1 How did inventory reduction in the supply chain lead to improved competitiveness at Xerox? Once the problems of introducing ‘just-in-time’ production systems had been solved at the Xerox plant making photocopiers at Venray in Holland, attention shifted towards the finished product inventory. Historically, stocks of finished products had been ‘managed’

by trying to turn the tap of sales on or off as stocks developed. This was characterised by the familiar ‘feast or famine’ situations. The objective of the next move for Xerox became clear: making only what you need when you need it, then shipping direct to the customer. But the key question had to be answered: just-in-time for what?

The answer is – the end-customer. And customer surveys showed that three types of delivery were needed:

● Commodity products should be delivered ‘off the shelf’.

● Middle-range products were required in five days.

● Larger products that had to be integrated into existing customer processes and systems had to be planned months ahead: but the quoted delivery date had to be met 100 per cent.

It was envisaged that this would lead to a radically different inventory ‘profile’ in the supply chain. Figure 1.6 shows a traditional inventory profile on the left. Most of the stock was held in local depots waiting for customer orders.