10.3 Knowledge Management Activities

It is important for information to be organized and accessible, especially in large corporations. Historically, there have been problems with locating information. An example of this is when employees leave a company and it becomes difficult to locate certain information that the employee created or edited. Knowledge management systems are used to organize information. Most of these systems serve one or more of the following purposes:

• to make knowledge visible through the use of maps, hypertext, and yellow pages.


• to develop a knowledge intensive culture


• build a knowledge infrastructure

Knowledge Creation

According to the textbook, "knowledge creation is the generation of new insights, ideas, or routines and it can be viewed as the interplay between tacit and explicit knowledge."

The four modes of knowledge creation are:

• Socialization mode is when new knowledge is created through social interaction, such as conversing with another member in the organization. The sharing of tacit knowledge.


• Combination mode is when new knowledge is created by merging, categorizing, reclassifying, and/or synthesizing explicit information


• Externalization mode, one creates new knowledge by transferring tacit knowledge to explicit knowledge. Example, documenting a process that was used for a client.


• Internalization mode, one creates tacit knowledge from explicit knowledge. Example, gaining an understanding of something through reading a written document.

Knowledge Sharing

Knowledge sharing involves volunteering information including ideas, solutions, and experiences to someone else. This can be done through a middleman, computer, or directly. Due to interoffice competition, some people are reluctant to share their knowledge with others. Some conditions that may encourage the sharing of knowledge include trust, interest, common language. and easy accessibility to experienced employees.

Knowledge seeking or sourcing is when a person intentionally tries to locate and use internal organizational knowledge.

The main purpose of knowledge management is to encourage and facilitate the sharing of information between various individuals and departments within an organization.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 396-398.

9.3 Global Information Systems

Interorganizational systems that are used to connect companies or parts of companies located in multiple countries are global information systems. Airline reservation systems like SABRE and electronic funds transfer (EFT) systems are examples of global information systems. There are three different types of companies that use global information systems:

• Multinational companies operate in several counties. Examples include McDonald's and Coca-Cola.
• International companies conduct business with companies located in other countries. An example is Boeing who contracts work from over 40 countries.
• Virtual global companies are joint ventures between business partners in different countries.

Global information systems offer several benefits which are only possible through the use of IT. The benefits are:

• Effective communication at a reasonable cost.
• Effective collaboration to compensate for distance, time, language, and culture.
• Allows access to databases of business partners which allows them to work on projects simultaneously.

There are many obstacles when designing and implementing interorganizational information systmes (IOS). When dealing with a global company, implementation and design become even more complex. Some things to consider are:

• Cultural differences- Culture refers to the accepted values and characteristics of society. This changes from country to country, so when conducting business away from "home," one must consider the cultural environment that he is in.
• Localization-Sometimes companies alter the logo, color, packaging, or size of product in order to be more appealing in a target area.
• Economic and Political differences- An example of this is the different infrastructure from one society to another, i.e. China limits what can be viewed on the Internet.
• Legal Issues-Legal issues include knowing a country's stance on patents, copyrights, computer crimes, privacy, data sharing, etc.
• Web Design for a Global Audience- It is important to insure that a website can be appropriately translated in various countries.
• Globalization and Offshoring of IT Activities
• Globalization and Personnel Issues- Training employees to work in a global environment is very important in operations and in hiring personnel abroad.

Global Supply Chains

Optimizing a global supply chain can be difficult. However, e-commerce has made sourcing suppliers and customers in different countries easier. The obstacles that arise with information systems implementation, are also the causes of supply chain interference. Because a global supply chain is larger than a domestic one, there is more opportunity for a breakdown in communication. IT has helped smooth out the process utilized in a global supply chain. IT provides :

• Communication infrastructure options
• Online help
• Helps locate business partners
• Solves language problems through machine translation or automatic translation.

Financial institutions are also using global supply chains for the exchange of money via EFT, e-payments. Currencies can be converted on a real-time for the most current conversion rates.

Globalization is becoming a more common practice among corporations. Information technologies support communication, operations, and supply chains. Many companies are now outsourcing logistic services to minimizes problems encountered in the global market.

Source:

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 352-358.

8.3 Supply Chain Opportunities

In recent years there have been many progressive changes in supply chain management (SCM). It has now become a common practice to share information along the supply chain, this is known as a collaborative supply chain because the various components work together. Companies that use a collaborative supply chain use master data management (MDM) systems to organize all information. Some providers of such systems are SAP, Oracle Corp.and IBM. MDM systems manage a large amount of information form both internal and external sources.

Example: Wal-Mart is known for its collaboration with P&G.

Managing E-Business
The increase in e-business has resulted in the utilization of the Internet in SCM. Using the Internet for SCM has several benefits including speed, it's less expensive, flexibility, and the possibility of shortening the supply chain. Overall, the increase of e-businesses has improved SCM performance and customer satisfaction.

Electronic marketplaces allow identification of upstream suppliers. E-marketplaces also allow for a better dispersion of resources as well as an increase in shared information.

Supply chain participants in e-businesses are also using electronic ordering and funds transfer (EOFT) and advanced shipping notice (ASN) to improve customer service. These transactions are conducted by using electronic data interchange (EDI).

SCM has morphed from a linear form into a "hub." Companies using linear SCM follow a sequence which can take longer. In the "hub" information is shared and steps can be skipped to expedite the process.

Managing Logistics
Logistics involves the movement of materials amongst the supply chain, including shipping, storage, and inventory management. Fixed management systems uses a technology based system to fully integrate all components of the supply chain. E-logistics involves drop shipping that allows the vendor to ship directly to the end consumer.

Managing Inventory
Inventory management is very important in providing timely delivery of goods. Some companies keep inventory on hand as a type of "insurance". However, this can be expensive to maintain. Collaborative fulfillment networks (CFNs) can be used to reduce inventory and transportation costs. Vendor managed inventories (VMI), the vendor is responsible for storing inventory in warehouses for the manufacturer or retailer.

Collaborative management, if coordinated properly can be more efficient and cost reductive.

Managing Other IT-Assisted Solutions

The supply chain hub has resulted into the formation of supply chain teams. Supply chain teams are comprised of several individuals with their own area of expertise. These individuals then address customer issues within their area of knowledge. For example one person may be designated to address delivery issues.

Virtual factories have been developed to let organizations simulate and make changes to their supply chain design before implementing the practice into the actual factory.

There are now more wireless options like RFID that can improve supply chain issues.

Ethical Issues Related to SCM

Collaborative supply chain management involves sharing information. This must be done in a responsible and secure manner. Also, by eliminating parts of the supply chain, jobs are also eliminated. Long-time employees may be displaced.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 307-312.