Smarter…Quicker…Better

1. Smarter…Quicker…Better Using Xerox Lean Six Sigma to create real value Michael Caceci Business Process Manager Xerox North American TeleWeb

2. Discussion topics • Today’s business challenges • Xerox’s experience with Lean Six Sigma • Xerox TeleWeb’s experience with Lean Six Sigma • Translating our experience into real value for customers

3. Xerox Today • $15.7B (US) in Revenue • 58, 000 employees worldwide • Broadest portfolio of products and services in the document management industry: office and production environments Our Vision: “Helping people find better ways to do great work”…

4. Business challenges we all share • Retain and gain customers to grow revenue • Manage costs by reducing waste • Increase overall productivity • Improve employee development, motivation and engagement

5. The critical challenge: How to achieve all four in a sustainable way Xerox’s challenges • Maximize customer value • Create growth opportunities • Reduce costs • Increase productivity

6. Meeting our challenges through Xerox Lean Six Sigma • Understanding what customers truly value and need • Transforming our culture • Positioning us for growth • Improving processes through fact-based, disciplined decision-making and measurable outcomes It’s becoming “the way we work”.

7. Our commitment starts at the top. • “I’m convinced that Xerox Lean Six Sigma is a way to rebuild value in our company because it is about substance, not form; it’s about discipline and infrastructure so projects can produce business results.” • —Anne MulcahyChairman & CEO

8. Xerox’s quality leadership journey “Quality is a race without a finish line.” - David Kearns LTQ 1994 Xerox Management Model 1996 Xerox Management Model 1997 Xerox 2005 1998 Xerox Six Sigma 2000 Xerox new quality 2002 Xerox Lean Six Sigma 2004 Xerox Lean Six Sigma 1997 Xerox ISO 1983 Leadership Through Quality Xerox adopts TQM and launches Leadership Through Quality The Xerox Mgmt. Model is introduced as partof Leadership Through Quality. Senior Mgmt documents the Xerox 2005 Leadership Through Quality strategy. Launch of design for Lean Six Sigma The XMM “evergreen” model is continuously assessed & improved. All major Xerox mfg. sites worldwide receive ISO 14001 certification Six Sigma deployed in mfg. ops. New quality policy, and procedures refreshed to be focused/faster Lean Six Sigma concepts & principles become corporate standard 1989: Baldridge Award Xerox – USMGManufacturing Category 1997: Baldridge Award Xerox Business Services Services Category

9. Combining two powerful approaches! Lean SPEED Enables Six Sigma Quality (faster cycles of experimentation/learning) Six Sigma QUALITYEnables Lean Speed (fewer defects means less time spent on rework) LeanSpeed + Low Cost Six SigmaCulture + Quality • Goal – Reduce waste and increase process speed • Focus – Identify non-value add steps and causes of delay • Method – Value Stream Tools, Kaizen events • Goal – Improve performance on customer CTQs (Critical To Quality) • Focus – Use DMAIC process with various tools to eliminate variation • Method – Management engagement, 1% - 3% dedicated as Deployment Champions and Black Belts

10. Finance Facilities Human Resources Sales and Marketing Xerox Customer Communications Administration Operations Information Technologies Engineering Manufacturing Enterprise-wide deployment Our view: Not just a tool for operational efficiency, but an enterprise-wide business strategy for creating real value

11. customer External and Internal Methodology and Tools: Creating real value for our customers Internal Operations Methodology & Tools Internal Manufacturing Quality Methodology & Tools Xerox Helping Xerox and our customers do great work!

12. Lean Six Sigma - Worldwide Deployment Status • 30 full-time deployment managers • 1,100 projects contributed to Xerox profitability in 2004 • 600 Black Belts achieved certification, completed, or started training in 2004 • 2,000 executives and managers completed leadership workshops • 2,500 Green Belts trained • 18,000 Yellow Belts trained plus many other on-line courses

13. Lean Six Sigma in Xerox North American TeleWeb

14. North America [3Centers] Europe [13 Centers] Xerox TeleWeb at a Glance • TeleWeb Goals: • Grow incremental revenue for Xerox • Improve Xerox’s sales productivity • Reduce total selling costs • Provide sales coverage based on increasing customer and market preference to do business by web and telephone • Saint John, NB • Halifax, NS • Lewisville, TX • TW HQ: Rochester, NY

15. “Virtual” Sales Executives provide direct, and dedicated sales coverage and support to current and prospective customers TeleWeb: Desk-based Account Coverage • Highly trained professionals • Majority hold university degrees and/or have a background in industry or related industries. • Receive the same extensive sales and product training as Xerox’s direct sales reps • Every VSE has a dedicated toll free number. Customers have direct access to their TeleWeb representative

16. We deliver “Coverage without Borders” • Market Segments: • Global and National Accounts • Large Regional Accounts • Small & Medium Businesses • TeleWeb Coverage is primarily account-based using pre-determined critical success factors

17. TeleWeb Lean Six Sigma Deployment Status • Dedicated Deployment Manager • 8 Black Belts • Over 24 projects completed to date • Since 2003, 12 Black Belts have completed the TeleWeb BB program • Most management positions now backfilled by certified Black Belts • All TW managers, and key support staff are Green Belt trained • 10 managers GB Certified to date • 100% of TeleWeb employees (600+) Yellow Belt Trained (on-line course)

18. Key learning • Leadership commitment • Project selection against key business priorities • Dedicated resources • Discipline and execution

19. Lean Six Sigma’s value for TeleWeb + • “Soft Metrics” • Increases in customer satisfaction • Improved employee development, motivation, and engagement • Increased use of TeleWeb by our sales partners • “Hard Metrics” • Increased sales revenue • Reduction in costs • Measurable increases in sales productivity by Xerox direct sales force or VSEs • Gains in process efficiency due to reductions in errors • More selling time

20. GOAL STATEMENT: The goal is to realize an incremental 2 hours per week, per Sales Manager, through the reduction of Non-value add activities TeleWeb Project Example: “Find the time” BUSINESS IMPACT:Sales Managers play a key role in driving revenue through effective management of VSEs. In effort to strive for optimal efficiency, minimizing Non-Value add activities from our managers’ work day will increase revenue. This will be achieved by focusing the “found time” on specific activities that help reps sign more orders. PROBLEM STATEMENT: It is a challenge for Sales Managers to follow a disciplined Sales Management Process due to the variety of tasks that currently occupy their time. This hampers their efforts to concentrate on revenue generating activities. TIMELINE: DEFINE: February MEASURE: March ANALYZE: April IMPROVE: May CONTROL: June • TEAM MEMBERS: • Black Belt • Green Belt • Program Manager • 2 Sales Managers • Reporting Manager SCOPE: All TeleWeb outbound sales programs

21. Previous Status • Managers overwhelmed: • Unable to complete activities expected of them in a normal week • Important tasks dropped when too much was on the plate, especially sales coaching and feedback • “Voice of the Customer” surveys: • VSEs wanted more: coaching, feedback and silent monitoring • Top three sales management “time-robbers”: • Gathering data from various reports • Creating reports to analyze results & satisfy upper management • Reading, researching and responding to email.

22. VOC: Manager Survey - Highlights - Where sales manager time is spent: Opportunity to “find the time”

23. Solution: Automated Daily Reports • Identified the greatest gains would come from reducing time spent by sales managers on reporting: • “Kaizen” to determine the vital few metrics and targets. • Reports were re-designed and managers agreed to follow the new process: • Daily Team Flash report: manage the “tails” • Weekly Sales Flash: used in Activity Update meetings. • Monthly Plan & Review: used during Monthly Reviews with VSEs • Annual Trends Report: spot trends in VSE performance and better tracking of results.

24. Project Results Original goal: free 8hrs./mo per manager Thanks to redesigned reports, data now delivered to Sales Managers when needed, with “drill down” capability, in a consistent format across programs. Saved 17 hrs./month per manager! = Annual Economic Profit: $800,000

25. Lean Six Sigma tools used by a TeleWeb Sales Manager to improve a process Fleet Implementation Program • Benefits to Xerox • Single point of contact for 100 plus unit deals • Eliminates the time direct reps used to spend on orders sold outside geographic assignment • VSE contacts customer and validates local requirements • VSE monitors install process – end to end Customer Benefits • Faster install of technology: saves money and improves office productivity sooner • Reduce or eliminate delays in the installation process • Single point of contact in Xerox with accountability to answer customer and end-user questions

26. Xerox Lean Six Sigma Helping External Customers

27. Lean Six Sigma consulting engagement focused on front of process to achieve quick results Designed and implemented a comprehensive Patron Access Management System System includes Access Brooklyn Card, innovative kiosks and Web site Patrons use card to reserve computer time, pay for print, copies and other services Case Study: Brooklyn Public Library Solution • Largest Public Library in the five boroughs of New York Measurable Results Client Challenges • Recover print costs lost due to free print policy • Make more effective use of librarians’ time • Provide patrons with better service, more equitable computer access

28. Lean Six Sigma… our next steps • Collaborate with companies that embrace the methodology • Share best practices • Benchmark • Joint projects • Drive culture of continuous improvement throughout Xerox • Leverage the potential • Continue to measure success internally and externally

29. Thank You!