Knowledge Management for Competitive Advantage

Dr Christian Hicks, Department of MMM Engineering,
Stephenson Building, University of Newcastle upon Tyne, Newcastle NE1 7RU.

Companies involved in the supply of complex goods on an engineer to order basis experience significantly higher risk and uncertainty than other manufacturing sectors. Demand and the requirement for resources is highly variable and occurs in large discrete units. The requirement to satisfy individual customer requirements leads to customisation with associated product development activities. These occur at both the tendering and contract execution stages. The specification and the requirement for resources is often uncertain at the tendering stage which leads to technical, delivery and commercial risks.

Many companies in this sector have sought to reduce risk, through the use of standardised business processes. This has been partially achieved by the use of business process re-engineering methods. Information technology provides the infrastructure to support improved recording of activities, data processing and communication between functions. Data reuse, and the feedback of information from manufacturing and operations to the design and tendering functions, enables companies to reduce costs and uncertainty. However, the effective use of information requires knowledge on its context, meaning and interpretation.

It is widely accepted that competitive advantage flows from a firm's unique knowledge. Thematic knowledge is formal and systematic and is easily communicated and shared. It resides in formulas, procedures and catalogues. Tacit or embedded knowledge is disorganised, context dependent, informal and relatively inaccessible. It often provides the flexibility to overcome the inadequacies of formal systems and procedures. In principle, thematic knowledge should be amenable to business process analysis and computerisation.  The elicitation of tacit knowledge is far more difficult and requires a "soft" systems approach.

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© Dr Christian Hicks, Department of Mechanical, Materials and Manufacturing Engineering, University of Newcastle upon Tyne