denotes premium content | May 25 2013 Feature
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:
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specific technologies (for example, composites) that represent product-embodied knowledge |
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individual and Organizational "know how" that represents process knowledge and requires a combination of explicit and tacit knowledge that is critical to Organizational competitiveness |
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systems integration knowledge that facilitates new and effective combinations of sophisticated components, products, and technologies that lead to even more complex finished products |
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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
it.
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. barclay@knowledge-at-work.com
and Thomas Pinelli is Educational Technology and Distance Learning
Officer, NASA Langley Research Centre t.e.pinelli@larc.nasa.gov .
