KNOWLEDGE MANAGEMENT IN LOW TECHNOLOGY MANUFACTURING ORGANIZATIONS : A CASE IN APPAREL MANUFACTURING This thesis was submitted to the Department of Mechanical Engineering of the University of Moratuwa in partial fulfillment of the requirements of the Degree of Master of Engineering in Manufacturing Systems Engineering by W.V.R.Perera Supervised by Dr. Chandana Perera \'A. o;:i LMKA 6 , 2 J O G Department of Mechanical Engineering University of Moratuwa Sri Lanka September 2006 6* I -7(W^) University of Moratuwa 87884 8 7 8 8 4 DECLARATION This Dissertation paper contains no material which has been accepted for the award of any other degree or diploma in any University or equivalent institution in Sri Lanka or abroad, and that to the best of my knowledge and belief, contains no material previously published or written by any other person, except where due reference is made in the text of this Dissertation. I carried out the work described in this Dissertation under the supervision of Dr. Chandana Perera. Signature Date Name of Student : W.V.R. Perera Registration No : 02/9634 Supervisor's comments : Signature Date : / ^ Name of Supervisor: Dr. Chandana Perera n ABSTRACT Knowledge Management (KM) is the process through which organizations generate value form knowledge based assets. Most of the high technology industries apply KM principles and hence foster all kinds of innovation to improve the company's productivity and its mid and long term advantage. Many researches have studied KM practices in high tech industries. However there are no much studies carried out to study how KM practices are used or can be used in low tech industries. In Sri Lankan context, the apparel industry is the leading industry in manufacturing and contribute a significant share of G.D.P. Today in the free quota era, the Sri Lankan apparel industry has to face the challenges in global market. Therefore it is worthwhile to study how KM practices are used and how KM can contribute to improve the performance in apparel sector. This research aims to study how these practices are presently used in the apparel sector to improve the performance in manufacturing. The research further identifies what kind of improvements can be done form the present KM practices so that they can enhance the organizational performance. To analyze KM practices, two case studies have been carried out in selected reputed apparel manufacturing organizations. Data is collected through in-depth interviews with machine operators, supervisors, production executives and production mangers. In addition to that, documentary analysis, observations, informal conversations are carried out to gather information on KM practices in these companies. Based on the results of case study analysis, factors important for successful implementation of KM are analyzed and a model (named as '5 Factor Model') is proposed for KM in low tech manufacturing organizations. Ill ACKNOWLEDERMENT It has been a long journey to finally complete one of my dreams. Many people have involved in this journey. Without their support and guidance, it would have much more difficult to accomplish. At this time, I would like to thank each of them for their encouragement and support. Firstly, I would like to express my heartiest gratitude to my project supervisor, Dr. Chandana Perera (Head of the Department, Department of Management of Technology, University of Moratuwa), for his invaluable support and advice that helped me complete this dissertation. Secondly, I wish to express my gratitude to Mr. Wanshapriya Gunaseela, the Group General Manager, Comfortwear (Pvt) Limited, EPZ-Nittabuwa for his kind support on factory visits and providing necessary information for case studies. Thirdly, I wish to thank Mr. J. Kabral, the Assistant Production Manager, Slimtext (Pvt) Limited, Kuliyapitiya for his extended support to make my work easy. Fourthly, my sincere thanks should go to Dr. U. Kahangamage and Dr. Ranjan Perera for their cordial support extended to me over a long period by giving necessary guidance. Finally, I owe appreciation to my beloved wife Chethika Perera for typing, editing and correcting this thesis several times and supporting me in numerous ways to complete this course. Viraj Perera rv Title Abstract Acknowledge List of tables List of figures £ Chapter 1 - Introduction 1.1 Background 2 1.2 Problem identification 2 1.3 Objective 3 1.4 Methodology 3 1.4.1 Information gathering through in-depth interviews 4 1.4.2 Documentary analysis 4 1.4.3 Information gathering through observation 6 1.4.4 Informal conversations 6 1.4.5 Developing a model to implement KM 6 1.5 Scope and limitation 7 Chapter 2 - Literature review 2.1 Knowledge - An Assessment 9 t 2.2 Data, Information and Knowledge with IT and Social Evolution 11 2.3 What is Knowledge Management? 12 2.4 What constitutes intellectual or knowledge-based assets? 13 2.5 What benefits can companies expect form KM? 13 2.6 What are the challenges of KM? 14 2.6.1 Getting employees on board 14 2.6.2 Allowing technology to dictate KM 15 2.6.3 Not having a specific business goal 15 2.6.4 KM is not static 15 2.6.5 Not all information is knowledge 15 2.7 Who should lead KM efforts? 15 2.8 What technologies can support KM? 16 2.9 Can knowledge be managed? 16 2.10 Momentum of knowledge management 16 2.11 Why interested now? 17 2.12 Application of Knowledge Management 18 2.13 Process innovation-Organizational perspective 18 2.14 Tacit knowledge management 19 2.15 Evolution of tacit knowledge 21 2.16 Vitalization of tacit knowledge 23 2.17 Transfer of tacit knowledge 25 2.18 Activities of knowledge management programmes 27 2.19 Examples of success 28 V Table of Content i iii iv viii viii ft 2.20 Guidelines for success 28 2.21 Issues and challenges 29 2.22 Practices of KM programme 30 2.23 Tools and techniques 31 2.24 Critical success factors 31 2.25 Advantages of KM system to the organization 32 2.26 Problems with KMs 32 2.27 Implementing a KMs 33 2.28 Criticisms of KM-control Vs creativity 35 Chapter 3 - KM Case study on Comfortwear (Pvt)Ltd- Nittabuwa 3.1 Knowledge infrastructure 37 3.1.1 Knowledge flow 3 8 3.1.2 Production and planning connectivity 3 8 3.1.3 Production process sub divi sion 38 3.1.4 Electronic documentation 3 9 3.1.5 Information flowing outside 39 3.1.6 Intranet and Extranet 40 3.1.7 Suggestions for infrastructure development 41 3.2 Knowledge creation 41 3.2.1 Knowledge creation on eggheads 41 3.2.2 Pilot appraisal as knowledge creation 42 3.2.3 Standardizing generated knowledge 42 3.2.4 Standard minute value (SMV) vs production 42 3.2.5 Suggestions for knowledge creation 43 3.3 Knowledge storing 43 3.3.1 Explicit knowledge storing 44 3.3.2 Tacit knowledge storing 44 3.3.3 Storing knowledge by storing people 45 3.3.4 Knowledge gap filling 45 3.3.5 Reaching steady state in production 45 3.3.6 Knowledge storing through muhiskills training 46 3.3.7 Suggestions for knowledge storing 46 3.4 Knowledge transferring and sharing 46 3.4.1 Periodic meetings 46 3.4.2 Knowledge sharing and transferring in groups 47 3.4.3 Knowledge transferring through team working 47 3.4.4 Hoarding knowledge Vs winning incentives 47 3.4.5 Knowledge transferring and sharing at training center 48 3.4.6 Multi disciplinary training 48 3.4.7 Suggestions for knowledge sharing 48 3.5 Organizational memory 50 3.5.1 Recalling memory 50 3.5.2 Far memory recalling 51 3.5.3 ITsupporton memory 51 3.5.4 Suggestions for organizational memory 51 VI » Chapter 4 - KM Case study on Slimtext (Pvt)Ltd -Kuliyapitiya 4.1 Knowledge infrastructure 54 4.1.1 ERP system 54 4.1.2 Intranet 55 4.1.3 Knowledge and information flow 55 4.1.4 Flow of information from outside 56 4.1.5 Suggestions for knowledge infrastructure development 5 7 ^ 4.2 Knowledge creation 57 4.2.1 Knowledge creation and design center 57 4.2.2 Pre production meeting 58 4.2.3 Trial on created knowledge 58 4.2.4 Created knowledge standardization 59 4.2.5 Suggestions for knowledge creation 59 4.3 Knowledge storing 60 4.3.1 Storing of explicit knowledge 60 4.3.2 Tacit knowledge storing 60 4.3.3 Cultural change for knowledge storing 60 4.3.4 Suggestions for knowledge storing 61 4.4 Knowledge transferring and sharing 62 4.4.1 Knowledge transferring at training center 62 4.4.2 Learning environment in training center 62 4.4.3 Informal knowledge transferring in production lines 62 £ 4.4.4 Knowledge transferring and sharing among the factories 63 4.4.5 Knowledge transferring meetings 64 4.4.6 Winning incentives by better transferring and sharing of knowledge 64 4.4.7 Suggestions for knowledge transferring 64 4.5 Organizational memory 65 4.5.1 Memory retrieving 65 4.5.2 Loss of memory over long time periods 65 4.5.3 IT support on organizational memory 66 4.5.4 Suggestions for organizational memory 66 Chapter 5 - Analysis of the Five Factor Model for Low Tech Manufacturing 5.1 Clear identification of the reasons for applying KM programme 68 5.2 Activities of KM programme 68 5.2.1 Appointment of a knowledge leader 70 5.2.2 Creation of knowledge teams 70 5.2.3 Development of knowledge bases 70 5.2.4 Knowledge centers 71 5.2.5 Intellectual asset management 71 5.3 Analysis of knowledge infrastructure facilities necessary for low tech Manufacturing 71 vn 5.3.1 Available facilities and there advantages and disadvantages 72 5.3.2 Knowledge infrastructure in case organizations 73 5.4 Analysis of knowledge creation in low tech manufacturing 73 5.4.1 Nonaka's spiral model integration for knowledge creation 74 5.4.2 Knowledge creation in case organizations and possible improvements 75 5.4.3 Role of the KM team and the knowledge leader 76 5.5 Analysis of knowledge storing in low tech manufacturing 76 5.5.1 Explicit knowledge storing 76 £ 5.5.2 Tacit knowledge storing 78 5.5.3 Knowledge storing in case organizations and possible improvements 78 5.6 Analysis of knowledge sharing in low tech manufacturing 78 5.6.1 Knowledge sharing in case organizations and possible Improvements 79 5.7 Analysis of organizational memory in low tech manufacturing 79 5.7.1 Organizational memory in case organizations and possible improvements 80 Chapter 6 - Conclusion and recommendation 82 References: 85 0 Appendices: A - Total performance score card for KM for improving plant level Performance A1-A4 B - Process sequence diagram of a bra. B1-B2 C -Organizational chart-Comfortwear (Pvt) Ltd CI D - Process sequence diagram of a brief Dl E -Organizational chart-Slimtext (Pvt) Ltd E l List of tables Table 2.1 A comparison of information and knowledge 09 Table 2.2 Practices and processes in KM 30 List of figures Figure 1.4.1 Information gathering through in-depth interviews 04 Figure 1.4.2 Documentary analysis 05 Figure 1.4.3 Information gathering through observations 06 Figure 2.3 The broadening arena of IT 11 Figure 2.4 The SECI Process (Nonaka, 2000) 22 Figure 3.1 Computer communication network between the production department and other departments 37 Figure 3.1.5 Equities group with Intranet, Extranet and Internet facilities 40 Figure 3.4.7 a Liner model of knowledge transferring 49 Figure 3.4.7. b Unity model of knowledge transferring 50 vrii Figure 4.1.2 Connectivity between Slimtext and other factories via Intranet 55 Figure 4.4.3 a Traditional class room model for knowledge sharing 63 Figure 4.4.3 b Unity of Knower, Knowing and Known 63 Figure 5.1 5 Factor model for KM 69 Figure 5.4 Nonaka's spiral model 74 Figure 5.5.1 5 Factor model metadata 77 4 IX •