Things change, people change, and processes are reinvented in all organizations. So how do you capture the right information, from the right people, at the right time, interpret it, and share it organization-wide? I once had a senior buyer reporting to me who was an expert in MRO (maintenance, repair, and operations) purchases, and who could find anything anybody ever wanted or needed with same day delivery if necessary. But all of this experience, expertise, and know-how was lost when he retired from our organization, because all his expertise went undocumented and was lost forever. Xerox had this same challenge with their service engineers who repaired copiers, but solved it with a knowledge management system called EUREKA. EUREKA allows their service engineers to capture service solutions online and then share these problems, symptoms, and solutions with their peers globally in seven languages. As these examples demonstrate, without a disciplined knowledge management model, data and information that is critical to your current and future success will be lost forever.

To understand the concept of knowledge management we must first understand the difference between data, information, and knowledge. Data is a record of transactions, such as purchases, that capture product descriptions, manufacturers, prices, product numbers, and quantities ordered, that have no intrinsic value in and of themselves. Information is data that has been put in context (i.e., 80% of your purchases are under $1,000 dollars). Knowledge is insight, interpretation, and sharing of data and information that has been cleansed, organized, objectified, and data mined to create value, such as predicting when a stockout will occur on an inventory item. Our goal then should be to combine data and information in a knowledge management repository to capture solutions in a user-friendly environment.

Information technology has given us the tools to capture, compile, analyze, and share data and information on all of our supply chain operations’ best practices, rules, and procedures. This is due to the development of internet applications, data warehouses, and data mining software that acts as an enabler to store, retrieve, and distribute supply chain information that is mission critical to our organizations. As an illustration, one of our members has deployed an internet application developed by our Association that provides decision support, project management, and a data warehouse to evaluate and select best value products, services, and technologies, share best practices, benchmarks, pricing, and data mine for savings opportunities at their shareholders’ organizations. This creates a virtual community of value analysis practitioners who can retrieve, interpret, and share knowledge that just a few years ago was only a dream, not a reality.

Data and information in and of itself doesn’t create value in an organization, only when data and information is structured creatively to improve performance can knowledge be harvested to identify trends and predict performance. The Institute of Supply Chain Management believes that, “Knowledge creation is the equivalent of supply chain forecasting, where organizations are attempting to identify trends in order to provide products and services (and technologies) when (and where) they’re needed.”

One emerging trend by companies throughout the country is the collecting, comparing, and sharing of benchmarks, ranging from inventory turns to fill rates, to improve their supply chain performance. This collaborative effort quickly identifies best practices and is a motivating factor in encouraging users to access this information online. Supply chain knowledge management shouldn’t be considered a new responsibility of supply chain managers, but a new way of capturing the right information, from the right people, at the right time.