TQM Case Study

Quality Engineering
ISSN: 0898-2112 (Print) 1532-4222 (Online) Journal homepage: http://www.tandfonline.com/loi/lqen20
TOTAL QUALITY MANAGEMENT AT XEROX: A CASE

STUDY
HOWARD S. GITLOW & ELVIRA N. LOREDO
To cite this article: HOWARD S. GITLOW & ELVIRA N. LOREDO (1993) TOTAL QUALITY
MANAGEMENT AT XEROX: A CASE STUDY, Quality Engineering, 5:3, 403-432, DOI:
10.1080/08982119308918983
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TOTAL QUALITY MANAGEMENT AT

XEROX: A CASE STUDY
HOWARD S. GlTL.0 W and ELVIRA N. LOREDO
University of Miami
School of Business Administration
Department of Management Science and
Institute for the Study of Quality
Coral Gables, Florida 33124
Key Words
Leadership through quality; TQM; Quality improvement process (QIP);

Problem-solving process (PSP); Benchmarking; Product delivery process (PDP);
Customer delivery process (CDP); Partnership and empowerment; Customer
satisfaction measurement system (CSMS); Management inspection process (MIP);
Common goals.
Background
The quality improvement process implemented by Xerox does not fit neatly
into any school of thought on Total Quality Management (TQM); it is very
much a Xerox process. The emphasis of the process is on identifying customer
needs and doing everything possible to satisfy those needs. Xerox's success in
fulfilling the goals of its quality improvement effort has allowed it to become
the first American company to regain market share from Japanese competitors,
without the aid of tariff protection or other government help (1).
Copyright @ 1993 by Marcel Dekker. Inc.

404 GlTLOW AND LOREDO
Unless otherwise stated, the information presented in this article is based on

documentation provided by Xerox.
Introduction
In 1959, Xerox introduced the world's first plain-paper copier. It was an

astounding success, creating a new industry. Xerox grew from a small com-
pany with revenues of $33 million in 1959, to a major corporation with reve-
nues of $176 million in 1963, $4 billion by 1975, and $18 billion in 1990.
For a time, Xerox operated from a position of great strength due to its
strong patent position in an enormous market. The absence of strong competi-
tors made the risks of uncontrolled growth and costs seem inconsequential
when compared to the opportunities for expansion. This unique position
allowed Xerox to offset inefficiencies by increasing prices. As a result, Xerox
lost sight of its customers' needs.
Crisis and Reaction
By the late 1970s, the company's lack of focus on customer needs created a
situation in which competitors were able to successfully beat or match Xerox
prices and product features (2). This caused Xerox's market share to drop from
a dominant position in the 1960s to less than 50 percent in 1980 (3). Further,
return on net assets declined from 19 percent in 1980 to 8.4 percent in 1983
(4).
At Xerox, initial reaction to its crisis focused on three priority areas (5):
Product Development and Delivery: Xerox changed its processes for
developing products by putting more emphasis on customer requirements.
Different market segments were identified and targeted according to their
needs. "The net result was better and faster decisions made lower and
lower in the organization" (6).
Customer Satisfaction: Xerox began to focus on customer satisfaction as a
priority issue. A "Customer Satisfaction Measurement System" was put in
place which used tools and methods to monitor customer satisfaction. Pol-
icy decisions were made with an aim toward increasing customer satisfac-
tion.
Reduction of Costs: Executive management decided to launch a concerted
effort to improve' return on net assets (ROA). ROA became the driving
force behind Xerox policy. Xerox "resized" (7) and reduced costs by
$600 million.
Management began to address customer needs by concentrating on the above
three priority areas. Nevertheless, competition continued to expand market
TOTAL QUALITY MANAGEMENT AT XEROX 405
share. Xerox management concluded that efforts to decrease costs and increase
ROA were undermining efforts to increase customer satisfaction and market
share. Management realized that identifying priority areas and setting policies
around those priorities would not be enough to improve the company's com-
petitive position; rather, what was required was a fundamental change in the
way Xerox did business.
Xerox Leadership Through Quality Process:

The Vehicle for Achieving Corporate Goals
Introduction
In 1983, top management began work to create a process which would fun-
damentally change all work and management practices at Xerox. The product
of that work was Leadership Through Quality (LTQ) (8). LTQ is a process
aimed at meeting customer requirements by continuously improving all
processes. Meeting customer requirements is Xerox's definition of quality. By
1987, customer satisfaction was elevated from one of three corporate goals to
the company's first priority and primary focus.
Developing Corporate Goals
LTQ is the vehicle used to deploy goals (called common goals) into all
processes. The four common goals are (9):
Customer Goal: To become an organization with whom customers are eager
to do business.
Employee Goal: To create an environment where everyone can take pride in
the organization and feel responsible for its success.
Business Goal: To increase profits and presence at a rate faster than the mar-
kets in which Xerox competes.
Process Goal: To use Leadership Through Quality principles in all Xerox
does.
LTQ seeks to deploy common goals throughout Xerox to (10): instill quality as
the basic business principle and to ensure that quality improvement becomes
the job of every Xerox employee; ensure that Xerox employees, individually
and collectively, provide external and internal customers with innovative pro-
ducts and services that fully satisfy their existing and future requirements; and
establish a way of life, management approach, and work processes that will
enable all Xerox employees continuously to pursue quality improvement in
meeting customer requirements.
406 GITLOW AND LOREDO
Leadership Through Quality Processes

LTQ consists of nine interrelated subprocesses. The subprocesses fall into
three categories: tools, teams, and management.
The Tools processes are briefly described below.
Quality Improvement Process ( Q I P ) . A tool to identify customer needs and
design methods to satisfy those needs.
Problem-Solving Process ( P S P ) . A tool to improve and innovate the
methods needed to satisfy customer requirements.
Benchmarking. A tool used to develop "best-in-class" methods to satisfy
customer requirements.
Customer Satisfaction Measurement System (CSMS). A tool to collect feed-

back from customers on the performance of the methods used to satisfy
customer requirements.
Statistical Tools. A set of statistical techniques for collecting and analyzing
data.
The Team processes are briefly described below.
Product Delivery Process ( P D P ) . A structure which organizes people into
cross-functional teams to deal with product related issues.
Customer Delivery Process ( C D P ) . A structure which organizes customers
and suppliers into teams to deal with customer-supplier issues.
Partnerships and Empowerment. An organizational structure for dropping
decision making to the lowest practical level to allow faster and better
decisions regarding customer needs.
The Management process, called Management Inspection Process (MIP), is a
system designed to focus managerial attention on opportunities for improve-
ment and innovation of the methods needed to satisfy customer requirements.
Each subprocess is discussed below in the order in which it is presented in
the Xerox literature ( I 1).
Quality Improvement Process (QIP)

QIP is built on the premise that all employees are suppliers of products or
services to customers, either external or internal. Each employee must be able
to identify and respond to customer requirements. This is accomplished through
Planning, Organizing, and Monitoring for quality as shown in Figure 1.
The Planning process requires identification of customers processes which
affect customers, and quality characteristics that satisfy customers' needs and
wants. Quality characteristics must be translated into operationally defined
technical specifications for suppliers. Completion of this phase provides techni-
~ ....-
IDENTIFY OUTPUT :J ~--------,
PLANNING
FOR
IDENTIFY CUSTOMER
I.....-._ _- - - . - :J
IDENTIFY CUSTOMER
QUALITY
1.....-.-----.---]REQUIREMENTS
TRANSLATE REQUIREMENTS INTO
I.....-.-------r---]
SUPPLIER SPECIiFICATIONS
IDENTIFY STEPS IN WORK PROCESS ,J
.-
ORGANIZING
FOR
QUALITY c= :J
SELECT MEASUREMENTS
c=_ _--,--._ _:J

DETERMINE PROCESS CAPABILITY
CAN IT "'" N
PRODUCE / _ - - - -
i:2?l
OUTPUT
? \(lY
y
EXITTOWORKPRC~'
PRODUCE
OUTPUT
MONITORING
FOR
'-------~-
EVALUATE RES_U_LT_S :J
QUALITY
~ ~>>------@
( ':~~~~E~~, Y PROD
sot,v
RECYCLE
Figure 1, Quality Improvement Process (9).

cal specification for products and services which are based on customer
requirements.
The Organizing process requires the formulation, standardization, and
deployment (through training) of the methods needed to surpass the technical
specifications required by customers. The quality characteristics needed to
monitor these methods must be identified and operationally defined. Finally, an
analysis must be made of the process capability of said methods.
The Monitoring process requires study of the methods needed to satisfy cus-
tomers as monitored through critical quality characteristics. The purpose of
these studies is to find opportunities for improvement or innovation of the
methods, and to analyze and implement changes to the methods. Next, a deter-
mination must be made as to whether the methods are capable of performing

within technical specifications so improvement energy can be focused on other
processes.
QIP provides Xerox employees with a tool to increase customer satisfaction
by identifying customer requirements and designing methods to satisfy those
requirements.
Problem-Solving Process (PSP)

The Problem-Solving Process is an important part of Leadership Through
Quality. It is through this process that Xerox employees work continuously to
improve and innovate methods which satisfy customer requirements. PAP is
similar to the Plan Do Check Act cycle and the quality improvement story. The
six steps in the PSP are shown in Figure 2 (12).
Identify and Select the Problem. A quality improvement team develops a
statement of a problem that is clearly understood by all team members.
Analyze the Problem. Team members analyze the problem and identify the
key cause@). This step involves gathering and organizing data to docu-
ment the cause(s) of the problem.
Generate Potential Solutions. Team members determine all potential solu-
tions to the problem, no matter how farfetched.
Select and Plan the Solution. Team members select the best solution to the
problem and construct a plan to carry it out.
Implementing the Solution. Team members use the solution on a trial basis
with the help of nonteam members. This step involves coordinating,
assigning, monitoring, and measuring the plan.
Evaluating the Solution. Team members evaluate the effectiveness of the
solution and report their finding to management. Additionally, the follow-
ing questions are answered: Will the problem stay solved? Are there any
new problems?
TOTAL QUALITY MANAGEMENT AT XEROX
Figure 2. Six steps in the PSP (9).
Benchmarking
In 1979, Xerox initiated the process of Benchmarking. Benchmarking allows
Xerox to: identify an area or function to be improved; identify a company (not
necessarily in the reprographics industry) or a group within Xerox that is a
recognized leader in that area or function; and plan improvements by compar-
ing practices, policies, and methods. According to a Xerox executive, "many
companies know who the best-in-class companies are for different functions,
but never make serious attempts to find out how they do it. Instead they con-
centrate only upon improving last year's performance by l o % , and don't real-
ize that another company might be 100% or even 1,000% more efficient" (13).
Benchmarking focuses the search for improved methods and encourages
employees to seek solutions and improvements outside the company. This
external focus fosters a corporate culture that readily accepts change and is
willing to assess its strengths and weaknesses. Benchmarking played a major
part in closing the gap between Xerox and its Japanese competitors (14). The
phases of the benchmarking process (15,16) are shown in Figure 3.
GITLOW AND LOREDO
P Planning
2, ldent~fybenchmark~ngpartners
'-i 3a Determme data collecr~onmethod

3b Collecr data.
Determ~necurrent competmve gap.
I
4.
Analysis
5 Projec( future performance.
6. Commun~catef~hd~ngs
and gabn acceptance
I Integration
I 7 Establ~shfuncr~onalgoals.
1- 8. Develop amon plans.
I Action
I
9. Implement plans and monltor progress.
10. Recal~bratebenchmark.
Figure 3. Benchmarking process model (9).

TOTAL QUALITY MANAGEMENT AT XEROX 41 1
Planning. The area to be benchmarked and the company providing the

benchmark are identified, the data collection method is determined, and
data are collected with regard to the benchmarked method. The goal of
this phase is to identify methods, not to establish numeric targets.
Analysis. The benchmarked company's method (as seen in a flow chart) in
the area under study is compared with Xerox's method (as seen in a flow
chart). The strengths and weaknesses of both methods are used to improve
the Xerox method.
It should be noted that methods are likely to change as Xerox and the bench-
mark partner react to the competitive environment. It is essential that
benchmarking be carried out continuously to preserve a benchmarked
method.
Integration. Benchmarked methods are used to set operational targets (17)
for change. It must be clear to everyone that the targets are supported by
data and will, in fact, create improvements in the process. Clear and sub-
stantive communication of the benchmarked findings is essential in obtain-
ing the support and commitment of the involved decision makers and in
securing the resources necessary to accomplish the targets.
Action. Action plans that will operationalize the benchmarked methods and
their targets are developed and implemented by Xerox employees. A
reporting mechanism is required to monitor the effectiveness of the plan.
The benchmarked method will be reassessed if it is deemed necessary to
change targets. Monitoring and recalibrating benchmarked methods
should be conducted on a routine basis.
Product Delivery Process (PDP)

In 1980, Xerox undertook its first benchmarking study. The results made
Xerox realize that its competitors were consistently delivering products in a
more timely and less costly manner (18). This was due in part to the
competition's ability to identify quickly customer needs and design products to
meet those needs. In one comparison of methods with a competitor, Xerox
found that its method used twice as many people and took twice as long as the
competitor's method. Subsequently, Xerox revised its Product Delivery Pro-
cess.
"The Product Delivery Process (PDP) organizes the functional activities and
processes necessary to design, develop, manufacture and deliver products to
operating units and their end users" (19). The process provides organizational
links among manufacturing, research and development, marketing, and busi-
ness planning by allowing representatives from these key areas to participate as
part of a PDP team.
PDP consists of seven phases (20): preproduct concept, product concept,

design of product, development of product (includes prototype and pilot), pro-
duction of product, launch of product, and maintenance of product. Each of the
above seven phases contains a Mangement Decision Process and Process Ele-
ments (21).
Management Decision Process (MDP)

Management Decision Process helps teams establish the results required for
successful completion of each phase of the PDP process. MDP sets guidelines
and establishes control over what needs to be accomplished, when it needs to
be accomplished, and what resources will be required to accomplish it. A PDP

team determines, at the beginning of a phase, the results required for the suc-
cessful completion of that phase; these results are called phase transfer criteria.
As a phase nears completion, the team conducts a phase transfer review to
determine if the criteria have been satisfied. The PDP will not enter its next
phase until all criteria have been met (22).
Process Elements are the detailed descriptions of what activities need to be
accomplished within each phase to meet the phase transfer criteria. Examples
of process elements include: engineering, reliability and maintainability,
materials acquisition, manufacturing, tooling, and spares. Each process element
defines customer/supplier relationships and the process inputs and outputs that
are required to meet the phase deliverables. Integration of process elements is
important to accomplishing the overall program deliverables.
The integration of the Management Decision Process and Process Element
activities make up the structure of the Product Delivery Process.
Customer Delivety Process (CDP)

The Customer Delivery Process is used to ensure that Xerox products reach
the end user with the quality, cost, timeliness, features, and capabilities needed
to meet customer requirements (23). CDP provides a method for examining the
interaction between suppliers and end users. This process helps define customer
needs and facilitates the basic activities of product marketing; those being:
"planning, developing, announcing, launching, delivering" (24). The major
components of CDP are Phase Output and Checkpoint Reviews and Process
Elements (25).
Phase Outputs and Checkpoint Reviews

For each product marketing activity a quality improvement team develops a
statement of purpose. This statement includes the specific outputs that must be
achieved before each phase of product marketing is completed and the next
phase begins. Further, each customer/supplier relationship is described for all

product marketing inputs and outputs. Having established the required outputs
for each phase, checkpoint reviews are scheduled. Checkpoint reviews occur at
those points in the process where decisions are made to move the product
development process to the next phase. The progress made in each phase is
compared to previously established criteria, which are built off specifically
identified customer requirements.
Process Elements
These activities must be managed concurrently throughout the CDP. Exam-
ples include market engagement plan, launch guideline deliverables, beta test
(field test with top customers), announcement plan, and inputs to development
and manufacturing. Integration of process elements is critical to the achieve-
ment of program deliverables.
Partnership and Empowerment. In 1878, Xerox management recognized
that employees at the district level are in the best position to identify the unmet
needs and wants of customers. This realization led to the formation of "District
Partnerships." District partnerships are teams of Xerox employees from sales,
service, and administration. The teams are empowered to make decisions and
implement policies that will meet customer requirements. These partnerships
decentralized decision-making power and increased the ability of Xerox
employees to identify areas of opportunity and react quickly.
The initial focus of all teams is on tackling problems that are accessible,
well-defined, and manageable in scope and complexity. The ultimate goal of
these partnerships is to give Xerox employees increased influence over their
work and to unleash creative energies with a systematic and focused problem-
solving capacity.
All partnerships are committed to the ultimate objective of "customer obses-
sion." Meeting this objective fulfills Xerox's common goal "to become an
organization with whom customers are eager to do business." This customer
first orientation shifts priority away from interdepartmental rivalries and
towards working together to identify and meet customer needs.
Success, as these partnerships operate in the company's U.S. Marketing
Group, is measured by a partnership's ability to meet the common goals.
Members of partnership teams agree to specific targets that will facilitate
achievement of the common goals. These targets are determined with the aid of
benchmarking and with input from customers.
When this approach was first instituted, many managers felt threatened as
more and more decision-making power was decentralized. To assure the con-
tinual support of Leadership Through Quality, Xerox began to evaluate and
promote managers based on their successful integration of Leadership Through
Quality.
414 GlTLOW AND LOREDO
Customer Satisfaction Measurement System (CSMS). The Customer

Satisfaction Measurement System (CSMS) gathers data from customers on their
overall satisfaction with Xerox and their rating of key performance indicators
(see Fig. 4). Customers provide direct feedback on equipment performance and
customer support, as well as: copy quality; equipment failures; speed in
delivery service; behavior of sales, service, and administrative employees; tele-
phone service; and performance of supplies.
The survey consists of 25 questions structured on a five point satisfaction
rating scale (see Fig. 5). Approximately 40,000 surveys are mailed to Xerox
customers each month. The surveys include a sample of all Xerox business
areas supported by the U. S. Marketing Group. In addition, the sample includes
a representation from all the key customer segments and geographical areas.
The return rate on the survey is approximately 30 percent and, of these,
approximately 33 percent include written comments (26).
The results of the survey are analyzed to understand the overall level of cus-
tomer satisfaction, areas of customer dissatisfaction, and the percentage of cus-
tomers that are very satisfied or delighted with Xerox performance.
Overall customer satisfaction with Xerox's products and services is gauged
by the response to the first question on the survey (see Fig. 5). The total
number of customers that choose either "very satisfied" or "satisfied" is
divided by the total number of respondents to obtain the "satisfied score."
Questions are expressed in supplier terms and at a supplier level to allow the
customer to provide an overall perspective on Xerox. Questions also ask custo-
mers to rate their propensity to acquire another product from Xerox; and to
recommend Xerox to a business associate.
Survey questions ask Xerox customers to rate specific product and service
elements. If there is a problem, a closed-loop resolution process is initiated by
a customer relations representative located in the partnership that supports that
customer. A telephone contact is made with the customer to resolve the
identified issue. A customer who indicates an area of dissatisfaction is con-
tacted even if he or she is satisfied overall.
The data obtained from the customer/Customer Relations Group interaction
is fed into the Customer Assistance Resolution System (CARES). This system
consolidates and ranks all "customer concern" information by frequency of
complaint (see Fig. 6). Xerox has had a formal system to identify customer
issues and to understand customer needs better for more than ten years. The
feedback provided by this system is used in the management process to
translate these needs and wants into improved products and services.
Statistical Tools. Xerox uses the basic statistical tools to gather and analyze
data. These tools include: flowcharts, histograms, check sheets, scatter
diagrams, Pareto charts, fishbone diagram, control charts, line graphs, bar
charts, and pie charts.

GITLOW AND LOREDO
XEROX C U S T O M E R SATISFACTION SURVEY: OPERATORS G O -

O!Caledn,W~r Inr fallowlngquelllOn, W l i h reference to your Xerox ...--------
....-........-.,,cr,a1rt --.---.............-----..........
SECTIONI: GENERAL SATISFACTION

Y.,"
5atllli.d
Based on your re<snt cxperiewe.

h o w satisfied are you w i t h Xerox? 0
O.li"ll.4"
Baled on your recent cxpericn<e, would you

acquire another p r o d u ~from
t Xerox? 0
Based on your recent experience. would you
rrmrnrnend Xatai t a a b u s i n e s s a r ~ o ~ i a t e ? 0
Ye,"
5.ti"i.d
HOWsatisfied arc you overall w i t h
the quality o f :
SECTION 11: PRODUCT. SERVICES and SUPPLIES
Figure 5. Xerox Customer Satisfaction Survey. From Xerox Corp., October 1991.
SECTION 11: PRODUCT. SERVICES and SUPPLIES

2. What speciftc thlngr 'an we do t o Inrreare your satisfaction w i t h Xerox. Our produrtr and Our l e r w r e s ? Thank
you for yourfcedba<k!
l o u r Name
Position
Id 1
Figure 5. Continued
GITLOW AND LOREDO
CUSTOMER CONCERNS \
Partnership Resolution Reg~onI HQ

Action Acllon
Figure 6. Cusromer/Customer Relations Group interaction (9).
Management Inspection Process (MIP). Leadership Through Quality

requires the participation of all employees; however, its success is completely
dependent on the support and involvement of management. MIP was designed
to ensure the continued participation of management by creating a system in
which managers are responsible for constantly monitoring all processes to
determine opportunities for improvement and innovation. Xerox managers are
expected to act as tutors and coaches, not as judges. Figure 7 shows a synopsis
of management's role in promoting Leadership Through Quality.
Summary. A very important part of Leadership Through Quality has been a
cultural transformation within Xerox. This transformation was promoted by
adherence to the following guidelines (27):
Begin and end communications with positive feedback
9 Don't overload a group or individual with information
Avoid overdoing negative feedback
Where possible, include specific examples
Ask questions
Be an active listener
Focus primarily on opportunities for improvement, not on results
Help teams understand their next action item
HOW TO INSPECT
CatherlCollect Data
~ o o kat work in progress andlor
completed work
Understand what has happened
Assess Progress
ldentify work well done

Identify areas for improvement
Plan feedback
Coach for Improvement

Give recognition
* Give feedback
Plan future actions
Key Interactive Behaviors to be used in the Inspection Process:

Seeking information
Testing understanding
Observing
Listening actively
Supporting
Building
Proposing
Summarizing
Giving information
Disagreeing
Figure 7. Management Inspection Process (9).

GITLOW AND LOREDO
Achieving Corporate Objectives: A Case Study

Introduction
Leadership Through Quality has allowed the management of Xerox to direct
their efforts toward a collective mission, thereby enhancing the ability of Xerox
employees to fulfill better the corporate vision. Xerox established opportunities
such as "Team Excellence Awards" in recognition of the teamwork necessary
to apply successfully the principles of Leadership Through Quality. These
awards are given annually to teams that, among other criteria, have demon-
strated an excellent application of the principles of Leadership Through Qual-
ity. The quality improvement effort depicted in the following quality improve-
ment story was recognized with a "Team Excellence Award" in 1991.

The "Hi-Rockers" Service Work Group maintains high-volume duplicators
and printing systems in the central Arkansas area. This case integrates the
Problem-Solving Process (PSP) and the Quality Improvement Process (QIP) to
achieve a corporate objective.
Problem Definition
The most important goal of Xerox is "to become an organization with whom
customers are eager to do business." Top management set a corporate wide
goal of 100% customer satisfaction, as measured by CSMS. Subsequently, the
Hi-Rockers began work to increase their CSMS rating to 100%.
CSMS measures customer satisfaction according to the customer's response
to the following question: "Based on your recent experience, how satisfied are
you with Xerox?" After administering the CSMS survey to their customers, the
Hi-Rockers found that only 83 percent of their customers were satisfied with
the services they were receiving (see Fig. 8a).
Based on the survey results and the corporate goal to increase customer
satisfaction to 100 percent, the Hi-Rockers developed the following problem
statement:
83% of the Hi-Rockers' customers say they are satisfied. Our customers should
be completely satisfied with Xerox Service, 100% of the time.
Problem Resolution
Identihing Customer Needs
The Hi-Rockers designed an "Ask the Customer" survey to gather informa-
tion about their customers' service requirements (see Fig. 9). Work group
members personally interviewed all their customers. The results of the "Ask
the Customer" survey were compiled in a Pareto diagram (see Fig. 10). The
Pareto diagram gave the Hi-Rockers some key insights into their customers'
service requirements, as well as indicating which service category had the
HI-ROCKERS
Cuslomer Satidanion
TEAM 07 198U CSMS
901 1 PROBLEM STATEMENT: In 1988 only 83% of our customers were satisfied- I
-we feel that 100% of our customers should be satisfied 100% of the time.
70
6 5 5
Jan Feb Mar Apr May Jun Jul Aug Sep Od Nw Dec
HI-ROCKERS
Customer S8llafactlon
TEAM 07 1989 CSI
B. 100
YTD 98.6%
80
Jan Feb Mar Apr May Jun Jut Aug Sep Od Nw Dec
8
Jan Feb Mar Apr May Jun Jul Aug Sg, Od Nw DBC
Figure 8. From Xerox Corp's Leadership Through Quality Hi-Rockers Team Ercellence QI
Story (1990).
"ask the customer"

ACCOUNT NAME:
srri.1 nurnbrc
CONTACT NAME:
cse nrrnr:
1. Are you satisfied with the level of urvice you are presently receiving?
a) If not, what problems exin (i.e . ResponuTime. Reliability. Copy Quality. Etc.?)
b) What do we do well?
2. What a n wedo to Improve oururvice to help you meet your needs?
3. Do you have any spacial nwds (Ie. Peak workload tmu,etc.)?
4. What are your exp.Ntions of us ngarding:

a) Reswnu Time? '
b) Callbacks?
C) Reliability7
dl Supplies?
e) other?
How are we doing in the above an-: (Rate 1-2-34-5 with S being the best)
S. Survey .Rev~ewCustomer Sunny Form wwh customer (4 or S bang our goal)

a) What individual should receive the Customer Survey form?
Figure 9. From Xerox Carp's Leadership Tlvough Quality Hi-Rockers Team Ercellence QI
Srory (1990).
greatest impact on improving customer satisfaction. For example, the Pareto

diagram indicated that 27% of the respondents ranked "quick response time" as
being their most important need; an additional 27% considered "after hours
maintenance" as their most important requirement.
Selecting An Area For Improvement

The Pareto diagram in Figure 10 identifies the needs and wants of custo-
mers. Subsequently, work group members filled out a solution selection
Conttol: Th. rnlml l o which ~mpl.m.nlat~onollhesoluuan ROO: The enpc1.d pavoll Irm mplrmrnlmg Inr
itwllhinIh.'onlrol of Ihrgroup #dullonIcal bendol analp84
n.roua.: Ih..nl.nt towhich th.mourcnlddl.n, peopl.. brwpl.billly: l h e d t g l r r lowhich Ih* p o p l e m v o l d roll

~ l c . ) r . q u i r dloimpl.mnl lh.rolvtimar. a ~ * pth. l c h m g n i d & . and t h
a v ~ i l . M ~ I ~ lorwe h. ~~gmizacioncan abrorb th.'hmgr.
Figure 11. Hi-Rockers solution selection worksheet. From Xerox Corp.'s Leadership ntrough
Quality Hi-Rockers Team Ercellence QI Story (1990).
of priority that would define "quick response time." Priority 1 indicates that a
machine is inoperable and requires a response time under two hours. Priority 2
indicates that a machine is not operating properly and requires a response time
under four hours (e.g., a machine has an occasional paper jam). Priority 3 indi-
cates that a machine has a minor problem and requires a response time under
eight hours (e.g., a machine has a squeak).
Proposed Solution
The Hi-Rockers brainstormed ideas for the improvement of service response
time. Based on these ideas, and with the consent of their customers, the Hi-
Rockers proposed that customers requesting service would give a priority code
to the customer service support center. This code would communicate the cus-
tomers' response time expectations to the Xerox service team. This method
differed from the company's existing method, which established response time
targets based on each individual machine's copy volume, regardless of the
machine's operational status (29). This meant that machines with minor prob-
lems would sometimes be serviced before machines that were not operational.
Dejining Supplier Specifications

After establishing customer requirements and proposing a solution, the Hi-
Rockers concentrated on developing a method that would put the solution into
effect. To that end, they brainstormed a list of specifications for the new prior-
ity calling process. Next, they developed a 31-step method for ensuring custo-
mer satisfaction (see Fig. 12).

This method has three major areas (30): communicating with customers on
how to use the priority system; communicating with employees to facilitate
meeting customer response time needs as identified by the priority system; and
collecting, compiling, and analyzing in-process measurement information to
ensure employees continually meet negotiated customer requirements. The Hi-
Rockers believed that their new priority scheduling process would enable them
to reach their goal of 100 percent customer satisfaction. The success of the new
process was measured through repeated applications of the CSMS survey. The
31-step method was instituted prior to April 1989.
Determining Process Capability

The capability of the new priority scheduling process had to be determined
to predict performance targets. To this end, work group members collected
data on Priority 1 service calls. For example, the run chart in Figure 13a tracks
the time required to complete Priority 1 service calls in April 1989 (3 1).
The average service time of 1.963 hours was below the customers' service
requirement. However, a range of 4.72 hours and a visual examination of
dispersion indicated that this process was not predictably meeting customer
specifications. In fact, two service calls took over 4 hours to complete and,
overall, nearly 30% of all service calls were completed outside the 0 to 2 hour
time specification set by the customer. The inadequacy of the Hi-Rockers' 31-
step priority scheduling system was reflected by the fall in the customer satis-
faction rating in April 1989 (see Fig. 8b). Likewise, data for the month of May
1989 was collected and plotted onto a run chart (see Fig. 13b). This run chart
indicates that the average service time for Priority 1 calls increased from 1.963
hours in April to 2.174 hours in May. The percentage of calls above the 2 hour
limit remained at 30 percent. However, four calls were recorded as having
taken exactly 2 hours to complete. If these are taken into account, the percen-
tage of calls at or above the 2 hour limit increased to 36 percent. Additionally,
426
GITLOW AND LOREDO
lSTEP 5 ," STEPS IN THE WORK ":IOCESS I

~OMMUNICA,TE "I"IO"ITI15ANDCODES ':0 CUSTOME"s I
1 I
THANK CUSTOME" FO" PA"TlCIPA'~
r. ,
CONTACTcne - LAS C~UN:AS - Fe" ASSISTANCE I"~
' "EPO"TlNG p"le"ITY CODES I
Communicating
with customer
L 'A CUSTOMEIit PLACES CALL TO esse]
CUSTOMEIit IUPORTSPRIORITY
r - -__-
1'2
I"
1
C~~
• '
en CALLS esse ON c.;lLL eLon OR EVERY 90 MINUTES. MINIMUM
--~ ~~~,~~~~,,~~~~'------------,
CSE Gm ALL CALLS ON TEAM.i'f'leRlTlES. ANDLQC.AT110NS OF OTHER nAM MEMBERS I
1 :
'*---.
/'1. en IItE~O~;:DS TIMECALLS WERE IN~ITIAUZED ,

r------~--""'-_':.-~~,,~~"""."":~,---------...
,. CSf PRIORITIZES EXISTING C~LLS. CONTACTS OTHE'~i eSb FOItAWAIitENESS I HELP I
[15i' CSE CALLS CUSTOMElltISI. VERIFIES)

15A.. L PlltOILEM.RECOlltDS PR'OlltITY
: 1
, •. esE DETE"MINES P.t:ItTl UK£LY NEEDED TO FIX EQUIPMENT
Comnlunicating
with ourselves
+ '
. 1 : -.
11•. OE GAINS A(,iREEMENT WITH eUSTOI~~EIt ON E.T.A.I
0'. OE RECORDS ETA
120. COORDtNATE WITHon'IEIt WORKG"OU" MEMiUItS FOIIt HELP IFNEEDED I

+ '
[:12. IItECOftD,ACyUAL ARlltlVE TlMEVE"S:US E.T .A.I
,X
Gf
I
CONFIRM ~OI,ILlM I OTHERISSUES WI:rHCUSTOMEIIt 1
[E:)ESTORIIOUlflMINT
@. CONFIRM ",O;'LlM RlSOLUTlONWIT!,. CUSTOME'"

, "'
In process
me.sur~ment
'-- 1],. .
110. CATHY D:ISTRIIUTES AND 'C)STS '~:HARTS
,
I
HI·ROCKEIitS EXAMINE CHAlltTS H)R QUAun CONFORM~~NC.E,tMPflOVEMENT OPPOIitTUNITI~
Figure 12. Thirty-one step method for ensuring customer satisfaction. From Xerox Corp.'s
Leadership Through Hi-Rockers Team Excellence QI Story (1990).
Prlorlty 1 Prlorlty 1
Awl1 1888 Run Chart May 1988 Run Chart
Tim.
A
Service Calls Servke Call

.....,. h r q . -Uw., 8p.c Limit h r w . ~ .-Upper 8-E Llmll
Prlorlty 1 Prlorlty 1
July 1890 Run Chart Aug. 1880 R u n Chart
Servlce Calls Servke Calls
h r s e -U w n 8 m c Llnll '----hrw -Uwer Bns U n i t
Figure 13. Run charts tracking time required to complete Priority I calls. From Xerox Corp.'s
Leadership Through Quality Hi-Rockers Team Ercellence Q I Story (1990).
a range of 8.73 hours marks a significant increase in the level of variation in

Priority 1 service response times. Further examination of Figure 13b also
reveals two runs of more than eight points below the process average.
Process Improvement: Initiating Countermeasures

The Hi-Rockers used the Problem-Solving Process (PSP) to plan improve-
ments in the 31-step method. They checked their work logs to determine what
events had taken place when service calls exceeded customer specifications
(32). They brainstormed to identify possible causes of these events and
identified five key problem areas. Next, work group members determined coun-
termeasures to improve their methods. The five problems and their counter-
measures are shown below.
PROBLEM 1 Customers failed to give a priority to the customer ser-

vice support center.
Countermeasure la: Increase customer awareness of the priority call system
by distributing phone directory cards, imprinted with the
customer service centers phone number and the priority
call codes, to all customers.
Countermeasure 1b: If a customer does not use the priority code, the service
support center queries the customer and assigns a prior-
ity code.
PROBLEM 2 The Hi-Rockers found that service technicians were
responding to Priority 2 calls before Priority 1 calls
because they were "right next door" to the Priority 2
call location.
Countermeasure 2: A policy to follow priority call codes, regardless of the
geographic location of the call, was put in place. The
importance of following the priority code process was
emphasized to all service technicians.
PROBLEM 3 Work group members failed to communicate with each
other when assistance was needed. For example, one
service technician might have received three Priority 1
calls and would be unable to complete them all within
the two hour limit.
Countermeasure 3: Service technicians were issued beepers so they could
communicate with one another in the field. If a service
technician ran into a problem, he or she could call
another service technician for assistance.
PROBLEM 4 Lost a team member due to promotion.

Countermeasure 4: None. Not within the control of team members.
PROBLEM 5 Work group members did not know how to analyze data
to improve response times. For example, they did not
understand the concept of being in statistical control, but
out of customer specifications. Also, they were not com-
fortable with the use of many of the tools and processes
of Leadership Through Quality.
Countermeasure 5: Continued training in the use and application of the tools
and processes of Leadership Through Quality.
The countermeasures were implemented between June 1989 and June 1990.
Checking Effectiveness of Countermeasures

Response times on Priority 1 calls for the month of July 1990 were collected
and plotted on a run chart (see Fig. 13c).
The average response for Priority 1 calls in July decreased to 1.245 hours.
More significantly, the range decreased from 8.73 hours in May to 2.56 hours.
Further, the percentage of calls requiring more than 2 hours dropped to 12 per-
cent of the total number of calls received. The decrease in the average and
range of service time from May was a clear indication that the countermeasures
were having a positive effect.
The Hi-Rockers continued to work on improving their response time record
using the PSP. A run chart for Priority 1 calls received in August 1990 (see
Fig. 13d) shows an average response time of 1.203 hours, with a range to
2.071 hours. Further, the percentage of calls requiring more than 2 hours
dropped to 8 percent of the total number of calls.
The longest service time required in August of 1990 was 2.35 hours. The
reduction in the average and range of response times to Priority 1 calls has
made the Hi-Rockers priority scheduling process a success-earning them 100
percent customer satisfaction (see Fig. 8c).
The Hi-Rockers continue to work on the priority calling plan. Their ultimate
goal is to reduce variation and provide service consistently within the time lim-
its established by customers.
Summary
Winning the Malcolm Baldrige National Quality Award was an affirmation

of the success of Xerox's quality improvement process. Xerox realizes that
quality improvement is a never-ending process that depends on the proper
training and motivation of all Xerox employees. Leadership Through Quality

has unified Xerox management in their policy making efforts. This unification
has brought Xerox from near bankruptcy to industry leadership.
Acknowledgments
The authors would like to acknowledge the support of the employees of

Xerox (especially, the Hi-Rockers) the University of Miami Institute for the
Study of Quality, and Wylene M. Wylie of Hoechst Celanese Corporation.
References
Sheridan, I. H., America's best plants, Ind. Week, 15 October 1990, p. 27.
From Xerox Corporation's Leadership Through Qualiry: lmplemenring Competitive Bench-
marking, Employee lnvolvemenr and Recognition-Readings. Pan I , Stamford, CT: Xerox
Corporation. 1987. p. 2.
Ibid. p.,3.
Ibid.
Ibid.
Ibid.
This policy, if effected through layoffs, could run counter to Dr. W. Edwards Deming's
theory of management.
This process was created under the auspices of David T. Kearns, at the time Xerox senior
vice president and chief staff officer, in consultation with twenty-five of the highest-ranking
executives and an organizational behavior-change consultant.
From Xerox Corporation's Leadership 7hrough Quality: Process and Tools Review, Fair-
port, NY: National Quality Award Team Training Sub-Team, 1989, p. 6-2.
Ref. 2, p. l I.
The following descriptions of these processes are paraphrased from Ref. 9.
Ibid. p. 2- 1 paraphrased.
Paraphrased from an article by David Altany, Copycats, Ind. Week, November 5 , 1990.
Ibid. p. 12.
Ref. 9, p. 3-2 paraphrased.
Camp, R. C., Benchmarking: The Search for Industry Best Pranices 7hat Lead ro Superior
Performance. Milwaukee, WI: ASQC Quality Press, 1989, pp. 17-19.
This portion of Xerox's Leadership Through Quality process may be in conflict with Dr.
Deming's theory of management; in particular, point eleven.
Ibid. p. 12.
Ref. 9, p. 4-1.
Ibid.
Ibid. p. 4-2 paraphrased.
Essentially, MDP sets targets to indicate the successful completion of each of the seven
phases. There is a danger that this process could degenerate into one in which targets are
based on expediency, rather than on profound knowledge and the system's capability.
Unless safeguards are built into MDP to prevent arbitrary target setting, its implementation
would not coincide with Dr. Deming's theory of management.
Paraphrased from Ref. 9, p. 4-2.
Ibid. p. 5-1.
Ibid. p. 5-2.
The nonresponse rate for this survey may bias its results in favor of customers who are
more willing to express their views.
Ref. 9, p. 9-1.
This worksheet prioritizes all bars based on the following six factors: (I) Control: The
extent to which implementation of the solution is within the control of the group; (2)
Appropriateness: The degree to which the solution satisfies the requirements of solving the
problem; (3) Resources: The extent to which the resources (dollars, people, etc.) required
to implement the solution are available to the group; (4) ROI: The expected payoff for
implementing the solution. Please note that ROI does not consider unknown and unknow-
able cost; this is in conflict with Dr. Deming's theory of management; (5) Time: A judg-
ment about the relative length of time it will take to resolve the problem; and (6) Accepta-
bility: The degree to which the people involved will accept the changes involved, and the
organization can absorb the change. Each team member ranks the above factors on a scale
from I to 5, with 5 signifying the highest effect. Each cell in the matrix shows all of the
five team members' ratings for a particular factor or problem. Next, the ratings for each
problem are tallied and entered at the bottom of its column.
Team Excellence 1990 presentation by HI-ROCKERS TEAM entitled "SPOIL THE CUS-
TOMER," p. 2.
Ibid.
The Hi-Rockers used X-bar charts of the time required to complete each Priority 1 service
call. However. to augment the clarity of this case, the original data has been plotted onto
run charts.
Care must be taken to distinguish special from random causes of variation.
About the Authors: Dr. Howard S. Gitlow is Executive Director of the Univer-
sity of Miami Institute for the Study of Quality in Manufacturing and Service
and a Professor of Management Science, University of Miami, Coral Gables,
Florida. He was a Visiting Professor at the Science University of Tokyo in
1990 where he studied Quality Management with Dr. Noriaki Kano. He
received his Ph.D. in Statistics (1974), M.B.A. (1972), and B.S. in Statistics
(1969) from New York University. His areas of specialization are the manage-
ment theories of Quality Science and statistical control.
Dr. Gitlow is a member of the American Society for Quality Control and the
American Statistical Association. He has consulted on quality, productivity, and
related matters with many organizations, including several Fortune 500 com-
panies.
Dr. Gitlow has coauthored several books. These include: The Deming Guide
to Quality and Competitive Position, Prentice-Hall (1987), thirteenth printing;
Tools and Methods for the Improvement of Quality, Richard D. Irwin Publish-
ers (1989); Planning for Quality, Productivity, and Competitive Position, Dow
Jones-Irwin Publishers (1990); and Stat City: Understanding Statistics Through
Realistic Applications, Richard D. Irwin Publishers (1987), second edition. He
has published many articles in the areas of quality, statistics, management, and
marketing.
While at the University of Miami, Dr. Gitlow has received awards for Out-
standing Teaching, Outstanding Writing, and Outstanding Published Research
Articles.
Elvira N. Loredo is a doctoral student in Management Science at the Univer-
sity of Miami. She received her M.S. degree in Operations Research (1991)
and her B.S. in Systems Analysis (1988) from the University of Miami. Ms.
Loredo has published several articles on quality management.

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Quality Engineering

ISSN: 0898-2112 (Print) 1532-4222 (Online) Journal homepage: http://www.tandfonline.com/loi/lqen20

TOTAL QUALITY MANAGEMENT AT XEROX: A CASE

HOWARD S. GITLOW & ELVIRA N. LOREDO

To link to this article: http://dx.doi.org/10.1080/08982119308918983

Published online: 29 Mar 2007.

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TOTAL QUALITY MANAGEMENT AT

Leadership through quality; TQM; Quality improvement process (QIP);

Copyright @ 1993 by Marcel Dekker. Inc.

Unless otherwise stated, the information presented in this article is based on

In 1959, Xerox introduced the world's first plain-paper copier. It was an

Crisis and Reaction

Xerox Leadership Through Quality Process:

Developing Corporate Goals

Leadership Through Quality Processes

Customer Satisfaction Measurement System (CSMS). A tool to collect feed-

Quality Improvement Process (QIP)

TRANSLATE REQUIREMENTS INTO

IDENTIFY STEPS IN WORK PROCESS ,J

c=_ _--,--._ _:J

Figure 1, Quality Improvement Process (9).

mination must be made as to whether the methods are capable of performing

Problem-Solving Process (PSP)

Figure 2. Six steps in the PSP (9).

'-i 3a Determme data collecr~onmethod

Determ~necurrent competmve gap.

5 Projec( future performance.

1- 8. Develop amon plans.

Figure 3. Benchmarking process model (9).

Planning. The area to be benchmarked and the company providing the

Product Delivery Process (PDP)

PDP consists of seven phases (20): preproduct concept, product concept,

Management Decision Process (MDP)

be accomplished, and what resources will be required to accomplish it. A PDP

Customer Delivety Process (CDP)

Phase Outputs and Checkpoint Reviews

phase begins. Further, each customer/supplier relationship is described for all

Customer Satisfaction Measurement System (CSMS). The Customer

TOTAL QUALITY MANAGEMENT AT XEROX

XEROX C U S T O M E R SATISFACTION SURVEY: OPERATORS G O -

SECTIONI: GENERAL SATISFACTION

Based on your re<snt cxperiewe.

Baled on your recent cxpericn<e, would you

SECTION 11: PRODUCT. SERVICES and SUPPLIES

SECTION 11: PRODUCT. SERVICES and SUPPLIES

Partnership Resolution Reg~onI HQ

Figure 6. Cusromer/Customer Relations Group interaction (9).

Management Inspection Process (MIP). Leadership Through Quality

ldentify work well done

Coach for Improvement

Key Interactive Behaviors to be used in the Inspection Process:

Figure 7. Management Inspection Process (9).

Achieving Corporate Objectives: A Case Study

ment story was recognized with a "Team Excellence Award" in 1991.

"ask the customer"

2. What a n wedo to Improve oururvice to help you meet your needs?

3. Do you have any spacial nwds (Ie. Peak workload tmu,etc.)?

4. What are your exp.Ntions of us ngarding:

S. Survey .Rev~ewCustomer Sunny Form wwh customer (4 or S bang our goal)