I3 UPDATE / Entovation International News

a free monthly briefing on the knowledge agenda

No. 50 April 2001





David J. Skyrme


David Skyrme Associates


Contents - Main Feature - Knowledge Digest


Conversion to 'Knowledge Factories'

Debra M. Amidon

When Peter Drucker first talked about the 'knowledge worker,' he was referencing the high technology professionals. When Karl-Erik Sveiby wrote about the 'Know-How' company (1987), he was referencing the services sector. As the knowledge profession evolved, we have all realized that the knowledge communities reside within and across all functions, sectors and regions of the world.

Perhaps the least well known is the manufacturing sector.

The integration of technology-push and market-pull (i.e., supply/demand, needs/seeds) ultimately come together in the manufacturing function - or the conversion phase (i.e., between creation and commercialization) within the process of innovation. With intensified global competition and companies that were more expert at commercializing technology - even from other countries, focus on the production aspects of goods and services became paramount.

Previously relegated to third-class citizenry in the corporate ladder - and in the professional schema - manufacturing engineers were put to the test. Not only were they able to display their prowess with statistical analysis, being first to embrace the quality agenda enables them to provide corporate leadership in team-building as well as with customer interaction. Instead of being perceived at the end of the value-chain, customers were perceived as the heart of the Quality Function Deployment (QFD) process.

A Refocus on Manufacturing

Across the nation - and indeed the world - there was an intensified focus on the manufacturing sector of the economy and its role in international competition. There was an appreciation for the conversion process within traditional industries, the services sector and the transformation of federal laboratories.

What emerged is an intensive movement to promote corporate agility, which that had its roots in the manufacturing sector. Today, the Agility Forum (they have dropped the word manufacturing from their title), which is based at Lehigh University, boasts a significant cross-industry membership, with research initiatives ranging from change management to 'Next Generation Manufacturing: Plan for Action'. Its conference agenda, similar to other manufacturing forums (e.g., the National Center for Manufacturing Sciences, the Center for International Manufacturing Systems) resembles one of an organization dedicated to the process of innovation. They even produced a 1997 NGM imperative paper on 'Innovation Process', which builds a bridge between technological innovation and the learning process.

"Only decades ago, the concept of producing defect-free products (i.e., zero defects) was at best a slogan something to rally around, certainly not attainable or even necessary. Today, it is part of the price of admission for manufacturing companies approaching six sigma (3 parts per million) quality levelsThe ability to innovate not only products and services, but also processes, strategies, organizational structures and enterprise designs and to rapidly change them, will become the next discriminator, and perhaps the (new) price of admission for U.S. manufacturers in the world marketDevelopment (therefore) of any innovation strategy should be viewed from both the micro- and macro-economic levels."

Ten Steps to Manufacturing Innovation

One way to begin to calibrate the innovation process is to view the system-as-a-whole by answering the ten questions outlined on the ENTOVATION Litmus Test - http://www.entovation.com/assessment/litmus.htm - that provide manufacturing professionals with a broader view of the innovation system within which manufacturing responsibilities lie. These ten steps enable a company to see where it is on the scale of innovation management capability and provide a foundation for strategy formulation. As with any corporate-wide initiative, companies must establish key players, agree upon a framework for dialogue, create an implementation plan (ideally after all stakeholders have been interviewed), manage the process, evaluate results, and be open to new ideas and unexpected business opportunities.

  1. Foremost, the innovation process should be made explicit by identifying a corporate officer and cross-functional team responsible for the process. Innovation can be stated as a core value of the firm, thereby ensuring that all participants in the process recognize its importance.
  2. Once the process if defined (i.e., cradle to grave, seed to need, etc) including the roles and responsibilities of all stakeholders, attempt should be made to define the metrics of progress both tangible and intangible that define optimal performance of the 'system'. Recognize that metrics that are difficult to define may be the vest measure of success. Develop the business case based upon the new Knowledge Value Proposition (i.e., the relationship between economics, behavior and technology) that promoted the creation, exchange and application of new (or reused) ideas. Develop key indicators and early warning signals that might be tracked in a periodic review. Be attentive to what incentives can be built into the system to foster behavior necessary in an innovative environment.
  3. Take stock of the education/training capability of the firm and from where ideas originate. Consider the implications of a 'real-time' learning environment that may not be classroom-based. Provide an infrastructure for the incubation of new business ideas that might develop into products /services and even new businesses that might contribute to the bottom line.
  4. Consider your local, national, regional and worldwide presence. How might these locations be converted into a distributed learning network that treats stakeholders, including customers, as sources of knowledge, rather than someone to who services are 'delivered'? The network however it is defined - operates far more as a system of conversations, rather than a value-chain transfer or delivery mechanism.
  5. Pay attention to the competitive environment, but be sure that your radar searches wide enough to capture potential competitors who may not even be a factor in your industry today. Ensure than any intelligence activity is designed as a feed-forward that automatically distributes insights to those with a 'need to know'. Where appropriate, rely upon available computer and communications to facilitate the process.
  6. Review the metrics of your own product and service development for example, the number of new products/services yielded in a given business period as a percentage of sales. Perform an in-depth analysis of the Knowledge Economy (i.e., projected trends) and determine the implications for your business. Consider some new adaptations that capitalize upon knowledge-based products and a new knowledge-delivery channel.
  7. Take stock of the variety of your strategic alliances research, joint venture, cooperative marketing, etc. Determine how they are being managed in ways that are consistent and aligned with your values and corporate strategy. Document successes and failures. Consider the portfolio of research alliances developed by your competitors their inherent strategy and the potential impact on your performance.
  8. Review your media/advertising strategy to assess how it portrays your intellectual and innovation capability. Furthermore, review your current level of customer intimacy from a sales, relationship and partnering perspective. Could a focus on customer knowledge rather than knowledge of the customer - reframe prospects for customer innovation?
  9. Rethink your leadership strategy both internal and external. The Knowledge Economy is an economy of opportunity, not problem-solving. It is an era of collaborative, not competitive strategy. It requires visible sharing of your own knowledge and on a worldwide stage. Determine your sphere of influence and how to best leverage the talents of your own workforce.
  10. Assess your technical infrastructure for internal and external communication (e.g., computers, software, multi-media, intranets, Internet, videoconferencing, collaborative applications, e-markets, et. al.) capability and the management effectiveness. Consider the overall behavior necessary in the innovative environment and determine if the given systems afford opportunities to manage the corporate memory, enhance electronic dialogue, deliver on-site training and learn from participation for continuous process improvement.

In short, position innovation strategy and management as a core competency. Make the process and the management and measurement thereof explicit. Illustrate how it can be seen as the migration from Business Planning - http://www.entovation.com/whatsnew/atlas1.htm - with more dynamic, robust models for ensuring future success than documenting past performance. Ensure that individuals ideally representing the 3-Gs (Generations) are motivated and rewarded for enhancing innovation. Take into consideration the relationships inherent in the 'Extended Enterprise' or the 'Strategic Business Network' (SBN) suppliers, distributors, alliance partners, customers, customer's customers and even competitors. Avoid punishing failure as you are building a common innovation language and culture of 'constructive innovation'. And by all means, celebrate progresseven the little victories.

The Knowledge Factory

Over the years, the focus on manufacturing has evolved to the concept of the 'factory'. ENTOVATION Colleague Kevin Meyer was one of the first to integrate the knowledge concepts into the manufacturing frame with a Website http://superfactory.com - and collaboration with http://www.Virtual-Workshops.com in which interested industrial participants are connected to instructors and other participants by using specially developed web conferencing software, an Internet connection and a phone line. Virtual-Workshops has conducted workshops for several thousand employees of DuPont, BP, Amoco, Exxon, Kodak, GM, Nordstrom, and 250 other companies. Programs are available in the following categories:

  • Manufacturing (over 40 courses)
  • Engineering/Quality (over 35 courses)
  • Business/Leadership (over 13 courses)
  • Safety/Environmental (over 5 courses)
  • Facility Management (over 29 courses)

There are numerous other relevant publication is the field providing leadership for the manufacturing function and overall enterprise leadership such as 'Manufacturing for Survival: The How-To Guide for Practitioners and Managers' by Blair R. Williams (1995); 'Fast Track to Waste-Free Manufacturing: Straight Talk from a Plant Manager (Manufacturing and Production)' by John W. Davis, Steven Ott (1999); 'America's Best: Industry Week's Guide to World-Class Manufacturing Plants' by Theodore B. Kinni (1996); 'World Class Manufacturing : The Next Decade : Building Power, Strength, and Value' by Richard J. Schonberger (1996); to mention a few.

And there are other factory concepts being realized by the Global Factory http://www.globalfactory.net/ - which has received $13M in first round financing. Positioning themselves as "the next step for e-collaborative manufacturing", the Global Factory Network is the first 'collaborative manufacturing execution platform'. For the first time, all parties in a manufacturing chain can operate as if communicating from within one enterprise. This breakthrough development means that outsourced manufacturing can now be globally managed as easily and consistently as in-house operations.

Benefits from Benefits of the Global Factory Network include:

  • Reduced levels of work in process inventory: Improved visibility throughout the production process reduces the need for safety stock, and allows the supply chain to run dramatically leaner.
  • Improved delivery performance: Improved visibility, plus date change and process boundary alerts, mean that orders no longer slip through the cracks, and that surprises are caught and responded to earlier than ever before.
  • Easier to establish new collaborative manufacturing relationships: The speed and ease with which the Global Factory Network allows companies to become productive members of the network, and then link with others, means that production tracking no longer is a gating item to establishing manufacturing relationships. This allows Global Factory Network members to take full advantage of the global nature of today's electronics supply chain, and the matchmaking ability of upcoming supplier exchanges.
  • Improved Customer Service: Customers can be given order visibility privileges, thus reducing the level of routine status questions being answered by customer service personnel, improving customer confidence in your delivery ability, and providing a valuable new self-service feature.
  • Streamlined new product introductions: Everybody in the CM supply chain can be on the same page right from the start of a new product manufacturing run. The Global Factory Network distributes the right production data to each member of the chain, correctly and seamlessly.
  • Improved Employee Productivity: No more frustrating production control meetings, struggling to cope with incomplete or inaccurate production data. No more calling around to get updates, faxing production reports, e-mailing spreadsheets, and all of the other time wasting, productivity sapping elements of the typical current 'system'.

These benefits could easily be attributed to an effective innovation system not necessarily the improved manufacturing function. This is an illustration of how each functioning the 'Community of Knowledge Practice' - http://www.entovation.com/innovation/cokp.htm - is moving toward an understanding of the entire 'system' in order to understand the function in of the parts. It is also proof-of-concept that, indeed, there is a leadership role to be performed by those in the industrial sector (not only services) - and the manufacturing function at that- in the Knowledge Economy!

Email: Debra M. Amidon

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© Copyright, 2001. David Skyrme Associates Limited and Authors - All rights reserved.

I3 UPDATE / ENTOVATION International News is a joint publication of David Skyrme Associates Limited and ENTOVATION International Limited - providers of trends analysis, strategic advice and workshops on knowledge management and knowledge innovation®

® Knowledge Innovation is a registered trademark of ENTOVATION International.




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