Robert K. Davis, VP, Xerox Business Systems & Transformation
As a $22 billion company with more than half our revenue coming from services, it should be of no surprise that Xerox is a leader in prescriptive analytics and analysis of Big Data. As an example, we process more than 34 million credit card transactions yearly, 37 billion public transportation transactions and more than 400 million Medicaid claims annually. With that focus on data and infrastructure, it also makes perfect sense to apply the same parameters to our global purchasing operations.
Our supply chain operations, like every major company in the world, are the backbone of generating revenue. It is this infrastructure that is responsible for obtaining goods and parts from a global list of suppliers and in turn making sure the final products and services arrive on time to our worldwide customers.
"To ensure that we deliver the most cost efficient service to the company, we have developed a robust set of world class procurement tools such as competitive analysis and best of breed modeling."
Behind the scenes at Xerox, hundreds of individuals in Global Purchasing manage Xerox’s yearly spending for business services, contract labor, facilities, information technology, marketing, transportation, business travel and vehicle fleets. They also direct production material suppliers, contract manufacturing, and design partners who help Xerox produce digital publishing systems, office printers, and multifunction devices and associated inks and toners.
To ensure that we deliver the most cost efficient service to the company, we have developed a robust set of world class procurement tools such as competitive analysis and best of breed modeling. These, along with powerful product cost engineering systems ensure we are able to deliver our cost productivity targets.
At Xerox, we’ve clearly defined our common platforms for our core business processes. This enables our architects and service owners to quickly build plans to migrate to our global standard platforms. We create catalysts for quick decisions and actions. And we find barriers and tear them down. It is this modernization of the supply chain infrastructure that has enabled us to make significant strides in developing an integrated command system through our Oracle ERP platform surrounded by best in class bolt on applications.
Xerox has thousands of vendors around the world and now we have extensive data on those vendors and on our inventory. With the development of new IT systems, we have been able to reduce supply chain inventory by as much as 20 percent, which in turn, delivers an improved cost of goods sold.
As simple as it sounds, we can now track individual part serial numbers and manage both deliveries to our manufacturing centers and to our customers. Unless your company is a start-up, you likely created or inherited a portfolio of applications based on a series of legacy trade-offs. So you now have a less than ideal portfolio of applications that run your business. Unravelling that portfolio, moving to the cloud, enabling mobile, driving to common global processes…will not happen overnight.
We have also developed a device customization center where we can configure network software before installation. This delivers extensive cost savings by configuring systems centrally, before installing them in customer locations. From offices in North America, Europe, and Asia, Xerox Global Purchasing team has achieved a significant milestone. Xerox just became the first company to successfully achieve the Chartered Institute of Purchasing & Supply (CIPS) Gold Certification at a global level.
What this means is that Xerox is achieving leading benchmark levels in all aspects of ethical, sustainable and strategic procurement, when measured against CIPS standards. These standards are structured around things like leadership and organization, strategy, people, process and systems, and performance measurement and management.
As important as knowing how to track your supplies and parts, is having someone on the ground in the right time zone who can interface with those suppliers in their own language. Responding to the realities of being where the action is, about six years ago Xerox opened its Asian Procurement Operation in Singapore to consolidate production purchasing. With more than 85 percent of Xerox’s production related purchasing taking place in Asia, it was a logical move to consolidate operations and put people in place to negotiate face to face with our suppliers.
The APO was established as an independent unit with an executive on the ground to make instant decisions locally, and expand the possibility of additional efficiencies and supply chain performance improvements. For Xerox, this has been a multi – year journey, which will continue as we find new and innovative ways to drive efficiencies. The combination of organizational and process re-engineering on top of a strong set of business principles, augmented with a strong IT infrastructure, has enabled the foundation for a robust and effective supply chain organization.