ARC's Tom Fiske's Presentation on Leveraging Knowledge Mgmt at ARC's 2008 Industry Forum
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Presentation on Leveraging Knowledge Mgmt at ARC's 2008 Industry Forum in Orlando, FL.
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ARC's Tom Fiske's Presentation on Leveraging Knowledge Mgmt at ARC's 2008 Industry Forum
- 1. Leveraging Knowledge Management in Plant Operations Tom Fiske Senior Analyst ARC Advisory Group tfiske@arcweb.com February 2008
- 2. 2 © ARC Advisory Group Major Challenge: Aging Workforce Exodus of Workers is Reducing Companies’ Ability to Sustain Operational Excellence 0 10 20 30 40 50 60 70 80 1900 1920 1940 1960 1980 1990 2000 2010 2020 2030 MillionsofPeople Year People Over Age 65 Source: US Census -10% 21% 52% -20% -10% 0% 10% 20% 30% 40% 50% 60% Number of People 35 to 44 Number of People 45 to 54 Number of People 55 to 64 Changing Workforce Demographics from 2000 to 2010 Source: US Bureau of Labor Statistics US Bureau of Labor Statistics • By 2010 more than 25% of working population will reach retirement age • Trend will continue into for seeable future Globally – Workers are Getting Older • Largest Group of Workers – over age 45 and will double in next ten years • Fastest Shrinking Age Group of Workers between 35 and 44 – arguably the most productive Europe is expected to lose 1 million jobs annually for the next 25 to 30 years • Severe shortage of skilled workers and engineers! Oil & Gas Industry • 50% of its production engineers will reach retirement age by 2010
- 3. 3 © ARC Advisory Group Loss of People and Knowledge The Degree of Difficulty in Retaining People and Knowledge All Companies Struggle with Keeping and Replacing People and Knowledge 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Very Easy Easy Niether Easy nor Hard Hard Very Hard Retaining People and Knowledge 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders VeryEasy Easy Niether Easy nor Hard Hard Very Hard Replacing People and Knowledge
- 4. 4 © ARC Advisory Group Loss of Production Know-How Production Know-How Time Operators Maintenance Technicians Process Engineers Today Productivity or Quality One of the Biggest Challenges Facing Manufacturers Today is Retaining Knowledge Retaining Valuable Knowledge requires Proactive Strategies to Deal With a Shifting Workforce Knowledge attrition is occurring from a variety of sources including • Retirement • Rapid growth • Turnover • Layoffs • Mergers and acquisitions • Internal redeployment
- 5. 5 © ARC Advisory Group What is Knowledge Management? KM is a methodology to create, capture, analyze, enhance, share, and use intellectual capital to drive effective plant operations and create a sustainable business advantage. Data collected and stored in various plant systems and databases is not knowledge. Knowledge Management for plant operations means establishing an understanding of the relationship between people, equipment, processes and workflows. The ultimate goal is to create a culture of understanding that makes the production perform to business objectives. KM involves getting the right information to the right people in the right context at the right time Knowledge Is a Valuable Organizational Asset
- 6. 7 © ARC Advisory Group The Knowledge Management Process Create Business Value Business Objectives Knowledge Requirements KM Components Create/Capture Store/Index Access/Disseminate Learn Use/Collaborate Enhance/Create Validate Knowledge Sources On-Demand Create Context
- 7. 8 © ARC Advisory Group Knowledge Management Best Practices 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Corporate-Wide Most Plants Some Plants Other None Companies with Institutionalized KM Programs The Majority of Companies Lack a Corporate-Wide Initiative for Knowledge Management
- 8. 9 © ARC Advisory Group Knowledge Management Best Practices 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Excellent Good Average Not Good Poor 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Excellent Good Average Not Good Poor 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Excellent Good Average Not Good Poor Creating Knowledge Using Knowledge Capturing Knowledge Few Companies excel at creating, capturing, or using knowledge • The majority of companies are average at creating and using knowledge • Most companies are not good at capturing knowledge
- 9. 10 © ARC Advisory Group Knowledge Management Best Practices Knowledge Sharing in a Plant and across the Enterprise More than Half the Companies are Average or Above in Sharing Knowledge within a Plant, but are Less Effective Sharing Knowledge across the Enterprise Sharing knowledge in a Plant Sharing Knowledge Across the Enterprise 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Excellent Good Average Not Good Poor 0% 20% 40% 60% 80% 100% All Followers Competitors Leaders Excellent Good Average Not Good Poor
- 10. 11 © ARC Advisory Group Knowledge Management Systems Automation Systems Knowledge Centers (Portals) Emails Groupware Lessons Learned Knowledge Repositories Best Practices Benchmarking On-line Communities Blogs SOPs Documents PPT Internet Intranets Extranets Training OTS PLM Expert Systems Databases Models Analytics KPIs KM is the Foundation for Sustaining and Improving the Proficiency of Human Assets Why KM in Manufacturing • Experts leaving the company • Need for everyone to get consistent information • Getting and training replacements is difficult • Capture Best Practices • Enhance Internal Collaboration
- 11. 12 © ARC Advisory Group Common Actionable Context Real-time Performance Management • Performance Intelligence • Resolution to Unit Operation Level • Operator Engagement • Targets, progress and trouble analysis in real-time • Operational Perspective Common View • Plant and Corporate “single version of the truth” • Aggregation of Operations Intelligence and Business Intelligence Common Alarm and Event Management Procedure & Transition Management Context Data Quality MgmtCommon Time Dynamic Plant Reference Model Application Portfolio Data Model Work Processes & State Context Data Quality MgmtData Quality MgmtCommon TimeCommon Time Dynamic Plant Reference Model Dynamic Plant Reference Model Application PortfolioApplication Portfolio Data ModelData Model Work Processes & State Work Processes & State Human Asset Reliability KM Value Proposition K-Worker Control Costs Production Performance Target Feedback Visualization Knowledge (Models) Measurement Prediction Market Information Analysis
- 12. 13 © ARC Advisory Group 6% 10% 16% 17% 20% 24% 24% 38% 69% 74% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of Respondents Other Threat of Outsourcing Adoption of Make-to-Order Product Proliferation Shorter Product Lifecycles Synchronization with other Plants Smaller Production Runs Regulatory Compliance Improve quality Visibility for Business Mgt. Visibility for Business Management and Real-time Performance Management are the primary drives Reasons Cited by Users for Purchasing OM Solutions Operations Management Includes KM Value Breadth of Collaboration The value of information is directly proportional to the number of people collaborating Time The value of information is inversely proportional to the time until it can be actionable
- 13. 14 © ARC Advisory Group Summary and Recommendations “IF A MAN EMPTIES HIS PURSE INTO HIS HEAD, NO MAN CAN TAKE IT AWAY FROM HIM. AN INVESTMENT IN KNOWLEDGE ALWAYS PAYS THE BEST INTEREST” Ben Franklin Today, nearly every plant worker can be considered a “knowledge worker”. As such, it is imperative to provide them with the tools, information and knowledge they need to do their tasks proficiently. If they don’t have the knowledge, then find ways to have them get the knowledge. Broaden the scope of your KM program. Companies with far reaching and institutionalized KM programs outperform those that don’t have one or takes a limited scope approach. Automation and plant systems contain a lot of information about the capabilities of your plant. Analytical tools are available to transform your real- time and historical information into knowledge. Utilize IT and applied Internet technologies. Internet technology-based products are available to help share knowledge throughout the plant, across the enterprise and into the supply chain. With these tools, knowledge can be presented in context with each worker's mission. The most effective way to retain and use knowledge is to embed it into business processes and workflows
- 14. 15 © ARC Advisory Group Thank You. For more information, contact the author at xxx@arcweb.com or visit our web pages at www.arcweb.com
Editor's Notes
- In general, we have an aging population throughout the world.The majority of the workforce is over 45 years of ageFrom 2000 to 2010, their will be a 52 percent increase in workers of 55 years of age, while those workers between 35 and 44 will decrease by 10 percent.Shortage of skilled operators and engineers. The oil and gas will be hit particularly hard. The exodus of skilled workers is eroding a company’s ability to sustain operational excellence
- KM is a business model embracing knowledge as an organization asset to drive sustainable business advantage. It is a management discipline that promotes an integrated approach to create, identify, evaluate, capture enhance, share, and apply an enterprise’s intellectual capital. Bottom line: getting the right information to the right people at the right time
- Knowledge management includes creating/capturing, storing/indexing, and sharingDescribe components and process
- Not many companies have corporate wide initiativesKM is growing in importance and is quickly becoming the number one focus of companies
- Describe performance level of leaders, competitors and followers for each category
- KM supports human asset reliabilityInformation must be put into proper context and be consistentMeeting corporate business strategies requires effective use of business-centric technology that links real-time operational and financial data so that operators, supervisors, managers, and executives can make decisions about manufacturing operations and completely and predictably understand the affects their actions have on performance and profitability. This concept is Real-time Performance Management
- Users cite visibility as the major driving force for the adoption of OM solutions. This driver is becoming increasing more important.