Foundations of Quality Management

Unit 7

Unit 7

Quality as a Knowledge Management Concept

Structure: 7.1 Introduction Learning Objectives 7.2 Knowledge and Information 7.3 Knowledge Management A Quality Management Framework 7.4 Knowledge Management 7.5 Tacit and Explicit Knowledge in Quality 7.6 Knowledge Repositories 7.7 Approaches to Knowledge Management 7.8 Obstacles in Knowledge Management 7.9 Case Study 7.10 Summary 7.11 Terminal Questions 7.12 Answers 7.13 References

7.1 Introduction
In todays competitive environment organization needs to have sound business knowledge to gain competitive advantage. In uncertain market conditions organization needs a quality approach that views knowledge as a foundation factor for organization survival and growth. Quality management emphasis on optimum utilization of resources and on greater productivity and the use of intellectual capital and knowledge assets hold the key to achieve desired result. Organizations need to take various decisions, plan, and organize, and knowledge is the basis for strategically decision making. They are the building blocks or raw material for decision making. Sound knowledge leads to effective decisions and provide overall quality and productivity. Such as, knowledge of customer need and expectation, knowledge of raw materials and resources to be used, knowledge of products and services to be delivered these are some of the information that helps to built strong decisions. Organizations face various concerns of survival, adaption and competence. By creating, acquiring, embedding and using knowledge, organizations can address the issues and gain competitive advantage.
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Managing information and knowledge require a significant commitment of resources. It needs organization to keep the track and update, and look for new sources of information and new technologies that helps to stand out from others. The concern for knowledge management is to exploit and develop knowledge assets that help to attain objectives. Knowledge assets refer to the accumulated intellectual resources that an organization possesses, including information, ideas, learning, understanding, memory, insights, cognitive and technical skills1. And to achieve objectives, management has to take responsibility for all those processes associated with identification, share and creation of knowledge that requires a systematic creation and maintenance of knowledge repositories to cultivate and facilitate sharing of knowledge and organizational learning. A knowledge conversion process helps to use, create share and transfer knowledge, it helps to preserve, embed and enhance knowledge of process, products or services, and it also helps to improve the knowledge access and develops an environment that is conducive to knowledge conversion process. Knowledge to be managed includes both explicit,-documented knowledge, and tacit subjective knowledge. Therefore, Quality management helps to address changes, improve knowledge management capacities and skills. With Integration of knowledge and quality management process overall quality and productivity of the organization will enhance and leads to a holistic development. Learning Objectives: After studying this unit, you will be able to: Discuss the importance and application of knowledge management Discuss the interrelation of quality and knowledge management Explain the storage, application and utilization of knowledge assets in organizations.

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7.2 Knowledge and Information

Information is an understanding of the relationships between pieces of data, or between pieces of data and other information. Information relates to description, definition, or perspective (what, who, when, where).2 Knowledge comprises strategy, practice, method, or approach (how)

Fig. 7.1

7.3 Knowledge Management A Quality Management Framework

A manager in Hewlett Packard noted, The fundamental building material of a modern corporation is knowledge H. James observed, All organization have it, but most dont know what they have know, dont use what they do know and dont reuse the knowledge they have3. Quality of any product/or service depends significantly on knowledge. To be considered as reliable, knowledge concerning the organization processes has to be identified and formalized as much as possible. In order to manage a business, organizations need to have strong in and around information. New century is dominated by knowledge-based enterprises operating within this forces requires concern for wider issues such as environmental scanning and, quality management is very focused on knowledge production and integration. Quality as such is defined as accelerated sustainable innovation in response to problems and is directed at improving quality of knowledge processes, production and integration in response to problems.

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Quality management focuses on performing knowledge processing to manage the best business processes and produce quality in products and services .It relies heavily on production of knowledge and put emphasizes on systematic, statistical, and scientific studies to bring quality to the modern enterprise. Knowledge management is contributing quality management by continuing contributing evolutionary development of effective programs, policies, and rules that accelerate innovation in quality management and its relate knowledge processes to eliminate error. Quality management decisions and business process actions can be confidently based on knowledge management. Deming quality guru in his quality philosophical framework summarized his philosophy and called A system of profound knowledge, which consists of four parts 1) Appreciation for a system 2) Understanding process variation 3) Theory of knowledge 4) Psychology In the third part of profound knowledge which is called theory of knowledge, Deming stresses the nature and scope of knowledge. Its, presuppositions and bases, and the general reliability of claims to knowledge4, Clarence Irving Lewis, author of Mind and the world believes that management decision should be driven by facts, data and justifiable theories, it should not be based solely on opinions .As such experience cant tested and verified but for prediction, good theories which are supported by data and shows cause and effect relationship can be used, as these theories explains the reason of why things happen. Quality and Knowledge An interrelation

Fig. 7.2
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Evans. R. James, Total Quality, Management, Organization and Strategy, 4 edition, Cenage Learning Sikkim Manipal University

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Role of Quality in Knowledge Management Managing Quality in knowledge assets is prerequisite, organization must ensure that data and information are valid and accurate, systems that process data (hardware and software) are reliable and information is accessible to all who need it. Data Validity: Data used for planning and decision making requires being accurate and valid. Good data yield good results. A sound decision requires quality data. To collect reliable data a systematic approach is required, internal cross functional teams or external auditors can conduct periodic audits of the process to collect the data. Standardized forms, clear instructions and adequate training lead to consistence performance in data collection For example Data security AT&T Universal Card Services, used standard data entry and procedures to facilitate the consistency and uniform editing of manually input data and followed stringent guidelines and standards for developing ,maintaining ,documenting and managing data system. The quality principle should be applied in managing and creating knowledge. Following are some of the features to manage quality in information: Capture data only once and keeping its close to the origin of data Eliminating human error by encouraging electronic support Using single database Ensuring proper training Defining targets and measures of data quality Error check and backup Error checking capability into software system Ensuring data availability and validity

Data Accessibility: Total quality focuses on data availability to everyone besides top managers. Collected information should be available to right person whenever needed. Right information, to right person, at right time is quality approach.
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Data accessibility empowers employees participation in quality improvement

and

encourages

their

Data security: Data are to be kept secure from the external threat .To prevent the external threats systems have to be safeguarded with the use of firewalls and passwords. Sensitive data are to be accessed by only authorized users to safeguard the data security.

Role of Knowledge in Quality Management: The quality of products and services is significantly depends on knowledge. Knowledge management involves the process of identifying, capturing, organizing and using knowledge assets to create and sustain competitive advantage. Knowledge management can contribute to quality in terms of providing, conceptual frameworks for thinking, knowledge processing and improving its character and helps to validate frameworks that can help individuals and groups. The contributions of Knowledge Management to Quality Management decisions are indirect, but they can have a pervasive positive impact on knowledge processing in QM and through this impact can affect QM decisions, implementation and business processing.

7.4 Knowledge Management

Concept: Knowledge management constitutes, the practices applied in an organization to identify, create, represent, distribute and enable implementation of perceptiveness and experiences. The experiences and insights are embedded in organizational processes and practices. It is the management of information, experiences, insights which helps to improve the process and enhance quality. Knowledge is information in context to produce an actionable understanding. It can be said that knowledge is information and context that leads the ability to act. Knowledge management focuses on how an organization identifies, creates, captures, and acquires shares and leverages knowledge.

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History and evolution of Knowledge Management Peter Drucker, Paul Strassmann, and Peter Senge these are the various theorists those have made contribution to evolution of knowledge management, Chris Argyris, Christoper Bartlett, and Dorothy LeonardBarton of Harvard Business School have examined various facets of managing knowledge. A study of Chaparral Steel, company, which has effective knowledge management strategy inspired the research documented Wellsprings of Knowledge Building and Sustaining Sources of Innovation (Harvard Business School Press, 1995). Peter Senge has contributed and focused on the "learning organization," a cultural dimension of managing knowledge. Diffusion of innovation concept has also made remarkable contribution to our understanding of how knowledge is produced, used, and diffused within organization. The appreciation of the mounting importance of organizational knowledge was accompanied by concern over how to deal with exponential increases in the amount of available knowledge and increasingly complex products and processes. Knowledge acquisition, knowledge engineering," "knowledge-base systems, and computer-aided facilities has contributed a lot in this sphere. 1980s spurred the rise of the knowledge management systems that relied on work done in artificial intelligence and expert systems. Characteristics of Effective knowledge management system5: An effective knowledge management system should include the following A system to capture and organize the tacit and explicit knowledge of business functions and processes to make people better understand how business functions. A system design that facilitates incorporation of new knowledge into the business system and that is toward continuous improvement and innovation. A common structure to manage knowledge, validate, synthesis new knowledge as it is acquired.

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A culture and values that support collaborative sharing of knowledge, across functions and encourages full participation of all employees in the process.

Why knowledge management ? Strategically linking organizational intellectual assets with positive business results and enhancing quality in business processes. Treating knowledge as an important concern of business activities and reflected in strategy, policy, and practice at all levels of the organization. To align strategy and process To measure return on quality To design effective performance measure systems

7.5 Tacit and Explicit Knowledge in Quality

Knowledge and information are the tools to deal with business problems; managing knowledge provides primary opportunity for achieving substantial savings, significant improvements in performance and provides competitive advantage. Knowledge is perishable and if it is not renewed and replenished, it becomes worthless. As it provide the know how that an organization has available to use, invest and grow. Many researchers and writers on this have drawn attention to the distinction between explicit and tacit knowledge. Tacit Knowledge : (personal know-how) Tacit knowledge is information that is formed around intangible factors resulting from an individual experience and is personal and content-specific. The tacit knowledge is which we cannot easily communicate in words or symbols or the rest of the knowledge. Much of our knowledge is tacit; perhaps we do not fully know what we know and it can be very difficult to explain or communicate what, we know. Tacit knowledge represents internalized knowledge that an individual may not be consciously aware of how he or she accomplishes particular tasks. For ex: A manager way of motivating employees to accomplish goals. In many organizations, however, especially the services sector, much of peoples valuable and useful knowledge is tacit rather than explicit.
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The salient characteristic of the tacit knowledge approach is the basic belief that Knowledge is essentially personal in nature and is therefore difficult to extract from the heads of individuals. In effect, this approach to knowledge management assumes, often implicitly, that the knowledge in and available to an organization will largely consist of tacit knowledge that remains in the heads of individuals in the organization.6 The tacit knowledge holds that people are knowledge carriers and dissemination of knowledge can be accomplished by the transfer of people from one part to another part of an organization, in this view, new knowledge is created when people come together under circumstances that encourage them to share their ideas, experience, knowledge and insights and this leads to learning in an organization Tacit knowledge improve understanding of who knows what in an organization an effort that is sometimes described as an effort to create know who forms of knowledge An example of the tacit knowledge approach to transferring knowledge within a global organization is provided by Toyota. When Toyota wants to transfer knowledge of its production system to new employees in a new assembly factory, Toyota typically selects a core group of two to three hundred new employees and sends them for several months training and work on the assembly line in one of Toyotas existing factories. After several months of studying, the production system and working alongside experienced Toyota assembly line workers were sent back to the new factory site. These repatriated workers are accompanied by one or two hundred long-term, highly experienced Toyota workers, who will then work alongside with all new employees in new factory to assure that knowledge of Toyotas finely tuned production process is fully implanted in the new factory.7 Explicit Knowledge (recorded) Explicit knowledge includes information stored in documents or other forms of media, or that which can be express to others. Explicit knowledge can be
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Sanchez Ron, Tacit Knowledge versus Explicit Knowledge Approaches to Knowledge Management Practice, http://www.knowledgeboard.com/download/3512/Tacit-vs-Explicit.pdf 7 ibid Sikkim Manipal University Page No.: 135

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put into a form that we can communicate to others the words, figures and models in book are an example of that. Explicit knowledge represents knowledge that the individual holds consciously in mental focus, in a form that can easily be communicated to others In traditional perceptions of the role of knowledge in business organizations, tacit knowledge is often viewed as real key to getting things done and creating new value. Not explicit knowledge. Thus we often encounter an emphasis on learning organization" and other approaches that stress internalization of information (through experience and action) and generation of new knowledge through managed interaction.

7.6 Knowledge Repositories

Knowledge repositories are knowledge assets, to organizations that refer accumulation of intellectual resources that organizations possess. Knowledge can easily be lost if information is not documented or when individuals leave the organization. Repositories are the storage of information for further use. Knowledge repositories, captures and manages, knowledge in an organization and can be said as organizational memory. It continuously captures and analyses the knowledge assets of an organization. It is a collaborative system where people can get information in order to retrieve and preserve organizational knowledge assets and facilitate collaborative working. As the process improvement requires new knowledge to result in better processes and procedures. Knowledge repositories or Knowledge assets are similar to capital assets. They are usually independent of those who created them and they can be used, moved, and leveraged by others to solve broad-based problems and to enhance performance. Knowledge repositories are storage of information or policies and are accessed to leverage organizational processes. They increases knowledge of an organization, both as in an individual sense as well as a whole.

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Kinds of Knowledge repositories:

Fig. 7.3: Knowledge Repositories

Employees: Employees are repositories of knowledge, they have firsthand experience, information, knowledge and learning, that can be utilize for the innovative process designing. Personal knowledge rooted in individual experience and involving personal belief, perspective, and values. The knowledge is stored in the brain of respective employees. They are the carriers of tacit knowledge, attributed with know-how to perform task and they have skills or the ability to solve problem. Database: Database is organizational knowledge repositories where the information is stored and retrieved. It is a collection of information that is organized so that it can easily be accessed, managed, and updated. It is an integrated collection of logically related records or files that is stored in a computer system, which consolidates records previously stored in separate files into a common pool of data records that provides data for many applications.
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Software: There are various softwares used to store and process information. It enhances knowledge repositories that support the collaborative generation of knowledge by providing a semi-automatically generated semantic net of the topics contained. What is a... how does one look... how does one use... how good is... how does one implement... (verbal description) (diagrams, animations) (examples, explanations) (situational ratings) (recipe or template)

Patents: A patent refers to a right granted to organization that invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement. Patents are unique information repository Documents: A document is a physical symbolic, diagrammatically, representation of the information to communicate. It is designed with the capacity to communicate and represents information. It carries organizational documented information for further retrieval. Guides Policies: Guiding policies are the source of organization plan and policies laid down for retrieval and organization information. Procedures: Procedures are the scientific method, which indicates sequence, steps, task, decision calculation and process to perform a job or process the job when undertaken produce the result or outcome. Technical drawings: Technical drawing is the standardized technical ideas These are the knowledge repositories or knowledge assets that stores information and knowledge for further process and enhancement, they play more important role than financial and physical assets in organizations.

7.7 Approaches to Knowledge Management

Approaches to quality management pertain to reshape processes to get valued result, in terms of quality and sustainable innovation in response to problems. The emphasis is strongly on the elimination of errors, from business process, employment of wide range of IT tools and techniques, human intervention, social, analytical, and techniques are employed to achieve this.
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The ultimate concern is to enhance organizational ability and capacity to attain organizational goal. Karl-Erik Sveiby identified two tracks of knowledge management: o Management of Information. According to Sveiby, " knowledge = Objects that can be identified and handled in information systems." o Management of People. For many researchers and practitioners, knowledge consists of " processes, a complex set of dynamic skills, know-how, etc., that is constantly changing." (From Sveiby, Karl-Erik, "What is knowledge management" ) Knowledge management approaches can broadly classify as: Mechanistic approaches to knowledge management Systematic approaches to knowledge management Cultural/behaviorist approaches to knowledge management Mechanistic approaches to knowledge management Mechanistic approaches to knowledge management are characterized by the application of technology and resources to do more of the same better Systematic approaches to knowledge management: The systematic approach to knowledge management retains the traditional faith in rational analysis of knowledge problem: such as The problem has a solution only the way of thinking has to be changed Cultural/behaviorist approaches to knowledge management Cultural/behaviorist approaches, This approach concentrates and tend to focus more on innovation and creativity the learning organization. And holds root in process re-engineering and change management, tend to view knowledge problem" as a management issue.

7.8 Obstacles in Knowledge Management

In general, managing knowledge has been perceived as a different kind of problem an implicitly human, knowledge work is fundamentally different in character from physical labor. The knowledge work is almost completely immersed in a computing environment. Alters the methods by which we must manage, learn, represent knowledge, interact, solve problems, and act.
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7.9 A Case Study8

Quality in Practice Knowledge Management for Continuous improvement at Convergys Convergys Corporation (NYSE: CVG), a member of the S & P 500 and the Forbes Platinum 400, is the global leader in integrated billing, employee care, and customer care services provided through outsourcing or licensing. Converges serves top companies in telecommunications, Internet, cable and broadband service, technology, financial service, and other Industries in more than 40 countries, and also provides integrated, outsourced, human resource services to leading companies across a broad range of industries. Convergys software processes more than 1.5 million individual bills each day to support more than 120 million sub-scribes, and manages more than 1.7 million separate customer and employee contacts, both live and via electronic interaction. Convergys employs more than 48,000 people in 48 customer contact centers, data centers and other offices in the United States, Canada, Latin America, Europe, the Middle East, and Asia. Convergys is on the Internet at http:// www. Convergys.com, and has world headquarters in Cincinnati. The outsourced customer service industry is maturing rapidly, is extremely dynamic, and the environment continues to become more and more complex. Some factors contributing to this situation include consolidation of providers, stiff price competition, and new competition from both the expansion to offshore markets such as India and the Philippines as well as traditional system integrators who are further penetrating the business process outsourcing (BPO) market. In addition, Convergys is a fairly young organization, having growth through a series of acquisitions that number more than 20 in the last 20 years. This high number of mergers creates a unique challenged to integrate the myriad of processes, procedure, and systems. With this environment and the expectations of clients, shareholders and employees to constantly improve, Convergys developed a vision To establish a high
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performance culture focused on continuously improving the value we provide to our clients, shareholders and employees. To deploy continuous improvement (CI) as a key part of the companys culture and achieve this vision, Convergys followed a two-step approach. 1. Establish leadership support and financial relevance. 2. Support and encourage total participation establish CI as part of everyones job. First, they built leadership support by linking CI to importance business initiatives in a highly visible way. With this strong foundation, they turned more attention to getting all employees involved in improving the business. To accomplish this goal, Convergys needed a tool to help facilitate sharing and accelerating improvement efforts. The tool they chose was a Web-based employee intranet that called the CI portal (see Figure 8.11). The CI Portal provides an infrastructure for companywide knowledge management activities. One of the primary ways employees use it us to submit, tract, and manage improvement efforts (see Figure 8.12). Additionally all improvement efforts and success stories from throughout the organization can be accessed through the CI Portal. Since its inception in the fourth quarter of 2000, more than 2400 improvement efforts have been submitted in the pipeline, 300 of which were completed, successful improvements by mid-2003. Convergys also introduced a Best Practices Knowledgebase to the CI Portal (see Figure 8.13). The purpose of the knowledge base is to encourage and facilitate the sharing of best practices that improve the value of services provided to their clients. Furthermore, through this knowledge base, best practices can be adopted and leveraged across the organization. To facilitate the sharing of knowledge across the organization, the knowledge base was designed to make it easy to record a best practice in a consistent format that makes it understood by others with little difficulty. Additionally, best practices are categorized in a way that makes it easy to find those that are relevant to a diverse set of needs. To ensure the ongoing credibility of the Best Practices Knowledgebase, a potential best practice is reviewed and endorsed
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before it can be designated as a best practice. Once the proper documentation is in place, the potential best practice is forwards to a vice president deemed to be a subject matter expert in the area of the idea. The VP is asked to review the practice and decide whether its use should be encouraged across the organization. The VP then designates the practice as a Best Practice. Another reason employees go to the CI Portal is to access resources to help them facilitate or accelerate improvement efforts. More than 40 specific improvement tools that are accessible through the CI Portal support their standard improvement methodology, which is referred to as The Improvement Process or TIP. Figure 8.14 shows TIP as accessed in the CI Portal. For each step of TIP, CI Tools are identified that support that step. GI Tools are approaches, tips and techniques that facilitate problem solving and making improvements. CI Tools are basically proven methods that assist in marking fact-based decisions. CI Tools can be used in a variety of ways. Independently, each tool can help to solve a common business issue. CI Tools also support a structured improvement effort. CI Tools are documented in the CI Portal in a simple, consistent, easy to- use format. Figure 8.15 shows list of the types of tools included in the CI Portal as well as the consistent format. Access to TIP and CI tools through the CI Portal provides an ongoing source of continual training for employees on an needed basis and a way to refresh and reinforce continuous improvement approaches. Additionally, self paced training modules have been developed specifically for CI and the CI Portal and are available to all employees to augment learning and personal development. Examples of the selfpaced course including the following. Driving Improvements with the CI Portal Accelerating Improvements with TIP and CI Tools Improving Business Processes Continuous improvement (CI) is an integral part of Convergyss culture and its value proposition. Through CI, Convergys has been able to generate significant financial benefits, such as maintaining higher profit margins than its competition. In 2002 alone, more than 2,000
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management employees (or 45 percent of management) were directly involved in CI activities. In a 24 Month period, more than 2,400 improvement ideas were submitted. Furthermore, thousands more embraced the CI culture. Several clients also acknowledged their approach to continuous improvement as a point of differentiation. CI and the uses of the CI Portal keep expanding. The focus will continue to be on how employees can be better equipped to facilitate making their own improvements. Additionally, Convergys continues to learn how to most effectively leverage the knowledge and experience of its employees through the sharing of success stories and best practices, and in the process, strengthen CI as a competitive advantage. Self Assessment Questions: 1. What are knowledge repositories? 2. Differentiate between Explicit and Tacit knowledge 3. Select the correct option: The Knowledge that is formed around intangible factors resulting from an individual experience and is personal and content-specific is: a) Explicit knowledge b) Tacit knowledge c) Transit knowledge d) Information

7.10 Summary
Quality is the totality of features and characteristics of a product in satisfying customer needs and expectations on a continuous basis to delight customer. Quality is conformance to requirements or specifications, quality of any product and service depends significantly on knowledge. As the Business organizations exist with certain mission they are trying to accomplish objectives, though they have to, face competition, gain competitive advantage, they have to improve the performance To deliver the best results, and they also have to deal with the change How to cope with change? Now all these need made lifelong learning as an inescapable reality for organization and they compete on the basis of knowledge. As the product and services are increasingly getting complex, endowing them with a significant information component is essential. Therefore, knowledge and
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information are considered as corporate assets and it need strategies policies and tools to manage these intangible assets same as the tangible assets of organization. Knowledge Management is the discipline that helps spread knowledge of individuals or groups across organizations in ways that directly affect performance. Knowledge Management envisions, getting the Right Information within the Right Context to the Right Person at the Right Time for the Right Business Purpose. Functionally, the ideal knowledge management Infrastructure should take advantage of existing knowledge stimulates the development of new knowledge and ideas, acquire it directly and painlessly, automatically classify and relate knowledge, make it globally accessible so that the right knowledge could be obtained and effectively utilized by any knowledge worker who needs it. Further organization needs to implement technology driven methods to access control and deliver information to share, identify and transfer knowledge within organization these are the best practices that often set high-performing organization apart from the rest Finally, the contributions of Knowledge Management to Quality Management decisions are indirect, but they can have a pervasive positive impact on knowledge processing in QM and this impact can positively affect QM decisions, implementation and business processing.
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A benchmarking study co-sponsored by the American Productivity and Quality Center reported that 79 percent of managers from the 70 responding companies felt that managing organizational knowledge is central to the organizations strategy, but 59 percent stated that their firm was performing this management function poorly or not at all. Also, 88 percent believed that a climate of openness the trust is important for knowledge sharing, but 32 percent of the respondents believed that their organization did not have such a climate. In many companies, the gap was attributed to a lack of commitment to knowledge management on the part of top managers. The transfer of knowledge within organizations and the identification and
9 th

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sharing of best practices often set high performing organizations apart from the rest.

7.11 Terminal Questions

1. How information plays a role in knowledge management? 2. What is the importance of knowledge management? 3. Fill in the blanks with the correct option: ______________ includes information stored in documents or other forms of media, or that which can be express to others. a) Explicit knowledge b) Tacit knowledge c) Any information d) Process knowledge

7.12 Answers to SAQs and TQs

SAQ 1. Refer to 7.6 2. Refer to 7.4 3. Refer to 7.5 Answers to TQs 1. Refer to 7.2 2. Refer to 7.3 3. Refer to 7.5

7.13 References
1. Howard, Alan, Rosa, David; Quality Management, Tata McGraw Hill Publication; Third Edition 2009. 2. M R Gopalan, John Bicheno; Management Guide to Quality and Productivity, Second Edition; Biztantra Publication.

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