2009年12月9日 星期三

KNOWLEDGE MANAGEMENT & COLLABORATION

KNOWLEDGE MANAGEMENT & COLLABORATION IN STEEL INDUSTRY: A CASE STUDY
CHAGARI SASIKALA
Deptt of Library & Information Science, Andhra University,
Visakhapatnam-530003, India
E-mail:prof.csasikala@gmail.com

In a globalized economy, business excellence can be achieved only with a strong foundation in knowledge. For this, organizations have to find effective ways to translate their ongoing experience into knowledge and disseminate the same. Further they have to collaborate with other companies in the industry for giving better products to the customers. This paper is based on a study of Knowledge Management practices in a large integrated steel company- Vizag Steel, a Govt. of India Enterprise. It emphasizes the need for reengineering KM practices in manufacturing sector to meet the challenges arising out of economic liberalization and globalization.


1.0 Introduction
"Knowledge has become the key economic resource and the dominant and perhaps even the only resource of competitive advantage.”
- Peter Drucker
In a globalized economy, knowledge is becoming the greatest asset of organizations. Organizations are recognizing that business excellence can be achieved only with a strong foundation in knowledge. Many times people do not distinguish between data, information and knowledge. Knowledge can be described as the information subjected to judgment and context, while information is nothing but the processed data and data is the unorganized and unprocessed facts and figures. Events generate data, processed data becomes information, information subjected to judgment and experimentation becomes knowledge and this experience again generates newer events. In India acquiring `Gnana' (which in Sanskrit language means knowledge) is the ultimate and the Upanishads talk of the knowledge in various terms. Kalam (2004), former President of India, observed that a knowledge society is one of the basic foundations for the development of any nation.
Knowledge Management can be defined as “a systematic process of identifying, capturing and transferring information and knowledge to help make best decision, exploit business opportunities and innovate”. It basically aims to bridge the gap between ‘what an individual knows and what he/ she needs to know’ and ‘what an organization knows and what it needs to know’.
2.0 Need for Knowledge Management (KM)
It is a well-known fact that knowledge of many is always better than individual excellence. Prusak (1996) listed the following factors which lead to the recognition and growing importance of KM:
i) The globalization of the economy, which is putting terrific pressure on firms for increased adaptability, innovation and process speed.
ii) The awareness of value of specialized knowledge as embedded in organizational process and routines, in coping with the above pressures.
iii) The awareness of knowledge as a distinct factor of production.
iv) Networked computing which enables us to work and learn with each other.
Corrall (1998) observed that the primary objective of KM is to convert human capital (individual learning/ team capabilities) to structural capital (organizational knowledge such as documented processes and knowledge bases) and thereby move from tacit to explicit knowledge and reduce the risk of losing valuable knowledge if people leave the organization.
3.0 Knowledge Management in Industry
Knowledge management had enabled many reputed companies to comprehensively change their approach and service capability both internally (towards their employees) and externally (share holders). Using vivid examples from leading Japanese companies like Honda, Canon, Matsushita and Mazda, Nonaka (1991) emphasized that making personal knowledge available to others is the central activity of the knowledge- creating company.
Buckman Laboratories, Memphis, USA based manufacturer of specialty chemicals for aqueous industrial systems can be described as the pioneer in knowledge sharing in industry. Robert (Bob) Buckman, Chairman& CEO of the company is the key architect of its successful knowledge sharing system. In March, 1992 he established the Knowledge Transfer Department with focus on ‘creating information that has value for action’. The company had received the Arthur Andersen Enterprise Award for knowledge sharing. Fullmer (1999), highlighted that K’Netix, the Buckman Knowledge Network played a key role in the company’s sales crossing $300 million by 1999 and in ‘90% culture change’.
In the oil and gas industry, Chevron emphasized the concept of ‘the learning organization’ by sharing and managing knowledge throughout the company. According to Derr (1999), former Chairman of Chevron, finding and applying new knowledge makes everyone’s work more interesting and more challenging. In 1998 the company created Global Information Link creating a single desktop and operating environment worldwide. Innovative Knowledge Management was one of the key factors in reducing the company’s operating costs by more than $2 billion per year.
Hansen and Oetinger (2001) while introducing the concept of T-shaped Managers-Knowledge Management’s Next Generation, stress that companies should utilize their intellectual resources to enable them to face an array of challenges. They also gave the following examples of KM across the world in three different sectors- Petroleum, Engineering and Steel.
Energy giant British Petroleum (BP), a company with more than one lakh employees and operations across 100 countries is well known for its knowledge-sharing practices. In 1990’s Graham Hunt was the Head of a BP petro-chemical business unit, responsible for the design and construction of a giant acetic acid plant in China. Due to the complexity of bringing such a plant on stream in 30 months time, 75 employees of BP from different parts of the world flew to China. They gave advice on technical, safety, legal, accounting and financial issues. This peer assistance enabled the project commissioning on time and within budget.
Siemens, the German MNC launched a training programme that brings high potential managers of different divisions together in small teams to solve a problem facing one of the business units. Team members work together for about a year, which includes attending several weeklong meetings at an off-site corporate campus. They then make recommendations to the business unit manager involved, who serves as the team coach during the project. Through the programme, team members develop their business skills, build informal relationships across the units and saved the company millions of dollars by solving real business problems.
Arcelor Mittal Steel, the London based world’s number one steel maker has institutionalized several simple mechanisms for sharing knowledge across their far flung units (in Europe and North / Central American, Africa, CIS countries) that could easily be implemented in companies from many other industries. One is the company’s policy on directorships, which requires the General Manager of every operating unit to sit on the board of at least one other unit. The CEOs of Germany and Trinidad plants sit on each other’s boards because they both produce long steel products - bars, rods and other structural products. This enables Arcelor Mittal’s Steel plants to adopt best practices from other plants. Managing Directors of each operating unit also have a phone meeting lasting nearly two hours. Executives report exceptions and things that in company parlance `keeps them awake at night'. In one of such tele-conferences, the Managing Director in Trinidad mentions problems he was having with a transformer that repeatedly failed. Managers in Mexico and Canada plants also had similar problems with similar transformers. The three plants ended up cooperating on trouble shooting and getting the expertise to perform repairs.




3.1 Knowledge Management In Indian Industry
In the post-independence economic history of India, 1991 was a watershed year in which wide ranging economic reforms were introduced. India has recently emerged as a vibrant free-market democracy after the economic reforms in 1991, and it began to flex its muscles in the global information economy (Das, 2002). In order to meet the challenges arising out of globalization of Indian economy, KM assumes great importance. Consequently a number of enterprises, both in private sector and public sector in India have initiated KM practices.
Larsen & Toubro, the diversified engineering giant has established a world class Technology Innovation Centre at Baroda, Gujarat state to develop new/improved processes in hydrocarbon, fertilizer, cement, power and other core industries through the use of modern technologies and sophisticated instrumentation. The Centre has linkages with Indian Institutes of Technology and research institutions like National Chemical Laboratory, Pune.
At Infosys, the Bangalore based global IT giant uses an integrated KM Strategy covering people, content and technology architecture (Kochikar, 2000). Since its inception, Infosys gave importance to learning in the organization. Its efforts to assimilate and distribute knowledge within the company began with the establishment of Education and Research Department in the year 1991. The department began gathering content and knowledge that was available within the organization and the scope of the department grew with the launch of Intranet.
A fully fledged KM programme began in 1999 with the launch of K-shop. Through K-shop, knowledge generated in each project across the global operations of Infosys was captured. Infosys was inducted into the global Most Admired Knowledge Enterprise (MAKE) Hall of Fame in the year 2005 due to its innovative KM initiatives.
Tata Steel, which has a 5 million tonne per annum capacity plant at Jamshedpur in Jharkhand state can be described as the pioneer in Knowledge Management practice in Indian steel industry. Tata Steel embarked on KM initiative in the year 1999 to systematically share and transfer learning concepts, best practices and other implicit knowledge (Mishra and Arora, 2001).
The KM system of Tata Steel underwent a lot of improvements and changes and in the process, it passed through many learning phases to reach the current state. In its latest phase, Knowledge Management has been identified as one of the key enablers to make Tata Steel self reliant in technology and will enable the company to become a truly global player.
In his pioneering study on the state of organizational culture for KM in Indian industry, Pillania (2006) emphasized the need for proper organizational culture for knowledge creation, sharing and dissemination which has serious implications for competitiveness of the firms, industry and the country.

4.0 Knowledge Management in Vizag Steel
Visakhapatnam Steel Plant (VSP) popularly known as ‘Vizag Steel’ is India’s first shore based integrated steel plant with a capacity of 3 million tonne of liquid steel per annum. The plant which became operational in 1990 is located at Visakhapatnam in the state of Andhra Pradesh, India. After a decade of turbulent times and losses, the plant got stabilized and made net profit for the first time during 2002. The company’s products enjoy market premium due to high quality and its sales turnover during 2008-09 was Rs.10,400 crores (US $ 2166 million).
4.1 Phases of Knowledge Management
Vizag Steel decided to embark on Knowledge Management (KM) initiative in the year 2001. The beginning was made in the Steel Melting Shop of the plant. Steel Melting Shop (SMS) is a core operational department of VSP, where iron (hot metal) is converted into liquid steel through LD process. Liquid steel is then made into blooms through the continuous casting process. Blooms are made as billets which are later converted as wire rods, bars, angles, channels etc. in Rolling Mills. The Steel Melt Shop has three LD converters of 150 tonne capacity each and 6 numbers of continuous bloom casters.
VSP was deep in troubled waters for almost a decade after its commissioning in 1991 and the Steel Melting Shop was the sick child of the plant, wherein Continuous Casting Department (CCD) was considered the most unreliable one. The technology was new (at that time in India only Bhilai Steel Plant was having a commissioned continuous casting shop). The employees were new with barely few experienced hands. The major problems faced by CCD were: Slide -gates, high number of breakouts, choked tundishes and bending blooms.
In its struggle to success the following changes/modifications/innovations have been done in the Steel Melting Shop.
 Russian technology on which the shop was operated was supplemented with Voest Alpine (Austria) technology, which resulted in continuous casting at higher speeds.
 For de-oxidation, Aluminum wire feeding (in place of Aluminum bars) greatly reduced running stoppers.
 Elimination of secondary oxidation and modification of tundish nozzle lead to large reduction in break-outs.
 Strict adherence of Standard Operating and Maintenance practices.
 Increased crane reliability
 Upgradation of Electrical and Instrumentation controls.
 Change in the mindset of the people on the shop-floor through a series of communication exercises and HRD programme for shop-floor employees.

The results of the above measures were extremely good as productivity has vastly improved. The average heats per day have gone up from 20 in 1992 to 62 in 2002.The Steel Melt Shop achieved the rated capacity of 3 million tonnes of liquid steel for the year ending March 31, 2002. This is the saga of `Struggle to Success' of Steel Melting Shop of VSP. The Steel Melting Shop thus played a major role in the turn around of Vizag Steel Plant.
The phases of Knowledge Management initiative at Vizag Steel are as follows:
Phase-I Phase-II Phase-III
2001-02 2002-06 2006-09
• Establishment of KM cell in SMS
• Process design
• System design • Awareness
• C o P
• Gnana Puraskar • Launch of KM portal – Gnana
• Expansion to other departments
Fig. Various phases of KM at Vizag Steel
The key drivers behind different phases of KM movement in Vizag Steel are:
• Not to reinvent the wheel - Phase-I
• Promote learning and Innovation - Phase-II
• Inventing Technology for Leadership - Phase-III

4.2 KM Strategies
Vizag Steel follows two strategies for Knowledge Management. Knowledge may be contributed by an employee (Codification) or a group of employees (Personalization). The other strategy – Knowledge distribution, derives the benefit of following the best practices identified and thus eliminating the process of ‘re-inventing the wheel’.
• Codification
• Personalization
• Knowledge Distribution
One of the objectives of Vizag Steel is to become a low cost steel producer. The company believes that this can be achieved through operational excellence besides other management strategies. The company therefore provides a platform to the employees to collaborate and contribute by each other’s experience and to innovate to achieve business excellence.


4.3 KM processes
Vizag Steel’s Knowledge Management initiatives are now coordinated by the KM group in Corporate Strategic Management Department, which facilitates knowledge generation and sharing within and outside the Company. The main processes are:
• Day to day operation
• New lessons learnt
• Cross-functional teams
• Quality Improvement Projects
• Knowledge sharing across the Division / Deptt.
• Follow-up actions for improvement
4.4 Domains of Knowledge Management
Domain knowledge can be defined as the name given to the purpose of knowledge bit (K-Bit). Each of the K-Bits given by a K-Source should have a purpose and should fit into any one of the following domains:
i. Procedures
ii. Practices
iii. Learning
iv. Root causes
v. Planning & Scheduling
vi. Success stories
vii. Systems improvement
viii. Savings

4.5 ‘GNANA’ – KM portal of Vizag Steel
Gnana, the web based KM program at Vizag Steel is an expert evaluation based system. The knowledge piece called as K-Chip submitted by an employee is automatically sent to the K-Veteran (knowledge expert) for evaluation of its quality depending on the category / sub-category chosen. After evaluation, if the K-Veteran approves the same it gets accumulated in the database as K-Asset and if it is not approved it will be turned as I-Piece. Facility is given to the K-Author for editing the I-Piece and resubmitting the same as per the guidance / comments of K-Veteran. The K-Veteran gives the rating on a 10 point scale depending on common guidelines whether the knowledge is tacit or explicit.
To recognize and reward the quality contributors to GNANA, a reward scheme “Gnana Puraskar Yojana” was launched in April 2005. So far 6000 K-chips and more than 4500 K-assets have been generated in Vizag Steel.
4.6 Community of Practice & Collaboration
Communities of Practice (CoP) are groups of people who share a passion for something that know how to do and who interact regularly to learn how to do it better .Such groups are called as “K-Groups” (Knowledge Groups) in Vizag Steel.
It is voluntary effort of people driven by the passion to excel in their work and people with similar interest and concern come together with the support of the management/superiors to enrich their knowledge through face-to-face interaction, conversations and communication. This helps the organization to create business value by breaking the silo of individual knowledge and developing group knowledge. This helps in establishing a network of people and knowledge. Ardichivili (2003) was apt in stating that when employees view knowledge as a public good belonging to the whole organization, it shows easily and trust increases knowledge sharing.
All CoP Coordinators are provided with access to update the time and venue details in the knowledge Management portal. After completion of the CoP session, the coordinator fills a standard form about the topic discussed, level of participating and future plans. They upload the presentations given at the session and add the details about the members present. This over a time became a digital library and helps others who are not able to attend a particular session to view the details and download the presentations. The attendance feed and other details available to the KM team are helpful in analyzing the progress and learning of the Communities.
As CoPs provide a platform to share experiences, learning and failures, this has helped in bringing process improvements. Some of the outcomes of CoPs in Vizag Steel are: improvement in specific energy consumption in Light and Medium Merchant Mill furnace; reduction in crane-rail consumption of Wire Rod Mill; reduction in drives’ failures etc.
Collaboration in Knowledge Management has become the sine qua non for growth and development of any industry. Collaboration can be within the organization and between organizations. According to Anklam (2002), within most companies, collaboration- co-laboring, sharing, creating something new together is the focus of several distinct type of communities, communities of learning, CoPs and communities of purpose. In situ repair of Turbo Generator-2 in Thermal Power Plant of Vizag Steel can be cited as an example of collaboration within the organization. The repair job done in 2001 was the first of its kind in steel industry in India and was accomplished with collaboration between various departments of the plant- Thermal Power Plant, Electrical Repair Shop, Central Maintenance (Electrical), Engineering Shops and Instrumentation. The total repair cost worked out to Rs.62 lakhs (US $128,000 ) in place of core replacement cost of Rs. 4 crore (US $ 830,000) and repair time was restricted to 4 months at plant site in place of 8 months at the Turbo generator manufacturer’s plant at BHEL- Hyderabad.
As regards collaboration between organizations, developing new knowledge along with competing partners is increasingly adopted in industry in order to gain a competitive advantage. Lanza (2005) stated that prior to entering knowledge based collaboration; companies should identify their coopetitors, choosing one of the following as the main goal:
• Acquiring and co-developing knowledge for a non-immediate new product development which mainly relies in knowledge exchange and sharing, whose main outcome is future technology development
• Acquiring and co-developing knowledge for a rapid market launch, aiming at knowledge creation, whose main result is a fast market entry with new products
Learning from Each Other (LEO) workshops conducted by Management Training Institute of Steel Authority of India Ltd. (SAIL) is a unique model of collaboration in KM between different organizations in steel industry in India. The Ranchi based Institute conducts the 3 day LEO workshops for shop- floor personnel of SAIL, Vizag Steel and Tata Steel. The areas covered include Coke Ovens, Blast Furnaces, Steel Melt Shop, Rolling Mills, Mechanical and Electrical Maintenance. Presentations are made by different Plants of the innovations/ modifications made and knowledge shared in respect of problems solved and benefits derived. Time bound plans are drawn up for bringing similar changes in other plants. For example, based on knowledge sharing in a LEO workshop on Reduction of failure rate of castings in the Continuous Casting Shop of Durgapur Steel Plant, a time-bound action plan was drawn up for reduction in failure rate of castings in the Continuous Casting Shop of Bokaro Steel Plant (MTI, SAIL, 2008). Though the above three steel manufacturing companies are competitors, collaboration in knowledge sharing is enabling them in technology optimization.
In order to face the challenges of globalization, growth, competitiveness and increasing knowledge content of products and services etc. Vizag Steel is striving to be a learning organization by collaboration in knowledge management. Zhujiang Iron and Steel Company (ZISCo), a Chinese state-owned enterprise encountered various challenges in 2007 particularly in the areas of Knowledge Management and development of organizational competence and learning capability (Huang, 2007). Vizag Steel, also a state owned enterprise, faced several challenges before its turnaround during 2001.These two companies with similar background may do well to collaborate for mutual benefit in Knowledge Management and organizational development.
5.0 Conclusion
Knowledge Management is a growing field in Indian industry. Thus there exist many opportunities and challenges for Indian companies in the field of KM. Creation of proper organizational culture and top management support are essential for knowledge dissemination and collaboration. Besides production and R&D, collaboration in KM, based on LEO model, can be expanded to other areas like materials and human resource management. In the technology driven global economy, effective knowledge management is the key for business excellence. As the focus is on learning organizations across the globe, there is a need for steel companies in India to reengineer their KM strategies based on the experiences of global giants like Arcelor Mittal Steel, Chevron and Siemens.

The learning from this experience of KM practices and collaboration in steel industry in India could be extended to enterprises in other core sectors of the economy - Power, Infrastructure, Heavy Engineering and Mining.

Acknowledgment
The author gratefully acknowledges the valuable inputs and suggestions from Mr. Subhendu Mohapatra, Asst.General Manager (Projects), Vizag Steel Plant in the preparation of this case study.

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