You are on page 1of 15

Knowledge and Process Management Volume 5 Number 3 pp 143–157 (1998)

" Case Study

Knowledge Logistics in Business Contexts:


Analyzing and Diagnosing Knowledge Sharing
by Logistics Concepts
Fons Wijnhoven*
University of Twente, The Netherlands

Knowledge sharing is regarded by many management scientists as a main factor to evaluate organizational
learning and knowledge management performance in organizations. Therefore, it is important to develop
instruments for the analysis and diagnosis of knowledge sharing. Unfortunately, management practice and
science lack instruments to evaluate the effectiveness of knowledge sharing within and between organizational
units. This paper explores the possibilities of logistic concepts in analyzing and diagnosing knowledge sharing.
Because the logistics concepts have been developed in physical/material elements sharing, it might be
impractical or misdirecting in the virtual/knowledge area. Consequently, each concept has been evaluated to its
practicability for knowledge-sharing analysis and diagnosis, leading to the KNOWLOG instrument and further
understandings of the nature of knowledge sharing. These insights and the instrument are applied to three
cases: a knowledge logistics coordinator, a high-tech equipment manufacturer and an IT consultancy/software
company. The author concludes with pros and cons for the knowledge logistics approach to the effective
management of knowledge sharing.  1998 John Wiley & Sons Ltd and Cornwallis Emmanuel Ltd.

INTRODUCTION 1945). Knowledge sharing in processes of inter-organiza-


tional design and manufacturing is also regarded as one of
A main reason for the existence of organizations is the the main reasons that enable industrial networking and
abilities of individual members to share their knowledge. cooperation (Hamel and Prahalad, 1994; Hakanson, 1987;
Because knowledge is a justified belief (Nonaka and Quinn, 1992). Additionally, knowledge is perceived as the
Takeuchi, 1995) about reality, consisting of explanations, main production factor in the post-industrial economy (Bell,
predictions and technologies (final theories) (Lyles and 1979; Drucker, 1994; Quinn, 1992; Stewart, 1997). In
Schwenk, 1992) it is vital for effective process management. organizational knowledge creation, the sharing of tacit and
Knowledge sharing enables organizations to specialize, thus explicit knowledge are both valuable, and the design of
to develop best of all knowledge, when the organization intra- and inter-organizational knowledge sharing has been
members are effective in complimenting each other’s limi- regarded as a main source of Japanese competitiveness
tations (cf. Barnard, 1938; March and Simon, 1958; Simon, (Hedlund, 1994; Nonaka and Takeuchi, 1995).
This paper will define knowledge sharing by the transfer
Fons Wijnhoven, Assistant Professor of Management Information Systems of knowledge, mostly by information media, and the
(MIS) at The University of Twente, has researched extensively the business interpretation of the newly received knowledge within and
impacts of IT, especially on its contributions to organizational learning and by existing knowledge of the receiver. This statement refers
knowledge management. He has published articles in journals as Inter-
national Journal of Information Management and Journal of Organizational to the problems of:
Computing and Electronics. He is author of a Dutch study text on Impact of
Information Technology and has a book on Knowledge Management in English Knowledge transfer, requiring means to bring an idea
to appear in 1998. (knowledge) to another person. To be able to do so, the
*Correspondence to: Fons Wijnhoven, Department of Information idea has to be coded in some way, so that any ‘matter’
Management, School of Technology and Management, University of
Twente, PO Box 217, 7500 AE Enschede, The Netherlands. E-mail: (e.g. paper, diskettes, voice) can be used for transfer. The
a.b.j.m.wijnhoven@sms.utwente.nl coding must be efficient, but especially effective, so that

CCC 1092-4604/98/030143-15$17.50
 1998 John Wiley & Sons Ltd and Cornwallis Emmanuel Ltd.
CASE STUDY Knowledge and Process Management

the interpretation of received codes will be such that requirements’ (Ballou, 1992, p. 4). Logistics is concerned
the receiver will understand the idea of the sender with how materials are supplied in or between organizations
(Guetzkow, 1965; Shannon and Weaver, 1949). in such a way that on-time-delivery of required products
Knowledge interpretation, requiring that the received and services to an organization’s (internal or external)
signs can be integrated with the ideas (knowledge) the clients is feasible. For inbound logistics, often called ma-
receiver already has. This means that the receiver’s terials management, this means that raw materials, additives
feeling of inconsistency must be resolved, or else the and semi-finished goods are purchased and stored, further
acceptance of received knowledge will become problem- delivered to production units for subassembly, delivered to
atic. This interpretation means creating logical consist- a subassembly store and later delivered to a unit for final
ency (semantic) and acceptance of the idea with the assembly. Finally, finished goods are stored to be available
basic values of a person (pragmatic consistency, con- to the sales department. Consequently for outbound logis-
gruity or cognitive dissonance reduction) (c.f. Shaver, tics, stores are connectors and decouplers of processes that
1977). exist in the value chain between supplier and client. This is
explained and described in Figure 1.
The increasing importance of knowledge sharing
Knowledge inbound logistics imply intra-organizational
(Drucker, 1994), and the rise of knowledge sharing support
knowledge sharing, that leads to tangible end products or
information technology, particularly Internet and Group-
client solutions for external clients. Knowledge outbound
Ware like Lotus Notes (Neilson, 1997; Pyle, 1994), has
logistics imply that knowledge-containing messages are
raised the interest in how knowledge sharing can be
delivered to (external) recipients (clients or partners).
improved in organizations. This interest is also connected to
Logistics has the goals of increasing revenues by
the growing interest in knowledge management (Davenport
improving the service levels and reducing costs of the
and Prusak, 1997; Nonaka and Takeuchi, 1995; Quinn,
logistic process (Ballou, 1992, p. 25). More concretely,
1992). The goals of knowledge management can be defined
logistics has the following performance criteria:
in relation to improving the structure of knowledge and the
processes of knowledge management. The goals of the
Delivery time: Time that exists between moment of
structure of knowledge management are about the correct-
material/goods request and delivery. In some cases this
ness and up-to-dateness of the contents of knowledge, the
time has to be zero, which consequently requires often-
location of knowledge (important for easing access and
costly storage. The JIT philosophy tries to reduce the
storage), the shape of information carriers (so that the
storage costs near nil by coordination of suppliers
knowledge is easily applicable), and the availability of the
and client production processes (Cf. Aggarwal, 1985).
best kind of knowledge. The goals of the knowledge
Delivery completeness: The volume of goods to be
processes are about the adjustment of knowledge, effective
delivered. In many cases incomplete delivery occurs as a
distribution to business parts and the sharing of knowledge,
consequence of scarce resources and scarce capacities of
effective and efficient knowledge storage, and enabling
the supplier and transportation facilities.
effective and efficient knowledge combinations.
Delivery reliability: The delivery on time. This criterion
Knowledge logistics intends to support the distribution
is very important because too late delivery will lead to
and storage of knowledge, meaning the flow of and
idle resources for the client, and too early delivery will
standstill of knowledge and thus supports some knowledge
lead to requirements for access space and risks of
management processes. The organization of standstill and
unsalability of goods.
stores of knowledge is important for:
Quality: The extent to which what is delivered is
Handling uncertainty in the knowledge-creation process according to specifications. This is extremely important
(Galbraith, 1973) when delivered components must precisely fit into a
Enabling speed of knowledge delivery (because it does larger product or system.
not need any knowledge production at the moment of Price: Logistics has its price. Therefore the optimiza-
demand) tions of stores and distribution routes and means saved
Creating high efficiency in the knowledge value chain by costs.
sharing knowledge resources synergically, and Volume flexibility: Transporters must particularly be
Enabling the separation/division of knowledge work so able to deliver large volumes as well as smaller ones
that specialization in knowledge development is feasible. economically. This requires flexibility of transportation
means or transportation scheduling.
Following the US Council of Logistics Management, Client customization: It is the client who should be able
logistics is defined as ‘. . . the process of planning, implement- to define how and when goods are delivered. Transpor-
ing and controlling the efficient, cost-effective flow and tation companies try to outperform competitors in client
storage of raw materials, in-process inventory, finished customization. One of the options for customization is
goods and related information from point of origin to point the delivery of additional services like Federal Express’s
of consumption for the purpose of conforming to customer tracking systems that enables clients to know exactly

144 F. Wijnhoven
Knowledge and Process Management CASE STUDY

Figure 1 The inbound logistics model

when certain goods can arrive, so that production in type of knowledge organization and knowledge
scheduling can be optimized (Lucas, 1996). logistics.
The logistics concept helps in operationalizing sociologi- The paper will end with the conclusions and a discussion
cally based knowledge sharing concepts so that its engineering is about the sense and nonsense of knowledge logistics.
eased. This requires a substantial further analysis and elab-
oration of main concepts. Particular problems are:
The logistics concept is related to physical goods KNOWLEDGE-SHARING CONCEPTS
handling, whereas the knowledge concept is about
virtual goods. Consequently, knowledge is less easy to According to Wijnhoven (1998), knowledge is an idea that
pack, store, quantify, trace and monitor. explains, predicts, or contains a final means-end theory
When the knowledge concept is so different from goods, (called technology). This means that its ‘storage’ and ‘distri-
what does this imply for the relevance and applicability bution’ requires coding the idea, so that the codes can be
of the logistic concept to the knowledge domain? transferred on material objects (signs) that can be physically
distributed or stored (Austin, 1976; Stamper, 1973). These
The research goals thus are:
signs require an interpretation of the receiver or retriever
1. Validating the relevance of logistics concepts for knowl-
before knowledge is re-established. Consequently, it is almost
edge sharing. This requires how concepts of logistics
impossible to know if the same idea has been re-established
can be used for describing knowledge-sharing phenom-
as intended by the coder; not only may the recovered ideas
ena. First, therefore, the knowledge-sharing concept is
be different, but also the signs may be transferred ineffec-
defined in the following section.
tively (distortion), or the messages were mistaken because of
2. Testing the applicability of knowledge logistics concepts language incompatibilities (see Figure 2).
on the analysis and diagnosis of knowledge-sharing Knowledge logistics, like logistics in general, is not only
processes in organizations. This requires first the an issue in space but also of differences in time (Figure 3).
putting together of knowledge logistic concepts as a Knowledge stores require effective organization to increase
practical method for knowledge-sharing analysis and the chance of knowledge reuse. It also requires an interpret-
diagnosis. Second, it requires case studies to critically ation process by retrievers. The related interpretation prob-
analyze knowledge logistics on a metric of applicability. lems are similar to those of knowledge exchange through
By critically, we mean that the method should be robust, space.
in the sense that it is applicable in different situations. From these conceptual insights, I conclude for knowledge
These situations are defined here in terms of differences logistics that in many cases the receiver of the signs has to

Knowledge Logistics in Business Contexts 145


CASE STUDY Knowledge and Process Management

Figure 2 Knowledge sharing through space

Figure 3 Knowledge sharing through time

be very active in re-establishing the knowledge. Interpret- Additionally, knowledge transfer happens in a social con-
ation thus requires that knowledge consumers will become text, which might facilitate or obstruct transferring specific
knowledge prosumers. The complexities of interpretation knowledge. In some cases, people may not be aware of the
and codification are specifically high when the knowledge is need for delivering specific knowledge to others, or they
difficult to analyze and thus more ambiguous (Daft and might find it against their personal interest (knowledge as
Weick, 1984). The use of media for storage and transporta- power) (Boone, 1997). The knowledge logistics concept
tion with appropriate levels of media richness is important focuses on storage and distribution of knowledge and treats
for effective knowledge logistics (Daft and Lengel, 1986). awareness and interest problems as context.

146 F. Wijnhoven
Knowledge and Process Management CASE STUDY

Figure 4 Classification of knowledge exchange relations and actors

RELEVANCE OF LOGISTIC CONCEPTS TO correlating data. This statement has been heavily criti-
KNOWLEDGE SHARING cized by rationalists, who proposed that only ideas
constitute how we observe reality, and thus create data.
The beginning of this paper mentioned several logistic In practice, knowledge is created via interactions of
processes, stores and performance criteria. Each of these observations and ideas (Kolb, 1984).
elements will be translated here to knowledge-sharing Additives. Besides ideas and data, people need time,
problems through space and time. skills, motivation and all kind of material means (paper,
offices and money) to create knowledge and interpreta-
tions. For instance, expert systems have been created to
Logistic elements and knowledge sharing
realize efficiency on these means.
Semi-finished goods. To create flexibility it is important
Suppliers. Knowledge suppliers are teachers,
to invest in some part of stable knowledge and infra-
researchers and experts. These three groups may over-
structure, that enables us to create many new knowledge
lap, but in general researchers and experts are knowl-
products by varying combinations of semi-finished
edge producers, whereas experts are also knowledge
goods (cf. Meyer and Zack, 1996; Hamel and Prahalad,
users. Teachers have a task in transferring valid knowl-
1994).
edge to learners. In some cases teachers are also
Purchased goods. Knowledge elements, ideas and data,
researchers (university professors). Knowledge brokers
can be purchased and stored to create semi-finished
connect these teachers, researchers and experts to the
knowledge. The purchasing process requires that some
demand for knowledge without owning the knowledge
transaction has happened, but this does not necessarily
themselves (Figure 4).
involve money, and often it is more an acceptance
Because of interpretation needs, it is hard to distin-
(internalization, Nonaka and Takeuchi, 1995) process
guish between knowledge supply and demand. When
than a physical transfer.
the knowledge is complex, or great differences in jargon
Purchased goods store. Knowledge stores can be created
or paradigm exist, interpretation costs are high. When
by a diverse set of means and requires (like in the case of
the interpretation efforts are high, knowledge receivers
any store) a structure for retrieval (Wijnhoven, 1998).
have to be prosumers (cf. Daft and Weick, 1984).
Production. Production is the creation of knowledge,
Because of the focus on business contexts, teachers and
which implies that knowledge elements are combined
researchers are excluded from this study.
and new elements are created. This process can be
Raw material. It is often stated that data are the raw separated in a subassembly and an assembly process.
material of knowledge, but philosophically this is only Subassembly. Knowledge subassembly combines knowl-
partially true (Churchman, 1971). The empiricists edge fragments to newly created insights that are stored
believed that knowledge comes from analyzing and and later are reused for creating deliverables for clients.

Knowledge Logistics in Business Contexts 147


CASE STUDY Knowledge and Process Management

Assembly. Knowledge assembly combines knowledge consultant in that case is a companion in the process of
fragments to deliverable knowledge. This assembly knowledge prosumption, and creates knowledge for
process is the end stage of the production process. himself as well during the process of knowledge
Subassembly store. A store for knowledge elements that delivery.
are used later in creating deliverable knowledge. Many Order. A request for specific knowledge under certain
knowledge stores may exist in an organization, related conditions.
with a different location in the value chain (see later on
decoupling).
Knowledge end products. These consist of knowledge Performance criteria for knowledge logistics
transferred to a tangible product (e.g. software) or
The logistic performance criteria are listed here again to
solution.
treat their operationalizations in the context of knowledge
End products store. Store of tangible knowledge-based
sharing.
products or solution capabilities.
Installation. A process in which knowledge or solutions Delivery time. Because knowledge is seldom a discrete
capabilities are transferred to clients, internal or external. product, delivery is mostly a learning and insight
The installation process can be the delivery of a course, process, and the delivery time is often hard to define.
consultancy, an information system, of books or other Nevertheless, people may often feel that they need
knowledge-containing material and the delivery of certain knowledge at a certain moment, but that it will
people capable of problem solving. take too long before it can be gained, and thus subop-
Distribution. Transfer of data that are intended to timal decisions are regarded as satisfactory (Simon,
reveal a knowledge-containing message. Distribution 1945). Because the limits of rationality can be changed
can happen via electronic, paper and other means. Often by information technology, IT-augmented knowledge
interaction between client and deliverer is required to delivery leads to increased rationality and to substantial
check if the message has been received in the sense competitive advantage (Drucker, 1994; Neilson, 1997).
it was intended by the sender (syntactically and Of course, the knowledge processing capability must
semantically). also be adjusted when more knowledge elements are
Client. Knowledge clients are more or less knowledge received.
consumers or prosumers. The extent depends on the Delivery completeness. Because only God is expected to
ambiguity of the message and difficulties of knowledge be omniscient, delivery completeness must be defined in
integration in existing ways of thinking and working. terms of the most important knowledge required. Con-
Decoupling. Decoupling defines the boundaries of the sequently, organizations and people need knowledge
consumer and producer systems. Because knowledge filters (search and attention rules in the terminology
clients are often knowledge prosumers, the knowledge of Cyert and March, 1963). Scientific or cognitive
client does not fit easily into one of the extremes. improvements might further develop the filter.
However, many parts of knowledge are applied without Delivery reliability. Delivery reliability with respect to
any production effort from the client. For instance, knowledge implies that knowledge fragments are
computers contain a large amount of knowledge defined actively available at the moment they are needed. When
and implemented by the manufacturer and software the knowledge is too late, it is obsolete, when it is too
producer. Also in organizations, the functional separ- early it will be regarded as irrelevant.
ation of tasks of designers, production planner, material Quality. Quality of knowledge is about the validity with
management, marketing, sales and services are defini- respect to the relations among its fragments and data.
tions of expertise in these separate areas, and thus are Price. Price can be expressed in terms like opportunity
decoupled knowledge stores. Multi-functional teams costs, costs of creation, replacement value, costs of
and matrix organizations require the reallocation and maintenance, costs of acquisition in terms of installation,
redefinition of knowledge stores and their decoupling and user value, market price of the knowledge logistics
(Mintzberg, 1983; Nonaka and Takeuchi, 1995). service (cf. Quinn, 1992).
Forecast. Decouplings can be organized by forecasts of Volume flexibility. Volume flexibility is about the
required knowledge. If these forecasts are highly poss- customization of bodies of knowledge. It requires that
ible, there is not much need for interactions with the body of knowledge is such that within a certain
knowledge clients about the contents of the knowledge strategic range, applicable knowledge can be created in a
stores. This is typically so in professional organizations, limited period of time and with limited efforts. This is
like health care, where the professional groups define the what is often done by R&D departments, and organiza-
main knowledge needs (consultancy or expert treat- tion consultancy offices that solve unique problems by
ments) for their clients. In many practices, however, their generic expertise (cf. Hamel and Prahalad, 1994).
knowledge needs are unpredictable, leading to efforts by Client customization. Client customization requires that
the clients in creating the required knowledge. Often the sufficient knowledge elements are selected for solution

148 F. Wijnhoven
Knowledge and Process Management CASE STUDY

of client problems, and that not too much is sold. Some and S1 stores are important for developing the organiza-
extra knowledge may be necessary to provide the client tional capabilities for a market. Finally, the S4 stores contain
with a background for understanding the delivered a client’s knowledge, which are often owned by the client
knowledge messages or solution. This knowledge- (knowledge prosumer). The client also largely creates the S4
packaging problem aims at increasing the usefulness and stores. The S1 to S3 stores are used to augment the value of
adoption potential of the knowledge. Sometimes this S4, but otherwise S4 insights are important for testing and
requires additional training and instruction, in other developing the validity of S1 to S3 store contents.
cases it may also require organizational change processes
(cf. Schein, 1994). The difference between volume flex-
ibility and client customization is that the first starts CASES
thinking about what the supplier can deliver, whereas
the second starts from the client’s needs. Research design
Organizations were contacted to test the practicability and
robustness of the Knowlog instrument. The practicability is
THE KNOWLOG INSTRUMENT
assessed by showing per case the opportunities of finding
significantly valuable insights, consisting of minimally one
For creating a logistics-based analysis and diagnosis tool for
advice to improve knowledge sharing in the case. The
knowledge sharing, it is important to start the discussion on
robustness is assessed by applying the method effectively in
what is actually the product delivered via the knowledge logistics
cases with different types of knowledge logistics. The
process. In many cases, not the knowledge is delivered but
classification of knowledge logistics is based on how their
what is delivered are knowledge-signifying data, codified
knowledge logistics has been organized specifically on its
physical products (e.g. information systems) or knowledge-
knowledge products (knowledge or solutions) and the
containing capabilities (e.g. people with specific skills).
organization of its stores (decoupling and store types).
These products and hired capabilities are called solutions. In
Empirically I will study a knowledge coordinator, a project
some cases actual knowledge is delivered (e.g. in training,
management organization and a client problem-solver. I
education, and other prosumer-like delivery), so that clients
will not study a functional bureaucracy, because these
are able to solve problems themselves. For having effective
organizations have been studied already intensively in the
and efficient knowledge logistic processes, therefore the
literature (cf. Mintzberg, 1983; Hamel and Prahalad, 1994).
virtual (knowledge) logistics and solution-related physical
Case 1 is called ACIB and is an interdepartmental
logistics have to be controlled. The logistic process requires
organization to encourage the development of knowledge
very specific control measures, depending on the level of
on information security in Dutch national governmental
knowledge ambiguity and client involvement (order domi-
departments. ACIB is a knowledge logistic coordinator, because
nation requires high client involvement, forecast domination
its objective is to help potential suppliers and requesters for
requires low client involvement). These ideas are assembled
knowledge to share their knowledge. Case 2 is called
in Figure 5 which shows an adjustment to the general
Nedap, and is ‘physically seen’ a high-tech producer of
logistics model to a Knowlog Diagram.
electronic security equipment. Nedap tries to deliver solu-
The Knowlog Diagram shows the elements to be
tions that solve the client’s problem after defining the
observed in an assessment of knowledge sharing. The
problem in interaction with the client. This requires a
performance criteria for diagnosis were defined above and
project-oriented approach. Case 3 is a large internationally
must be applied differently depending on the type of
operating IT services provider, Cap Gemini, active in
supplier–client relationship. Some organizations will have very
management and IT consulting, project services, informa-
strongly forecast dominated logistic processes. The empha-
tion systems management, education & training, and
sis then is on low-cost delivery and low customization. This
software products. Cap Gemeni also applies project man-
means that this organization type will have lowly devel-
agement, of course, but more strongly shares knowledge
oped S2, S3 and S4 stores. The S1 store is the functional
stores with clients and so tries to solve client-specific problems.
expertise store, which is dominant in classic functional
bureaucracies. Organizations also need well-developed S2
stores, which contain market forecast-dominated contents. Case 1: ACIB*
Knowledge and information brokers use S1 to enable A Dutch Government’s Auditing Office’s audit in 1988
variations cheaply in different markets, and thus develop S2 concluded (correctly) that Dutch government departments
stores explicitly (Meyer and Zack, 1996). Organizations have information systems that are extremely vulnerable,
that are strong in solving client unique problems apply which could have tremendous negative impact. After this
project management methods and develop knowledge
stores attached to projects. S3 contains the project-related
*The author acknowledges Ms Mieke Borgers-Zoom of ACIB for her
knowledge. The contents of the S3 stores are driven by the contributions to this case study. The case describes the situation at August
specific order received from a client. Interactions with the S2 1997. ACIB’s homepage is http://www.minbiza.nl/acib/acib1.html.

Knowledge Logistics in Business Contexts 149


CASE STUDY Knowledge and Process Management

Figure 5 Knowlog Diagram and legenda

audit, it was recognized that government departments do organizations (mainly universities and consultancy firms)
have a substantial amount of knowledge on IS security, but when no department seems to have any knowledge on a
that this knowledge is fragmented and scattered over many specific security subject. This is mainly the case with specific
departments. Consequently, it was decided to establish an information technological subjects. ACIB thus has a pivotal
advisory and coordinative center on IS security, called position in relations between knowledge delivers (mainly
ACIB*, for facilitating the sharing and assembling of knowledge departments) and knowledge clients (departments as well).
fragments among the departments. Additionally, ACIB also However, although ACIB only has seven employees, its
has the task to import security knowledge from other impact is large. It has become a recognizable spot between
departments, where problems and knowledge can be
dropped. ACIB tries to connect knowledge supply and
*ACIB stands for Advies en Coordinatiepunt Informatie-beveiliging. demand (problems) via organizing meetings and referring to

150 F. Wijnhoven
Knowledge and Process Management CASE STUDY

Figure 6 Knowlog Diagram for ACIB

expertise else, and it assembles knowledge by brochures, oped, because ACIB is not involved in solving client
newsletters, manuals for reaching high-security objectives, problems (ACIB only develops and delivers knowledge that
and a CD-ROM for vulnerability assessment. Because of clients can use in their own projects). The S4 store,
this task definition, ACIB does not really own the knowl- containing knowledge about problem-solving processes,
edge it distributes. The main oranizational memory contents is absent at ACIB and is available at each department
are shared with all the departments. It is ACIB’s objective to separately.
deliver knowledge in such a way that departments can solve Reflecting about the knowledge logistic performance
problems by themselves. ACIB is only involved in problem- criteria, I conclude:
solving activities in a department when it can generate
knowledge that it can deliver to other departments as well. Delivery time is defined by the occurrence of specific
ACIB does not deliver body shopping for helping depart- problem types and the process of achieving the security
ments with acute manpower problems. ACIB therefore is objectives as defined by the government’s security
deliberately kept small. The services ACIB supplies are not policy rules. In principle, therefore, ACIB is intended as
so specific that they require a core competence, but they are a temporal organization, but the need for coordinating
extremely valuable for the departments. Therefore, all knowledge logistics may be permanent.
departments together fund ACIB and the knowledge Delivery completeness. ACIB provides information prod-
distributed via ACIB is free of charge for participating ucts and knowledge on IT security by assembling
departments. This results in the Knowlog Diagram, where knowledge fragments and adding external insights when
the memory stores are put in broken ellipses because its needed. ACIB is strong in coordinating the organiza-
contents are not only owned by ACIB (see Figure 6). tional knowledge but clients might have to go to other
ACIB’s S1 consists of non-client-specific newsletters, experts for further support on technical problems.
brochures and homepages. The S2 store consists of ACIB’s homepage gives a list of hyperlinks to
knowledge ACIB employees have to help clients with more companies and institutes for external help.
specific questions. The seven ACIB employees have Delivery reliability. ACIB filters relevant internal and
some specialization to specific problem classes, type of external knowledge fragments by its understanding of
departments and techniques. The S3 store is weakly devel- what is needed according the IS security policy.

Knowledge Logistics in Business Contexts 151


CASE STUDY Knowledge and Process Management

Quality. The quality is what clients need to obtain Case 2: Nedap*


the IS security objectives. The knowledge is mostly Nedap employs about 450 people in The Netherlands and
delivered to the IS security coordinator of a department. another 100 across the world (particularly the USA). The
At the moment, government and parliament are putting company specializes in the development, production and
great pressure on the departments to realize the security sales of electronic detection systems and high-tech elec-
objectives. Consequently the IS security coordinators tronic and mechanical equipment. Nedap has offices in most
have a very high knowledge need. European countries and the USA. The main market groups
Price. Because ACIB has been established also to are retail support (mainly consisting of anti-theft security
encourage interest in security of information systems for systems for shops), security control systems (mostly chip
government departments, it has been wise to have charts and related hardware and software), cattle manage-
knowledge logistics free of charge. A market-like fund- ment systems for the detection and management of animals,
ing may lead to some underutilization of the available IT logistics, polling systems, industrial electronics according
resources. to client-specific needs, and computerized tank products (for
Volume flexibility. ACIB’s main volume is forecast (pol- outdoor terminals that accept credit and debt cards for gas
icy) driven, and its contents are about government stations).
specific organizational aspects of IS security. ACIB’s Since 1993, Nedap has gradually been reorganized from
knowledge products are largely planned by the procedure a functional to a market group orientation, so that employ-
ACIB has developed for reaching the IS security policy ees are closer to the understanding of market needs and
objectives for the departments. Nevertheless, occasion- client demands. Each market group acts as a strategic
ally ACIB has to act very quickly and effective when new business unit (SBU). Each SBU consists of a group of people
and unpredicted disasters occur. This is the case, for whose jobs have been enlarged to generate stronger busi-
example, with the appearance of new viruses or hacking. ness awareness and to reduce the amount of specialist
functions. Nedap wants to deliver client solutions, and sees
Client customization is rather low. ACIB has to dissemi- a product not necessarily as a means to that. The products
nate knowledge for all departments who participate and and the context of their application are the main criteria by
ACIB is a partner in reaching the IS security objectives for which knowledge is being organized at Nedap. Nedap aims
each department. However, each department’s IS security at solving client problems, not by just selling a piece of
coordinator has to make his own specific application of equipment but by analyzing clients’ problems and engaging
the rules and knowledge required. The information- in a partnership with them. The analysis of the problem
technological problems change rapidly because new IT leads to an offer consisting of a statement of what the client
products have new security problems. These problems are, can expect from Nedap, and an agreement to realize certain
however, IT-market general, and thus are left to external IT benefits for the client. The explicit and tacit knowledge at
consultants. Nedap is stored in the market groups. Knowledge about
An issue may be to consider developing ACIB more production techniques is stored on the shop floor and knowl-
commercially. If ACIB becomes a knowledge broker, this edge about products is stored in the development depart-
may hinder the utilization of the knowledge logistics and ments. The production techniques are: metal working,
lead to underutilization of existing knowledge fragments. injection moulding, print production and assembly. The
Another possibility may be to develop ACIB as an product knowledge consists of product designs, which
expertise center. In that case ACIB must concentrate, own product fits which application, and about product installa-
and develop the knowledge (also the knowledge fragments tion. In the development department much knowledge
that the departments now have) themselves. This will exists about clients situations, their problems and the kind
reduce the collective nature of IS security knowledge, of related solutions that have been found in the past.
whereas otherwise it can generate extra incomes by Knowledge is mainly stored in the heads of organization
delivering knowledge to externals. The ACIB case, how- members, who collaborate in small groups and thus share
ever, shows that expertise can be excellently augmented much relevant knowledge for a specific project. Some
and created by creating an effective knowledge logistic experts store specific types of knowledge on a computer-
coordinator. The resulting body of knowledge can become based system, but this is occasional. The development
huge, because departments share knowledge and each department has a CAD system where product information
department is actively involved in knowledge creation. and drawings are stored. Developers also use logbooks,
It is also unclear to what extent government IS security consisting of paper notes. Most important is that organiza-
knowledge can be and may be sold at all. Because tional memory stores are organized along a market group
knowledge logistics seems to be so effective in this case and
IS security will be a problem as long as people will use
information systems, it is unwise to dismantle this effective *This case is presented with the support of Nedap’s CEO Peter Rietbergen,
who is kindly acknowledged for his participation. The case describes the
organization when the IS security policy objectives will be situation at February 1997. Nedap’s homepage is http://www.nedap.nl/
reached. index.html.

152 F. Wijnhoven
Knowledge and Process Management CASE STUDY

Figure 7 Knowlog Diagram for Nedap

classification. Nedap does not use IT means for the access Delivery completeness. Within a market group, problem
and distribution of its knowledge between market groups, analysts, material managers, production planners, shop-
because only occasionally Nedap has projects that require floor production and sales staff collaborate at one time,
collaboration of several market groups. On basis of this learn from each other and share tasks. Consequently, the
description, the Knowlog Diagram is drawn in Figure 7. group as a whole creates a clear overview of activities
Nedap’s S1 store contains knowledge about techniques related to the problem solution process for each client.
and products, stored in respectively the shopfloor and the Delivery reliability. When a client’s problems are not
development department. The S2 store has knowledge of well understood, the chance is high that irrelevant
the market group. This knowledge organization is based on knowledge is retrieved and applied. Thus Nedap places
a long-term strategic forecast of market segments. The S3 great emphasis on high-quality problem analysis. The
store has the knowledge of a client’s problem-solving R&D group, however, is also poorly connected to the
project. This means that clients are important contributors actual business lines of the market groups. It is unclear
to this knowledge store. For Nedap’s objective the client is how the R&D efforts are used in the business lines and
an essential provider of knowledge about his problems, and how R&D gets feedback from the business lines’ needs.
thus a knowledge prosumer. Nedap, however, does not Quality. Quality of knowledge is about its validity,
share much of its competence with clients, because clients which means that knowledge has to be checked with
are mainly interested in the solution and its effectiveness. respect to the validity of the relations among its
Nedap has a clear set of services and markets it wants to elements and reliability of used data. This is, of course,
deliver, thus clients have to adjust to Nedap’s knowledge very important at Nedap, because the solutions have to
forecast or go to another company. work perfectly when installed. Therefore most of the
With respect to the knowledge logistic performance employees at Nedap are engineers at the BSc or MSc
criteria we can state the following about Nedap: level. Further Nedap has an R&D department that
constantly improves products and technical features.
Delivery time. Because Nedap delivers high-quality Price. The cost of knowledge logistics in the market
solutions, it requires a well-developed inbound knowl- groups is low. The organic nature of the market
edge logistics. To reduce time problems, the market groups-organization leads to knowledge flows when
groups have developed inter-personal understanding by needed and the job enlargements reduce the need of
task rotation and job enlargement. flows. More difficult and costly will be the further

Knowledge Logistics in Business Contexts 153


CASE STUDY Knowledge and Process Management

development of inter-unit knowledge sharing (between Table 1 SBAs and expertise areas of Cap Gemini
market groups, and between the market groups and the
R&D group). Strategic business areas Expertise areas
Volume flexibility. The informal organization of the
market groups leads to great inflexibility of knowledge USA Oil and gas industry
volume exchanges. On some occasions people will United Kingdom Finance
Scandinavia Utility industry
exchange insights in a few minutes, at other times they
Benelux Trade, distribution & transport, health
will quickly organize a meeting with a larger group, and care
if necessary plan training and courses. France Telecom
Client customization. Because of Nedap’s high-tech Rest of Europe Railways, air traffic control, air and
products and increasing client demands, Nedap has an space industry
South-east Asia (no expertise areas yet allocated)
increasing problem in handling large knowledge
exchange volumes but the SBU organization has reduced
this problem. The flexibility of customization is, how-
ever, limited by the market group identity definition.
these developments, Cap Gemini is now developing as a
Nedap therefore has more difficulties in profiting from
virtual office. Figure 8 shows the Knowlog Diagram for Cap
available knowledge resources at other units.
Gemini.
At Nedap, we see an explicit design of knowledge Cap Gemini’s S1 store is technological knowledge and
logistics but also the restrictions this involves. Both are knowledge about expertise areas. This store includes
nevertheless strong elements in the market. In more com- tools and IT knowledge for the professionals. The S2
plex and dynamic markets, however, important client needs store has market information. These are knowledge
will be difficult to meet with this design, because this will stores related to SBAs. The S3 store has general client
require knowledge exchange and combination between and project information. Through, for example, CapCom
the business units. Improving abilities in inter-unit knowl- project members contribute lessons learned from pro-
edge exchange is a very acute problem for Nedap, jects. Interactions with stores S1 and S2 are likely to
because Nedap grows fast, the high-tech technology improve practices. The S4 store has client knowledge.
changes quickly, and client demands are increasing This is information on a client’s problem, the concrete
considerably. Skills databases and organizational memory project underway, and the solution and knowledge deliv-
information systems (Stein and Zwass, 1995) should be ered. This store is produced by intensive interactions
considered to manage the complexities of inter-unit between Cap Gemini and its client, and must have very
knowledge logistics. low interpretation problems for clients (in fact it should be
the client’s language). Some of this knowledge can be
Case 3: Cap Gemini* converted in a Cap Gemini language to improve current
Cap Gemini is an international IT organization active in the practice (S1).
management, execution and support of IT development. With respect to the knowledge logistic performance, the
The knowledge of Cap Gemini can be organized in a following statements are relevant for Cap Gemini:
segment of information technology (S1) and market knowledge Delivery time. Because knowledge is seldom a discrete
(S2), the functional and market-oriented knowledge stores. product, delivery is mostly a learning and insights
These knowledge stores are classified along strategic busi- process and the delivery time is often hard to define.
ness areas (SBA) and expertise areas per SBA (see Table 1). However, clients often demand very clear delivery on
Because of several market developments, especially organi- time. Formal project management methods and tools are
zation consultancy offices that develop in the area of IT therefore important elements in the S1 store. The
consultancy, Cap Gemini is also developing in the area of internal knowledge delivery time problem has been
organization consultancy. solved partially by applying (often Intranet-based) IT
Much of the relevant knowledge is acquired via training means. Much knowledge transfer, however, requires
and experience, and is stored in individual professionals’ great media richness in the knowledge transfer
heads. Much supportive knowledge, called tools (e.g. SDW, media and Cap Gemini therefore needs R&D and has
PMW, BASISplus, ESTEEM, GUI-Master and DB-Master), substantial training facilities for its employees.
is stored in electronic media and is accessible via Intranet. Delivery completeness. The delivery completeness
Project knowledge, called CapCom and the Knowledge must be defined in terms of the most important
Galaxy, is now also available via the Intranet. Because of knowledge required (critical success factors) for a client.
Here it is hard to forecast a client’s need, and therefore
the order defines the knowledge needs to a large extent.
*Marcel Beek and R. Koot of Cap-Gemini are acknowledged for participat-
ing in this case study. The case represents the situation at August 1997. The delivery completeness of the S4 store (problems
The homepage of Cap Gemini is http://www.capgemini.nl. stores) is dependent on the problem perception and the

154 F. Wijnhoven
Knowledge and Process Management CASE STUDY

Figure 8 Knowlog Diagram for Cap Gemini

project limits definition. This is also a commercial Volume flexibility. Because Cap Gemini also moved to
process. the consultancy industry, volume flexibility has become
Delivery reliability. Delivery reliability is important not more important. Knowledge delivery should be exactly
only with respect to the solution delivered but also to what the client needs. This is done by selecting
the training and implementation of the solution in the relevant knowledge from internal as well as external (or
organization. This means that clients should be able to client) stores, and combining these with a knowledge
make maximal use and exploit the solution optimally. package to be delivered. Cap Gemini has also
Consequently, the implementation of the solution (infor- developed S1, S2 and S3 stores, so that volume
mation system) requires substantial relevant learning and flexibility can be high without reducing quality and
knowledge transfer to the client. efficiency.
Quality. Quality of knowledge is vital in the profes- Client customization. This requires sufficient knowledge
sional services that Cap Gemini supplies. This means elements to be selected for solutions of client problems,
that knowledge has to be checked with respect to the and that not too much is sold. Some extra knowledge
validity of the relations among its elements and re- may be necessary to provide the client with a
liability of data. This is indeed what happens via the background for understanding the solutions.
interactions between the four knowledge stores in Cap
Gemini. In this case, we see that knowledge logistics is very
Price. The cost of knowledge sharing is substantial in elaborate: all four knowledge stores are used and these
professional services and Cap Gemini’s training budgets stores also interact. The resulting logistic complexity is
are the highest per employee in The Netherlands. handled effectively, mainly by the support of collaborative
Because IT-knowledge is precious and employees are information systems. These information systems also allow
very busy with client problem solving, knowledge a well-developed store method of knowledge logistics, so
sharing is perceived as costly by individual employees. that the knowledge logistic process can be demand (client)
Thus Cap Gemini has to create incentives for knowledge driven. It is still unclear how people can be motivated to
sharing. deliver their knowledge in the knowledge stores. The

Knowledge Logistics in Business Contexts 155


CASE STUDY Knowledge and Process Management

problem is that it takes time and that the individual rewards easily overcome (by IT communication) than distances in
are unclear. physical distribution. Differences in languages and cul-
ture are much harder to solve than with physical goods.
Practicality and robustness of Knowlog This also explains why knowledge transfer all over the
The three cases demonstrate that significant insight can be world is often more effective when it is packaged as a
gained by the Knowlog instrument. The knowledge logis- solution (gadgets and software) (Hedlund, 1994). Many
tics can be analyzed by its stores and movements, and consultancy firms, however, now strongly develop as
diagnosis is feasible with the performance criteria. The inter-cultural, global companies (e.g. Anderson Consult-
practicality test of the Knowlog instrument is positive, ing, EDS, KPMG). This enables these companies to build
because in all cases it leads to significant advice for up large knowledge stores that can be consulted locally.
improvement (ACIB: not developing as an expertise center The transfer of knowledge is thus limited and costly and
or knowledge broker, and trying to change from a temporal must be carefully designed in terms of what it contrib-
to a permanent agency; NEDAP: developing inter-unit utes to the company as a whole. The knowledge logistics
knowledge sharing and considering organizational memory- service levels must be defined locally and strategically,
like information systems; Cap Gemini: developing incentive and must lead to concrete and global competitive
systems for knowledge delivery). Furthermore, the recogni- advantage.
tion of what kind of product is delivered to a client, and the
2. What is the relevance and applicability of the logistic concept to
insights into the interaction of its solutions and knowledge
the knowledge domain? This paper has shown the oppor-
aspects, may make an organization more sensitive to what a
tunities of applying a knowledge logistics concept.
client really needs and how this is delivered. The method is
Many may find this interesting, but at the same time
also robust, because the analysis works independently of
may argue against the idea of thinking about knowledge
product type (solution or knowledge) and logistic organi-
logistics, because it is the application of a physical
zation (knowledge logistic coordinator, project organization
streams metaphor, and thus by definition (ontologically)
or problem solver).
incorrect. However, while I agree that it is a metaphor, I
do not totally agree therefore that the logistic concept
cannot be applied to knowledge sharing. The paper thus
CONCLUSION AND DISCUSSION far has shown that is can be applied. The case studies
section concluded that the logistic concept delivers
Let us review the answers to the questions at the beginning
important concepts in thinking operationally about
of the paper:
knowledge sharing and the performance criteria to be
applied to evaluate knowledge logistics. The case studies
1. What are the problems with applying the logistics concept to
also showed that significant improvements in knowledge
knowledge sharing analysis and diagnosis? It is often said
sharing could be proposed. An important element of
that knowledge cannot be stored and transferred like
logistics is the way goods are routed by a limited set of
goods, because it cannot be packed and moved simply
transportation means. The conceptual section of this
because it is an intangible asset. This intangibility hypoth-
paper shows that at the informational, signs level,
esis is correct because knowledge is not much more than
routing is an important issue in the design of knowledge
an idea about relations between means and ends (tech-
logistics supporting IT infrastructures. This is, however,
nologies) or cause and effect (explanations and predic-
closer to the term information logistics than knowledge
tions). However, many of these ideas can be packaged
logistics. Knowledge logistics should also consider the
after codification as informational products (e.g. software,
transportation means more carefully, now that more
information systems, consultancy) or solutions. Transmit-
media are being supplied (e.g. distance learning, Internet,
ted knowledge packs, however, also require interpret-
multi-media). Depending on the type of service to be
ation, and it is often difficult to re-establish the
delivered, one must carefully select the transportation
knowledge as intended by the sender (different language,
medium. Many routing problems will remain transparent
different jargon, etc). In the cases of Cap Gemini and
for the selector of the media, but for the supplier of the
Nedap, these interpretation problems were treated effec-
media it is important. Possible design alternatives here
tively by putting emphasis on training (leading to
are centralization versus decentralization of storage and
standardization of interpretation rules). At Nedap,
retrieval (the last possibly enabled by the Internet), and
organic structures enabled much feedback on knowledge
the availability of send and store modes in knowledge
messages, so that understanding was eased. We also find
distribution.
the knowledge logistic, and even the packaging concept,
valuable in understanding what happens in the delivery The idea that motivated this paper was also that applying
of knowledge-intensive products and services. Indeed, the logistics concept to knowledge sharing enables socio-
knowledge volumes are hard to measure, as are their logical concepts about knowledge sharing to become more
distances. In fact knowledge distances can be much more precise for engineering. We are now able to analyze and

156 F. Wijnhoven
Knowledge and Process Management CASE STUDY

diagnose knowledge sharing in a whole organizational sys- Hakansson, H. (ed). (1987) Industrial Technology Development: A
tem and we are able to find points for improvement at a Network Approach, Croom Helm, London.
global level. More detailed analysis is, however, required if Hamel, G. and Prahalad, C.K. (1994) Competing for the Future:
Breakthrough Strategies for Seizing Control of Your Industry and
we wish to incorporate knowledge sharing into a level Creating the Markets of Tomorrow, Harvard Business School Press,
where it can lead to the design of new information systems, Boston, MA.
e.g. of the organizational memory information systems type Hedlund, G. (1994) A model of knowledge management and the
(cf, Wijnhoven, 1997). N-form corporation. Strategic Management Journal, Vol 15,
pp. 73–90.
Kolb, D.A. (1984) Experiential Learning. Experience as the Source
of Learning and Development, Prentice-Hall, Englewood
ACKNOWLEDGEMENTS Cliffs, N.J.
Levinthal, D.A. and March, J.G. (1993) The myopia of learning.
This study has profited from the work of Marcel Beek (Cap Strategic Management Journal, Vol 14, pp. 95–112.
Gemini, The Netherlands) who gathered some of the data Lyles, M.A. and Schwenk, C.R. (1992) Top management, strategy
for the case studies. The author also appreciates the efforts and organizational knowledge structures. Journal of Management
and suggestions of Rob van de Weg (University of Twente, Studies, Vol 29, pp. 155–174.
Lucas, H.C. (1996) The T-Form Organization: Using Technology
School of Computer Science) during this research project. to Design Organizations for the 21st Century, Jossey-Bass, San
Mark Hafkamp and Aard Groen are acknowledged for Francisco, CA.
commenting on a previous version of this paper. Despite March, J.G. and Simon, H.A. (1958) Organizations, John Wiley,
these contributions, the whole responsibility for this New York.
publication is with the author. Meyer, M.H. and Zack, M.H. (1996) The design and development
of information products. Sloan Management Review, Vol 37,
No 3, pp. 43–59.
Mintzberg, H. (1983) Structures in Fives: Designing Effective Organi-
REFERENCES zations, Prentice Hall, Englewood Cliffs, NJ.
Neilson, R.E. (1997) Collaborative Technologies and Organizational
Aggarwal, S.C. (1985) MRP, JIT, OPT, FMS? Making sense of Learning, Idea Group, Hershey, PA.
production operation systems. Harvard Business Review, Nonaka, I. and Takeuchi, H. (1995) The Knowledge-creating Com-
September–October, pp. 8–16. pany: How Japanese Companies Create the Dynamics of Innovation,
Austin, J.L. (1976) How to Do Things with Words, Oxford University Oxford University Press, Oxford.
Press, London. Pyle, L. (1994) Creating Lotus Notes Applications, Que Corporation,
Ballou, R.H. (1992) Business Logistics Management, Prentice Hall, Indianapolis.
Englewood Cliffs, N.J. Quinn, J.B. (1992) Intelligent Enterprise: A Knowledge and Service Based
Barnard, C.I. (1938) The Function of the Executive, Harvard University Paradigm for Industry, The Free Press, New York.
Press, Cambridge, M.A. Schein, E.H. (1994) Innovative cultures and organizations. In:
Bell, D. (1979) Thinking ahead: an information revolution presents Allen, T.J. and Scott Morton, M.S. (eds) Information Technology
new opportunities and new problems for business and society. and the Corporation of the 1990s: Research Studies. Oxford Univer-
Harvard Business Review, May–June, pp. 20–42. sity Press, New York, pp. 125–146.
Boone, P.F. (1997) Managing Intracorporate Knowledge Sharing, PhD. Shannon, C.W. and Weaver, W. (1949) The Mathematical Theory of
dissertation, Erasmus University, Rotterdam. Communication, University of Illinois Press, Chicago.
Churchman, C.W. (1971) Design of Inquiry systems: Basic Con- Shaver, K.G. (1977) Principles of Social Psychology, Winthrop,
cepts of Systems and Organization. Basic Books, New York. Cambridge, MA.
Cyert, R.M. and March, J.G. (1963) A Behavioral Theory of the Firm, Simon, H.A. (1945/1976) Administrative Behavior: A Study of
Prentice Hall, Englewood Cliffs, N.J. Decision-making Processes in Administrative Organization, The Free
Daft, R.L. and Lengel, R.H. (1986) Organizational information Press, New York.
requirements, media richness and structural design. Management Stamper, R.K. (1973) Information in Business and Administrative
Science, Vol 32, No 5, pp. 554–571. Systems, John Wiley, New York.
Daft, R.L. and Weick, K.E. (1984) Toward a model of organizations Stein, E.W. and Zwass, V. (1995) Actualizing organizational
as interpretation systems. Academy of Management Review, Vol 9, memory with information systems.Information Systems Research,
pp. 284–295. Vol 6, No 2, pp. 85–117.
Davenport, T.A. and Prusak, L. (1997) Working Knowledge: How Stewart, T.A. (1997) Intellectual Capital: The New Wealth of Organi-
Oranizations Manage What They Know, Harvard Business School zation, Nicholas Brealey, London.
Press, Cambridge, MA.
Wijnhoven, F. (1997) Developing organizational memory informa-
Drucker, P. (1994) The age of social transformation. Atlantic
tion systems. School of Management Studies, University of
Monthly, November, pp. 53–80.
Twente.
Galbraith, J. (1973) Designing Complex Organizations, Addison-
Wijnhoven, F. (1998) Designing organizational memories: concept
Wesley, Reading, MA.
and method. Journal of Organizational Computing and Electronic
Guetzkow, H. (1965) Communications in organizations. In: March,
Commerce, Vol 8 (1), pp. 29–55.
J.G. (ed.) Handbook of Organizations, Rand McNally, Chicago,
pp. 543–573.

Knowledge Logistics in Business Contexts 157

You might also like