CASE BRIEF 1959 - Xerox 914 Introduced 1960 - Sold all it could produce 1970s - Its ROA was as low as 20% Strong patents Growing market Little competition No focus on customers
CASE BRIEF 1970s - IBM & Kodak entered the high volume copier’s (Xerox) market 1980 - Xerox market share fallen less than 50% Xerox ignored, which the Japanese companies concentrated High Quality Low volume copiers
CASE BRIEF 1983 - was predicted that Xerox will be closed for $2 billion due to Rework Scrap Excessive inspection Lost business Other problems
CASE BRIEF 1983 - As compared to competitors, Xerox had 9 times suppliers 2 times employees Twice the cycle times 10 times rejects 7 times manufacturing defects
CASE BRIEF 1983 - David T Kearns, President planned long range quality strategy Bench marking Team formation TQM approach Wrote TQM policy LEADERSHIP THROUGH QUALITY
LEADERSHIP THROUGH QUALITY Objectives To instill, Quality for all To ensure, Satisfaction for all To establish, Quality way of life Four goals are Customer Employee Business Process
LEADERSHIP THROUGH QUALITY Brought changes in Product planning Distribution Establishing unit objectives Focus on customer
LEADERSHIP THROUGH QUALITY Benchmarking, nearly 200 processes from non- competitive companies Cummins Engine – Production scheduling LL Bean – Distribution system American Express – Billing system Measuring customer satisfaction 40,000 mails surveyed Seeking feedback on Equipment performance, Sales, Service & Administrative support
LEADERSHIP THROUGH QUALITY Equal training at all levels world wide, in quality principles, starting from top management In 5 years, 4 million hours with more than $125 million all employees had received quality related training In 1988 – 79% were involved in Quality improvement teams
OTHER ISSUES Xerox worked with suppliers, to give long term contracts Implementing statistical methods Total quality process JIT inventory concept Employee relations Being role model Promoted leadership Reward & recognition (team work & quality) Manager become coaches
IMPACTS OF LEADERSHIP THROUGH QUALITY Reject rates become 300 PPM (10,00,000) Suppliers become defect free (30 US suppliers) Suppliers reduced to 500 (from 5,000) Purchase cost reduced by 45% Manufacturing cost dropped by 20% Product development time decreased by 60% Overall product quality improved by 93%
THE PATH TO TRANSFORMATION Projects will be selected based on value creation opportunity (ROIC/Economic Profit) with number of projects in process controlled Adopt a consistent financial results tracking approach as determined by deployment team and the financial organization Deploy and train resources in roles as defined (Full Time Black Belts, Full Time Deployment Managers, Sponsors, Green Belts)using consistent training
THE PATH TO TRANSFORMATION Assign demonstrated top performers to the full-time roles Adopt the defined organizational structure to enable success Operations leadership will be engaged in the process and will integrate Lean Six Sigma into daily business operations Commit at least 0.5% of employee population as Black Belts in ‘03 and another 0.5% in ’04 to achieve critical mass towards our transformation
SIX SIGMA as a business process that allows companies to drastically improve their bottom line by designing and monitoring everyday business activities in ways that minimise waste and resources while increasing customer satisfaction by some of its proponents also be described as an improvement programme for reducing variation, which focuses on continuous and breakthrough improvements.
SIX SIGMA the major components for a successful six sigma implementation are Management involvement Organisation Infrastructure Training and Statistical tools.
SIX SIGMA METHODOLOGY Define. Define which process or product that needs improvement. Define the most suitable team members to work with the improvement. Define the customers of the process, their needs and requirements, and create a map of the process that should be improved. Measure. Identify the key factors that have the most influence on the process, and decide upon how to measure them. Analyse. Analyse the factors that need improvements. Improve. Design and implement the most effective solution. Cost- benefit analyses should be used to identify the best solution. Control. Verify if the implementation was successful and ensure that the improvement sustains over time.
LEAN Lean is about controlling the resources in accordance with the customers’ needs and to reduce unnecessary waste it is generally understood to represent a systematic approach to identifying and eliminating elements not adding value to the process. Consequences of this are striving for perfection and a customer-driven pull of the process. A systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the customer in pursuit of perfection
LEAN METHODOLOGY Understanding customer value. Only what the customers perceive as value is important. Value stream analysis. the next step is to analyse the business processes to determine which ones actually add value. If an action does not add value, it should be modified or eliminated from the process. Flow. Focus on organising a continuous flow through the production or supply chain rather than moving commodities in large batches.
LEAN METHODOLOGY Pull. Demand chain management prevents from producing commodities to stock, i.e. customer demand pulls finished products through the system. Perfection. The elimination of non-value-adding elements (waste) is a process of continuous improvement. “There is no end to reducing time, cost, space, mistakes, and effort”.
LEAN SIX SIGMA In 2003 More than 1000 senior leaders trained Six Sigma implemented from manufacturing to supply chain into all business areas LEAN SIX SIGMA IS NOT THE ONLY ANSWER BUT IT’S A SIGNIFICANT PART OF THE EQUATION
XEROX LEAN SIX SIGMA VIEWED IN THREE DIMENSIONS Projects and Results Culture Change Leadership DevelopmentXerox Lean Six Sigma is a significant part of the equation for moving Xerox from a good company to a truly great company again
QUALITY IS THE RESPONSIBILITY OF EVERY XEROX EMPLOYEEBASIC PRINCIPLE
CRISIS AND QUALITY RENEWAL 1990 - Xerox grew at steady state At the end of the century Technological changes Decreased quality focus New quality initiative Lean Six Sigma Emphasis on behaviors and Leaderships to achieve performance excellence
LEAN SIX SIGMA 2003 - Established Lean Six Sigma, includes a dedicated infrastructure and resource commitment to focus on Critical customer opportunities Significant training of employees Black belt improvement specialists Value driven project selection process Customer focus with linkage to strategies and objectives
BASIC PRINCIPLE Customer focused employees Team work Alignment with objectives Use of quality tools Benchmarks to enable rapid changes
BASIC PRINCIPLE Key components are Performance excellence process DMAIC process Market trends & benchmarking Behaviors & Leadership
BASIC PRINCIPLE Communication of direction Accountability of objectives Statistical methods, Lean flow methods and other process management skills External perspective includes Market trends and benchmarking Sharing of information Flexible to changes
WE DELIVERQUALITY AND EXCELLENCE IN ALL WE DOBASIC PRINCIPLE
Contrast Leadership for quality and Lean Six Sigma as quality initiativesfor Xerox. How did their motivations differ? What differences or similarities are evident in the principles behind these initiatives and the way in which they were implemented?Q UESTION 1
TQM LEAN SIX SIGMAOrigin The quality The quality evolution in Japan, evolution in Motorola & Toyota JapanTheory Focus on No defects & Remove waste customersProcess view Improve and Reduce variation and improve uniform processes & Improve flow in processes processesApproach Let Project management everybody be committedMethodologies Plan, do, DMAIC & Understanding customer study, act value, value stream, analysis, flow, pull, perfection
TQM LEAN SIX SIGMATools Analytical and Advanced statistical and analytical tools statistical toolsPrimary Increase Save money & Reduce lead timeeffects customer satisfactionSecondary Achieves Achieves business goals and improveseffects customer loyalty financial performance and improves Reduces inventory, increases performance productivity and customer satisfactionCriticism No tangible Does not involve everybody, does not improvements, improve customer satisfaction, does resource- not have a system view & Reduces demanding, flexibility, causes congestion in the unclear notion supply chain, not applicable in all industries
What lessons might thisexperience – particularlyin responding to the new crisis – have for other organizations?Q UESTION 2
A NSWER 2 The main criticism against TQM is that there is a widespread confusion concerning what TQM really means, a number of failures of organisations trying to implement TQM have been documented. A number of organisations have put a large amount of resources on implementing TQM, but with no tangible improvements achieved.
A NSWER 2 There is a difficulty in six sigma programmes to exceed the customer’s needs and hence increase the customer satisfaction. To avoid this problem some companies use voice of the customer tools in their define phase. Six Sigma programmes fail to create conditions in order to involve everyone, which is more emphasised in the TQM literature.
A NSWER 2 In six sigma training programmes, one can only start a project which gives a certain amount of savings. This project is often executed in the department of the project members. The project normally leads to an improvement in the department of the project members, but due to the performed change another department can experience deterioration. Six sigma is sometimes accused for not having a system view.
A NSWER 2 The main criticism against lean is the lack of flexibility the concept offers and that the concept actually can lead to delays for the customers. Lean, which was developed for manufacturing and distribution situations, is applicable in all range of areas, including both manufacturing and service industries.
Discuss the meaning of“Quality is a race without a finish line” What is its significance to Xerox, or to any organization?Q UESTION 3
QUALITY “AS YOU GET BETTER,SO DOES THE COMPETITION”
“I N THE RACE FOR QUALITY, THERE IS NO FINISH LINE !” D AVID T. K EARNS Quality also has it’s price and managing talent does mean that one should have best practices in place within your organization - Tall order as many line managers responsible to work with HR on this, do not persist with the process or they procrastinate and miss the opportunity.
“I N THE RACE FOR QUALITY, THERE IS NO FINISH LINE !” D AVID T. K EARNS Talent Management starts with attracting and then recruiting the best skill available. We should clearly differentiate between recruiting for potential and / or for skill. Each person within the organization should have a clearly defined performance balanced scorecard stipulating the expected deliverables of that position.
“I N THE RACE FOR QUALITY, THERE IS NO FINISH LINE !” D AVID T. K EARNS Individual competencies should be measured against the deliverables prior to any appointment being made. A clear career development path should be noted on the balanced scorecard and coaching should take place regularly to ensure growth. It is during these coaching sessions that additional talent will be discovered and explored.
“I N THE RACE FOR QUALITY, THERE IS NO FINISH LINE !” D AVID T. K EARNS Training is pivotal to developing talent. It is only when we have developed the talent that we can manage it! In order to manage talent, the leader must be fully aware of the strategic direction of the organization and department. Developing people should then be aligned with this expected outcome. Should a member of staff be incapable of delivering the expected, it should be addressed immediately and if necessary, a transfer to a more appropriate department should be initiated.
“I N THE RACE FOR QUALITY, THERE IS NO FINISH LINE !” D AVID T. K EARNS Should a member of staff be unwilling to deliver the required output, a disciplinary process may be an option Remember this is also part of managing talent!.