Conceptual
Framework For Knowledge Management In Reverse Enterprise
S. Wadhwa, J. Madaan, Indian Institute of Technology
ABSTRACT:
Here emerging discipline of Knowledge management that promises to capitalize on organizations’ intellectual capital can be utilized as the motivation for enriching research in the field of reverse enterprise system. Objective of this paper is to communicate a critical review of knowledge management in the Reverse Enterprise System using framework of knowledge chains to outline findings. These knowledge chains is generally accepted as being the network of processes that increase the value of knowledge as it progresses from data to innovation. To face the challenges of knowledge based economy, companies involved in return operations are required to be aware of how knowledge is created and disseminated in returns. This paper suggests the role of KM is not just to create information and knowledge, but also to efficiently disseminate their findings to enrich research in product return system.
Keywords: Reverse
1. Introduction
Here concept of Reverse Enterprise Systems (RES) provides an integrated overview of the manufacturing and logistics aspects of the returns at the enterprise level. RES employs the term reverse manufacturing for the manufacturing aspects that include remanufacturing, disassembly, planning, scheduling, and disassembly process planning. Logistics aspect of RES is usually called reverse logistics as shown in figure 1. The ultimate success of any Reverse Enterprise System will depend on its ability to participate in one or more successful organizations, as well as its ability to integrate the enterprise’s complex network of reverse chains. The product returns management is also facing the increasing importance of new technologies like IT tools and developing knowledge based economy that provide new opportunities for return management. These factors make real time information accessible and collaboration across reverse manufacturing and logistics functions easier. Therefore in order to succeed in this new economy based on knowledge, the RES needs to be innovative and develop new competencies. Every organization’s intellectual capital consists of tangible and intangible assets. Intangible assets, which correspond to tacit and undocumented explicit knowledge, consist of skills, experience, and knowledge of an organization’s people (Simard, 2003). Management of these assets calls for a Knowledge Management System (KMS) as an emerging discipline that promises to capitalize on organizations’ intellectual capital (Wadhwa & Rao, 2003). The concept of taming knowledge and putting it to work is not new; phrases containing the word knowledge, such as knowledge bases and knowledge engineering, existed before KM became popularized (Wadhwa & Saxena, 2006).
Figure 1: Reverse
KMS is unique because it focuses on the individual as an expert and as the bearer of important knowledge that can systematically share with an organization. Although most KM research has explored conventional forward chain yet product return as an RES has not been investigated. Therefore this paper communicate the potential of managing knowledge in product returns as an enterprise RES. Here RES focus on need to reduce operating costs by reusing products or components, requiring an efficient means to bring back obsolete, outdated or clearance items and improve quality and service to its customers, therefore it must consider its both forward and return chain “Knowledge Based Systems” KBS perspective. This KBS perspective accumulates knowledge from planning, production and distribution to customer followed by gate keeping exercises; collection; inspection and sorting; reconditioning; disposition; and redistribution. Among these entire return activities gate keeping is considered to be highly knowledge intensive, it is decided which products to be allowed in the returns, otherwise companies might be flooded with products which cannot be recycled, remanufactured or disposed. A Good KM assisted gate keeping can be the first critical factor in making the entire reverse flow flexible and profitable. This paper addresses the issues and looks at how knowledge management (KM) should be used to help RES and react to the discussed challenges such as high uncertainty regarding locations from where used produced products need to be collected, their quantity, their quality and timing.
2. Literature Review
Although products have been returned since the early days of commerce, reverse logistics has only attracted academic attention since the early 1990’s. As reverse enterprise system is a relatively novel field of study, use of terminology is not definitively established. In this paper, we use the definition put forth by the European working group on reverse logistics.The process of planning, implementing and controlling flows of raw materials, in process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal (Rogers et al, 2002). Reverse logistics (RL) commonly refers to the backward movement of materials in the supply chain (Rogers and Tibben-Lembke, 1999). While some authors limit reverse logistics to the sum of those activities that ensure a sustainable, or environmentally friendly recovery of products and materials (Murphy & Poist, 2000), broader definitions extend this to the handling of all kinds of product returns, including the take-back of unwanted products, recalls and warranty returns. Here use the broader definition of reverse logistics as reverse enterprise system in the sense that we include products flowing backwards for all kinds of reasons. Furthermore, the terms product returns and reverse logistics are used interchangeably in this paper. For a thorough review of previous research and gaps related to technical aspects of reverse logistics please refer to Fleischmann et al (2001). Most of the earlier work on reverse logistics examines it from an environmental point of view. Surprisingly little has been written about implementation of KMS view to knowledge rich product returns operations. KM implementation and use has rapidly increased since the 1990s: 80 percent of the largest global corporations now have KM development (Simard, 2003). In terms of product returning from the forward supply chain, the use of a KM as an integral part of the RES is appealing and can easily be incorporated to integrate the knowledge of reprocessing and logistics activities. Although it is important to investigate how KM can really help the reverse enterprise to solve problems they face while trying to achieve concurrent objectives of satisfying profit motive of management along with legislative policy favoring environmental laws. KMS has drawn widespread attention and has promising features, but it is too soon to say whether or not it will stay.
3. Motivation For Application
KM In RES
Today liberal returns policies, direct sales channels and environmental
legislation has contributed to the growth of returns flows; therefore now
companies can look for rise in productivity and
profitability through efficient and effective management of RES. Efficient and effective RES can help in recovering
value from reverse logistics and manufacturing structures to be set up for the
arising goods flow from users to producers. Capturing
the knowledge about the product assembling and dissembling, along with
logistical aspects both in forward and reverse direction can immensely help in
effective and efficient management of RES (Wadhwa & Madaan, 2004).
Organizations involved in returns face problems organizing, identifying the
content, location, and use of this knowledge. An improved use of this knowledge
and its management is the basic motivation for identifying application KM in
RES. Classifying important factors responsible for application of KM to RES
includes:
3.1. Business Needs
3.1.1. Decreasing Time And Cost
And Improving Handling Of Returned Products
Avoiding delay reduces time and resources consumed
on reverse manufacturing functions; repeating successful return processes
increases productivity and the likelihood of further success. So, organizations
need to apply knowledge gained in previous return processes to future
processes. Unfortunately, the reality is that development teams do not benefit
from existing experience and they repeatedly commit inaccuracy and delay in
decision even though some individuals in the organization have knowledge and
experience to avoid them. Therefore RES could gain much more if they could
share this knowledge.
3.1.2. Making Better Decisions
In RES, sortation specialist at the inspection
points is involved constantly makes technical or gate keeping about the
products entering into return chain. Therefore individual knowledge of
sortation specialist regarding the assembly and disassembly process alongwith
logistical complicacy must be shared and leveraged at enterprise levels. RES
need to define all reprocessing and reverse logistical activities and for
sharing knowledge so that individuals at all levels throughout the organization
can make correct decisions about the product return processes.
3.2. Knowledge Needs
During production, the product would have undergone various processes such
as assembling, painting etc which might change the fundamental properties of
materials used or which necessitates special requirements for disassembly. For
e.g., a part coated with a hazardous chemical might need to undergo special
treatment before it can be handled for disassembly. Hence it is important that
one must have some degree of knowledge about all the processes and materials
that were used in the manufacturing of the products that can be used while
reprocessing the returned products. This knowledge in
regarding product life cycle, product attributes etc which is critical to
achieve and improve business goals. We now look at some of these knowledge
areas and organizations’ related needs that can be used for RES.
3.2.1. Acquiring Knowledge About
New Technologies
The emergence of new information system like
Design/disassembly data sharing systems, Lifecycle information monitoring
systems makes management of RES more efficient
focusing on product identification and describes the procedure to disassemble
the products. Soga et al (1999) illustrates information systems
developed at Hitachi Corporation that uses Radio Frequency Identification
(RFID) technology to store and retrieve information regarding product on an
individual basis. If these IMS can not be
managed properly they can turn out to be
management’s worst nightmare. It is difficult to become proficient with a
new technology and managers to understand its impact and cost when using it.
So, enterprise involved in returns must quickly acquire knowledge about new
technologies and master them.
3.2.2. Accessing Domain Knowledge
Management of RES requires access to knowledge of product
and information movement not only in forward but also in return direction.
Meyer (1999) described product returns as if it is not managed properly
they tend to cause excessive costs for all the parties involved. Therefore,
knowledge needs to be managed as cross-functional business processes in RES
(Harrington, 1991; Smith, 1997). This can be done
either by training or by hiring employees knowledgeable in return process and
spreading it throughout organization.
3.2.3. Sharing Knowledge About Return Processes
Having identified the knowledge and information requirements for decision making, we now establish knowledge sharing system that would provide appropriate decision support for RES management.
A knowledge sharing approach is proposed as a means to model KM systems
(Tiwana, 2002). A knowledge sharing approach is where knowledge is maintained
at product level and is updated as the product moves across the various stages
of its lifecycle. This will enable decision support that handles the unique
requirements of every product. A formal knowledge
sharing also ensures that all individual involved in return processes to access
it. So, organizations must formalize knowledge sharing while continuing
informal knowledge sharing.
3.2.4. Capturing Knowledge And Knowing Who Knows
What
When a key person managing the return process with
all the critical knowledge suddenly leaves an organization, it creates severe
knowledge gaps—but probably no one in the organization is even aware of what
knowledge they lost like sortation specialists at inspection point having detailed knowledge about the
particular product leaves. Knowing what employees know is necessary for
organizations to create a strategy for preventing valuable knowledge from disappearing.
Knowing who has what knowledge is also a requirement for efficiently staffing
projects, identifying training needs, and matching employees with training
offers.
3.2.5. Collaborating And Sharing Knowledge
Communication system often acts as means of
reducing some degree of uncertainty in RES and knowledge transfer. The
collaboration between supply chain partners would provide crucial
feedback to manufacturers and other supply chain users for analyzing and
improving the take back function of returned of the products. For instance,
manufacturers would be able to determine the components that are most reusable
and have maximum market value or components that are most likely to break down
during its usage. This state of mutual sharing of knowledge could be used to
improve the design of the product for increasing its lifecycle performance.
4. KM Background
Before proceeding further let us introduce some
key KM concepts that will help us to appreciate KMS implementation in RES. Here
it is important to understand three basic levels of refinement to knowledge
i.e. data, information, and knowledge. Information is data that
is organized to make it useful for end users who perform tasks and make
decisions.
4.1 Data
In RES
Considering RES we gather and sort data from a variety of sources. These include: partners in reverse enterprise system like suppliers, retailers, manufacturers, reverse manufacturing and logistics either by OEM or third party services providers. On site soration specialists, who act as gatekeepers for the products to enter return chain, can acts as critical source for data. Beside this literature, practitioners, scientists and surveys also act as data sources. The creation and treatment of return data is the goal of RES. This deals with the development of an experimental platform that will eventually permit the testing of various configurations for the return chain, and aid in the establishment of different operation and planning approaches for each of the units coming from customer after use. The platform will be used as an integration tool for the various return activities to converge at one place. This experimental platform will be made up of intelligent software agents that will collectively manage return procurement, reverse manufacturing and redistribution operations through the use of raw, detailed local information.
4.2. Information In RES
Planning and control of RES is quite complex due to the uncertainty regarding the time, place of origin, and quality status of returns. In RES information flows coincide with product flows, but they have a phase delay compared to physical flows; that is, information are generated by a physical process performed on some physical flows. Here information can be used to get information on the upcoming return before the physical flow reaches the process.
Figure 2: Knowledge Sharing In
Reverse
As outlined in Kokkinaki et al (2001), information and communication technologies (ICT) can be used to minimize uncertainty and volume of incoming returns. To this end, RES provides a secure intranet, extranet, internet connectivity on its servers to share information related to product design Information, product disassembly Information, location Information or lifecycle Information. In this virtual space, suppliers, customers, retailers, competitors and distributors can manage knowledge and activities related to returns at various levels as shown in figure 2.
5. Knowledge Management Role
In RES
It has been well noticed that a high level of uncertainty is also an important characteristic of RES therefore KM can play an important role in this domain. Reliable planning of collection and recovery may therefore be a difficult task for decision makers. Furthermore, the form of recovery and the sequence of processing steps required are often dependent on the quality of the input, knowledge, and information about the returned product which is another unknown factor. The main issue with KM in RES is use of diverse and changing resources. Mainly KM focuses on understanding how knowledge is acquired, created, stored and utilized within an organization. Knowledge management in RES integrates the information both with the outside parts and inside parts of the process of returned product handling, help the partners in RES to make appropriate choices, support process, administrate collaborations. Information needed to be integrated in different phases has been shown in table l. Here, four processes enable end-users, while interacting with their KM system, to generate and share knowledge.
5.1. Knowledge
Creation
Organizational knowledge creation is generative, where knowledge is actively constructed from information previously stored and new information drawn from the environment. Here systematically, and transferring and recording the “lessons learned from the previous return process” in a way that will be of maximum benefit to the enterprise.
5.2. Knowledge
Storage And Retrieval
In order to store and later to retrieve knowledge, generated at various functional points in RES, must first be determine: What is important knowledge to retain? How best to retain it?
Knowledge at various points in RES and who needs that knowledge is shown in table 1.It is important to note that functional and effective knowledge storage systems allow categorization around learning needs, user expertise, use of the knowledge, and location (where the information is stored). Some of the key enabling technologies are multimedia databases, query languages, text index, search engines, data mining and RFID and storage servers/advanced computer storage technology allow knowledge to be effectively stored and made accessible (Alavi & Leidner, 2001).
5.3. Knowledge
Transfer
KT from an intra and/or inter-enterprise perspective involves the mechanical, electronic, and interpersonal movement of information and knowledge both intentionally/formally and unintentionally/informally. The various levels at which transfer occurs are transfer of knowledge between reverse enterprises partners. Workflow systems, groupware, database, GDSS, video teleconferencing, electronic bulletin boards, discussion forums, knowledge directories, list -servers and graphics applications are some of the key enabling technologies for KT.
5.4. Knowledge
Application
Dramatic advances in communications and transportation, has speeded the flow and production of goods and/or services, eased the task of managing globally dispersed assets both in forward and reverse direction.
Source
of Knowledge Type
of Knowledge Application
of knowledge Collection Phase Availability of Collection
centre Transportation distance Transportation time Transportation cost Product classification Inspection/ Separation
specialist Recovery phase Inventory Inspection/ Separation Knowledge Product design and technical
knowledge Remanufacturing cost , time knowledge Disposal Knowledge Product
design and Development Production
planning and control collection and distribution phase Distribution Distribution Cost & time Customer feedback &orders disposal knowledge Retailers Customers Recovery
and Collection phase
Table
1: Dimension Of KM In RES
These factors have all combined to create highly- competitive global markets in which changes are rapid and companies need to be quick and flexible, but able to retain benefits of economics of product return. Effective KM application in RES promotes an integrated approach to identifying, managing, reverse manufacturing and logistics options. Application of KM improves upon the current system in both macroeconomic and microeconomic respects. For sharing an enterprise’s information assets, automatic inference expert systems, rule-based/case-based expert systems, workflow systems, workflow automation systems are the key enabling technologies for knowledge integration and application in RES. Next we describe the aspects of KM in RES and framework used in this study.
6. Implementation
Of KM In RES
To optimize a return chain all elements of the RES must be connected to enable the flow of knowledge. Connectivity is the first attribute to allow the flow of knowledge throughout the RES. The second attribute is the communication of knowledge in a fashion that allows all elements to make decisions that maximize customer value while reducing cost and cycle time for taking back the product and sending back to new potential user. The third attribute of KM in RES is ability to collaborate in a real time fashion, encourage knowledge sharing and allowing the flexibility in supply chain according to the market place changes.
This framework was developed integrated information and Knowledge management site for RES. Here different partners of RES may work together within the site. Since reverse manufacturing and logistics processes involves more participants, who may adopt various special professional information systems, the system we developed was derived from a collaborative information /knowledge integration supporting system. This framework does not directly support the professional activities in RES, but facilitates the information and Knowledge sharing and concurrent approach by involving the different participants of both forward and return process.
Figure 3: Information And KM Collaboration
Framework For RES
Further explaining Nonaka and Noboru (1988) contribution, knowledge generation can play key roles in value creation. RES often uses multidisciplinary set of activities such as inspection/separation, reuse, re-manufacturing, recycling, re-distribution and disposal at this end.
Figure 4: Knowledge Based Operation And
Planning Of Return
6.1. Socialization
Here in RES socialization can occurs when researchers and management people are in direct coordination with staff directly involved in its application. The experimental platform is being developed through socialization. A small team of experts in computer programming, artificial intelligence, life cycle management and product design are working in close collaboration on it, exchanging their ideas and knowledge to create an innovative tool that can be used for efficient management of returns. This may be seen as a “combination’ tool, but it is created through the transfer and sharing of tacit knowledge among management and staff involved in returns.