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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
(Best Practice Replication)
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
(Best Practice Replication)
• 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
(Best Practice Replication)
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
(Best Practice Replication)
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)
SCM : Key Performance Drivers
– 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.
SCM : Key Performance Drivers
• 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!
SCM : Key Performance Drivers
• 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.