Xerox Case Study

Introduction

Many companies design new products in line with organizational strategies and tend to be closed minded on changes developing in the operating environment. Xerox suffered the same fate with the iconic Xerox 914. It introduced a revolutionary product that created an entirely new industry. The first decade proved to be one of phenomenal success enabling the copier manufacturer to record revenue collection of up to one billion dollars in a comparatively short duration. The company monopolized this industry leading to a situation that left it vulnerable to the lack of competitors. The FTC investigated the monopolistic tendencies of the company and negotiated a deal which saw Xerox release it much guarded patents to it competitors in an effort to open up the industry (Evans, 2013). This paper discuses Toyota’s quality practices, quality management systems, process performance protocols, customer oriented culture and the implementation of the six sigma philosophy statistical process control relative to organizational objectives. The Xerox case study will be instrumental towards establishing how quality and performance management is implemented, checked and appraised at Toyota.

Xerox Case Study summary

In 1959, the Xerox 914 was introduced creating a novel plain paper copier industry. This product is still ranked by quality and performance analysts as one of highly successful products. The product dominated the new industry during the 60s generating revenues of about one billion within a short duration (Evans, 2013). However, in the second half of the 70s decade, returns on assets had decreased by 80%. Xerox found itself in a competitive predicament as other established companies like Kodak and IBM entered the market increasing competitiveness, fragmenting the market as Xerox dependency on strong patents as a strategic objective was challenged. Xerox had failed to focus on consumer preferences and satisfaction, a factor, which enabled new industry entrants to capitalize on.

During the 70s, the FTC called on Xerox to release 1700 patents to other copier manufacturers in an aim to eliminate monopolistic tendencies. Kodak and IBM were market players in the Xerox dominated industry (Evans, 2013). A Number of Japanese based organization entered the market by launching top end copiers targeting the low volume market segment. Xerox lost its market share with a marked consistency throughout the seventies and into the early 80s. After conducting a market analysis, it was found that the institution suffered from quality and process performance challenges, which had led it to lose 80% of revenue to new entrants.

Toyota’s history of quality management techniques

In the first half of the 80s, quality control management was relatively new due to tendencies by the top management to fail to foresee the advantages associated with investing capital towards enhancing operational processes (Evans, 2013). During this period, quality inspection was conducted at random at points of operations classified as sensitive. Though these inspectors comprised a team of dedicated personnel, tricks of the trade were employed to minimize cost. The consumer was basically protected through a thorough inspection of the finished product rather than through a total quality management process.

The use of statistical information to certify the quality of operational process through mathematical means was at the time unknown and a very new concept. As such, quality costs were not accounted for and quality planning was impossible (Evans, 2013). The automobile industry required suppliers to use accredited production systems in an effort to minimize costs. This resulted in a tendency to ensure that defects in automotive parts were not transferred on to the assembly lines.

It became clear that it was in an organization’s best interests to invest in product quality. Scrapping and reworking were eliminated making prevention of the production of defective products important towards ensuring quality in the production process (Evans, 2013). Progressive companies worked towards ensuring that each employee was involved in the quality management process. Statistical data eventually became and important tool in process control and performance.

Toyota’s present quality and process performance management initiatives

In an effort to cut costs as well as improving quality, quality improvement initiatives have led to organizational strategies that call for an overhaul of organizational cultures. Presently, Toyota as an automotive brand is renowned for its quality high quality and economical products. This has been driven by the company’s organizational culture, which is pegged, on customer satisfaction. All the personnel at Toyota regardless of job description proactively engage in established quality control activities. Quality is progressively enhanced at each production process stages.

The Lean management model was formulated as a result of continuous innovations in the early 80’s on the iconic Toyota Production System. The Six Sigma on the other hand is a product of two quality management processes, the statistical metric referred to as Six-Sigma pioneered by the electronics company Motorola.

The Lean management philosophy focuses on the waste elimination objectives in a given operational process. The philosophy recognize seven waste types consistent with conventional operational processes. These include defects, delays, overproduction, unnecessary inventory, unwarranted transportation, unnecessary motion and inappropriate processing Raghunath, A. & Jayathirtha, R. V. (2013. This is defined by identifying which process add value and process which do not add value. Value Stream Mapping or VSM is the tool employed in Lean management processes. Technique employed under this concept include the 5S method, which seeks to ensure a productive work setting clean, organized, sustainable and continuously developed production process.

The two continuous improvement models can be combines to create the Lean Six Sigma Methods aimed at enhancing production as well as transactional process at Toyota. The two models have distinct methodologies which foster improvements but with a complementary effects. It is important to point out that the successful implementation of the combined models is dependent on organizational culture and organizational leadership.

It is important to point out that Xerox was able to transform its business processes through the Leadership through quality model. Product planning, instituting unit objectives and distribution systems were formulated through focusing on customer preferences. Benchmarking was institutionalized too relative to other uncompetitive players in the industry.

The Six Sigma model

As Naik and Sony (2011) provide, the Six Sigma model correlates positively with organizational learning and innovation performance towards appraising an organizations position in a highly competitive operating environment. Toyota’s organizational culture upholds organizational learning. The automotive manufacturer understands that the globalised operating environment is highly competitive and it is through learning that it can be in a position to proactively adapt to the constantly evolving environment.

The Six Sigma model underscores the need for learning within the organization because it is through learning that employees are able to find solutions to common problems. It is important to note that Toyota has its own unique organizational learning culture, which incorporates the organizational characteristics and strategic needs. This is enabled through exploitative learning, which entails acquiring novel behavioral capabilities formulated to encompass existing insights. The second form of exploitative learning entails acquiring behavioral tendencies, which are external to existing insights.

The Six Sigma model promotes the protection of process information for analysis in an attempt to determine through statistical methods, the mean process performance values as well as the identifiable variations with respect to output quality. Continuous improvement is conducted in five phases. These include defining, measuring, analyzing, improving and controlling also referred to as DMAIC. The defining phase describe project organization, goal setting and the valuation of the total value of an identified project. Qualitative tools and diagrams such as fishbone are employed to identify resource requirements and formulation of problem solving process.

The measuring phase maps the entire process, which is progressively refined through gathering of more qualitative data. Through graphical analysis, Toyota is able to project the possible impacts of a defined event. The analysis phase also employs statistical tools to investigate process abilities and possible sources of identified variations. These Six Sigma measuring tools enable management teams at different levels to pinpoint defects or challenges, which present variations in the quality of a product. These are basic to the improvement on the performance of the process. The insights derived from these phases guide management teams in carrying out the improvement phase so as to generate solutions. Possible solutions are prioritized, run through a pilot run and finally implemented. The final phase of the control phase, which validates the entire process appraising the quality design process at Toyota.

The implementation of DMAIC at Toyota calls certified Six Sigma specialists to have a specific set of skills to implement the five phases fully. These include team leadership, communication, technical and computer skills as well as the ability to master specialized tools conclusively. Other desired qualities include experience in project management, financial analysis experience, and problem solving attributes.

Organizational learning under Sigma Six

Toyota understands that an organization operating in a competitive global industry cannot attain sustainable excellence without investing in continuous learning as described earlier towards pursuing excellence in quality and process performance (Sony and Naik, 2012). It is important to understand that Sigma Six plays an instrumental role in enabling organizations conform to external operating environment changes through adaptation.

The behaviors and attitudes projected by employees is a critical factor in determining the rate at which an organization conforms to operating environment changes relative to alterations required towards excellent quality management interventions. Continuous appraisal in an organization’s quality and process performance management strategies, outcomes are largely dependent on organizational learning (Sony and Naik, 2012).

The implementation stage is the most significant phase of the quality planning process with reference to Sigma Six. Education, proactive participation and training are critical factors in an organization’s quality planning process (Sony and Naik, 2012). Employee commitment is a necessary driving force in the organization’s management hierarchy. Deficient commitments towards quality learning approaches limit the implementation of effective quality methods.

Sigma Six defines the desired quality of learning as that which translates to a permanent change in a manner of working which adequately appraises quality achievements in ideology and most importantly knowledge. Process consultation is a vital element in organizational development (Sony and Naik, 2012). By employing the following four characteristics, namely, interpersonal competencies, capabilities to nurture learning experiences, theoretical problem saving abilities and self-awareness with regard to acquired knowledge, Toyota has been able to realize desired organizational development.

The application of statistical process control at Toyota

The statistical process control or SPC is a significant decision making tool employed fully at Toyota. In other words it is an essential human thought processing technique vital in a quality oriented and performance appraisal manufacturing setting (Buch and Wetzel, 1993). The external environment determines to a large extent the interdependency of units, process transformations and more so, the feedback systems employed towards anticipating industry changes (Abilla, 2006).

The current global environment in which Toyota operates can be classifies as a pull economy. In a pull economy, manufacturers have no option but to respond to the pull forces effected by customers as opposed to the traditional market where a push force is exerted by the manufacturers  (Infinityblog, 2013). Toyota has innovatively developed its manufacturing process to respond to the prevalent customer pull. It is important to point out that Toyota initiated the trend towards process systems that respond to customer pull.

This tool began being used in the American manufacturing entities during the 80s towards appraising quality standards while keeping variability to a bare minimum. This technological intervention was developed to appraise quality control management. However, this developed into a social technical intervention to accommodate align organizational strategies to core operating objectives and marketing strategies.

Political and management oriented subsystems were at loggerheads during the early implementation stages of identified social-technical interventions. These commonly led to organizational failure to meet organizational objectives. This called for the need to align and implement subsystem changes to sustain the socio-technical aspects of the SPC within organizations.

For instance, in 2009, Toyota opted to recall nearly a quarter million vehicles in an effort to resolve problems with the vehicles resulting from a manufacturing defect. The defect revolves around a design problem with the car’s braking system such it needed a longer distance to come to a halt. In an effort to ensure that the company responds to the customer pull force, it was necessary to ensure that the flaw was corrected before accidents were attributed to the flaw. Toyota was able to apply the SPC as a quality control mechanism for appraising its production process.

Conclusion

In the past decade, there have been rapid developments in the global automotive industry reminiscent of the developments that shook up Xerox in the 70s through to the 80s. When the FTA decided to make changes and open up the industry pioneered by Xerox innovative product, the company was ill prepared to adapt to market conditions. Toyota has long been described as a progressive and innovation driven organization. This paper has served to conclusively delve into Toyota’s quality practices, quality management systems, process performance protocols, customer oriented culture and the implementation of the six sigma philosophy, statistical process control relative to organizational objectives. The Xerox case study will be instrumental towards establishing how quality and performance management is implemented, checked and appraised at Toyota

References

Abilla, P. (2006). Statistical Process Control Techniques – Why You Should Care. Retrieved from http://www.shmula.com/statistical-process-control-why-you-should-care/241/

Buch, K. & Wetzel, D. (1993).The evolution of SPC in manufacturing. The Journal for Quality and Participation 16.6: 34.

Dervitsiotis, K. N. (1999). How to attain and sustain excellence with performance-based process management. Total Quality Management 10, 3. pp 309.

Evans, L. (2013). Managing for Quality and Performance Excellence, 8th Edition. Cengage Learning, 01/2010. VitalBook file.

Infinityblog. (2013). Manufacturing Quality Control: Toyota Recalls 242,000 Vehicles. Retreived from http://www.infinityqs.com/blog/manufacturing-quality-control-toyota-recalls-242000-vehicles

Raghunath, A. & Jayathirtha, R. V. (2013). Barriers for implementation of Six Sigma by Small and Medium Enterprises. International Journal of Advancements in Research & Technology , Volume 2. 2.

Sony, M & Naik, S. (2012). Six Sigma, organizational learning and innovation: An integration and empirical examination. International Journal of Quality & Reliability Management Vol. 29 No. 8. pp. 915-936