Benchmarking is comparing business processes and performance metrics to best practices from other companies or industries in order to improve. Xerox used benchmarking in the 1980s after losing market share, comparing itself to competitors like Canon and IBM. Xerox benchmarked all aspects of its business from supplier management and inventory to marketing and quality. This led to significant improvements in defects, costs, productivity and reliability, allowing Xerox to become the market leader again. Benchmarking involved planning, analysis, implementation and continuous improvement.

1. BENCHMARKING

2. What is benchmarking?
• Benchmarking is the process of comparing one's
business processes and performance metrics to
industry bests or best practices from other
industries.
• Benchmarking is a systematic method by
which an organization can continuously
measure themselves against the best
industry practices or world class and
improve accordingly.

3. The Evolution of Benchmarking
• The method may have evolved in the early 1950s, when W. Edward
Deming taught the Japanese the idea of quality control.
• The best example is Toyota Motor
Corporation’s following the footsteps of Ford
Motor Corporation albeit with the adaptation
of the Ford’s Just-in-case system into
Toyota’s Just-in-time system.However the
word “BENCHMARKING” was not coined at
that time.

4. TYPES OF BENCHMARKING
• Internal benchmarking : Benchmarking against its own unit or branches.
• External Benchmarking : Comparison of the same product or service
produced by direct market competitors.
• International Benchmarking : Involves benchmarking against companies
outside the country.

6. 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

7. The Xerox Case
• The company invented the photocopier in 1959 and maintained a virtual
monopoly for many years thereafter.
• By 1981, however ,the companies market shrunk to 35% as IBM and Kodak
developed high-end machines and Canon, Richo and Savin dominated the
low-end segment of market.
• Xerox’s products had over 30,000 defective parts per million—about 30
times more than its competitors.

8. 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 companys formal
planning processes.
• Action: Implement action plans established and assess them periodically to determine whether
the company is achieving its objective.
• Maturity: Determine whether the company has attained a superior performance level.

9. 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
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.

10. Inventory Management
Inventory holding Time reduction
• Xerox asked Branch managers to match the Stocking Policy with
Customer’s installation Orders .
• Minimize Inventory Carrying Cost was to delay the assembly of product
into the final Configuration.

11. Marketing
• Company sent 55,000 questionnaires to monthly to customers to measure
customer Satisfaction & record Competitor’s performance.
• Those Competitors who have scored higher, Xerox benchmark itself
against it.

12. Quality
• As a part of “Leadership Through Quality” program, Xerox started providing its
customers( External & Internal) innovative products & services.
Total Quality Management
• Team consists of Senior managers & Consultants from McKinsey help to make
TQM
• Under which New three SBUs were introduced:
Enterprise Service Business
Office Copiers
Home Copiers
• All these have autonomy in Engineering, marketing & pricing.

13. Reaping The Benefits
• Number of defects reduced by 78 per 100 machines.
• Service response time reduced by 27%.
• Defects in incoming parts reduced to 150ppm.
• Inventory costs reduced by two-thirds.
• Distribution productivity increased by 8-10%.
• Increased product reliability on account of 40% reduction in unscheduled
maintenance.

14. •Increased product reliability on account of 40% reduction in unscheduled
maintenance.
• Became the leader in the high-volume copier-duplicator market segment.
•Xerox went to be only company to win three prestigious quality awards-
Malcolm Baldridge National award, Deming award ,and European 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.
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