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BENCHMARKING : BENCHMARKING Presented by:- Group VI Pankaj Palrecha 32 Harsh Nirmal 30 Ritesh Botadra 04 Ritesh Desai 08 Preeti Sawant 45 Ashley Mascarenhas 21 Index : Index Define Procedure of Benchmarking Cost of Benchmarking Types of Benchmarking Guidelines of Benchmarking Case Study – Zerox Background Issues faced Benchmarking Implementation Result of Benchmarking Benchmarking : Benchmarking Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice. Benchmarking is 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. Procedure of Benchmarking : Procedure of Benchmarking Identify your problem areas Identify other industries that have similar processes Identify organizations that are leaders in these areas Survey companies for measures and practices Visit the "best practice" companies to identify leading edge practices Implement new and improved business practices Cost of Benchmarking : Cost of Benchmarking Visit Costs Time Cost Benchmarking Database Cost Types of benchmarking : Types of benchmarking Process Benchmarking Financial Benchmarking Performance Benchmarking Product Benchmarking Strategic Benchmarking Functional Benchmarking Guidelines for Successful Benchmarking : Guidelines for Successful Benchmarking Thorough understanding of one's own processes. Emphasis on industry best practices. Company or plant visits. Selection of appropriate benchmarking partners and techniques. The benchmarking partner's willingness to share information. Maintaining confidentiality of critical information. Involvement of management and employees in the analysis of best practices. Emphasis on practices and processes, not on end results. Benchmarking should be a continuous process as the competition is always changing. Commitment towards adaptation and implementation of best practices. Selection and empowerment of benchmarking teams. Willingness to change as per the findings of the benchmarking study. The adaptability of the practices should be tested and the implementation results should be verified. Strict adherence to the benchmarking. Case Study : Case Study Background 'Xerox' trademark in 1948 Xerox was listed on the New York Stock Exchange in 1961 and on the Chicago Stock Exchange in 1990. Revenues soared from $37 million in 1960 to $268 million in 1965 Xerox acquired a majority stake in various company’s Rank Xerox in 1969 Setup R&D facility in 1969 Profits increased five-fold from $ 83 million in 1966 to $ 407 million in 1977 Slide 10: Competition In the early 1980s, Xerox found itself increasingly vulnerable to intense competition from both the US and Japanese competitors. According to analysts, Xerox's management failed to give the company strategic direction. It ignored new entrants (Ricoh, Canon, and Sevin) The company's operating cost (and therefore, the prices of its products) was high and its products were of relatively inferior quality in comparison to its competitors. Return on assets fell to less than 8% and market share in copiers 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 Slide 11: Cont… Average manufacturing cost of copiers in Japanese companies was 40-50% of that of Xerox 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, four times the number of design changes, and three times the design costs. Japanese could produce, ship, and sell units for about the same amount that it cost Xerox just to manufacture them Xerox's products had over 30,000 defective parts per million - about 30 times more than its competitors. Benchmarking also revealed that Xerox would need an 18% annual productivity growth rate for five consecutive years to catch up with the Japanese. Slide 12: Benchmarking was implemented at Xerox 'Leadership Through Quality' SUPPLIER MANAGEMENT SYSTEM INVENTORY MANAGEMENT MANUFACTURING SYSTEM MARKETING QUALITY Slide 13: Benchmarking was implemented at Xerox 'Leadership Through Quality Slide 14: REAPING THE BENEFITS Highly satisfied customers for its copier/duplicator and printing systems increased by 38% and 39% respectively. Customer complaints to the president's office declined by more than 60%. Customer satisfaction with Xerox's sales processes improved by 40%, service processes by 18% and administrative processes by 21%. Overall customer satisfaction was rated at more than 90% in 1991 Slide 15: Other Benefits Number of defects reduced by 78 per 100 machines. Service response time reduced by 27%. Inspection of incoming components reduced to below 5%. 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. 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%. You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.