posted 1 Jun 1998 in Volume 1 Issue 6
A Strategic Imperative – Knowledge
Management in the Aerospace Industry
Rebecca O. Barclay and Thomas E. Pinelli , Ph.D. draw on a 10 year study carried out at Boeing into the large commercial aircraft sector. They examine how knowledge can be used for competitive advantage in this risk intensive industry concentrating on the research, development and production aspects of new aircraft.
The rollout of the Boeing 777 on April 9, 1994 represented a marked departure from the established strategy and practice associated with the research, development, and production (RD&P) of large commercial aircraft (LCA). The traditional technology-driven, innovation-based strategy that had previously dominated throughout the LCA industry emphasised development of aircraft whose technological improvements exceeded the capabilities of their predecessors, for example, in range and speed. Under this strategy, pricing of a new LCA would be determined by the cost of the advanced technology embodied within it.
Now RD&P strategy for new aircraft focuses on market demand and requires the application of technology and innovation to address user-defined requirements. Technology is used to improve reliability, dependability, safety, and overall economic performance, with the parameters of these factors being determined in a “balanced scorecard” approach. In theory, a technological advance that reduces fuel consumption, for example, but adds to the cost of design, fabrication, installation, or maintenance is strategically unacceptable. Under the traditional strategy, such a technological advance would have been highly desirable because it offered basic performance improvements.
Thus, the challenge of the new strategic approach is to design and build LCA that deliver the best in economic performance at lower overall costs to airlines and to the travelling public - and to deliver LCA when the marketplace wants or needs them. Making this approach work requires fundamental changes in organisation and management, chief among which is the management of knowledge as intellectual capital to achieve and maintain competitive advantage. However, little is actually known about how knowledge is produced, transferred, and used in the LCA sector, and the relationships among knowledge, learning, and innovation are not well understood. To address these fundamental issues, we undertook a 10-year study of the LCA sector of the aerospace industry that examined multiple aspects of knowledge production, transfer, and use at the individual, Organizational, national, and international levels. The results of this decade of work, which are published in Knowledge Diffusion in the U.S. Aerospace Industry (Ablex, 1997), represent a significant first step in understanding how to manage knowledge for competitive advantage within the LCA sector.
The knowledge- and risk-intensive nature of the industry
The aerospace industry, in particular the LCA sector, offers a significant opportunity for studying and advancing knowledge management. Apart from obvious contributions to the economic and national security of the United States (it generates the largest trade surplus of any manufacturing industry), the industry produces high-value-added products and serves as a knowledge base for other manufacturing industries. The LCA sector is a particularly critical component of the U.S. industrial base, for it employs a disproportionately large number of highly paid, highly skilled workers in knowledge-intensive production jobs. LCA are a rich source of knowledge, product, and process technologies and sophisticated manufacturing and production techniques. The 777 exemplifies such richness and complexity, for it incorporates:
|specific technologies (for example, composites) that represent product-embodied knowledge|
|individual and Organizational "know how" that represents process knowledge and requires a combination of explicit and tacit knowledge that is critical to Organizational competitiveness|
|systems integration knowledge that facilitates new and effective combinations of sophisticated components, products, and technologies that lead to even more complex finished products|
|management knowledge that enables the company to organise and manage complicated “teaming and production processes from an international group of subcontractors and vendors.”1|
In building the 777, Boeing used such state-of-the-art manufacturing technologies as laser alignment to achieve extremely precise fits and avoid costly and time-consuming mock-up development. The Dassault/IBM CATIA (Computer-Graphics-Aided-Three-Dimensional-Interactive-Application) design system linked approximately three terabytes of data and enabled the nearly 1000 members of various design-build teams on three continents to share their knowledge in real time, avoiding significant numbers of error and rework incidents. Of the 777’s 3 million-plus parts, 132,500 were designed entirely in the paperless CATIA environment, and a complete mockup of the aircraft was created online, alleviating the need for an expensive physical prototype.2
The RD&P of an LCA represents a high-risk venture that is compounded by technical and marketplace uncertainty. However, LCA manufacturers make major capital investment decisions despite uncertain future payoffs. They typically spend several billion dollars to conceptualise, develop, and build a new airframe. The Boeing 777 was no exception: the RD&P costs of this aircraft exceeded $5 billion, and the unit (per plane) cost approximately $150 million.3
The high-stakes economics of LCA production pushes companies like Boeing to form transnational and strategic alliances and partnerships to spread financial risks, acquire capital, gain market access, and obtain external knowledge and technology. Indeed, a notable feature of the 777 is its substantial international component, including the outsourcing of certain production-related activities and components. Boeing contracted with 241 vendors; nearly one-third were firms from Australia, Brazil, Canada, France, Ireland, Italy, Korea, Singapore, and Japan.4 Figure 1 below illustrates the rapidly internationalising nature of the pyramid structure that characterises LCA production. Contractors and vendors are now located all over the globe, rather than coming only from the U.S.
The proliferation of joint RD&P
arrangements, coupled with increasingly sophisticated and tightly networked
transportation and communication systems, has contributed to the globalisation
and subsequent diffusion of knowledge and technology. Competing on the basis of
knowledge requires that LCA manufacturers recognise and protect knowledge as an
essential element in competitive success; develop strategies, methods,
technologies, and techniques for leveraging knowledge; and implement internal
knowledge management programs that foster collaboration, continuous learning,
and knowledge-sharing among employees.
Knowledge use in the LCA sector
The RD&P of LCA depends on the effective deployment of large numbers of workers who bring specialised combinations of education, skills, and experience to knowledge-intensive production jobs. However, until recently most high-technology industries have ignored the characteristics, behaviour, and role of knowledge and its use by knowledge workers. Examining the production, transfer, and use of knowledge by individuals within specific communities of practice within the LCA sector was the focus of our work. During the lifetime of the research project, we surveyed (i.e., by telephone, mail, and personal interview) approximately 15,000 aerospace engineers and scientists. For demographic purposes, approximately 90% were males who held a bachelor’s or an advanced degree. They had been educated as engineers, performed engineering duties, and had approximately 15-18 years’ job experience. About 70% of the study participants work collaboratively in groups, with group size typically ranging from 4-8 members. In addition, they work in multiple groups, the number of workgroups ranging from 3-6. Thus, we can confidently say that the RD&P of LCA represents a collaborative process in which knowledge sharing plays a significant role.
Across the RD&P spectrum (from R&D to manufacturing through sales and service), aerospace professionals reported that they devote more than 80% of their workplace time to communicating and working with information and knowledge. Thus, we also assert that producing, transferring, and using knowledge is a critical component of who these professionals are and what they do in their specialised communities of practice. They actually spend more time communicating and sharing knowledge with others than they spend working with information and knowledge that they receive from others. They appear to prefer informal, oral communication channels over formal, written channels, devoting more time to oral than written communication, a finding that poses interesting challenges for knowledge management. The study participants also indicated that they use more codified, explicit knowledge (in the form of internal reports, drawings, and specifications, for example) than they produce. This finding points out the importance of ensuring that knowledge is classified, organised, and presented according to user-defined requirements.
The ability to communicate information and knowledge effectively appears to be linked closely with career advancement. The study participants indicated that as their years of experience increased and as they advanced professionally, the amount of time they spend communicating information and knowledge has also increased.
We also explored knowledge-seeking and acquisition preferences and processes in the LCA sector. Accessibility has long thought to be the key determinant in the use of information and knowledge. Our findings indicate, however, that within LCA communities factors related to information quality and reliability may play a greater role in users’ search and selection processes than do accessibility factors.
Study participants reported that (good) technical quality, comprehensiveness, and relevance of the knowledge to their work are the key factors in their selection of sources of codified knowledge. Their selection and use of knowledge is problem-solution oriented, for study participants initiate a search for information when faced with a specific problem, task, or project. The information search typically begins with a search of their personal stores of information and knowledge. Should this search not yield what they need, they seek out co-workers within the organisation to determine who holds the desired information and knowledge and what they know. Colleagues who are frequently identified as “gatekeepers” are valued for their ability to supply the needed knowledge itself or provide pointers to others who have the desired knowledge. The reason given for placing such a high value on gatekeepers is that a colleague or co-worker is likely to understand and possess both tacit and explicit knowledge that is relevant to the problem, task, or project at hand. The table below shows source of information preferences, as identified by a subset (N= 1347) of study participants from the aerospace community.
Table 1. Source selection preferences for addressing project, task or problem.
If internal sources cannot provide needed or desired information or
knowledge, the informal search is extended to colleagues outside the
organisation. Thus, the role of the gatekeeper is extended to that of the
“linking agent”, who puts the individual inside an organisation in touch with an
expert outside Organizational boundaries. Often, the information-seeker is
searching as much for a way to articulate and contextualize the problem, task,
or project as he is searching for specific answers. Once the problem, task, or
project has been adequately framed and contextualized, the seeker begins to look
for specific codified knowledge that can be applied to solving or completing
Users indicate that the amount of time and effort it takes to locate information and knowledge (who knows what, what form it is in, and where it is located) and the time and effort it takes to acquire them are major drawbacks to effective knowledge transfer and use. Thus, modelling knowledge so that it can be presented in a problem-solution context should help alleviate these problems.
Managing and leveraging knowledge
Today’s intensely competitive global economy is characterised by the growth of strategic alliances and partnerships, increased sharing of knowledge and technology, and the rapid diffusion of innovation. Nowhere is this environment more apparent than in the RD&P of LCA, where knowledge diffusion and sharing can provide powerful incentives to innovate. At the same time, diffusing and sharing knowledge can help build and strengthen relationships with production partners and customers. Effective knowledge management practices can play a major role in such activities and associations.
Within the LCA sector, the search for information and knowledge occurs within a problem-solution context. Within this context, knowledge is sought and valued for its technical quality, comprehensiveness, and relevance to the problem at hand. Our research indicates that informal networks, which rely heavily on oral communication, play a vital role in the acquisition and diffusion of knowledge. Thus, linking people to other people becomes critically important for the effectiveness of a knowledge management program. Identifying, encouraging, and rewarding the gatekeepers and linking agents within organizations is also a key step, as is encouraging and rewarding collaboration and knowledge-sharing. Providing tools that facilitate collaboration and enable knowledge-sharing and re-use is an obvious technological requirement. The Boeing Company's extensive intranet has demonstrated the value of such enabling technology in facilitating group work, particularly in the concurrent design and manufacturing of the 777. It fostered the re-use of existing knowledge and the creation of new knowledge, thanks to rapid feedback and input from users.
We hope that other knowledge-intensive organizations will benefit from our research, and we encourage them to adapt the lessons learned from the LCA sector in meeting their own knowledge management needs.
Rebecca Barclay is President, Knowledge Management Associates Inc. email@example.com and Thomas Pinelli is Educational Technology and Distance Learning Officer, NASA Langley Research Centre firstname.lastname@example.org .