© C.Hicks, University of Newcastle KNOW99/1 Knowledge Management in Capital Goods Companies Dr. Christian Hicks University of Newcastle upon Tyne

© C.Hicks, University of Newcastle KNOW99/2 Capital Goods Companies Products usually complex Customised to meet individual customer requirements Engineered-to-order Low volume demand

© C.Hicks, University of Newcastle KNOW99/3 Competitive Factors Product performance Cost of ownership Level of customisation Capital cost Delivery Financing terms

© C.Hicks, University of Newcastle KNOW99/4 Business Activities Tendering Design Manufacture Assembly Construction Commissioning Increasing interaction between processes, as concurrent engineering aims to minimise lead-times Require feedback of operational experience to design and tendering

© C.Hicks, University of Newcastle KNOW99/5 Characteristics Business processes, design and manufacturing systems are all complex, interacting and dynamic. Capital goods companies have increasingly shifted towards design and project management as manufacturing is increasingly outsourced. Knowledge base and knowledge management activities are major factors influencing success.

© C.Hicks, University of Newcastle KNOW99/6 Tendering Preliminary development of conceptual design. Definition of major components and systems. Delivery, price, cost and performance commitments made. Success depends upon understanding customer requirements, translating them into specifications and integrating components and subsystems into products. Need to meet commercial, delivery and regulatory needs. Customer requirements include explicit and tacit components.

© C.Hicks, University of Newcastle KNOW99/7 Company Structure ETO companies are dynamic, often changing internal structure to match external requirements Strategic alliances / joint ventures Transitory supply chain relationships Staff turnover / contract labour Knowledge transfer / innovation through supply chains Product model evolves as contract progresses. Problems with incomplete / partial information.

© C.Hicks, University of Newcastle KNOW99/8 Knowledge Management Practices Required to capture and reuse knowledge gained from previous contracts. Standard subsystems result in lower costs and are less uncertain than development subsystems. Knowledge is shared between processes which are often separated by significant time delays and organisational boundaries. Competitiveness may require controlled and secure access to knowledge.

© C.Hicks, University of Newcastle KNOW99/9 Research Objective is to identify new or improved knowledge management activities which will yield benefits. Some companies have established processes, whereas others develop them as required on a project basis. Knowledge workers operate within defined business processes and informal routines Business processes and routines established through observation of processes and routines. Formal methods used for mapping business processes (SSADM/IDEF)

© C.Hicks, University of Newcastle KNOW99/10 Routines Identification of drivers and actors People / system driven Identification / dissemination of internal / external knowledge

© C.Hicks, University of Newcastle KNOW99/11 Knowledge Classification Knowledge processing - generation, transfer, utilisation, identification, capture / retrieval, format, codification, assurance Domains - internal/ external, technical area, focus The part of the organisation’s performance affected by the knowledge management activity Formality - time and location dependency, MIS

© C.Hicks, University of Newcastle KNOW99/12 Case Studies Product development Manufacturing efficiency improvement Tendering processes Design of business processes

© C.Hicks, University of Newcastle KNOW99/13 Product Development Design team habitually re-specified components and systems for new orders Led to excessive costs and lead-times Business processes were mapped and links between tendering, design and manufacturing were made explicit. Some personal routines were formalised and included with formal processes. This lead to increased standardisation, reduced costs and lead-times.

© C.Hicks, University of Newcastle KNOW99/14 Conclusions ETO companies are complex and dynamic organisations Interactions between wide range of processes that may be separated by a time lag. Formal processes have been modelled. Current research is focused upon identifying, classifying and documenting routines Objective is to identify improved KMA’s. The performance of the associated business processes will be compared.