APPLICATION OF TOTAL QUALITY

MANAGEMENT PROCESSES IN
RESOLVING QUALITY CHALLENGES IN
MANUFACTURING INDUSTRIES - CASE
OF XEROX HOLDINGS LTD

Isaac Machanda
Student No. R2212D15793649
Module: Business Functions and Procedures
Module code: UU-MBA-714-ZM-71085

7th April 2024

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ABSTRACT
This report discusses Xerox Holdings corporation concerning its business performance and
practices during the past one hundred years. It highlights the origin of Xerox, its business
portfolio, core values, and competencies.

Quality management is critical to ensuring the profitability and sustainability of

manufacturing industries. One of the most effective quality management approaches is Total
Quality Management, TQM. During its long existence, Xerox has faced serious problems
related to the quality and pricing of its products. The report discusses how two of these
financial performance problems were resolved by implementing TQM. It also explains how
the various principles of TQM were applied in restoring Xerox to its financial glory. The
report also reveals the underlying causes of the problems that Xerox faced and explains how
organizations can prevent themselves from getting into similar problems.

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TABLE OF CONTENTS

Contents
ABSTRACT ............................................................................................................. 2
TABLE OF CONTENTS ............................................................................................ 3
INTRODUCTION ..................................................................................................... 4
PRODUCTS AND SERVICES .................................................................................... 4
FINANCIAL OVERVIEW ......................................................................................... 5
VISION STATEMENT, MISSION STATEMENT AND CORE VALUES .......................... 6
Mission Statement.................................................................................................. 6
Vision statement .................................................................................................... 7
Core Values and Capabilities.................................................................................... 7
Customer Satisfaction ......................................................................................... 8
Quality and Excellence ........................................................................................ 8
Premium Returns on equity and assets ................................................................... 8
Employee Value Proposition................................................................................. 8
Good corporate citizenship ................................................................................... 8
Innovation ......................................................................................................... 8
Innovation ............................................................................................................ 9
TOTAL QUALITY MANAGEMENT .......................................................................... 9
TQM IN XEROX ................................................................................................ 10
DISCUSSION......................................................................................................... 12
CONCLUSION AND RECOMMENDATIONS ........................................................... 13

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INTRODUCTION
Xerox Holdings Corporation is a service and sales company operating in the printing and
document-handling industry. Its precursor, The Haloid Photographic Company, was
incorporated in 1906, in Rochester, New York, USA (Xerox, 2006). The flagship products for
The Haloid Photographic Company included the manufacture of photographic paper and
related equipment. The company was renamed Xerox Holding Corporation in 1946 when
Joseph Wilson took over the operations of the Haloid from his father. Xerox Holdings
Corporation is now called simply as Xerox. Xerox is publicly traded on the Nasdaq Global
Select Market, NASDAQ|XRX, with a wide shareholder profile including employees,
members of the public, private companies, and government departments.

PRODUCTS AND SERVICES

The product portfolio for Xerox has morphed over the years from simple photographic paper
and machines to digital automated and complex document management systems like workflow
systems and IT services. The company has over the years grown into a global brand. Currently,
Xerox offers digital and print products to diverse industrial sectors like finance, health,
manufacturing, and public administration institutions in over 160 countries worldwide. Xerox
provides products and services to customers in North America, the Middle East, Europe,
Central and South America, Africa, and Asia. With this wide geographical spread, the company
can deliver its technology-based solutions to its customers regardless of size and location. With
regards to document handling technologies, Xerox supplies a wide range of printers to meet
the diverse needs of its clientele ranging from private home applications to large corporate
entities and public government institutions.

In 2022 Xerox rebranded its equipment financing business, which came to be known as
FITTLE, to include leasing options so that more businesses and individuals could afford Xerox
quality products. See figure1 for the full range of products offered by Xerox.

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Figure 1 Xerox Products Portfolio, Source: Investor deck 2024.

FINANCIAL OVERVIEW
Xerox is a large size corporate business with annual revenues of $7 billion with over 20,000
employees (Xerox, 2024). According to the company's investor deck presentation on the 2023
financial and strategic review, its main revenue streams are from contractual print and digital
services which accounted for more than 56% of total revenue in 2023. Twenty-five percent
(25%) of revenue is earned from sell of office printing and digital document management
equipment. The flagship products, paper account for up to 10% of revenues with a host of other
services accounting for 9%. (Xerox, 2024). See figure 2 below. Xerox’s revenue and profit
figures have varied over the years due to changes in the business environment and fluctuations
in the demand for its products.

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Figure 2 Xerox Revenue Mix 2023, Source: Investor deck 2024

VISION STATEMENT, MISSION STATEMENT AND CORE

VALUES
The mission and vision statements of an organization are an essential foundation for the
company's strategic performance (Darbi, 2012). Researchers Rarick and Vitton established that
businesses that have and operate in line with their mission and vision statements have double
the returns on equity compared to those that do not have. Because of their strategic importance
to the business, careful thought should be given to the crafting of mission and vision statements.

Mission Statement
A mission statement indicates the company's line of operation, succinctly identifying what it
does to meet its customers' needs. A Clear mission statement guides the formulation of the
Company's strategic objectives. A mission statement will capture the company's approach to
customers, services and products, employees, growth, and technology. The following fitting
statement has been crafted for Xerox:

"To help people find better ways to do great work – by constantly leading in document
technologies, products, and services that improve our customers' work processes and business
results" (Xerox 2015).

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The above statement elucidates the organization's business activities and its inclination to meet
its customers' needs. Nonetheless, it is not so clear on the company's position concerning
employees' interests. More recent taglines for Xerox make up for this deficiency. The phrase
"We make work, work" (Xerox, 2024), captures the company's strides in making work a
meaningful activity for its clients and workers.

Vision statement
A vision statement stipulates the business's future aspirations, indicating the position the
company will take in the future. The following is the vision statement for Xerox.

“To be the Document Company that leads the world in enabling customers to better manage
documents — from paper to digital — regardless of whether those documents reside in the
office, at home, or in transit” (Xerox 2015)

The above vision statement captures Xerox's desire to be the world leader in document
management and lead the transformation of how work is done from paper to digital platforms.
This well tallies with the company's drive for innovation taglines:
"To innovate the way the world communicates connects and works" (Xerox 2016 and "We used
to be copiers. Now we are innovators" (xerox, 2024).

Core Values and Capabilities

A company’s core values are the principles that guide the conduct and relationships between
its officers, management, and customers. Xerox has been in existence for close to 120 years.
The company has survived several generation challenges, world wars, economic booms and
downturns, social and technological changes, and more. This longevity is attributed to the
company's versatility underpinned by the core values that enable it to innovate and move with
the changing business atmosphere. According to the company's code of ethics, its core values
are centered on meeting customer needs and accommodating the employees' interests while
fostering profitability and growth (Xerox, 2024). Below are some notes of on Xerox’s core
values:

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Customer Satisfaction
The company understands that its success depends on satisfying its customers. This entails that
it performs sales and marketing activities with honesty. At all times, the company’s officers
avoid conflicts of interest and restrain themselves from collecting gifts in exchange for
services. Keeping customer information in confidence is another vital way that Xerox keeps its
customers satisfied. The company is also wary of special restrictions related to government
customers.

Quality and Excellence

The company impresses on its staff to ensure quality and excellence in all activities. Excellence
involves exercising fiduciary control and abiding by company regulations, procedures, and
policies.

Premium Returns on equity and assets

This involves putting in place appropriate safeguards to ensure that company assets, both
intellectual and tangible, are protected and used in a manner that maximizes returns.

Employee Value proposition

Xerox demonstrates that it values its employees by ensuring the comfort of every worker
through the implementation of enhanced worker rights and appropriate remuneration. The
company bars alcohol and substance abuse, violence, and harassment of fellow employees in
the workplace.

Good corporate citizenship

Xerox is a good corporate citizen as it ensures that it honors all its tax obligations to regulators.
The company promotes and adheres to environmental and social sustainability programs to
ensure that its business activities fully benefit the community.

Innovation
The company has attained and maintained market leadership for its products and services
through its efforts to continually innovate and bring on board new products that enhance
customer experience and make work enjoyable.

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Innovation
Xerox has had an illustrious journey in innovation and continues to be a leader in the document
management and digital platforms industry. Starting with the invention of the xerographic
copier some 78 years ago, the company has developed a wide array of products along the way.
The xerographic machine was a breakthrough technology of its time as it enabled people to
access and share information with ease. In 1974, xerox had another extraordinary milestone in
innovation, the birth of the ethernet, following its invention of the first personal computer two
years earlier (Hiltzik,2009). The ethernet communication protocol was primarily used as a
communication bus in Xerox's production and publishing systems. Later, this technology
became the bedrock on which modern-day internet was developed. Thanks to its continued
investments in research and development, the company has over fifty product designs that have
been patented on its books.

To this day, Xerox continues to be a trailblazer in document and information management

technology. The focus has been to streamline workplace productivity by innovating in
technology. Most recent innovations have been in the digitization of documents and pacing
information technology solutions for simplifying workflows. In its continuous improvement or
reinvention drive, Xerox is set to make strategic investments in augmented reality (AR)-driven
service experiences and robotic process automation (RPA). The company is actively pursuing
these technological trends by harnessing the utilization of artificial intelligence AI.

The company continues to tap into technological advancements to create new innovative
products that “make work, work” (Xerox, 2024).

TOTAL QUALITY MANAGEMENT

Every business aspires to meet its customers' needs by providing high-quality products in a
consistent and reliable pattern. By so doing, the business gains customer loyalty and a good
reputation in the industry. Stoner and Hattwick (2000) identified eight aspects that an
organization should consider when devising a system for ensuring a high quality of goods and
services. These aspects are reliability, durability, serviceability, response time, reputation,

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performance, features, and aesthetics. Consistency in exhibiting the above traits leads to
customer satisfaction and loyalty.

Total Quality Management (TQM)is a philosophy that streamlines the implementation of

quality management systems that address the above-identified aspects. It seeks to synergize the
different functions (production, finance, marketing, etc) of an organization to attain and
maintain customer satisfaction. TQM aptly describes a company's culture, attitude, and
organization in its quest to provide a satisfactory service to its customers. Besides customer
satisfaction, TQM focuses on continuous improvement and employee participation. By
implementing TQM, organizations can increase the involvement of employees and
management in the continuous improvement of satisfying customer needs.

This management approach was premised on the Toyota Production System (TPS) in the 1950s
and gathered pace in the 1980s. Over time, several companies, including Ford, IBM, Philips,
Motorola, and Xerox have satisfactorily implemented TQM to resolve customer satisfaction
concerns. The section below shows how Xerox has adopted and applied TQM principles in
resolving challenges in the quality of its products and customer satifaction.

TQM in Xerox
Xerox was prompted to begin implementation of TQM due to the challenges that the
organization began facing concerning customer satisfaction and employee engagement.
Customer dissatisfaction was evident with the poor market performance in the 1980s. In 1981,
its market share dropped to about 35%. This slump was attributed to rival Japanese companies,
among them Ricoh Company Ltd, who rallied the market by introducing simpler and better-
performing printing products (Casseres, 1997), while Xerox stuck to their old and complex
design of printers. A strategic change was needed at this juncture for Xerox to return to its
market-dominant position.

The Japanese rivals had used low-cost production strategies to attract customers from the
dominant companies like Xerox. Xerox products were still of high quality but came at a high
production cost resulting in high market price creating customer dissatisfaction. On the other

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hand, Japanese printers were of good quality and at a low market price, therefore, they grabbed
the market share.

Cutting market prices on Xerox printers would have led to revenue losses and the collapse of
the business. To get the business out of this trough, Xerox was not fixated on cost reduction
but also turned to re-examining its product quality and finding new unique customer needs
(niches) that they would meet and re-establish a competitive edge. The company also enhanced
its customer engagement by frequently seeking feedback on their experience with the new
product features. This level of engagement with customers demonstrates the company's
commitment to satisfying the needs of the customers and appetite for continuous improvement.

With the above approach, Xerox was able to regain its market share and the company stocks
soared once more. By 1999 Xerox was posting high profit annual returns averaging 20 percent.
However, the company could not sustain these gains and the profits tumbled once more. The
stock market price collapsed from an all-time high of $103.4 in May 1999 to the pitiable low
of $7.56 per share at the end of 2000. (Megatrends, 2024)

Xerox sought and implemented additional measures to regain and maintain its market share.
The company needed to reduce the cost of its products while maintaining high quality. It turned
attention to the cost of raw materials and its suppliers. Xerox began to consolidate its
manufacturing locations and reduce its supplier base. Xerox now deals with suppliers as
clusters. This measure resulted in competition among suppliers (intra-group) and led to the
reduction of the cost of raw materials. Grouping of suppliers also resulted in reduced cost of
quality management as the number of quality inspections and associated overheads were
reduced. Reduced workload due to a reduced supplier base ensured that the company could
engage with and commit its workforce to more productive ends.

During the time Xerox was experiencing a second slump in revenue, the business environment
was also evolving. Its competitors began to switch from analogue to digital systems. To counter
this threat, the company also decided to make a strategic switch and introduced digital copiers.
The introduction of digital products re-ignited sales volumes and led to increased revenues
again.

After the market slump of 1981, xerox employed a continuous improvement technique of
benchmarking its products with the works of its rivals. Benchmarking is a multi-stepped

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approach; it begins with planning for data gathering, followed by analysis, and recommending
appropriate action (Rani et al, 2012). This process enabled Xerox to learn new trends and best
practices much earlier and devise a fitting response.

Notable outcomes of the benchmarking of operations of Xerox against its Japanese rivals relate
to the number of suppliers of raw materials, production lead times, the number of defective
products per million batch, and the number of personnel required for identical volumes of
goods. Xerox's production lead time was double what was required to produce a similar volume
of goods for the Japanese counterparts. Xerox required five times more technical staff for
similar factory operations. It also had higher design costs due to frequent reworks for designs
of similar products. Further, xerox posted thirty times more defects in production volumes than
their Japanese counterparts.

Xerox undertook a careful analysis of the observations from the benchmarking process pitching
its strengths and weaknesses against those of its rivals. It then drew up actionable goals to
address the identified inefficiencies. One of the action items was to trim down the number of
suppliers. Through its consolidation of production locations and grouping of suppliers, Xerox
was able to reduce the number from 5000 to 500, half the number servicing the Japanese
industry. Additionally, Xerox introduced vendor certification as a way of extending quality
protocols to its suppliers and contractors, this helped reduce quality management costs and
matched up to the defect rate of its rivals. Further, Xerox introduced innovative ways to
improve the functionality of its main products. It implemented smart packaging systems that
could collect information on product environmental conditions like temperature and humidity,
and delayed consumption counts for every opening (Xerox, 2014).

DISCUSSION
Rani et al (2012) postulate that the gains witnessed in Xerox's reduction of defects in supplied
parts in a million products is attributed to the successful implementation of TQM. If this
management approach is institutionalized, many businesses will get to the right quality on the
first attempt without the need for reworking products.

Apart from product quality enhancements to meet customer satisfaction, TQM facilitates the
continuous improvement of services that have benefits for both the business and its customers.

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Employees involvement in the quality management cycle can not be overemphasized. The
recovery of Xerox from two market slumps could not have been achieved without the full
participation of its workforce.

Xerox’s recovery was aided by the company’s close collaboration with suppliers and
customers. From the quality management perspective, a company needs to consider suppliers
of raw materials as partners in production and customers as partners in continuous
improvement. All businesses have to continue striving for improvements for them to
experience sustained profitability and productivity.

CONCLUSION AND RECOMMENDATIONS

The successful implementation of TQM ensured that Xerox recovered from revenue and
market losses on two occurrences. However, the two setbacks could not have occurred had
Xerox taken some strategic decisions much earlier. In the early 1970s, Xerox birthed the idea
of personal computers and inverted the first model, but it failed to leverage its strength in
innovation to develop the computing and software business. Microsoft and Apple used Xerox's
ideas to develop the mega-size business empires that they have grown to be. Had Xerox pursued
its innovative strength in computing much earlier, the competition of new entrants on the
supplier of printers could not have had a huge impact on its revenues. From the foregoing,
organizations need to time and again carry out their situational analysis on the strengths and
harness available business opportunities.

The first financial slump for Xerox in the early 1980s was due to competition from new entrants
offering similar products at a reduced cost. The proliferation of these new companies in the
print industry started much earlier in the 1970s. Xerox did not pay attention to trends in the
market and did not conduct market research and reviews, hence the company was caught off
guard. The measures that were put in place to reverse the market share could have been
implemented much earlier had the appropriate business environment assessment been
conducted earlier. It is, therefore, prudent for organizations to frequently analyze their business
environment and update their strategic objectives.

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While TQM and other quality management tools can be used to salvage disturbing occurrences
in a business's performance and growth, as the case was with Xerox, strategic ambition and
leadership can prevent such downturns. Recognising the value of quality management systems,
Xerox has continued to practice the various principles of TQM like customer satifaction,
employee engagement and continous improvement supported by techniques like
benchmarking. Consequently, Xerox operates as a customer centric and innovation driven
business, and has maintened its position as a market leader in the document and information
management industry globally.

References

1. Casseres, . B. G., 1997. Competing in Constellations: The Case of Fuji Xerox. Global Perspective, Issue
6 Computer Age. New York: Diane Publishing Company.
2. Darbi, W. P. K., 2012. Of Vision and Mission Statements and Their Potential Impact on Employee
Behaviour and Attitudes. International Journal of Business and Social Science, 3(14).
3. Fry, F. Stoner, C. and Hattwick, R. (2000). Business: An Integrative Approach 2nd ed. Mc Grow-Hill,
New York
4. Hiltzik, M. A., 2009. Dealers of Lightning: Xerox PARC and the Dawn of the
5. Macrotrends,2024, Xerox Holdings 47-year Stock price history
https://www.macrotrends.net/stocks/charts/XRX/xerox-holdings/stock-price-history
6. Rani S, Duhan, RK& Deshwal, S 2012, 'Study of implementation of Total Quality Management for defect
reduction in manufacturing Industry, ISQR Journal of Civil and Mechanical Engineering Vol 1, No.3, pp
11-13
7. Rarick,, C. A. & Vitton, J., 1995. Corporate Strategy: Mission Statements Make Cents. Journal of
Business Strategy, 16(1), pp. 11-12.
8. Xerox, 2006, 2005 Annual Report
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xerox.com
10. Xerox, 2014, 2013 Annual Report
11. Xerox, 2024 XRX-Investor Deck 2023, Strategic and Financial Overview
12. Xerox, 2024, 2023 Annual report
13. Xerox, 2024, web, https://www.xerox.com/en-us/about

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