The Xerox 914, the first plain-paper copier, was introduced in 1959. Regarded by many people as the most successful business product ever introduced, it created a new industry. During the 1960s Xerox grew rapidly, selling all it could produce and reaching $1 billion in revenue in a record-setting time. By the mid-1970s return on assets was in the low 20 % range. Its competitive advantage was due to strong patients, a growing market, and little competition. In such an environment, management was not pressed to focus on customers. During the 1970s, however, IBM and Kodak entered the high-volume copier business-Xerox’s principal market. Several Japanese companies introduced high quality low volume copiers, a market that Xerox had virtually ignored, and established a foundation for moving into the high-volume market. In addition, the Federal Tarde Commission accused Xerox of illegally monopolizing the copier businesses. After negotiations, Xerox agreed to open approximately 1,700 patents to competitors. Xerox was soon losing market share to Japanese competitors, and by the early 1980s it faced a serious competitive threat from copy machine manufacturers in Japan; Xerox’s market share had fallen to less than 50%. Some people even predicted that the company wouldn’t survive. Rework, scrap, excessive inspection, lost business, and other problems were estimated to be costing Xerox more than 20% of revenue, which in 1983 amounted to nearly $2 billion. Both company and its primary union, the amalgamated Clothing and Textile Workers were concerned. In comparing itself with its competitors, Xerox discovered that it had nine times as many suppliers, twice as many employees, cycle times that were twice as long, 10 times as many rejects, and seven times as many manufacturing defects in finished products. It was clear that radical changes were required. Company President David T. Kearns became convinced that Xerox needed a long-range comprehensive quality strategy as well as a change in its traditional management culture. Kearns was aware of Japanese subsidiary Fuji Xerox’s success in implementing quality management practices and was approached by several Xerox employees about instituting total quality management. He commissioned a team to outline a quality strategy for Xerox. The team’s report stated that instituting it would require changes in behaviors and attitudes throughout the company as well as operational changes in the company’s business practices. Kearns determined that Xerox would initiate a total quality management approach, that they would take the time to “design it right the first time.” And that the effort would involve all employees. Kearns and the company’s top 25 managers wrote the Xerox Quality Policy, which states: “Xerox is a quality company. Quality is the basic business principle for Xerox. Quality means providing our external and internal customers with innovative products and services that fully satisfy their requirements. Quality improvement is the job of every Xerox employee.” Kearns further said that market trends and benchmarking help provide an external perspective required to lead the market with innovative products, services, and solutions and add value to the customer experience. This component encourages all people to share information and knowledge that enable changes in the best interest of customers and shareholders. Finally, behaviors and leadership reinforce customer-focused behaviors, based on the principle that “Quality is the responsibility of every Xerox employee”. If Kearns asked your opinion as an expert on total quality management, would you pursue benchmarking? If yes, how? If not, why not? (Give 3 Pros and Cons)
The Xerox 914, the first plain-paper copier, was introduced in 1959. Regarded by many people as the most successful business product ever introduced, it created a new industry. During the 1960s Xerox grew rapidly, selling all it could produce and reaching $1 billion in revenue in a record-setting time. By the mid-1970s return on assets was in the low 20 % range. Its competitive advantage was due to strong patients, a growing market, and little competition. In such an environment, management was not pressed to focus on customers.
During the 1970s, however, IBM and Kodak entered the high-volume copier business-Xerox’s principal market. Several Japanese companies introduced high quality low volume copiers, a market that Xerox had virtually ignored, and established a foundation for moving into the high-volume market. In addition, the Federal Tarde Commission accused Xerox of illegally monopolizing the copier businesses. After negotiations, Xerox agreed to open approximately 1,700 patents to competitors. Xerox was soon losing market share to Japanese competitors, and by the early 1980s it faced a serious competitive threat from copy machine manufacturers in Japan; Xerox’s market share had fallen to less than 50%. Some people even predicted that the company wouldn’t survive. Rework, scrap, excessive inspection, lost business, and other problems were estimated to be costing Xerox more than 20% of revenue, which in 1983 amounted to nearly $2 billion. Both company and its primary union, the amalgamated Clothing and Textile Workers were concerned. In comparing itself with its competitors, Xerox discovered that it had nine times as many suppliers, twice as many employees, cycle times that were twice as long, 10 times as many rejects, and seven times as many manufacturing defects in finished products. It was clear that radical changes were required.
Company President David T. Kearns became convinced that Xerox needed a long-range comprehensive quality strategy as well as a change in its traditional management culture. Kearns was aware of Japanese subsidiary Fuji Xerox’s success in implementing quality management practices and was approached by several Xerox employees about instituting total quality management. He commissioned a team to outline a quality strategy for Xerox. The team’s report stated that instituting it would require changes in behaviors and attitudes throughout the company as well as operational changes in the company’s business practices. Kearns determined that Xerox would initiate a total quality management approach, that they would take the time to “design it right the first time.” And that the effort would involve all employees. Kearns and the company’s top 25 managers wrote the Xerox Quality Policy, which states: “Xerox is a quality company. Quality is the basic business principle for Xerox. Quality means providing our external and internal customers with innovative products and services that fully satisfy their requirements. Quality improvement is the job of every Xerox employee.”
Kearns further said that market trends and benchmarking help provide an external perspective required to lead the market with innovative products, services, and solutions and add value to the customer experience. This component encourages all people to share information and knowledge that enable changes in the best interest of customers and shareholders. Finally, behaviors and leadership reinforce customer-focused behaviors, based on the principle that “Quality is the responsibility of every Xerox employee”. If Kearns asked your opinion as an expert on total quality management, would you pursue benchmarking? If yes, how? If not, why not? (Give 3 Pros and Cons)
Case Summary:
Company X the first plain paper was introduced in 1959. The company products are regarded most successful business products ever introduced. The competitive advantage of company X is strong patents, little competition and a growing market. The focus and aim of the company are to provide innovative products and services to the customers in order to enhance customer experience.
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