Knowledge Management Cases in Asia/Implementation of Knowledge Management in Asia's Beverage Industry/Literature Review

There is not a standard definition for knowledge management (KM). Kwahk, Kim, & Chan (2007) defined KM as the uncovering and managing of various level of knowledge within individuals and teams and within an organization and it aims to improve organizational performance. Sporleder and Moss (2002) defined KM with more details as an integrated approach to identifying, creating, managing, sharing, and exploiting all information and knowledge assets of an organization. Soo and his colleagues viewed KM in a simpler way; they think KM is a process of knowledge creation and the organizational performance outcomes that result from that knowledge (Soo et al., 2002) Although there is not a clear definition of KM, researchers believe that KM is an important source to maintain organizations’ competitive advantage (Brannback & Wiklund, 2001; Hagen, 2002; Sporleder & Moss, 2002; Nonaka & Takeuchi, 1995).

Hagen stated that the food supply chains are under increasing competitive and regulatory pressure to develop and maintain knowledge management systems that facilitate assurance of quality standards in food products (Hagen, 2002). The advance in biotechnology in food industry is a factor which led to intense competition and urge for quality assurance. Since some events came out in food supply chain, including the application of biotechnology on agricultural products and food processing, food safety has been users’ concern (Brannback & Wiklund, 2001; Hagen, 2002; Sporleder & Moss, 2002). The accountability and traceability of food ingredients (Hagen, 2002), handling process (Hagen, 2002), preservation (Sporleder & Moss, 2002), and labelling (Sporleder & Moss, 2002) has become more important. They are especially important for those food firms who want to enter European market, because TTA (traceability, transparency, and assurance) protocols have been launched. In current food supply chain, both customers and producers requires more information and knowledge (Brannback & Wiklund, 2001), and the need for enhanced flow of information from upstream suppliers to downstream customers are increasing (Sporleder & Moss, 2002). The competition among competitors in food industry has been changed from tangible assets to value added and wealth creation through KM (Sporleder, 2001). And the information and knowledge management of firm includes brands, reputations, and customer and supplier relationship (Sporleder & Moss, 2002). Due to the globalization of industrial market and technological advancement, the competition in food industrial market is intense. It is important for organizations to identify new knowledge to maintain their competitiveness. The change in dominant logic affects business processes and knowledge management processes. KM has been essential for success in food chains and companies need to develop social capital and good networks to facilitate their knowledge management needs (Sporleder & Moss, 2002).

KM tools and strategies

There are varies KM tools and strategies in the food and beverage industry. Voelker viewed the enterprise content management (ECM) as KM tool which associates with document management, document imaging, web content management, real-time collaboration, e-learning tools, e-mail management or archiving, collaboration workspaces, work flow or work process automation, records management, digital asset management and report management (Voelker, 2005). Voelker suggested that beside XML-based management, content integration can provide a management layer above multiple content repositories and allow content reuse (Voelker, 2005).

A fast food leading company who offer food and beverages, the Mc Donald’s, established “AccessMCD” as a part portal and part content integration layer to give access to the core document repositories. The tool has improved the organization’s digital asset management capabilities and has provided a single source of corporate information. Before the establishment of central repositories, Mc Donald’s was facing problem of content replication. It was because the content and the platform were developed separately by independent franchisees and business partners from different countries and locations. It caused many problems to Mc Donald’s, including different version of documents and images for same products, competing platforms which reduce efficiency, and heavy burden on network bandwidth due to large amount of communication. Thus, core repository was developed to improve content consistence and platform consistence. (Voelker, 2005).

Mc Donald’s not only enhanced the content management, but also improved KM process. As Mc Donald’s is a multinational corporation, there were regional language variations for same product which caused communication inefficiency. Therefore, a global taxonomy has been built and information has been categorized in detailed level to solve the problem. Two-level search are provided to allow user perform searches in core document repositories and microsites. Moreover, some level of workflow automation is available with the system. If corporate authors indicate that the documents need translation, those documents will be automatically routed to translators. The time and labour cost are saved. (Voelker, 2005).

Another case discussed by Shein, Frito-Lay, a US snack food company, had built a KM portal on the corporate intranet. The portal not only acts as a single access point of information, but also acts as a collaboration workspace, an e-learning tool and communication channel. The portal has provided a space for knowledge sharing. Different content-including research abstract (performance scorecards) are given to different staff teams and customer communities. Staff can share summary of researches, latest news about customers, best practices or effective presentation on the platform. Before the occurrence of KM portal project, information was scattered in disparate systems, it was difficult for staff to capture useful information. There was not place for brainstorming and collaboration online. Support staff needed to response to same queries over and over. Salespersons from different offices had to send faxes to share documents, and they had to travel physically to meet retail customer. More important, turnover rate of salespeople was high as salespeople felt frustrated and disconnected. It was because there was not efficient way to collaborate salespeople due to geographic constraints.

The establishment of KM portal has improved the situation. It greatly reduced manipulation of large amount of data and faxes across different offices. Physical traveling has also be reduced. Besides, customers can access information through the Customer Community Portal (CCP) and the communication with customer has been improved. Besides, the CCP is successful in fostering communication and building relationship. Individual members feel connected with the rest of team and thus the turnover rate has been reduced (Shein, 2001).

Expertise profiles are also valuable KM tools in food processing industry. In the case of Frito-Lay, expertise profiles were created in the portal. Staff’s strengths and areas of expertise are catalogued and their contact information is provided. Before the existence of KM portal, new staff had to spend lots of time to learn skills and take up the work. The expertise profiles not only can improve knowledge sharing, but also an effective tool to assess gaps in employee’s skills and an important tool for maintaining knowledge during turnover of staff (Shein, 2001).

The above tools and strategies focus on identifying, storing and sharing knowledge for efficient and effective transaction processing. However, unlike most researchers, Alavi and Leidner believe that knowledge application is more important than knowledge itself in resulting competitive advantage (Alavi and Leidner, 2001). Kwahk, Kim and Chan agreed with Alavi, they suggested that knowledge application at top-level core business management tasks influence organizational performance more than KM in transactions processing. Therefore, their study focused more on knowledge integration across organizational units to support business decision making (Kwahk, Kim, & Chan, 2007). The study showed that a decision support loop is valid and useful for a beverage company. The decision support loop works by integrating individual knowledge into organizational knowledge to capture and define problems. Then, the loop formulates and tests knowledge model and finally generate decisions. In the study, a beverage company with $600 million annual sales volume needed to identify core factors and core activities which are at leverage points in decision making for increasing profit. For example, the company found that increasing ordering time and delivery time could be led by increasing market share. By using decision support loop with cognitive model, top management can estimate strength of the impact between causal factors and can target business problems (Kwahk, Kim, & Chan, 2007).

Problems solved by applying KM tools and strategy

Companies in the beverage industry are able to make their assets available online by applying new KM tools to their business. In 2001, the coca cola company worked with IBM to create a KM system allowing its staff to make access to the marketing and advertising information by searching the digital media system of the company. According to M2 Presswire, the system consisted of still images, videos and documents for staff to retrieve and look for relevant information as reference and resources bank. The system functioned as a business tool enabling the company staff from 200 countries to work collaboratively on new projects at the same time as well as launching projects globally. Problems in the past including communication errors, limited working efficiencies and a lack of knowledge to the assets of the company were solved with the help of this system. It helped the company transfer its tacit knowledge into explicit knowledge while the company staff could work efficiently with this powerful system and the system allowed the company staff from all over the world to work together at the same time on developing new projects without the limitation of geographical barriers.

The use of KM theories helped beverage companies reduce their costs and make it a competitive advantage for their business. One case about the dairy industry in Australia involved some food poisoning incidents caused by dairy products. At that time, it was commented that there is “lack of enforcement of food standards by the states and territories.”(Soliman,2000) Therefore, the use of Hazard Analysis Critical Control Point (HACCP) has been suggested to deal with the food safety problems. The HACCP system put the causes of food poisoning, the use of food ingredients, the involved procedures during the food production into consideration so as to detect errors and make corrections. According to Soliman, Dairy companies using the HACCP were able to make the quality of their products more transparent while the food safety issues become more tangible to manage. As a result, this KM tool helped dairy companies improve the quality of their products while they could improve their customers’ satisfaction as well as business performance.

Organizations often found themselves in a difficult position to improve staff relationships as well as equipping their staff with suitable skills for changes. Learning organizations that are willing to adopt KM technologies are able to deal with these problems. In a case mentioned by Fuyuno, a Japanese food processing company practiced a KM system to improve the internal communications among the staff. A drastic change in the company’s culture took place as the staff became more involved in the companies affairs. An atmosphere that staff were willing to share their knowledge was created while their staff were active in discussing the ways to improve the quality of their product and customer services. Apart from the sense of belonging brought by the KM system, the situation in Nestle made KM an even more vital component in its business. Although problems existed during the application of KM due to the differences in culture, language, individual learning needs and styles among the staff in different geographical division, Mr Dawn Waldron, the learning and training manager of Nestle, pointed out that staff were their greatest asset while the organization aimed to make sure its staff were equipped with important skills in order to excel in the workplace. Therefore, e-learning solution was used to make it possible for staff to develop skills from anywhere. Open learning courses or vital skills learning were provided while staff could learn what they have to learn according to their preference. Competitive in the business were maintained and intellectual capital could be developed through this continual learning system while costs could be saved through this one-stop-system for staff from different countries.

Further development trend of KM on an industry-wide basis

KM in the beverage industry may still be in a developing stage but according to the Chan and Yao’s research paper (2007), the KM gap among the Asian and Western Companies is getting close. It means more companies in Asia may take the opportunities to apply KM strategies to their business. Chan and Yao’s research paper (2007) pointed out that organizations in Hong Kong are not aware of the importance of KM. They suggested that KM in Hong Kong is hindered by the effects of Chinese culture leading to a lack of willingness to share knowledge. So, in Hong Kong, trend for developing KM in the beverage industry could be adopting ways to motivate people’s incentive to share their knowledge in the system and encourage their active participation in the KM system. Possible measures may include reward system that gives prizes to staff based on their contribution to the system. Therefore, KM in Asia may focus more on culture instead of technology in order to achieve greater user involvement.

According to Buckman, trends for KM include connectivity and communication. In brief, connectivity is about the numbers of users on the network and quality of the network. Communication is about how people could communicate more efficient and unhindered by the limitations of language. The trend of KM in Asia is similar because companies may have to follow these two aspects to develop new directions to maximize usability of their KM system. Apart from establishing a virtual community, beverage companies in Asia may make use of mobile technology for its network users to access the system for sharing and retrieving knowledge. With the use of WiFi, connectivity issue of KM could be enhanced. Communication aspect could be improved through virtual discussion conference and forum. Besides, e-learning could be used by companies to arrange virtual training for new recruits and provide chances for their staff to practice their ability under different situation in virtual scenarios.