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Xerox Lean Six Sigma:Evolving Lean Six Sigma to Larger-Scale End-to-End Processes
George MaszleWCBF Global SummitOrlando, FLA Oct 2008
Xerox’s Profile Today
• $17B (U.S.) in Revenue (YE 2007)
• ~58,000 employees worldwide• Broadest technology and services
portfolio in documentmanagement and production
Our Mission: help organizationsachieve their business goals throughSmarter Document ManagementSM
- 2 -
Profitability
GrowthGrowth
2002 - 2005
2005 - 2008
2000 - 2002TurnaroundTurnaround
Growth and GreatnessGrowth and GreatnessXerox’s Recent Journey
Stronger, Different, BetterStronger, Different, Better
Profitability2000 - 2002
Expanding Customer Relationships Leadership Offerings Flexible and Sustainable Business
Model
Investing for Growth Earnings Expansion Balance Sheet
Restructuring
Liquidity Stabilization Cost Base
Restructuring
Lean Six SigmaLean Six Sigma
- 3 -
Current Worldwide Deployment Status
• >2,000 executives and managersleadership trained
• ~ 7,000 Green Belts trained• ~40,000 Yellow Belt trained and on
many other on-line courses• Design for Lean Six Sigma in product
design / development
• ~ 40 full-time deployment managers• >4,000 projects, many with customers,
underway or completed contributing toXerox profitability
• Corporate financial targets met orexceeded in each year to date
• ~1,000 Black Belts trained; ~400currently leading projects
- 4 -
Meeting our Challenges Through Lean Six SigmaMeeting our Challenges Through Lean Six Sigma
• Understand what customers trulyvalue and need
• Strengthen and transform our culture
• Position us for growth
• Improve processes through fact-• Improve processes through fact-based, disciplined decision-makingand measurable outcomes
It’s transforming“the way we work”
- 5 -
Our Commitment Starts at the TopOur Commitment Starts at the Top
“I’m convinced that Xerox LeanSix Sigma is a way to rebuildvalue in our company becauseit is about substance, not form;it’s about discipline andinfrastructure so projects caninfrastructure so projects canproduce business results.”
— Anne MulcahyChairman and CEO
- 6 -
Business Results
Leadership Development
• Profitability
• Growth
• New opportunities
• Future leaders
• Shared business discipline
Lean Six Sigma: Xerox’s Primary ObjectivesLean Six Sigma: Xerox’s Primary Objectives
Culture Change
• Continuous learning
• “Customer In” vs. “Company Out”market view
• Facts/data driven decisions
• Busting bureaucracy
• Collaborative, enhanced teamwork
- 7 -
• Goal — Reduce waste and
LeanSpeed + Low Cost
• Goal — Improve
Six SigmaCulture + Quality
Six Sigma QUALITYEnables Lean Speed
(fewer defects meansless time spent on rework)
Lean SPEED EnablesSix Sigma Quality
(faster cycles ofexperimentation / learning)
Combining Two Powerful ApproachesCombining Two Powerful Approaches
• Goal — Reduce waste andincrease process speed
• Focus — Identify non-value add steps andcauses of delay
• Method — Value StreamTools, Kaizen events
• Goal — Improveperformance on customerCTQs (Critical to Quality)
• Focus — Use DMAICprocess with various tools toeliminate variation
• Method — 1%to 2%dedicated as DeploymentManagers and Black Belts
- 8 -
Sales andMarketing
Administration
Facilities
CustomerCommunications
Finance
HumanResources
EnterpriseEnterprise--wide Deploymentwide Deployment
Xerox
InformationTechnologies
Communications
Operations
ManufacturingEngineering
Our view: Not just a tool for operational efficiency, but anenterprise-wide business strategy for creating real value
- 9 -
Lean Six SigmaStrategic
New Opportunities
Results
Strategic Linkage and ExecutionStrategic Linkage and Execution
$
StrategicPlan
AnnualPlan
StrategicLinkage
andExecution
ProjectsGenerated
1%ofWorkforce
Priorities,Definition,
Scope
Effort
BenefitLeadership
Master BB
Black Belts
Green Belts
D M
AI
C
- 10 -
Nov 02 Jan 03 Feb 03 Jun 03 Nov 03 Dec 04
Executive LaunchLeadership Training
Sponsor Training
Dec 07
SeedingLean Six Sigma
DeploymentDesign and Launch
Phased Xerox Deployment PlanPhased Xerox Deployment Plan
BB Training
GB Training
MBB TrainingDFLSS
DeploymentExecution andSustainability
Manage the Effort
DFLSS Launch
- 11 -
Growth Curves: Evolving Business ImprovementGrowth Curves: Evolving Business Improvement
WW Operations - Standard
External and InternalMethodology and Tools,
Robust DfLSSDeployment: Creating
Real Value forOur Customers
time
Total QualityManagement
Internal ManufacturingQuality Methodology
and Tools - 1998
WW Operations - StandardMethodology and Tools
- 12 -
1970’s
LSS Maturity or GrowthCurve is a series of
Cust
omer
Valu
e&
Busi
ness
Impa
ct
DfLSSSoftware
CurriculumRedesign &
EnhanceRevenue
DfLSSMarketing
StrategicInnovation
Xerox Lean Six Sigma Growth Curve
ChangeLeadership
ACFC Curve is a series ofinitiatives to buildoperationaleffectiveness across theenterprise.
Cust
omer
Valu
e&
Busi
ness
Impa
ct
time
Launch LSS BB
LSSDMEDI
LSSLeadership
TrainingGBLSS
DfLSSE/M
Marketing
2002 2004 2006 2008 2010
ACFC
- 13 -
Key factors differentiating “A”curve from “F” curve
Business Integration andAbility to Show Impact
Project Selection Link toBusiness Strategies andCustomer Value
Ability to Change Culture &
Annual
$
0
SustainedCommitment
F As many as 50%end up here
Long Term GoalLong Term Goal –– Sustained Business ResultsSustained Business Results
$
Ability to Change Culture &Leadership Behavior
Full Value-Chain Engagement
Ability to Evolve to higherLevels of Maturity andBusiness Relevance (ACFC,DfLSS, Innovation)
* Chart adapted from Strategic Six Sigma: Best Practices from theExecutive Suite by Dick Smith and Jerry Blakeslee
1 2 . . . . . nYearInitial Leadership
Commitment
0
*
What is next on the horizon ?
• Re-strengthening End-to-EndBusiness Process Management
• Lean Six Sigma has establishedthe sound foundation requiredto make “Real” progress in thisto make “Real” progress in thisarea
• To achieve higher level gainswill require new and differentways of looking at businessprocesses
- 15 -
What is the History of Business Process Management (BPM)?In
tere
st
or
Hyp
e
ProcessReengineering
movement
BusinessProcess
PEMM Article(Hammer 2007)
BPMSpanyi
Reengineeringthe Corporation(Hammer, 1993)
1985 1995 2000 2005
Time
Inte
rest
or
Hyp
e
SixSigma
TQM
‘Don’t AutomateObliterate’
(Hammer, 1990)
ProcessManagementmovement
BPM Third Wave(Smith and Fingar,
2002)
2010
BPM(Jeston/Nelis2006, 2008)
1990
Spanyi2003
Rummler-Brache
2003
Source: Adapted from BPM Third Wave ,Howard Smith and Peter Fingar
- 16 -
What is End-to-End Business Process Management?Business Process Management: The design and execution ofend-to-end business processes that create value for the customerand the business.End-to-End Business Process: An organized group of relatedactivities that work together across the enterprise to create aresult of value for customers. End-to-End means the processstarts with the customer and ends with the customer.starts with the customer and ends with the customer.
Key Themes or Concepts:• End-to-End Group of Activities
• Aligned to Serve Customer Needs
• Cross Functional – Spans Enterprise
• Outcome Focused
• Process, not Organization Focused
• Process Ownership and Accountability
• Intentionally Designed
• Repeatability and Reliability
• Collaboration across organizations
• People Focused on Results
- 17 -
Typical Functionally Managed Organization
Sales Finance Engineering
Lean Six Sigma has strengthened processes within the walls, but has done less tobreak-down the walls across the enterprise
End-to-End goals not aligned, miscommunication happens, errors occur
People are empowered to fix things only inside their castle - No one is empowered tofix anything across the entire organization
Service Distribution Production
Source: Adapted from Michael Hammer
Page 18
Michael Hammer’sMichael Hammer’s Thinking has EvolvedThinking has Evolved
“Process management is the culmination of the movement totransform business operations. It provides a unifying theme forinitiatives directed at improving organizational performance. “
(Michael Hammer - 2002)
“Sadly, however, casualties litter the road. Since 2000, I havepersonally observed hundreds of companies try to rejuvenatepersonally observed hundreds of companies try to rejuvenatethemselves by creating or redesigning business processes. . . . . . .In most of the companies I studied, executives werefloundering. They realized that they needed to change manythings to harness the power of processes, but they were unsureabout what exactly needed to be changed, by how much, andwhen.”
(Michael Hammer - 2007)
- 19 -
Michael Hammer’s Thinking onRequired Enablers
• BPM Concepts have Evolved• Redefined the required system (HBR –
April, 2007)• Added emphasis on “Enterprise
Capabilities”Process Enablers:
Performer Skills,Knowledge &
Motivation
ComprehensiveProcess Design
Process OwnerResponsible for
Results
Infrastructure toSupport the
Process
Metrics toTrack ProcessPerformance
Enterprise Capabilities:
Culture of Customer-Focus, Accountability,Teamwork & Change
Leadership thatSupports the Creation
of Processes
Enterprise Skillsand Methodology
for Process Redesign
Governance Mechanismsto Manage Complex Projects
and Change Initiatives
Source: Adapted from Michael Hammer
- 20 -
Business Process Management (BPM) ExpertsView of Six Sigma Evolution“As companies move along the six-sigma learning curve, they willencounter the same challenges they confronted with previousinitiatives: project proliferation, limited payback, competition withother efforts, and inapplicability to solve larger problems. Afterpicking the low hanging fruit, they will find themselves in need ofa broader and more robust approach.”
- Michael Hammer
“Lean Six Sigma is limited in how far it can take an enterprisewithout a strong and complimentary Business ProcessManagement approach…Six Sigma is not a subset of BPM . . . . . It is a useful adjunct”
- John Jeston and Johan Nelis.
- 21 -
Lean Six Sigma & BPM: Stronger Together
Lean Six Sigma Business ProcessManagement
Improvementtools and LSSmethods, withskilled resources
End-to-endProcessMgmt.focus
• Skilled Belts
• DMAIC, DMEDI, IDOV
• Project Selection
• Structured Approachto Improvement
• Process Owners
• Process Architecture
• End-to-end Focus
• Cross-functional
• Collaboration
• CustomerFocus
• BusinessResults
• Functional leadersidentify Projects
• Six Sigma Tools
• Lean Tools
• DfLSS
• MBBs, BBs, GBs
• Collaboration
• Process Infrastructure
• GovernanceMechanisms
• Process Owner decidesimprovement projects
• Enhanced tools
• End-to-end ProcessExperts
Results
• Metrics &Measures
• Performancescorecards
• CultureChange
- 22 -
Growth Curves: Evolving Business ImprovementGrowth Curves: Evolving Business Improvement
Lean SixSigma
Next Growth Curve
End-to-EndProcess
Management
time
Total QualityManagement
Next Growth Curve
LSS is a foundation for BPMand needs to bestrengthened and sustainedfor BPM to succeed
- 23 -
Why is Business Process Management Important toXerox? Why Now?
Why Important• Enables realization of LSS Vision• Operationalizes VOC/customer value through process vs. project focus• Leverages investment in LSS infrastructure for greater results• Will delivers systemic productivity beyond traditional Lean Six Sigma:
overcomes functional boundaries and organizational non-value add
Why Now• Builds on the business improvement momentum created by LSS• Must strike while the iron is still hot• Leaders are recognizing the need and expecting it
- 24 -
Senior Leaders were recently asked, “Where should SixSigma Champions spend their time?” Activities included:
90%
100%
•• Identifying CrossIdentifying Cross--OrganizationOrganization ProjectsProjects
%V
ery
Imp
ort
an
t+
Imp
ort
an
t
•• CollaboratingCollaborating on Endon End--toto--End Enterprise Wide ProcessEnd Enterprise Wide Process
•• LeadingLeading Change and BusinessChange and Business TransformationTransformation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
%V
ery
Imp
ort
an
t+
Imp
ort
an
t
- 25 -
Many Challenges to Implementing BPM:Leadership – Understanding, Systems Thinking Mindset, Functional background
Process Owners – New Position, Role / Accountability, Alignment, Clout
Customer-In – Culture, Mindset, Incentives, Metrics based on “Eyes of the customer”
Organizational History – Strong functional history, How People Succeeded, Bureaucracy
Lack of Resources – Unclear Accountability, Impacts momentum
Support Infrastructure – Takes time to Build, Not as Clear as Six Sigma
Deployment Recipe – Less clear, not as codified as Lean Six Sigma, more customizedDeployment Recipe – Less clear, not as codified as Lean Six Sigma, more customized
Metrics and Reward Systems – Customer and Process focused, Common Across Process
Job Definitions and Titles – Changing Roles, Different/New training
IT Systems – Process Aligned, Control by Process Owner, Investment Strategy
Budgeting & Planning Processes – Process Focused, Process Owner vs. Functional Role
Resistance – Fear/Mistrust, Balancing Central vs. Decentralization, Uncertainty of Payback
- 26 -
John Jeston & Johan Nelis View of Business ProcessManagement
• Various enablers required for success
• BPM doesn’t replace everything else and is not a panacea.
• It must augment and align with strategy, HR, Financial Systems, IM andother management disciplines
• Business Process Management is a system; the transformation must bemanaged as a project
BPM Transformation ProjectManagementManagement
ChangeManagement
BenefitsRealization
ProcessAnalysis
ResourcePlanning
MultipleStakeholderManagement
ResourceMeasurements
Roles/jobDescriptions
LeadershipOrganizational
Maturity
RiskManagement
BusinessStrategy
Root CauseAnalysis
PerformanceMeasures
ProcessGoals
OrganizationalStructure
ProcessMeasures
ManagementReporting
ProcessSimulation
Commitment
ContinuousImprovement
Involvement
QuickWins
Source: Adapted from Business Process Management, John Jeston & Johan Nelis
- 27 -
Next Steps – To Be Continued . . . . .
• Forward thinking, disciplined companies are embracingBusiness Process Management, building on their Six Sigmaand Lean Six Sigma foundations
• For Xerox: natural follow-on and builds on LSS deployment
• Xerox will continue building LSS foundation as sound basefor End-to-End Business Process evolution
• “Under-the-Radar” projects are piloting key elements of• “Under-the-Radar” projects are piloting key elements ofBPM, enhancing our learning and building leadershipcredibility
• Xerox is not ready to fully deploy BPM thinking but…. . . making good progress in targeted process areas ofthe business to enable higher customer value andbusiness impact
- 28 -
Thank You!
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