
• Focus on the analysis and design of workflows and
processes within an organization.
• It help organizations fundamentally rethink how they
do their work in order to dramatically
improve customer service, cut operational costs, and
become world-class competitors.
• Process re-design, is a medium sized operation which
is normally done as a need for process improvement
• This low scale change operation happens at frequent
intervals in an organization and is resulted by means
of a job description change or automation of a portion
or the entire process.
• This tactical technique of process change is best
suited for small and stable processes. Improvement to
the existing process can be done to improve the
quality and efficiency of the end product.
• 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.
WHAT TO BENCH
• An inventory strategy companies employ to
increase efficiency and decrease waste by
receiving goods only as they are needed in the
production process, thereby reducing
• A few years ago, Google's human resources
department noticed a problem: A lot of women were
leaving the company.
• it's the Google HR department's mission to figure out
why and how to fix it.
• Google calls its HR department People operations,
though most people in the firm shorten it to POPS.
• The group is headed by Laszlo Bock
• It found it was really a new mother problem: Women
who had recently given birth were leaving at twice
Google's average departure rate
• At the time, Google offered an industry standard
maternity plan i.e. Of 12 weeks leave.
• in 2007, Google changed the plan.
• New mothers would now get five months off at full
pay and full benefits.
• A new mother can take a couple months off after
birth, return part time for a while, and then take the
balance of her time off when her baby is older.
• Google began offering the seven weeks of new-
parent leave to all its workers around the world.
• The five-month maternity leave plan, for instance,
was a winner for the company. After it went into
place, 50% reduction in job dropping was observed.
• Xerox was started in the year 1938.
• Xerox was listed on the New York Stock Exchange in
1961 a and on the Chicago Stock Exchange in 1990. It is
also traded on the Boston, Cincinnati, Pacific Coast,
Philadelphia, London and Switzerland exchanges.
• The strong demand for Xerox's products led the company
from strength to strength and revenues soared from $37
million in 1960 to $268 million in 1965.
• In the early 1980s, Xerox found itself increasingly
vulnerable to intense competition from both the US
and Japanese competitors.
• As a result of this, return on assets fell to less than
8% and market share came down sharply from 86%
in 1974 to just 17% in 1984.
• Between 1980 and 1984, Xerox's profits decreased
from $ 1.15 billion to $ 290 million.
• In 1982, David T. Kearns (Kearns) took over as the
• He discovered that the average manufacturing cost of
copiers in Japanese companies was 40-50% that of
• As a result, Japanese companies were able to
undercut Xerox's prices effortlessly
BENCHMARKING AT XEROX
• The program encouraged Xerox to find ways to
reduce their manufacturing costs.
• Benchmarking against Japanese competitors, Xerox
found out that it took twice as long as its Japanese
competitors to bring a product to market, five times
the number of engineers.
• The company also found that the Japanese could
produce, ship, and sell units for about the same
amount that it cost Xerox just to manufacture them.
• In addition, Xerox's products had over 30,000
defective parts per million - about 30 times more than
• Benchmarking also revealed that Xerox would need
an 18% annual productivity growth rate for five
consecutive years to catch up with the Japanese.
• Xerox collected data on key processes of best
• Xerox identified ten key factors that were related to
• These were
billing and collection
human resource management
• These ten key factors were further divided into 67
• Each of these sub-processes then became a target for
• . For the purpose of acquiring data from the related
benchmarking companies, Xerox subscribed to the
management and technical databases.
• referred to magazines and trade journals, and also
consulted professional associations and consulting
• computer program was developed that made order
filling very efficient.
• The program arranged orders in a specific sequence
that allowed stock pickers to travel the shortest
possible distance in collecting goods at the
• The increased speed and accuracy of order filling
• Number of defects reduced by 78 % per 100
• Service response time reduced by 27%.
• 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
• 40% reduction in unscheduled maintenance.
• Notable decrease in labour costs.
• 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%.