Gensym's ReThink software helps Xerox re-engineer its $3 billion purchasing process; Software toolkit identifies $150 million in cost-saving measures

Business Wire, Sept 28, 1995

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sept. 28, 1995-- Xerox Corp. (NYSE: XRX) is using Gensym's ReThink software to re-engineer and validate its $3 billion process for purchasing all non-production related goods and services such as furniture and computer leases. ReThink has helped Xerox identify a number of steps in their process that could be changed to achieve a purchase order lifecycle time savings of 10 to 15 percent and an overall cost savings of 5 percent, or $150 million.

"Our goal was to re-engineer Xerox's semi-manual `non-production' procurement process into a comprehensive automated process beginning with the requisitioner and including the entire purchase order lifecycle," said Robert Bowman, manager of major projects at Xerox. "Our goal was to decrease the purchase process time from two or more weeks to two days or less and to reduce the cost per transaction. We also wanted to be able to view the status of each purchase order over the life of the order."

Before using ReThink, Xerox's Business Process Re-engineering (BPR) team mapped their existing purchasing process using a simple flow diagramming tool. They then used a paper-based methodology to propose a revised procurement process. After identifying a new 42 step procurement process, the BPR team turned to Gensym's ReThink. "Using ReThink, we were able to rapidly analyze and test the proposed revised system to see if it would really work when implemented," continued Bowman. "ReThink helped us validate and refine the proposed purchasing process and quickly evaluate different scenarios. This included identifying bottlenecks and areas where automation was essential."

Gensym's ReThink is a graphical, object-oriented software toolkit for business process modeling, simulation, and re-design. ReThink enables management and "re-engineers" to work together to explore alternative process designs with easy-to-use hands-on modeling and simulation capability. Once re-engineering is completed, ReThink business models can be used on line to help monitor performance and manage operations. As a result, critical enterprise knowledge captured during re-engineering can continue to provide value. This capability clearly differentiates ReThink from other BPR tools.

Xerox's team took the process flows created in the flow diagramming tool and added them to ReThink along with transition volumes and staffing requirements at each process point. ReThink enabled the re-engineering team to represent more refined flows and more detailed data points than the flow diagramming tool had. Using its simulation capabilities, ReThink graphically tracked individual items through each step of the proposed process and offered feedback to the re-engineering team and business analysts. The team simulated daily, weekly, and annual volume cases to understand constraints and throughput performance. "As a result of our intensive modeling, ReThink was able to identify six steps that could benefit from being either combined or divided. It helped us fine tune our plan," continued Bowman. "Moreover, it provided concrete evidence to management that our new procurement process could be successful when implemented."

Xerox is currently distributing the redesigned procurement process and ReThink to many of its offices worldwide. "We intend to keep the model `evergreen' to assist in evaluating `what if?' cases relating to fluctuations in purchase order volume caused by business changes such as new product launches, increases or decreases in personnel, etc.," said Bowman.

With ReThink, business processes are described graphically on an electronic window. Process designs are brought to life using computer animation techniques. Graphical objects connected by arrows show the flow of work among value-added tasks. Tasks can be combined to describe processes at any level of detail. Bottlenecks and costs can be studied by associating resources with these tasks. And since ReThink understands time, managers can quickly evaluate the performance of proposed process designs. Questions such as "How will restructuring impact my customer response and cycle time?" "How will the overall cost of this process be affected?" and "What utilization will I achieve with my resources?" can be answered quickly and directly.

"Re-engineering is too critical and complex to attempt without tools," says Tom Foley, ReThink's architect and product manager at Gensym. "Only powerful software tools can assist management in redesigning processes and understanding the performance implications of the new designs. ReThink allows managers to propose process changes and immediately see the financial and business impact those changes might have. It unifies process design, analysis, and implementation."

Founded in 1986, Gensym Corporation is the leading supplier of software products for developing and deploying intelligent real-time solutions for industrial, scientific, commercial, and government applications. With over 3,000 product licenses sold worldwide, Gensym serves 30 industrial sectors including the process industries, discrete manufacturing, telecommunications, environmental, power, and aerospace. Headquartered in Cambridge, Mass., Gensym has regional offices in Atlanta, Boulder, Chicago, Cincinnati, Dallas, Detroit, Dortmund, Edinburgh, Genoa, Hong Kong, Houston, Leiden, London, Los Angeles, Munich, New York, Paris, Philadelphia, Rochester, San Francisco, Seoul, Sydney, Toronto, Stockholm, and Washington, D.C. Gensym maintains a homepage on the WWW at http://www.gensym.com.