The encyclopedia · Product & Design · Product decision · 2000–2008
Xerox turned OR into a lean printing service worth $200M
Xerox's LDP package applied operations research to print shops, cutting labor cost per unit 20-40% across ~100 sites and adding ~$200M in profit.
Xerox
the move
The US printing industry is a $100 billion market, and most of its shops and document-manufacturing facilities were too small to hire the analytical talent that large manufacturers use.
Xerox invented LDP Lean Document Production, a class of operations-research-based productivity offerings, and implemented it in approximately 100 sites. The tools attacked the work that dominates print economics: how work is measured, balanced, and scheduled through the shop.
The results were measured in revenue-per-unit labor cost, which fell 20-40 percent at the sites. Since 2000 the offerings generated roughly $200 million of incremental profit across the customer value chain, and Xerox extended OR to small and medium print shops it had never reached.
why it works
- OR was packaged into a service a small shop could buy
- Measured outcomes made the value legible to clients
- The upside was shared across the customer value chain
- Patents protected a repeatable methodology
what transfers
A scarce analytical skill becomes buyable when it is packaged as a repeatable service with measured outcomes; the vendor wins by sharing the client's productivity gain rather than selling hours.
what came after
Xerox was named a 2008 Franz Edelman Award finalist; INFORMS cited about $200 million of impact on Xerox profits from LDP utilization. Xerox filed 48 patents on the methodology, 11 of which had issued by early 2008.
references
- LDP Lean Document Production - O.R.-Enhanced Productivity Improvements for the Printing Industry
- Edelman Finalists Announced
- World's Best Analysts Compete to Win Edelman Prize in Operations Research & Analytics
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