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Knowledge Management

Notes: Atul Derolia


Knowledge management is the systematic management of an organization's knowledge assets for the purpose of
creating value and meeting tactical & strategic requirements; it consists of the initiatives, processes, strategies,
and systems that sustain and enhance the storage, assessment, sharing, refinement, and creation of knowledge.

Knowledge management (KM) therefore is a strong tie to organizational goals and strategy, and it involves the
management of knowledge that is very useful for many purposes and which creates value for the organization.

Knowledge Management is an organizational function that concerns itself with the capture, storage, and
dissemination of the knowledge that is inherent in the organization by using software or a Procedural tool
to capture, store, and disseminate knowledge.


1. According to John Girard, Knowledge management is the creation, transfer, and exchange of
organizational knowledge to achieve a advantage.
2. In the words of Meridith Levinson, KM is the process through which organizations generate value from
their intellectual and knowledge-based assets.
3. According to Gartner, “Knowledge management is a discipline that promotes an integrated approach to
identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets. These
assets may include databases, documents, policies, procedures, and previously un-captured expertise
and experience in individual workers.”

Difficulties in KM
Today's Knowledge Management Challenges

1. Security. Providing the right level of security for knowledge management is key. Sensitive information
should be shielded from most users, while allowing easy access to those with the proper credentials.

2. Getting people motivated. Overcoming organizational culture challenges and developing a culture that
embraces learning, sharing, changing, improving can‟t be done with technology. There is no use in
launching a tool if there is no drive to share the knowledge.

3. Keeping up with technology. Determining how knowledge should be dispensed and transferring it
quickly and effectively is a huge challenge. Constantly changing structures mean learning how to be
smart, quick, agile and responsive – all things a KM tool must be able to accomplish.

4. Measuring knowledge. Knowledge is not something that can be easily quantified, and is far more
complex because it is derived out of human relationships and experience. The focus should be on shared
purpose rather than results or efforts.

5. Overcoming shared leadership. KM tools allow others to emerge as voices of power within an
organization. Workers are given a “voice”, which can sometimes cause internal conflict.

6. Keeping data accurate. Valuable data generated by a group within an organization may need to be
validated before being harvested and distributed. Keeping information current by eliminating wrong or
old ideas is a constant battle.

7. Interpreting data effectively. Information derived by one group may need to be mapped or standardized
in order to be meaningful to someone else in the organization.

8. Making sure information is relevant. Data must support and truly answer questions being asked by the
user, and requires the appropriate meta-data to be able to find and reference. Data relevancy means
avoiding overloading users with unnecessary data.

9. Determining where in the organization KM should reside. Does KM fall under HR, IT,
communications? This decision will determine what drives your knowledge sharing initiative and who
will be responsible for maintaining the community.

10. Rewarding active users. Recognizing the users who actively participate and contribute to a knowledge
database will not only encourage them to continue contributing, but will also encourage other users to

Implementation of KM
1. Establish Knowledge Management Program Objectives

Before selecting a tool, defining a process, and developing workflows, you should envision and articulate the end
state. In order to establish the appropriate program objectives, identify and document the business problems that
need resolution and the business drivers that will provide momentum and justification for the endeavor.

Provide both short-term and long-term objectives that address the business problems and support the business
drivers. Short-term objectives should seek to provide validation that the program is on the right path while long-
term objectives will help to create and communicate the big picture.

2. Prepare for Change

Knowledge management is more than just an application of technology. It involves cultural changes in the way
employees perceive and share knowledge they develop or possess. One common cultural hurdle to increasing the
sharing of knowledge is that companies primarily reward individual performance. This practice promotes a
"knowledge is power" behavior that contradicts the desired knowledge-sharing, knowledge-driven culture end
state you are after.

Successfully implementing a new knowledge management program may require changes within the organization's
norms and shared values; changes that some people might resist or even attempt to quash. To minimize the
negative impact of such changes, it's wise to follow an established approach for managing cultural change.

3. Define High-Level Process

To facilitate the effective management of your organization's knowledge assets, you should begin by laying out a
high-level knowledge management process. The process can be progressively developed with detailed procedures
and work instructions throughout steps four, five, and six. However, it should be finalized and approved prior to
step seven (implementation).

Organizations that overlook or loosely define the knowledge management process will not realize the full
potential of their knowledge management objectives. How knowledge is identified, captured, categorized, and
disseminated will be ad hoc at best. There are a number of knowledge management best practices, all of which
comprise similar activities. In general, these activities include knowledge strategy, creation, identification,
classification, capture, validation, transfer, maintenance, archival, measurement, and reporting.

4. Determine and Prioritize Technology Needs

Depending on the program objectives established in step one and the process controls and criteria defined in step
three, you can begin to determine and prioritize your knowledge management technology needs. With such a
variety of knowledge management solutions, it is imperative to understand the cost and benefit of each type of
technology and the primary technology providers in the marketplace. Don't be too quick to purchase a new
technology without first determining if your existing technologies can meet your needs. You can also wait to
make costly technology decisions after the knowledge management program is well underway if there is broad
support and a need for enhanced computing and automation.

5. Assess Current State

Now that you've established your program objectives to solve your business problem, prepared for change to
address cultural issues, defined a high-level process to enable the effective management of your knowledge
assets, and determined and prioritized your technology needs that will enhance and automate knowledge
management related activities, you are in a position to assess the current state of knowledge management within
your organization.

The knowledge management assessment should cover all five core knowledge management components: people,
processes, technology, structure, and culture. A typical assessment should provide an overview of the assessment,
the gaps between current and desired states, and the recommendations for attenuating identified gaps. The
recommendations will become the foundation for the roadmap in step six.

6. Build a Knowledge Management Implementation Roadmap

With the current-state assessment in hand, it is time to build the implementation roadmap for your knowledge
management program. But before going too far, you should re-confirm senior leadership's support and
commitment, as well as the funding to implement and maintain the knowledge management program. Without
these prerequisites, your efforts will be futile. Having solid evidence of your organization‟s shortcomings, via the
assessment, should drive the urgency rate up.

7. Implementation

Implementing a knowledge management program and maturing the overall effectiveness of your organization will
require significant personnel resources and funding. Be prepared for the long haul, but at the same time, ensure
that incremental advances are made and publicized. As long as there are recognized value and benefits, especially
in light of ongoing successes, there should be little resistance to continued knowledge management investments.

8. Measure and Improve the Knowledge Management Program

How will you know your knowledge management investments are working? You will need a way of measuring
your actual effectiveness and comparing that to anticipated results. If possible, establish some baseline
measurements in order to capture the before shot of the organization‟s performance prior to implementing the
knowledge management program. Then, after implementation, trend and compare the new results to the old
results to see how performance has improved.

Principles of KM
1. Knowledge is messy. Because knowledge is connected to everything else, you can‟t isolate the
knowledge aspect of anything neatly. In the knowledge universe, you can‟t pay attention to just one

2. Knowledge is self-organizing. The self that knowledge organizes around is organizational or group
identity and purpose.

3. Knowledge seeks community. Knowledge wants to happen, just as life wants to happen. Both want to
happen as community. Nothing illustrates this principle more than the Internet.

4. Knowledge travels via language. Without a language to describe our experience, we can‟t communicate
what we know. Expanding organizational knowledge means that we must develop the languages we use to
describe our work experience.

5. The more you try to pin knowledge down, the more it slips away. It‟s tempting to try to tie up
knowledge as codified knowledge-documents, patents, libraries, databases, and so forth. But too much
rigidity and formality regarding knowledge lead to the stultification of creativity.

6. Looser is probably better. Highly adaptable systems look sloppy. The survival rate of diverse,
decentralized systems is higher. That means we can waste resources and energy trying to control
knowledge too tightly.

7. There is no one solution. Knowledge is always changing. For the moment, the best approach to
managing it is one that keeps things moving along while keeping options open.

8. Knowledge doesn’t grow forever. Eventually, some knowledge is lost or dies, just as things in nature.
Unlearning and letting go of old ways of thinking, even retiring whole blocks of knowledge, contribute to
the vitality and evolution of knowledge.

9. No one is in charge. Knowledge is a social process. That means no one person can take responsibility for
collective knowledge.

10. You can’t impose rules and systems. If knowledge is truly self-organizing, the most important way to
advance it is to remove the barriers to self-organization. In a supportive environment, knowledge will take
care of itself.

11. There is no silver bullet. There is no single leverage point or best practice to advance knowledge. It must
be supported at multiple levels and in a variety of ways.

12. How you define knowledge determines how you manage it. The “knowledge question” can present
itself many ways. For example, concern about the ownership of knowledge leads to acquiring codified
knowledge that is protected by copyrights and patents.

Types of Knowledge
Explicit Knowledge

This type of knowledge is formalized and codified, and is sometimes referred to as know-what (Brown & Duguid
1998). It is therefore fairly easy to identify, store, and retrieve (Wellman 2009). This is the type of knowledge
most easily handled by KMS, which are very effective at facilitating the storage, retrieval, and modification of
documents and texts.

From a managerial perspective, the greatest challenge with explicit knowledge is similar to information. It
involves ensuring that people have access to what they need; that important knowledge is stored; and that the
knowledge is reviewed, updated, or discarded.

Many theoreticians regard explicit knowledge as being less important (e.g. Brown & Duguid 1991, Cook &
Brown 1999, Bukowitz & Williams 1999, etc.). It is considered simpler in nature and cannot contain the rich
experience based know-how that can generate lasting competitive advantage.

Although this is changing to some limited degree, KM initiatives driven by technology have often had the flaw of
focusing almost exclusively on this type of knowledge. As discussed previously, in fields such as IT there is often
a lack of a more sophisticated definition. This has therefore created many products labeled as KM systems, which
in actual fact are/were nothing more than information and explicit knowledge management software.

Tacit Knowledge

This type of knowledge was originally defined by Polanyi in 1966. It is sometimes referred to as know-how
(Brown & Duguid 1998) and refers to intuitive, hard to define knowledge that is largely experience based.
Because of this, tacit knowledge is often context dependent and personal in nature. It is hard to communicate and
deeply rooted in action, commitment, and involvement (Nonaka 1994).

Tacit knowledge is also regarded as being the most valuable source of knowledge, and the most likely to lead to
breakthroughs in the organization (Wellman 2009). Gamble & Blackwell (2001) link the lack of focus on tacit
knowledge directly to the reduced capability for innovation and sustained competitiveness.

KMS have a very hard time handling this type of knowledge. An IT system relies on codification, which is
something that is difficult/impossible for the tacit knowledge holder.

Using a reference by Polanyi (1966), imagine trying to write an article that would accurately convey how one
reads facial expressions. It should be quite apparent that it would be near impossible to convey our intuitive
understanding gathered from years of experience and practice. Virtually all practitioners rely on this type of
knowledge. An IT specialist for example will troubleshoot a problem based on his experience and intuition. It
would be very difficult for him to codify his knowledge into a document that could convey his know-how to a
beginner. This is one reason why experience in a particular field is so highly regarded in the job market.

The exact extent to which IT systems can aid in the transfer and enhancement of tacit knowledge is a rather
complicated discussion. For now, suffice it to say that successful KM initiatives must place a very strong
emphasis on the tacit dimension, focusing on the people and processes involved, and using IT in a supporting

Tacit knowledge is found in: the minds of human stakeholders. It includes cultural beliefs, values, attitudes,
mental models, etc. as well as skills, capabilities and expertise (Botha et al 2008). On this site, I will generally
limit tacit knowledge to knowledge embodied in people, and refer separately to embedded knowledge (as defined
below), whenever making this distinction is relevant.

Embedded Knowledge

Embedded knowledge refers to the knowledge that is locked in processes, products, culture, routines, artifacts, or
structures (Horvath 2000, Gamble & Blackwell 2001). Knowledge is embedded either formally, such as through a
management initiative to formalize a certain beneficial routine, or informally as the organization uses and applies
the other two knowledge types.

The challenges in managing embedded knowledge vary considerably and will often differ from embodied tacit
knowledge. Culture and routines can be both difficult to understand and hard to change. Formalized routines on
the other hand may be easier to implement and management can actively try to embed the fruits of lessons learned
directly into procedures, routines, and products.

IT's role in this context is somewhat limited but it does have some useful applications. Broadly speaking, IT can
be used to help map organizational knowledge areas; as a tool in reverse engineering of products (thus trying to
uncover hidden embedded knowledge); or as a supporting mechanism for processes and cultures. However, it has
also been argued that IT can have a disruptive influence on culture and processes, particularly if implemented

Due to the difficulty in effectively managing embedded knowledge, firms that succeed may enjoy a significant
competitive advantage.

Embedded knowledge is found in: rules, processes, manuals, organizational culture, codes of conduct, ethics,
products, etc. It is important to note, that while embedded knowledge can exist in explicit sources (i.e. a rule can
be written in a manual), the knowledge itself is not explicit, i.e. it is not immediately apparent why doing
something this way is beneficial to the organization.


Pillars of Knowledge Management

(It has another PDF)

Inventory Management

What is inventory? Inventory refers to those goods which are held for eventual sale by the business enterprise. In
other words, inventories are stocks of the product a firm is manufacturing for sale and components that make up
the product. Thus, inventories form a link between the production and sale of the product.

The forms of inventories existing in a manufacturing enterprise can be classified into three categories:

(i) Raw Materials:

These are those goods which have been purchased and stored for future productions. These are the goods which
have not yet been committed to production at all.

(ii) Work-in-Progress:

These are the goods which have been committed to production but the finished goods have not yet been produced.
In other words, work-in-progress inventories refer to „semi-manufactured products.‟

(iii) Finished Products:

These are the goods after production process is complete. Say, these are final products of the production process
ready for sale. In case of a wholesaler or retailer, inventories are generally referred to as „merchandise inventory‟.

Some firms also maintain a fourth kind of inventory, namely, supplies. Examples of supplies are office and plant
cleaning materials, oil, fuel, light bulbs and the like. These items are necessary for production process. In practice,
these supplies form a small part of total inventory involving small investment. Therefore, a highly sophisticated
technique of inventory management is not needed for these.

Motives for Holding Inventories:

A simple but meaningful question arises:

Why do firms hold inventories while it is expensive to hold inventories? The reply to this question is the motives
behind holding inventories in an enterprise.

Researchers report that there are three major motives behind holding inventories in an enterprise:

1. Transaction Motive

2. Precautionary Motive

3. Speculative Motive

A brief description about each of these motives follows in seriatim:

1. Transaction Motive:

According to this motive, an enterprise maintains inventories to avoid bottlenecks in its production and sales. By
maintaining inventories; the business ensures that production is not interrupted for want of raw material, on the
one hand, and sales also are not affected on account of non-availability of finished goods, on the other.

2. Precautionary Motive:

Inventories are also held with a motive to have a cushion against unpredicted business. There may be a sudden
and unexpected spurt in demand for finished goods at times. Similarly, there may be unforeseen slump in the
supply of raw materials at some time. In both the cases, a prudent business would surely like to have some
cushion to guard against the risk of such unpredictable changes.

3. Speculative Motive:

An enterprise may also hold inventories to take the advantages of price fluctuations. Suppose, if the prices of raw
materials are to increase rather steeply, the enterprise would like to hold more inventories than required at lower

Benefits of Inventory

Holding inventories bears certain advantages for the enterprise.

The important advantages but not confined to the following only are as follows:

1. Avoiding Losses of Sales:

By holding inventories, a firm can avoid sales losses on account of non-supply of goods at times demanded by its

2. Reducing Ordering Costs:

Ordering costs, i.e., the costs associated with individual orders such as typing, approving, mailing, etc. can be
reduced, to a great extent, if the firm places large orders rather than several small orders.

3. Achieving Efficient Production Run:

Holding sufficient inventories also ensures efficient production run. In other words, supply of sufficient
inventories protects against shortage of raw materials that may at times interrupt production operation.

Objectives of Inventory Management:

There are two main objectives of inventory management:

1. Making Adequate Availability of Inventories:

The main objective of inventory management is to ensure the availability of inventories as per requirements all
the times. This is because both shortage and surplus of inventories prove costly to the organization. In case of
shortage of availability in inventories, the manufacturing wheel comes to a grinding halt. The consequence is
either less production or no production.

The either case results in less sale to less revenue to less profit or more loss. On the other hand, surplus in
inventories means lying inventories idle for some time implying cash blocked in inventories. Speaking
alternatively, this also means that had the organization invested money blocked in inventories invested elsewhere
in the business, it would have earned a certain return to the organization. Not only that, it would have also
reduced the carrying cost of inventories and, in turn, increased profits to that extent.

2. Minimizing Costs and Investments in Inventories:

Closely related to the above objective is to minimize both costs as well as volume of investment in inventories in
the organization. This is achieved mainly by ensuring required volume of inventories in the organization all the

This benefits organization mainly in two ways. One, cash is not blocked in idle inventories which can be invested
elsewhere to earn some return. Second, it will reduce the carrying costs which, in turn, will increase profits. In
lump sum, inventory management, if done properly, can bring down costs and increase the revenue of a firm.
Inventory Management Techniques

Inventory management techniques

Inventory management uses several methodologies to keep the right amount of goods on hand to fulfill customer
demand and operate profitably. This task is particularly complex when organizations need to deal with thousands
of stock keeping units (SKUs) that can span multiple warehouses. The methodologies include:

 Stock review, which is the simplest inventory management methodology and is generally more appealing
to smaller businesses. Stock review involves a regular analysis of stock on hand versus projected future
needs. It primarily uses manual effort, although there can be automated stock review to define a minimum
stock level that then enables regular inventory inspections and reordering of supplies to meet the
minimum levels. Stock review can provide a measure of control over the inventory management process,
but it can be labor-intensive and prone to errors.

 Just-in-time (JIT) methodology, in which products arrive as they are ordered by customers, and which is
based on analyzing customer behavior. This approach involves researching buying patterns, seasonal
demand and location-based factors that present an accurate picture of what goods are needed at certain
times and places. The advantage of JIT is that customer demand can be met without needing to keep
quantities of products on hand, but the risks include misreading the market demand or having distribution
problems with suppliers, which can lead to out-of-stock issues.

 ABC analysis methodology, which classifies inventory into three categories that represent the inventory
values and cost significance of the goods. Category A represents high-value and low-quantity goods,
category B represents moderate-value and moderate-quantity goods, and category C represents low-value
and high-quantity goods. Each category can be managed separately by an inventory management system,
and it's important to know which items are the best sellers in order to keep quantities of buffer stock on
hand. For example, more expensive category A items may take longer to sell, but they may not need to be
kept in large quantities. One of the advantages of ABC analysis is that it provides better control over high-
value goods, but a disadvantage is that it can require a considerable amount of resources to continually
analyze the inventory levels of all the categories.

Supply Chain Planning

Supply Chain Planning within an organisation exists on many levels, as well as in many functional areas. At a
minimum, most organisations formally update their Profit Plans on a yearly basis. However, planning is an
ongoing process that happens at different levels and different times dependent on resource availability and this is
recognised by the 5 levels of Supply Chain Planning Horizon. Additionally, it is important that all the functional
plans tie together to ensure that they mesh and support the company‟s overall plan and objectives.

It is important to have a plan of different time frames (time-phased plans) that fit together to support the long-
term plan. The complexity also changes with each time-phase. The figure below shows how the 5 different level
of Supply Chain Planning Horizon fit together, their review frequency and complexity in organisation from Low
to High.

Generally, organisations use a variety of terms to explain the various planning levels. In this blog I will briefly
discuss what Profit Plan, Sales Inventory & Operations Planning (SIOP), Master Plan, Material Plan (Mat. Plan)
and Factory Plan or Line Scheduling are which make the Supply Chain Planning building block in a typical

Profit Plan- Yearly/Quarterly

At the highest level of Supply Chain Planning, which also extends the furthest in time, is the Profit Plan, which
is mostly extended to 12 months and generally reviewed on a quarterly basis. The profit plan serves as a basis
for financial planning. With the information developed from the profit plan, you can anticipate the need for
increased investment in receivables, inventory, new product introduction, head counts, capital investment or

The profit plan considers an organisation‟s objectives, overall service requirements, and how management intends
to achieve its organisation‟s vision. These plans are complex and usually include cross functional teams which
adds to complexity of the process. This stage of Supply Chain Planning defines projected implications of supply
chain activities within the business and their financial implication on revenues, cost and working capital.

Sales Inventory & Operations Planning (SIOP) – Monthly

SIOP in itself requires several blogs or even book(s) to cover its basics, as it is one of the core processes in any
organisation or should be one! Simplistically speaking, The SIOP process does exactly what it says on the tin – it
provides a general overview of company‟s Sales, Inventory and Operations Planning method! Its purpose is to aid
you in understanding the planning balance between supply and demand.

It represents an organizational improvement process which will…

1. Balance employee understanding of supply capacity and market demand.

2. Establish a common language for information sharing among all functional groups

SIOP is a cross-functional Supply Chain Planning process designed to keep demand and supply in balance by:

1. Monitoring external market demand changes through the Sales department.

2. Communicating market changes to the internal organization

The SIOP which is 5 Step monthly process (shown below) helps the business and Supply Chain communities
proactively plan for changes in demand by Monitoring the ExternalMarket.

SIOP as Supply Chain Process:

 is a forecasting and decision making process,

 involves every department in the business,

 gives the visibility and alignment on the middle term demand (2-18 months)

It is a monthly process

 That provides realistic demand, production, and inventory plans to meet customer requirements.

 That is implemented by a cross-functional team

 That is documented and agreed by all parties

 That provides communication and co-ordination of activities in different departments

Master Plan or Master Production Schedule (MPS)- Monthly/Weekly

The master level or top-level schedule used to set the production plan in a manufacturing facility on a monthly
basis but spread over a number of weeks. APICS considers the term Master Production Schedule (MPS) and
Master Schedule to be synonymous and defines them as “The anticipated build schedule for those items assigned
to the master scheduler. It represents what the company plans to produce expressed in a specific configurations,
quantities and dates.” However, Everdell (1987) defines the master schedule as referring to the “presentation of
information that expresses how a master scheduler has decided to satisfy the demand placed on the ‘end item’ by
determining production quantities to be completed on specific schedule.”

In theory, Master Production Schedule is the linking pin between the marketing and sales (sales orders,
forecasting), manufacturing operations and engineering functions. The MPS function should aim to develop and
maintain a manufacturing plan which is satisfactory for all three functions. Moreover, the master schedule is
reconciled monthly with the rough cut supply plan resulting from the SIOP Supply planning process.

The Master Production Scheduler (or equivalent process owner) creates and maintains the Master Production
Schedule in the ERP system. The MPS is used to drive and direct all manufacturing, purchasing, and
manufacturing related engineering activities. To have successful MPS, BOM Accuracy and Inventory Accuracy
are key.

BOM Accuracy– The Engineering Manager (or equivalent process role) creates and maintains the engineering
BOM‟s and facilitates the translation of engineering BOM‟s into manufacturing BOM‟s. The Manufacturing
Manager (or equivalent process role) creates and maintains the manufacturing BOM based on coordination with
the Engineering Manager‟s engineering BOM‟s.

Inventory Accuracy– Demonstrating inventory management abilities by performing cycle counting on a regular
basis and an annual physical inventory. There needs to also be a demonstrated ability to identify and correct
inventory errors outside of these physical counts on a daily basis.

Materials Planning – Weekly/Daily

In most companies there is a material planning process that maintains valid material plans along with a control
process that communicates priorities through either MRP, production schedules, supplier schedules, Min/Max
planning and / or Kanban for replenishment as an example on daily or weekly basis. Materials planning are daily
to weekly activity in most operations to maintain required customer service. Again like SIOP, material planning is
a topic of greater depth and breadth in terms of the key concepts. However, here are brief definitions of some key

Min max planning- An inventory planning technique that uses min and max inventory values for items and
maintains on hand balances between these two levels

Kanban planning- An inventory planning technique that determines Kanban size, number of Kanban cards,
minimum order quantity, lead times, lot multipliers and safety stock days

Reorder point planning- An inventory planning technique that uses reorder point and reorder quantity values for
items and maintains on hand balances required to meet forecasted demand during lead time plus safety stock

MRP- The original MRP dates back to 1960s, when letters stood for materials requirements planning (now called
MRP or MRP I). MRP enables a company to calculate how many materials of particular types are required, and at
what times they are required (Slack et. al., 2004*). MRP in itself is massive topic and entire chapter can be
dedicated to explain this!

Factory Plan or Line Scheduling – Daily

The production line scheduling process is owned by Supply Chain/Materials Planning Team. The Supply
Chain/Materials team decides how constrained materials will be allocated to meet what customer demand.
Operations/Manufacturing is involved in constrained capacity decisions to meet the line schedule (demand)
which is presented in shape of work orders which is to be released when MRP run over night daily(if you are
using ERP/MRP). If managed by Kanban or Min-Max systems, then planners need to maintain inventory levels to
the trigger levels to maintain Min-Max stocks or Kanban quantities.

Planners must ensure line schedules are aligned with MPS or SIOP; also work orders are maintained for aging or
volume to assure alignment with SIOP or actual demand, in other words, line scheduling process has to be fully
integrated with SIOP. The daily work that is given to lines/cells should be in line with the agreed upon production
plan level with production folks. Furthermore, attainment and/or linearity to this plan is tracked and managed.

Lastly, line scheduling processes must be aligned with the On Time Delivery (OTD) Policy, drive sufficient
inventory visibility and reduction in premium freight.


Knowledge Worker
A knowledge worker is an employee whose primary contribution to the workplace is knowledge of a specific
subject. Some examples of knowledge workers include physicians, academics, engineers and architects.
Knowledge workers may be said to think for a living, rather than performing manual or interpersonal tasks. While
most jobs require some degree of knowledge work, employees designated as knowledge workers are generally
differentiated by their ability to solve problems and develop new resources in their specific field of expertise. The
number of employees who may be classified as knowledge workers has grown since the term was coined in 1969,
notably due to a move towards workplace collaboration that values contributions from all workers.

Knowledge workers is a term used to refer to the employees in the IT (Information Technology), BPO (Business
Process Outsourcing), Financial Services, and other sectors where the brain or the intellectual work is the
determinant instead of brawn or physical labor. In this respect, knowledge workers have become a separate
category altogether for the HR managers and the HR field as managing them needs different approaches when
contrasted with managing employees in other sectors. This article examines some such approaches that are needed
for managing the knowledge workers.

Knowledge Worker Characteristics As discussed by Mr. William W. Prince in Encyclopedia of Management

(, Knowledge work is complex, and those who perform it, require certain skills and abilities as well as
familiarity with actual and theoretical knowledge (Knowledge Workers Forum 2006). These persons must be able
to find, access, recall, and apply information, interact well with others, and possess the ability and motivation to
acquire and improve these skills. While the importance of one or more of these characteristics may vary from one
job to the next, all knowledge workers need the following characteristics:

1. Possessing factual and theoretical knowledge

2. Finding and accessing information
3. Ability to apply information
4. Communication skills
5. Motivation
6. Intellectual capabilities.

1. Possessing Factual and Theoretical Knowledge

Knowledge workers are conversant with specific factual and theoretical information. School teachers possess
information regarding specialized subject matter, teaching strategies, and learning theories. The sales
representative commands factual knowledge concerning the product he or she sells and theoretical knowledge
about how to interest customers in that product. Prospective knowledge workers may need years of formal
education to master the information needed to enter a particular field of work. Because knowledge is always being
created, this type of employee will be acquiring additional information on a continual basis.

2. Finding and Accessing Information

At a time when the operations of today's information society depends on knowledge that is continually growing
and changing, distribution of information within organizations has become problematic due to the massive
amount of information with which employees need to be familiar. Knowledge workers must therefore know how

to independently identify and find such material. Such employees need to know which sources provide the
information they need and how to use these sources in order to locate information successfully.

3. Ability to Apply Information

Knowledge workers use information to answer questions, solve problems, complete writing assignments, and
generate ideas. Use of analogical reasoning and relevance judgment enables employees to address successfully
personal and customer service-related issues. Analogical reasoning is a knowledge-based problem-solving process
in which persons apply information from precedents to new situations. Relevance judgment is the process by
which individuals decide whether or not a precedent is applicable to the problem at hand. The non-repetitive
nature of knowledge workers' jobs makes crucial the ability to apply information to new situations.

4. Communication Skills

Knowledge work is characterized by close contact with customers, supervisors, subordinates, and team mates.
Successful knowledge workers present clearly, in spoken and written word, both factual and theoretical
information. These employees listen with understanding and ask for clarification when they do not understand
what is being said to them. Knowledge workers must be able to speak, read, write, and listen in one-on-one and
group settings. Emphasis on quality customer service and customization of goods and services to meet individual
customer needs and wants brings knowledge workers into close contact with customers. The goals of
organizational effectiveness and continual improvement of products, together with the need to continually
consider new information in order to accomplish work, require communication between supervisor and
supervised and among team mates or colleagues. Knowledge workers possess communications skills that enable
them to collaborate with one another for goal-setting, decision-making, and idea generating purposes.

5. Motivation

The nature of knowledge work requires continual growth, in terms of mastery of information and skill
development, on the part of those who do this type of work. Knowledge workers must become and remain
interested in finding information, memorizing that information, and applying it to their work. Because new
technological developments call on knowledge workers to change continuously the way they accomplish their
work, these individuals must maintain a desire to apply their talents toward incorporating new information and
new technologies into their work.

6. Intellectual Capabilities

Knowledge workers must have the intellectual capabilities to acquire the skills discussed above. Such intellectual
capacities include those concerned with the understanding, recall, processing and application of specialized
information. Persons who perform knowledge work must possess the abilities needed to acquire appropriate
communication skills and to learn how to figure out where and how information can be located. Knowledge
workers are able to learn how to read and write at post secondary levels and to perform abstract reasoning. They
also have the intellectual capacity to understand the value of acquiring and maintaining the knowledge and skills
needed to accomplish their work.