Knowledge Exchange in Production Networks: Operational Excellence Multiplied

Ikujiro Nonaka, one of the most influential researchers in knowledge management, once stated that “[i]n an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products.” (Nonaka 1991, p. 96) Thus, manufacturing network managers have to focus their attention not only on the management of the physical flow of goods but also on the management of the intangible flow of knowledge (Chew et al. 1990). This applies to all kinds of industries: The strength of an international manufacturing company today is to a large degree dependent on its ability to exploit the knowledge that is available somewhere within its network or in its boundaries. To achieve this, network management has to be aware of the knowledge available at each site, generated, e.g., through Operational Excellence programs. It further has to trigger the distribution of process innovations and successful practices within the network (De Meyer and Vereecke 2009). However, many attempts to foster the exchange of knowledge in the network fall short of expectations. Popular examples are idle databases or lacking exchange of successful practices. Competition between manufacturing sites adds further barriers to the sharing of knowledge.