Knowledge Management Case Study

Best practices yields one free fab plant

A classic case study from the 1990s. It demonstrates how by sharing best practices across their world-wide operations Texas Instruments saved of the order of $500 million.

Keywords:benchmarking, best practices, facilitation, sharefair, recognition

Description

Jerry Junkins, CEO of Texas Instruments in 1994 proclaimed:

"If only we knew what we knew. We can not tolerate having world-class performance right next to mediocre performance simply because we don't have a method to implement best practices."

This set in motion a programme to share best practices across its 13 semiconductor fabrication plants. It started by benchmarking TI's operations with other manufacturing companies, seeking ways of reducing cycle time. But as trainers went around TI's own plants they often discovered even better practices. This led to the creation of the TI-BEST (TI Business Excellence Standard) Programme by TI's Quality Leadership Team.

Overall approach

The overall approach with each business unit was a 4-stage process, and is not atypical from that emanating from any benchmarking / improvement process:

1. Define business excellence for your business, i.e. describe a best practice is what is "best for me". The current state is compared against the 'standard' found during benchmarking to indicate areas for improvement.
2. Assess progress - use a quality model such as EFQM (European Foundation for Quality Management).
3. Identify improvement opportunities - each TI unit lists its best practices and creates a prioritized list of improvements.
4. Develop an action plan - to share its best practices and eliminate weaknesses.

Main activities

• Best practices knowledge base - a database was created that held over 500 practices. Team facilitators supported requests. They also encouraged people to talk directly to best practice practitioners.
• Facilitator network - world-wide there were 138 facilitators. Their role was to promulgate best practice and support demand from users. Each facilitator spent 10%-50% of their time on these activities.
• ShareFairs - one-day events designed to share knowledge across the manufzcturing plants. The first ShareFair was held in June 1996 to which 500 people attended. The event comprised of exhibits and seminars, plus of course, informal networking.
• Special recognition - such as the "not invented here, but I did it anyway" award.
• ICT infrastructure - Lotus Notes was the main platrform. It held the knowledge base, in which each best practice was categorized. But it also provided discussion forums and intelligent agents linking a best practices database to external resources.

Supporting these activities was an Office of Best Practices. This team of 15-people identified, captured and cataloguef best practices. They offered the following services:

• continual supply of best practices and external benchmarking studies; these help business units assess their performance vs. the best
• tools and techniques for best practice capture and sharing: newsletters, forums, databases, email
• communication of latest techniques and trends
• training for facilitators.

Results

TI's 13 semiconductor wafer fabrication plants dramatically reduced cycle times and performance variability. Construction of a new plant was avoided, thus saving $500 million in direct costs and cumulative savings of $1.5 billion. Hence the slogan:

"One free fab plant"

Lessons

The best practices team had to overcome some initial reticence. Before TI-BEST implementation, sharing was not seen as a priority. There was a focus on financial performance. Hence the team needed to build a sharing culture and show how it was everyone's responsbility. The key lessons they drew from their experience are:

• Without a strong 'call to action', little will happen - hence the visible support of the CEO was vital
• To change the culture, change the metrics - find where sharing is working and recreate the conditions
• Focus on "solving problems" not "sharing knowledge"
• It's not about technology - but people sharing face-to-face

Comments

As the last point above emphasises, sharing knowledge needs personal contact and interaction. You cannot simply transfer best practices by accessing information in a database. Plant personnel went on visits to their counterparts in other parts of the world to improve knowledge transfer.

Our best practices case guide includes other case studies as well as providing additional material on how to share best practices. Details are here on our archive website

Additional Reading

'Leveraging Knowledge for Operational Excellence', Cindy Johnson, Journal of Knowledge Management, Vol 1, No. 1, pp. 50-55 (Sept 1997).

Last updated: 10th April 2011