1.

The Xerox Corporation came to be known as one of the best examples for successfully
implementing the benchmarking process in their company. This goes from a long way of
success that turned into many challenges for the company. They were being left behind
by their competitors when it comes to product quality, marketing strategies, and other
management processes. The company's value rapidly decreased due to the poor decision-
making and strategies made by the management. When Kearns became the CEO of Xerox,
he sought to alleviate the problem of the company and revitalize it. He determined that
one of the most crucial variables that is causing the decline of the company is the
manufacturing costs of its products and services. This led Kearns to adopt the “Leadership
Through Quality” program which educates the company to focus on quality control. With
this program, Kearns also decided to assess the performances of its competitors,
especially the Japanese, this process is popularly known as the Benchmarking Process.

Kearns’ decision to introduce new programs to the company was brilliant and just in time.
The company was heading to a very dangerous road of possible liquidation due to the
rapid decrease in their sales. The programs were able to revive the company in every way
possible. The company’s lack of quality control and strategic management were the key
factors of their decline which gave Kearns the motivation for his decision-making
processes. He focused on these variables because he saw how enormous the impact that
these things do to the entire company.

2. 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 business operation or process by exploiting ‘best practices,’ and not on
‘best performance.’ Benchmarking can also be defined as comparing an organization or a
part of it with other companies.

Types of Benchmarking Processes:

• Strategic Benchmarking – aims to improve a company's overall performance by

studying the long-term strategies and approaches that helped the ‘best practice’
companies to succeed. It involves examining the core competencies,
product/service development, and innovation strategies.

• Competitive Benchmarking or Performance Benchmarking – used by companies

to compare their positions with respect to the performance characteristics of their
key products and services. This involves companies from the same sector.
 • Process Benchmarking – used by companies to improve specific key processes and
operations with the help of best practice organizations involved in performing
similar work or offering similar services.

• Functional Benchmarking or Generic Benchmarking – used by companies to

improve their processes or activities by benchmarking with other companies from
different business sectors or areas of activity but involved in similar functions or
work processes.

• Internal Benchmarking – involves benchmarking against own units or own

branches. This allows easy access to information and takes less time and resources
to conduct unlike other types of benchmarking.

• External Benchmarking – used by companies to seek help from other

organizations that succeeded on their practices. This type of benchmarking
provides an opportunity to learn from high-end performers.

• International Benchmarking – this involves benchmarking against companies

outside the country due to the few suitable benchmarking partners in the country.

The implementation of Benchmarking is made up of a four-stage process that consists of

the following:

• Planning – this includes identifying, establishing, and documenting specific study

focus areas, key events, and definitions. The ‘best practice’ companies are
identified at this stage and appropriate data collection tools are selected and
updated for use. This stage takes up about 30% of the total time spent in the
process.

• Data Collection – this stage involves accumulating qualitative data and learning
from the best practices of different organizations. Information is mainly collected
through questionnaires and site visits to various organizations. This stage takes up
about 50% of the total time spent in the process.

• Data Analysis and Reporting – this stage involves the critical evaluation of
practices followed at high-performing companies, and the identification of
practices that help and deter superior performance. A detailed final report is
 presented which contains key findings. This stage takes up the remaining 20% of
the total time spent in the process.

• Adaptation – this stage includes the development of an initial action plan to adapt
and implement the practices followed by high-performance companies. The time
spent in this stage depends upon the scope of the implementation process being
done by the company.

3. Xerox adopted the “Leadership Through Quality” program which led the company to find
ways in reducing their manufacturing costs. They opted to use the benchmarking process
against their Japanese competitors which led them to the discovery of the following: it
took Xerox twice as long to bring a product to the market, they have five times more
engineers than the Japanese, they spend four times more in design changes, and their
design costs are triple. They also found out that the Japanese company can produce, ship,
and sell their products with the same amount Xerox uses on the manufacturing alone.
Xerox also realized that their products had over 30,000 defective parts per million which
is 30 times more than their competitors.

With the use of the Benchmarking Process, Xerox defined it as the process of measuring
products, services, and practices against the toughest competitors, identifying the gaps,
and establishing goals. With the company’s goal being “Always achieve superiority in
quality, product reliability and cost.” Xerox also developed its own benchmarking model
which includes 10 steps that are being categorized under 5 stages:

• Planning
Step 1 – Determine the subject to be benchmarked
Step 2 – Identify the relevant best practice organizations
Step 3 – Select/develop the most appropriate data collection technique

• Analysis
Step 4 – Assess the strengths of competitors (best practice companies)
Step 5 – Compare Xerox’s performance with its competitors. This stage
determines the current competitive gap and the projected competitive gap.

• Integration
Step 6 – Establish necessary goals based on the data collected to attain best
performance
 Step 7 – Integrate these goals into company's formal planning process. This stage
determines the new goals or targets of the company and the way in which these
will be communicated across the organization.

• Action
Step 8 – Implement action plans established
Step 9 – Assess them periodically to determine whether the company is achieving
its objectives. Deviations from the plan are also tackled at this stage.

• Maturity
Step 10 – Determine whether the company has attained a superior performance
level. This stage also helps the company determine whether benchmarking
process has become an integral part of the organization’s formal management
process.

The information that Xerox was able to gather on the key processes of ‘best practice’
companies were analyzed to identify and define improvement opportunities. The
company was able to identify factors such as opportunities in their Marketing
Department. Under that department, there are further sub-process that were identified
as in need of improvement. With this, the company opted to subscribe to management
and technical databases, referred to magazines and trade journals, and consulted with
professional associations and consulting firms.

Xerox began to implement competitive benchmarking which they found to be

inadequate for companies like them. Instead, they explored functional benchmarking
where they studied Warehousing and Inventory Management System of L.L. Bean, a
mail-order supplier of sporting goods and outdoor clothing. Bean developed a computer
program that made the system of order filling very efficient. It arranged orders in a
specific sequence that allowed delivery personnel to travel a short distance in collecting
the products from the warehouse. The speed and accuracy of order filling was also
noticeable which attracted Xerox to develop and implement the program in their
company as well. Xerox had also benchmarked other companies with regards to their
processes such as: billing and collection (Amex), factory floor layout (Cummins Engines
& Ford), quality improvement (Florida Power & Light), supplier development (Honda),
quality management (Toyota), research and product development (HP), division of
General Motors (Saturn), manufacturing operations (Fuji Xerox), and manufacturing
safety (DuPont).
4. With the implementation of the Benchmarking Process, Xerox was able to acquire the
following benefits from their hard-earned work:

• Increase in customer satisfaction – this was one of the most major achievements
of the company since they started with the program. The number of customer
complaints decreased by 60% due to highly-satisfied customers. This also pave the
way for the improvement of various processes such as sales, service, and
administrative. The financial performance of the company also improved
accordingly. The overall customer satisfaction was rated 90% in 1991.

• Reduction of the following:

- Number of defects produced by machines and incoming parts
- Service response time
- Inspection of incoming components
- Inventory costs
- Labor costs
- Errors in billing
- Unscheduled maintenance

• Increase of the following:

- Marketing productivity
- Distribution productivity
- Product reliability
- Country units’ sales

• Only company worldwide to win all 3 prestigious quality awards

- Deming Award in 1980 (Japan)
- Malcolm Baldrige National Quality Award in 1989
- European Quality Award in 1992

Benchmarking does not always provide companies the outcome they expect because it
will still depend upon the various factors such as the adaptability of the company and
more. Although the benefits are limited at first, it should come as a challenge for them
to work harder in achieving better results for the whole organization. The success of the
benchmarking process can be ensured by implanting Total Quality Management which
requires to control the established processes for the entire organization. It will allow the
management to monitor all the things that are going on inside the company and be able
to continue reaping the benefits of their hard-earned achievements.