Enhancing efficiency in the chain

Managing knowledge is an area of potential productivity improvement. Our work force now spends about 30% of its time finding information.

By -- Modern Materials Handling, 2/1/2001

The efficient transmission of pertinent information and knowledge is vital to supply chain management. Note that there are two components, information and knowledge.

The information component focuses on data, analysis output, and transactions. Most of the business systems in use today, such as enterprise resource planning (ERP), decision support tools, and warehouse management systems (WMS) emphasize information to manage supply chains.

For instance, ERP systems, among other responsibilities, manage orders and the resources involved with procurement, manufacturing, and delivery. To satisfy customer demand in this information-centric environment, we translate these requirements and match them to available capacity and process. Similarly, WMS software manages data and capacity in a transaction orientation: "Pick up such and such a pallet and put it away at such and such a location."

Knowledge differs from information in that knowledge is perception and knowing gained through experience or learning. In this sense it is markedly different from information, with its focus on data, analysis output, and transactions. You might think of knowledge as focusing on problem solving and sharing based on experience. The term in vogue today is knowledge management. Its potential impact is on supply chain management, which encompasses efficient management of all resources and processes, orders, materials, production, transportation, distribution, and people.

The hallmark of the information environment is treating people, the most vital element in supply chains, as resources.

There is an expectation for people to respond "robot-like" to specific instructions and transactions rigidly determined by the information systems.

Knowledge management, however, recognizes that people are intelligent and, when provided with access to knowledge, will cleverly work through problems, in effect displaying ingenuity impossible in an information-only environment.

Take, for example, the practice of cross-docking. Implemented well, a cross-docking system provides the most direct route from the manufacturer to the retailer via the distribution center. However, poor knowledge flow can be a detriment to such a system. A corporate knowledge management portal may enhance problem solving in a cross-docking operation by providing a centralized repository for training and troubleshooting.

The use of portals in a cross-docking environment allows workers to easily and instantaneously access Web-based training, operating manuals, and help desks. Dynamic training tools make use of sound, video, and animation technology to create interesting learning modules. These modules are deliverable when needed as opposed to "when scheduled." When troubleshooting is necessary, it is easy to share knowledge through corporate portals.

Personnel will find a centralized location for the logging of reports helpful in problem solving because the contents are keyword and full-text searchable. In addition, the reports logged by staff members in various locations provide a knowledge map. These maps will direct someone experiencing a problem to another who has dealt with similar situations.

Managing knowledge is an emerging area of potential productivity improvement. The stakes are high. America's work force spends approximately 30 percent of its time finding information. This burden represents an area of potential savings in an organization that, if missed, could result in lost profits, a noncompetitive position in its market, and, quite likely, its collapse.