KNOWLEDGE-BASED ASSET MANAGEMENT FOR WAVERIDERS

Team A2

Overview

Introduction to Knowledge Management KM for WaveRiders Facilities Management for WaveRiders Resource Utilisation for WaveRiders

Knowledge will help us make the more returns on our engineering assets as we enter this crucial stage in the organisations journey

Is KM Valid or Distorted?

Knowledge is at the heart of much of today’s global economy, and managing knowledge has become vital to companies’ success. (Kluge et al. 2001)

The basic economic resource … is no longer capital, nor natural resources …, nor ‘labour’ … It is and will be knowledge. (Drucker, 1993)

Where’s the payoff?

‘Last year, U.S. companies spent $ 4.5 billion on software and other technologies that claim to foster information sharing among employees. Where’s the payoff?.’ (Gilmour, 2003)

Large numbers of European organisations are taking great interest in the idea of knowledge management and many are launching knowledge management initiatives and programmes. However, large proportion of such initiatives have failed. (Storey and Barnett. 2001)

Why does KM fail?

Failed Publishing paradigm

Lack of reflective thinking

Corporate culture

Misunderstanding of people’s welling of sharing the knowledge.

Knowledge requirement of WR

distributions, discount structure, pricing structure and safety requirement, market size and competition and regulation of the European market

technological innovation more appropriate raw material health and safety requirement knowledge of exploiting WR’s assets knowledge of current capability customers’ requirement current processes maintainace cost employees’ past experience

KM Strategies

Codification strategy (20%) Focusing on development of computer

support systems, databases and routines.

Personalisation strategy (80%) Focusing on individual development,

team building and inter-personal communication.

Process of knowledge transform

1. Tacit to tacit

2. Explicit to explicit

3. Tacit to explicit

4. Explicit to tacit

Valid KM

Deliver the intellectual capacity of the firm to the individual knowledge workers who make the day-to-day decisions that in aggregate determine the success or failure of a business.

KM strategic plan

Codification Strategy -- Purchase Oracle Database System

Personalization Strategy -- Develop a Brokering Model

Harris poll (2003)

Harris poll of more than 1,000 workers of how their thought their companies handled knowledge sharing:

Some people in the company can help me to do my job better. (67%)

I don’t know how to find these colleagues. (39%) Work is often duplicated because people are unaware

of each other’s work. (60%) Opportunities to innovate are missed because the

right people do not work together. (54%) Wrong decisions are regularly made because

employee knowledge isn’t effectively tapped. (51%)

Focus on past experience?

Using the rearview mirror to navigate the

road ahead.

Brokering Model

Creating a communication FORUM. Encourage people to discuss the problem

that they have encountered during the work. Recruit one staff to categorise the topic. Hold a party to provide chance for employee

to meet together. Vote for three people who have made the

most contribution in FORUM. Free trip to Zermatt in Switzerland and a

‘master of knowledge’ medal.

Advantage of adopting BM

Taping people’s eagerness of sharing their knowledge.

Taping people’s appetite for knowledge. Providing sustainable development of

knowledge management system. Define talents within the organisation. Providing a communicating platform for

people who share the same interest.

Cost of KM Strategy

WaveRiders

Profit after tax £ 329,751

Cost on the trip £ 3,600

Purchase medal £ 390

Build Oracle Database £ 30,000

Returned Hosting £ 120

Total £ 33,870

£ 295,641

Facilities Management(Base on our KM model)

Strategic Analysis

Developing Solutions

Strategy Implementation

Process of developing a facilities management strategy Atkin, B. & Brookes, A. (2000)

Facilities ManagementRoles

Roles WaveRiderLeaders ManagementMentor No need base on our KM model

Strategic business planner Management

implementerAll of the people inside the organisation

base on our KM modelEnvironmentalist Outsource

Resource obtainer  Financial manager  

Networker OutsourceSurvivor  

SpokespersonAll of the people inside the organisation

base on our KM modelAgile purchaser  

Lessor  contractor  

InnovatorAll of the people inside the organisation

base on our KM modelInformation manager Outsource

Facilities ManagementGoals

Goals (Atkin, B. & Brooks, A. 2000):

1. Consider the needs of the organisation, differentiating between core and non-core business activities.

2. Identify and establish effective and manageable processes for meeting those needs.

3. Establish the appropriate resource needs for providing services, whether obtained internally or externally.

Facilities ManagementGoals Cont’d

4. Identify the source of funds to finance the strategy and its implications.

5. Establish a budget, not only for the short term, but also to achieve best value over the longer term.

6. Recognise that management of information is the key to providing a basis for effective control of facilities management.

Facilities ManagementA business plan for facilities management for WaveRider

Needs: Increase sales & profit

Core business activities: Expand their target market and increase sales

Non-core business activities: Social responsibility etc

Effective processes for meeting the needs: Choose the right market; produce high performance products; develop new product and lower costs

Facilities Management A business plan for facilities management for WaveRider Cont’d

Resources needs for providing services (Internal & External): Customer and market information; high quality facilities management and information management and outsource partnerships

Source of funds to finance the strategies: All from WaveRider Sales

Budget: 2.8 million facilities. 20,000 for managing (assumption)

Managing the information: Consider outsource companies

Facilities ManagementFacilities Management Information Systems

Functions of the System:

1. Data collection

2. Storage of data

3. Analysis of data

Facilities Management Six key areas that must be considered when developing a FIMS

Alexander (1996): The structure of the organisation and business to identify patterns of

management behaviour

The types of projects that will need decision support and the associated information flow patterns

Customer requirements for information, both internal and external

Human resource implications for training and skills requirements

Budgetary constraints, taking account of initial and ongoing costs

Other computing systems that could be integrated to provide an optimum solution

Facilities Management Develop a FIMS to WaveRider – company structure

Facilities Management Develop a FIMS to WaveRider – Leadership style

Leadership Style (Base one our KM model): Contingency and situation; Fiedler's contingency theory.

Facilities Management Develop a FIMS to WaveRider cont’d

Customer requirements for information (Internal & External): Questionnaires and Bench marking.

Human resource implications for training and skills requirements: 5 in Production department; 2 in Finance department; one in each other department. Training together.

Budgets: 2000 (assumption).

Computing systems could be integrated.

Facilities Management Transportation effectiveness

Route - whether it crosses state or national boundaries, customs requirements, legal factors.

Capacity - volumes of goods, number of items, distances.

Time - short haul time, mean transportation time.

Cost - cost per shipment, cost per carrier per mile, cost of packing.

Facilities Management Transportation effectiveness for WaveRider

Route: Always use the cheapest ones but have backup routes.

Capacity: Maximise the capability for every carrier.

Time: Base on minimising costs.

Cost: Minimising costs.

Facilities Management Recovery strategies

Customers Supply Chain Inputs Communications Computers Software Data Facilities People Furniture Office Equipment Production Equipment Office Supplies

Facilities Management Recovery strategy for WaveRider

1. Customers

2. Supply Chain Inputs

3. Communications

4. Computers

5. Software

6. Data

7. Facilities

8. People

9. Furniture

10. Office Equipment

11. Production Equipment

12. Office Supplies

1. Special offers or promotional activities

2. Find backup suppliers3. Always have backup of the

meetings and other communication activities

4. Insurance 5. Backup system6. Backup system 7. Insurance 8. Motivation by rewards 9. Insurance10. Insurance11. Insurance and have

backup suppliers12. No need

Facilities Management Outsourcing – advantages

Reasons to outsource Facilities Management (Hinks and Reuvid in Reuvid and Hinks, 2002; alternative copy ; Park, 1998; Alexander, 1996):

Reduce costs

Gain better results - specialist firms may be able to provide higher quality, faster or safer services.

Increase flexibility - an organisation can expand/contract to react to their markets. They also remove the issue of a skill shortage within their workforce.

Focus on core skills - to remain competitive the company neesd to focus on and re-engineer their core business processes.

Facilities Management Outsourcing – disadvantages

However, outsourcing is not always the best solution: Lack of common goals and agendas between the outsource

company and the client organisation.

Lack of confidence in the ability of the outsource company to meet the quality, availability and capacity requirements

Resource utilization

Important to WaveRiders because: low inventory turnover (0.4) Need to better manage our resources and

focus on profitable markets i.e. Europe

The relationship between productivity and utilization

1. Low productivity, low utilization 2. Rising productivity, rising

utilization 3. Peak productivity, high utilization 4. Falling productivity, peak

utilization

Methods

According to Waveriders market research:

The latest industry figures show that in the last three years the market in the UK was fairly stagnant.

Resource redeployment i.e. focusing on Europe

Purchasing the Material Requirements Planning (MRP) System

Exploring new manufacturing possibilities in Europe

Resource Utilisation Knowledge

Production scheduling

Production line (quantity, types, condition….)

Demand/forecastMarket informationSupplier delivery timesEuropean

manufacturing data

Inventory management

The quantity of raw materials

The quantity of products

Dependent demandRaw materials from

new suppliers

Resource Utilisation

Purchasing an Materials Requirements Planning (MRP) system will help us deal with our production scheduling and inventory management as we grow

Cost of about $10,000

References

Atkin, B. & Brooks, A. (2000) Total Facilities Management. 2nd Edition. Blackwell Publishing Ltd. UK.

Barnes, J. (2001) A guide to business continuity planning. New York ; Chichester : Wiley.

Drucker, P. (1993). Pos-Capitalist Society. Oxford: Butterworth-Heinemann. Gilmour, D. (2003) ‘How to Fix Knowledge Management’. Forethough, 10, 16-

18. Kluge, J., Stein, W. and Licht, T. (2001). Knowledge Unplugged: The McKinsey

Survey on Knowledge Management. Basingstoke: Palgrave. Park, A. (1998) Facilities management : an explanation. Basingstoke :

Macmillan. Reuvid, J. & Hinks, J. (2002) Managing business support services : strategies

for outsourcing & facilities management. London : Kogan Page. Storey, J. and Barnett, E. (2000) ‘Knowledge management initiatives: learning

from failure’. Journal of Knowledge Management, 4, 145-156. http://reliabilityweb.com/index.php/articles/

the_human_factor_in_field_productivity/