A Case Study on Knowledge Mgt.

8/8/2019 A Case Study on Knowledge Mgt.

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A

CASE STUDYON

KNOWLEDGE

MANAGEMENT

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} Once upon a time, in the Industrial age,

machinery determined what you couldproduce & sell. This is no longer true. Today

the most important asset is people & whatthey know. But unlike machinery, people are

mobile, they up & leave and when they

leave an organization, their knowledge goeswith them. As companies come to realize thevalue of their intellectual assets, they put into

place the initiatives that manage theseassets.

The most popular term for these initiatives is

Knowledge Management.

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} What is Knowledge Management.?

} knowing what you know and profiting from it.-- Laypersons term.

} Information combined with experience, context,interpretation & reflection. It is high value form of

information that is ready to apply to decisions &actions.-- Albert & Bradley-1997

} In the new economy, knowledge is not just anotherresource alongside the traditional factors ofproduction land, labor & capital but the only

meaningful resource today.-- Peter Drucker

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Business Knowledge

Codified or Explicitknowledge

Tacit knowledgeor know-how

- Written, transferred &shared.- Definable

- Protected under legalmechanism.

- By nature, difficult todescribe.- Demonstrated but cant

codified.- Resides with its holder.

- Transferred only through

Demonstration & on-the-jobtraining.

Knowledge Management

Knowledge Management means The strategies & processes ofidentifying, capturing and leveraging knowledge to help the firmcompete.


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} The knowledge management process is

geared to :

}Make all successes repeatable &sustainable;

} Recognize a mistake and never make itagain;

}Never re-invent the wheel or duplicate aneffort;

} Shorten the learning curve; and

}Make every decision at every level, withawareness of the full knowledge base ofthe organization.

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} Requirement of effective Knowledge

Management

} Effective knowledge managementrequires a combination of many

organizational elements technology,human resource practices, organizationalstructure and culture in order to ensure

that the right knowledge is brought intofocus at the right time.

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}4 ways to best develop & motivateknowledge workers

Know peoples strengths.

Place them where they can make thegreatest contributions.

Treat them as associates.

Expose them to challenges.

-- Peter F. Drucker

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Knowledge Management at Tata Steel

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In the late 1990s Introduction of KM at Tata Steel

Knowledge Repository.

Knowledge communities.

In 2001 Introduction of KM Index.

In 2003 Tata Steel was recognized as one of Asias Most Admired

Knowledge Enterprises [MAKE].

Only steel company in the world to have received the MAKE

award.


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} I am proud that Tata Steel is recognized forits knowledge creating and sharing characterand I congratulate all the employees of TataSteel.

This award, however, is only a milestoneand must not be mistaken for our destination.We need to make knowledge the primarysource of our distinction in an industry wheretechnology is increasingly becoming acommodity.

B. Muthuraman, MD, Tata Steel

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Asias Most Admired Knowledge Enterprise

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} In 2003, Awarded by MAKE award.

}Only one mfg. company in India & only steelcompany in world.

} The award was in specific recognition of Tata

Steels KM initiatives.} Expectations from KM initiative of Tata Steel mgt.-

To play a key role in establishing intellectual assets.

To be an imp. source of competitive advantage for Tata Steel.

} Linked Performance Assessment Programme onthe participation of each individual employee inthe KM program by introducing KM index.

} It helps in benchmarking the employeesparticipation.


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Asias Most Admired Knowledge Enterprise

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} Tata Steel scored 1100 hits in 2001-2002compared to SHELLs (2nd most admired

company in Europe) 1000 hits, even though TataSteels registered users are 3000 whereas Shells

are 10000 users.

} Benefits of KM initiative to Tata Steel mgt.Expert skills became available throughout the organization.

Increased productivity.Increased job satisfaction.

Reduction in R & D expenditures.


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Background Note ( History of Tata Steel)

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} 1907- Tata Steel was established by J. N. Tata atJamshedpur in Bihar, India.

} 1911- Commenced production with a capacity of0.1mn tonne of Mild Steel.

} 1958- Capacity had increased to 2mn tonnes.} 1973- Took over some flux mines & collieries near

Jharia, West Bokaro.

} 1983- Acquired the Indian Tube Co. Ltd. (A mfg. ofseamless & welded tubes).

} 1991- Acquired the Ferro-chrome unit of OMC AlloysLtd. near Bamnipal in Orissa.

} 1995- Asias first & Indias largest Integrated SteelProducer (ISP) in the private sector.

} 2000- 8 Divisions of Tata Steel had ISO-14001 certified.


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} In the early 1980s- Tata Steel initiated a

modernization program (of 5 phases) for its steelplants by realizing the need for modernization.

} By early 2000- Tata Steel had completed 4 phases of

its modernization program with an investment of @Rs.60 billion.

} In April 2000- Commenced 5th phase of

modernization program.

This phase focused on attracting, developing and

retaining the companys most valuable asset, itspeople, under its Performance Ethic Program.

} In April 2000- Tata Steel started its Cold Rolling Mill

(CRM) plant at Jamshedpur.


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} By April 2001- Worlds lowest-cost producer of steel.

World Steel Dynamics (WSD) identified and ranked 12companies as World Class Steel Makers.

Tata Steel stood at no.1 with a score of 131 points,

ahead of Usinor (France), and Posco (South Korea).

} In August 2001- Tata Steel announced a new

program as Vision-2007, aimed at making Tata

Steels Economic Value Added (EVA) positive by year2007.

Achieved positive EVA in only one year after launch.

} In 2003- Tata Steel was the most profitable steelcompany in India. (because of its strong B2C and B2B

sales).


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KM Initiatives at Tata Steel

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} In 1999- KM program was started at Tata Steel.

} Basic aim of KM program- To tap the abundantknowledge base in the form of tacit knowledge andexplicit knowledge that was lying unused, and makeit available for use across the company.

} The KM process was started by bringing together agroup of people from different dept. within thecompany with the support of top management ratherthan hiring people from outside.

} Knowledge repositoryActive participation of all employees.

Repository was placed on the corporate intranet.Employees shared their experiences of successes andfailures in implementing various projects in company.

} For effective KM, Tata Steel integrated the KR at thedivision/dept. level with the main KM repository.


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Knowledge

Repository

Internet

Journals,Vendors

Knowledge

Manager

Authors

Experts

Communities

User On-line

Training

Knowledge

Knowledge

Problems

Feedbacks

Fig 1: Knowledge System


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} Knowledge communities

Formed one year after the Knowledge repository.

A forum of like-minded people to meet and

share their experiences.It was not a problem solving platform, but to

learn from one another.

They may took up a problem and solved it by

brainstorming.

Not aimed at short-term gains, but were aninvestment for the companys future.


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Phases of KM Initiatives at Tata Steel

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Revamped Strategy

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} Problems in successful KM implementation

Poor connectivity.

Access technology was not standardized.

Irrelevant contributions were made to theknowledge repository.

} Ravi Arora (Head-KM at Tata Steel) said : Worse,

there were cultural problems with technologyphobias and attitudes such as,

This is another method to downsize &

Why should I share my precious knowledge?


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Revamped Strategy

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} In May 2000, Tata Steel

Adopted a refined strategy for KM.

Started organizing seminars on KM.

Identifying & recognizing some successful KMefforts.

Hired McKinsey consultants for advice on

communities of practice.

}Communities of practice Capturing the tacit knowledge of experts.

Improving the quality of knowledge repository.

Encouraging usage of the repository.


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Revamped Strategy

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}Members of communities

Champion.Convener.

Practice Leader.

Lead Expert.Practitioner.

} In 1999-2000 Only 100 feedbacks were received.

} In 2000-2001 Only 240 users felt that the availableknowledge was useful and could be applied in their

work.} Basic needs such as :

To improve the quality of knowledge.

To inculcate the habit of browsing, so that they canacquire the knowledge stored and use it.


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Revamped Strategy

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}With this objective in mind, In Jan 2001

Introduction of KM Index.To measure the performance of the system.

To reward successful KM initiatives.

Each officer was expected to score minimumof 130 points on KM index.

} In 2001-200270Pointsmaking a valuable contribution tothe Knowledge Repository.

30Pointsassigned to one-time feedback,interaction or collaboration with the author ofanother KP.

30Points assigned for the application of a KPfrom site.


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Revamped Strategy

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} In early 2002

Introduced a stringent monitoring system forKM.Employees started browsing the KM pages

more frequently.

}On the cultural front, employee attitudestransformed from

I am an expert, I dont need new

knowledge} To one of a continuous quest for knowledge like

I need help.

I can also help.


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Revamped Strategy

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} To increase the effectiveness of KM, Tata Steelmade two major changes in organization 1] Performance evaluation of employees was

linked to KM. Stared using a balance scorecard :

To monitor the performance of employees.

Divisions in the KM process.

For taking corrective measures to improve theimplementation of KM.

2] Launched a formal rewards & recognitionsystem for KM. The CEO rewarded the :

Best performing employee

Best team

Best knowledge community.


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Benefits reaped from KM

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Benefits of KM

Fig 1: Benefits of KM

ReduceCosts

IncreaseRevenues

Utilize

ExistingKnowledge

Create NewKnowledge


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Benefits reaped from KM

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} In addition to above benefits, Tata Steel reaped otherbenefits too, such as :--

Increased collaboration, conversation andinteraction among employees.

Experts skills are available throughout the org.

Increased job satisfaction.Increased productivity.Knowledge was available quickly and easily.

Innovations were encouraged.

} Other indirect benefits were :--

Reduced the loss of intellectual capital.Reduced expenditures on R&D, as new ideas weregenerated from within the org.Reduced the duplication of ideas being usedacross the org.


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Future of KM at Tata Steel

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} In the future, Tata Steel plans :--To link e-learning with the KM repository and KMcommunities.To devise an intellectual capital index.

To network with retired employees.To develop employee skills for betterexternalization of knowledge & integration withthe customers knowledge.

}According to Mr. Arora, The key to business

modernization in the21

st

century is not justthrough the expenditure of huge sums of moneyto create physical assets, but orienting people -the greatest asset towards meeting theopportunities and challenges of the future.


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Future of KM at Tata Steel

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} Tata Steel seemed to be well placed toachieve its mission which was redrafted in

1998 :--

Tata Steel enters the newmillennium with the confidence

of a learning and knowledge -

based organization.


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References

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}www.tatasteel.com


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} Thank You

A Case Study on Knowledge Mgt.

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