OPERATION MANAGEMENTSUBMITED TO: SUBMITED BY: GROUP 7 NITISH GOEL (65)DR. R.K SINGH SANTOSH GHILDIYAL (72) ANKIT PHARTIYAL (77) LAISHRAM ARNOLD (91) DHEERAJ KUMAR (118)
BENCHMARKING Process of improving performance by constantly identifying, understanding and adapting best practices and processes. Comparing ones organization or a part of it with that of the other companies.
Benefits of Benchmarking Promotes a thorough understanding of company’s own process Saves time and money Identify non value added activities Focuses on performance measures and processes and not on products It provides a basis for training human resource
STAGES IN A BENCHMARKING Planning: Identifying, establishing and documenting specific study focus 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, and the identification of practices that help and deter superior performance. Adaptation
Benchmarking at XeroxBenchmarking 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 aboutthe same amount that it cost Xerox to manufacture them.Xerox’s products had over 30,000 defective parts per million—about 30times more than its competitors.
Benchmarking Model at Xerox• Planning: Determining the subject to be benchmarked, identify the relevant best practice and develop most appropriate data collection technique.•Analysis: Assess the strengths of competitors and compare Xerox’s performance with competitors.• Integration: Establish necessary goals and integrate these goals into the company’s 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.
Supplier management system Japanese Companies•It has 1000 suppliers•They trained Vendor’s Employee in Quality Control , manufacturing automation.•Just-in-time i.e. Delivery in small quantities, as per customer’s 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.Inventory Management Inventory holding Time reduction•Xerox asked Branch managers to match the Stocking Policy with Customer’sinstallation 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.
Manufacturing SystemManagers were encouraged to identify its :Internal Customers ( i.e. Assembly Line Workers) & External Customers ( i.e. Endusers who load the papers) in order to meet their needs.MarketingCompany sent 55,000 questionnaires to monthly to customers to measure customerSatisfaction & record Competitor’s performance.Those Competitors who have scored higher, Xerox benchmark itself against it.QualityAs a part of “Leadership Through Quality” program, Xerox started providing itscustomers( External & Internal) innovative products & services. Total Quality ManagementTeam consists of Senior managers & Consultants from McKinsey help to makeTQM.Under which New three SBUs were introduced:Enterprise Service BusinessOffice CopiersHome CopiersAll these have autonomy in Engineering, marketing & pricing.
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%.
• 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 qualityawards- Malcolm Baldridge National award, Deming award ,andEuropean 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.