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Knowledge Management in Capital Goods Companies

Knowledge Management in Capital Goods Companies. Dr. Christian Hicks University of Newcastle upon Tyne. Capital Goods Companies. Products and processes usually complex Customised to meet individual customer requirements Engineered-to-order Low volume, “lumpy”, erratic demand.

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Knowledge Management in Capital Goods Companies

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  1. Knowledge Managementin Capital Goods Companies Dr. Christian Hicks University of Newcastle upon Tyne

  2. Capital Goods Companies • Products and processes usually complex • Customised to meet individual customer requirements • Engineered-to-order • Low volume, “lumpy”, erratic demand

  3. Classification of ETO Companies • Product / project focus • “Normal” / “Radical” design • Established / ad-hoc business processes

  4. ETO Processes • Physical / non-physical. • Multistage - tendering, contract execution, operations, maintenance. • All processes complex, interrelated and knowledge based. • Processes dynamic and often reconfigured. • General shift towards the outsourcing of physical activities.

  5. Methodology • Analysis of business processes using Structured Systems Analysis and Design Methodology. • Classification of knowledge • Identification of KM issues

  6. 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

  7. Case Study • Design and contract company - no physical processes • Product orientated company • Mainly “normal” designs but some “radical” design activities • Established processes

  8. Tendering • Key process that had a large impact on project success / failure • 75-80% of costs and delivery commitments made at the tendering stage • Involves conceptual design and definition of major components and systems and suppliers. • Includes performance and technical specifications, delivery schedules, price and commercial terms. • Tendering normally carried out within severe time constraints with sparse knowledge and high uncertainty.

  9. Tendering • Requires a detailed knowledge of • Customers / market / operations • Design / manufacturing / suppliers • Product / systems / subsystems • Costs / lead-times / capabilities / capacities • Tacit knowledge, previous experience and company culture are key.

  10. Specific Conclusions • Poor sharing of knowledge and information between multistage processes. • No system for selecting ITTs worthy of response. • Key knowledge of manufacture and operations gained prior to D&C strategy. Problem as older staff leave. • Significant risk associated with supplier selection at the tendering stage. • Poor reuse of knowledge across contracts.

  11. General 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.

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