Leveraging knowledge for supply chain excellence

Leveraging Knowledge For Supply Chain Excellence

K.S.Srinivasa Murty

Structure of the Presentation

•What is Knowledge Management?

•An over view of Knowledge Processes.

•What does leveraging corporate Learning

and Knowledge Management Involve?

•How does KM support supply chain

excellence?

Sustainable Competitive Advantage a firm has comes from what it “collectively knows”, how efficiently it uses what it knows and how readily it “acquires and uses new knowledge”.

Knowledge management provides an enabling framework to derive this advantage.

What Is Knowledge Management ?

Develop and put in place an “enabling framework”

for improving -• Capturing and locating • Sharing, and • Creation of new knowledge

To strengthen business performance.

Knowledge Management is focussed heavily on

Learning and Collaboration

What Is Knowledge?

Knowledge is the human interpretation of data / information for potential action

Essentially knowledge is people based

Tacit

Explicit Embedded

(Experience,past memories,hard to catalogue, document)

(Formal, codified,data bases, policy manuals, white papers etc.)

Knowledge Processes

Focus on new knowledge

Focus on existing knowledge

Process focus

Content focus 1.

Locat

ing &

Captu

ring

2. S

harin

g3.

Creat

ing

(innov

ation

)

Knowledge Management Is ...

increasing the capacity for effective action

by

connecting people to people

and

people to information

Capability building - “Raising the floor / raising the ceiling”

What Does Leveraging “Collective Knowledge” Involve?

• Working in collaborative teams to deliver business excellence

• Developing and sharing “best practices”• Faster replication of innovations through

faster movement of knowledge through the organization / partners in extended supply chain

• Acquisition and sharing of “new knowledge” • Managing organizational learning.

“While Knowledge Management is common sense, it is not yet a common practice.”

Effective management of knowledge assets needs more than an appreciation of its relevance - there is need for appropriate interventions - culture change initiatives, knowledge engineering tools and techniques and Information technology.

Building Blocks For Holistic Knowledge Management Solutions

Organisational / culturalEnablers

TechnologyEnablers

30% 20%

50%

KnowledgeProcesses

30% 20%

Integration

Key Knowledge Management Processes

– Linking people to people in “cross functional teams” / “communities of practice to share knowledge”

– Linking people to information / knowledge repositories / best practices ( Knowledge centre / Knowledge Portal)

Building Blocks for KM

Knowledge Center (Knowledge Portal)

-Repository of functional

knowledge

-Dissemination of best practices

-Upgradation of functional skills

-Place to search

-Place to post a query

Teams to develop content

Key projects documented

Online courses development

Storehouse of functional knowledge Distilled learnings in specialty areas Focussed functional training

Knowledge Hubs

HLL function.com

List of Experts -HLL and external

Knowledge Sharing culture

• The most important enabler for leveraging collective knowledge is the Organizational Culture

A Culture of Absolute Trust is the Essential Prerequisitefor Proactive Knowledge Sharing

Culture change initiatives

Establish Knowledge sharing as one of the desired behaviors.

Realign incentives and reward program tostrengthen knowledge sharingEstablish rituals / Annual events tostrengthen knowledge sharing - “Teamawards”, “Knowledge Fairs” etc.

Stress on knowledge related behaviors in

Performance Development Planning (PDP)

How does one create The culture ?• When Managers say, “I don’t know - Will you please

tell me ?

• When you reward and recognize the value of sharingknowledge

• When Senior Management ‘ Walk the Talk ‘. When Managers also become good ‘ Mentors ’

• When Senior Managers adopt young managers as

Mentors!

• When failures are treated as essential to learning

The Challenge:

• Reduce costs - mandated cost reductions by cutting budgets (5% / year, adjusted for production)

• Different departments were discovering ways to reduce costs - RAPID (Rapid Action for Process Improvement Deployment)(duplicating efforts!)

• Foster sustainable cost reductions through sharing of cost-cutting best practices

Ford Motor Company

(Best Practice Replication)

KM Solution:

• Mandated that department managers document their cost-reducing best practices:

• Can include words, sound bites, and images• Must include manager's contact information• Includes contact info for associated suppliers (for

any needed special tools/materials)

Ford Motor Company


Created "Best Practice Replication" system:

• People enter documented best practices on a website on Ford's Intranet

• A business specialist reviews the practice for suitability and application

• The practice is routed to other departments that might benefit

Ford Motor Company


• Recipients are asked about their intention to implement and any expected savings

• Has used some incentives (besides the mandate to reduce cost):

• offers "good Samaritan" awards to valued contributors

• offers "copycat" awards to successful reusers of best practices

Ford Motor Company


Results:

• The Best Practice Replication system has had incredible ROI:• cost 10 days of an intranet developer's time and is

run by 2 business specialists• is credited with saving $547 million over 3 years -

1996 to ‘98.• Replication process patented and licensed to Shell

Ford Motor Company


Key success factors:• KM aligned to strategic objectives - Cost

reduction, cycle time reduction and complexity reduction

• Standardized the web based applications (e.g., page can link to an Excel file that anyone can use)

• Pages link to author’s contact info• Engineers can make heavy use of digital photos to

collaborate• Integrated collaborative working / knowledge

sharing into the normal work flow!

Ford Motor Company

What Does Leveraging “Collective Knowledge” Involve?

• Working in collaborative teams to deliver business excellence

• Developing and sharing “best practices”

• Faster replication of innovations through faster movement of knowledge through the organization

• Acquisition and sharing of “new knowledge”

• Managing organizational learning.

The Traditional Vision of Supply Chain Constrained Itself to the Boundaries of an Organization

Purchase

Production

Inventory /Warehousing

Transportation

SOURCSOURCEE

MAKMAKEE

MOVMOVEE

STORESTORE SELLSELL

This approach was however inward looking

An Evolved Definition of the Supply Chain Web Emerged in the Last

Decade

Collaboration and Quick Response ( QR)Collaboration and Quick Response ( QR)

• Collaboration with partners

• Rapid Response

• Information visibility

• Shortened product life cycles

• Time to market (SPEED)

• Product variety proliferation

New ResponsesKey Challenges

A Supply Chain means more than physical flow of goods

Physical FlowPhysical Flow

Fiscal FlowFiscal Flow

Information FlowInformation Flow

Supply chain has 2 critical functions

Physical function Market Mediation Function

Ensure that the variety/ supplies match what customer wants to buy.

SCM : Key Performance Drivers

• Vendor Transformation:

– Vendor selection / development and the unique

way relations are managed on an ongoing basis -

pre-selection audits to establish capabilities and

potential synergies, post selection operational

reviews, certification ( at different levels ,

reflecting the strength, depth and maturity of

relationships)

• Vendor Transformation:

– Vendor selection / development and the unique

way relations are managed on an ongoing basis -

pre-selection audits to establish capabilities and

potential synergies, post selection operational

reviews, certification ( at different levels ,

reflecting the strength, depth and maturity of

relationships)


– Knowledge sharing with strategic

vendors’ participation in new component

and product development etc.

– Identify and set targets for cost savings

to be achieved by key suppliers through

cross corporate teams (supplier & Bharat

Forge) / through knowledge sharing.


• Leverage technology to automate

transaction oriented , non strategic purchase

activity and release time for strategic

sourcing. This will improve purchasing

efficiency as well as effectiveness.

• You can add greater value to company

profitability and still handle much larger

value of purchase with out excessive

pressure and the job can also be more

exciting when pure chasing becomes

strategic sourcing!

• Leverage technology to automate

transaction oriented , non strategic purchase

activity and release time for strategic

sourcing. This will improve purchasing

efficiency as well as effectiveness.

• You can add greater value to company

profitability and still handle much larger

value of purchase with out excessive

pressure and the job can also be more

exciting when pure chasing becomes

strategic sourcing!


• Leverage technology ( connectivity with

suppliers and key customers) to manage

supplier and customer partnerships.

• Capable 3P service providers can greatly

help timely deliveries without excessive

inventories.

• Leverage technology ( connectivity with

suppliers and key customers) to manage

supplier and customer partnerships.

• Capable 3P service providers can greatly

help timely deliveries without excessive

inventories.

Leveraging knowledge for supply chain excellence

Education

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