Knowledge Management Called New Source of Competitive Advantage

Harnessing the power of what we know, what data we have on hand, and the innate powers of the human intellect has become one of the new requisites for supply chain—and business—success. In the pages of Supply Chain Management Review and in a recent webcasts we’ve done, we have focused on one aspect of that process known as supply chain analytics. Essentially, analytics is the process of using available data and information to make predictive decisions about the future.

Now we’ve come across another interesting take on intelligence called “knowledge management.” A new book from Carla O’Dell and Cindy Hubert of APQC called The New Edge in Knoweldge describes the KM concept and gives some real-world examples of leading companies that have put it into practice.

The authors define knowledge management as the systemic effort to use information for creating value. The process needs to be managed such that the right knowledge goes to the right people at the right time to enable better decision making and improve overall organizational performance.

In addition to offering a practical framework for getting a KM effort underway, the APQC authors provide some instructive case examples. One that I particularly liked was Fluor, the big engineering and construction management company, which created knowledge communities throughout its far-flung organization. The company actually has on online portal, available to all employees, that provides them with access to the intellectual capital in the organization—communities of practice, knowledge-sharing activities, and a range of other resources.

One element of knowledge management that makes it so attractive is the decidedly human orientation. As explained in The New Edge in Knowledge, KM is not automated decision-making or technology run amok. Rather it’s a structured process for people within an organization to figure out how to effectively share the data that is available and then how to put is to good use—i.e., create value. It’s an interesting concept, a good book, and a welcome affirmation of the power of the human intellect.

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