5. Knowledge management and mass customization
Like e-commerce, knowledge management is valuable to mass customization by providing frameworks and infrastructure for knowledge creation, knowledge distribution, and knowledge-based innovation regarding customers. From a pragmatic standpoint, knowledge management can be viewed as a business process where which valuable knowledge is identified, collected, created, organized, stored, distributed, and eventually applied to problems or accomplish goals [36] and [37].
In today's business environment, characterized by fierce competition and constant change, intellectual capital or knowledge is recognized as an important organizational resource for creating strategic value [38], [39], [40] and [41]. Management of insights and knowledge is facilitated by systems that gather, analyze, and disseminate this information. Knowledge management has captured attention because it views intellectual capital as manageable and suggests frameworks to help companies effectively utilize this valuable resource. Fahey et al. [42] agree organizations need to focus on the knowledge gained via e-business to enhance customer relationship management, supply chain management and product development.
In the knowledge economy, proprietary intelligence associated with design, production, and delivery of innovative products or services is recognized as a key source of sustainable competitive advantage. Although the strategic value of knowledge is clear, most companies have not mastered the art of managing knowledge. In fact, the very capability to manage an organizational knowledge base is considered a strategic competence [40], [41], [43], [44], [45] and [46].
Researchers view knowledge management as an extension of traditional data and information management (or e-commerce) and suggest a holistic approach of knowledge management as a generic task permeating a knowledge worker's management functions [43], [47], [48] and [49]. Rather than treating knowledge management as a new duty separate from existing work practices, an integrated approach is taken to embed knowledge management tasks in the business processes.
While providing intelligent decision support, the knowledge base component of the business processes allow user flexibility to adopt, adapt or override system recommendation. The integration of the knowledge base increases the difficulty of replication by competitors and thereby constitutes a source of sustainable competitive advantage. In the implementation of a knowledge management solution in a bank, Samiotis et al. [50] found support for knowledge-management in e-banking roles. Bose and Sugumaran [51] found knowledge management technology applied in customer relationship management, particularly in creating, structuring, disseminating, and applying knowledge. Rowley [52] agrees customer knowledge is an important e-business opportunity and knowing customers in the digital economy depends on knowledge management.
Depending on the nature of business, an organization can choose to place more emphasis on human capital or technological capabilities when implementing knowledge management. The experience of Partners HealthCare provides an example for the technological approach [53]. A problem common to physicians is the quantity of information as there are almost 10,000 different diseases and syndromes, 3000 medications, 1100 lab tests, and over 400,000 articles added yearly to biomedical literature. Errors resulting from updates and the complexity are many and costly. A report from the Institute of Medicine indicated more than a million injuries and as many as 98,000 yearly deaths are attributable to medical errors. To combat this problem, Partners created an order entry system to double-check physicians’ prescriptions against a database of patient history, a database of drugs, and a medical expert system. Physicians’ knowledge and judgment are still important and can override system recommendation, but the system and other knowledge management systems have significantly reduced wasted resources and enhanced customer service quality. By embedding knowledge delivery process in the customer service process, Partners HealthCare has demonstrated that flexible and efficient knowledge systems can be easily implemented.
6. Leveraging information into knowledge: synergies for mass customization strategic success
Information and communication technologies make it possible to both leverage and integrate approaches more quickly, helping organizations respond to customer wants [54]. Knowledge management implementation is facilitated by organizations’ capabilities in implementing e-commerce applications. Likewise, implementation of e-commerce applications can benefit from experience acquired from knowledge management practices. A reinforcing effect results from the shared characteristics of e-commerce and knowledge management. These effects includes:
6.1. Internet utilization
Both e-commerce and knowledge management rely on the Internet and the related technologies (such as the WWW, search engines, shopping activity tracking programs, and software agents). For e-commerce, not only are the online storefront operations relying on the browser-based user interface, but the back-office systems must also be integrated through Internet-based communication protocols to create attractive customer value (guaranteed fulfillment, consistent quality, and competitive price) all while keeping operational costs within acceptable ranges. Similarly, knowledge management projects involve using the Internet to link knowledge buyers, knowledge sellers, and knowledge brokers in a knowledge market [44]. Thus the Internet is providing a convenient and affordable infrastructure for enterprise knowledge management activities and this infrastructure is necessary for mass customization.
Using Web 2.0 services, customers and product/service providers are viewed as equal parts of the team. They share opinions, perceptions, preferences, and comments throughout the product life cycle. Deployed properly, Web 2.0 services hold potential for supporting mass customization because they serve to capture a large volume of customer feedback, both positive and negative, in a real-time environment. Used effectively by organizations, this data on their products and services and those of the competition can be included in the strategic planning and new product and service development process. With feedback on customer preferences in hand, companies know which product and service components or variables are appropriate for customized offerings. Customization is not limited only to the order placement and processing stages, but includes planning, design, manufacturing, and after-sale services. Communication ensures maximum accommodation of customers’ needs and desires [34] and since customers control the content, the more they participate, the more deeply their participation becomes [55]. To please customers, firms must maintain a rich repository of customer profiles. These profiles allow firms to understand customers’ preference and experiences in using their products. Such comprehensive user profile results from meaningful interactions [53].
Grenci and Watts [56] agree providers will be differentiated by their ability to employ powerful Web-based interfaces to support a strategy that develops customer-controlled customization processes. Thus the need for e-commerce and supporting knowledge management systems must be in place for mass customization success. Dietrick et al. [57] support information systems as needed to manage product and process compliexity in mass customization and call for context-specific IT services as a prerequisite for successful mass customization.
Facing a massive amount of information, customers’ attention will be drawn to websites offering innovative, unique values. Knowledge management supports e-commerce by enabling a company to put its entire organizational knowledge base behind major business processes including new product development, customer service, and supply chain management. The infrastructure constructed for e-commerce applications also provides valuable mechanisms for the implementation of knowledge management.
6.2. Intangible assets emphasis
While such tangible resources as capital, distribution channels, technology, and warehousing facilities are necessary for successful operations, intangible assets (customer trust, brand image, value and innovation capabilities) are even more important for a successful e-commerce business. The capability of organizational members to be actively engaged in knowledge acquisition, knowledge updating, and knowledge exchange is an essential condition of implementing mass customization initiatives and innovation. The rich knowledge information and knowledge content, according to Wolfinbarger and Gilly [58], represents an important motivating factor by providing online shoppers with freedom, control, and enjoyment. These intangibles are difficult to quantify but are important to users.
Chu et al. [59] found software enhancements including the ability to configure 3D parts in a regular web browser, conduct an on-line evaluation of a car's interior using a digital human model, and even Internet-based design review systems that allow designers and others involved to change a prototype without access to CAD systems are changing collaboration for mass customization.
6.3. Integration requirement
Both e-commerce and knowledge management must be tightly integrated with major business processes. The experience accumulated via e-commerce indicates both internal and external processes must be streamlined and seamless. Knowledge management emphasizes the importance of integration with major business processes, such as new product development, customer service, and quality assurance and important for mass customization. Grover and Davenport [44] agree the ultimate succes
5. Knowledge management and mass customization
Like e-commerce, knowledge management is valuable to mass customization by providing frameworks and infrastructure for knowledge creation, knowledge distribution, and knowledge-based innovation regarding customers. From a pragmatic standpoint, knowledge management can be viewed as a business process where which valuable knowledge is identified, collected, created, organized, stored, distributed, and eventually applied to problems or accomplish goals [36] and [37].
In today's business environment, characterized by fierce competition and constant change, intellectual capital or knowledge is recognized as an important organizational resource for creating strategic value [38], [39], [40] and [41]. Management of insights and knowledge is facilitated by systems that gather, analyze, and disseminate this information. Knowledge management has captured attention because it views intellectual capital as manageable and suggests frameworks to help companies effectively utilize this valuable resource. Fahey et al. [42] agree organizations need to focus on the knowledge gained via e-business to enhance customer relationship management, supply chain management and product development.
In the knowledge economy, proprietary intelligence associated with design, production, and delivery of innovative products or services is recognized as a key source of sustainable competitive advantage. Although the strategic value of knowledge is clear, most companies have not mastered the art of managing knowledge. In fact, the very capability to manage an organizational knowledge base is considered a strategic competence [40], [41], [43], [44], [45] and [46].
Researchers view knowledge management as an extension of traditional data and information management (or e-commerce) and suggest a holistic approach of knowledge management as a generic task permeating a knowledge worker's management functions [43], [47], [48] and [49]. Rather than treating knowledge management as a new duty separate from existing work practices, an integrated approach is taken to embed knowledge management tasks in the business processes.
While providing intelligent decision support, the knowledge base component of the business processes allow user flexibility to adopt, adapt or override system recommendation. The integration of the knowledge base increases the difficulty of replication by competitors and thereby constitutes a source of sustainable competitive advantage. In the implementation of a knowledge management solution in a bank, Samiotis et al. [50] found support for knowledge-management in e-banking roles. Bose and Sugumaran [51] found knowledge management technology applied in customer relationship management, particularly in creating, structuring, disseminating, and applying knowledge. Rowley [52] agrees customer knowledge is an important e-business opportunity and knowing customers in the digital economy depends on knowledge management.
Depending on the nature of business, an organization can choose to place more emphasis on human capital or technological capabilities when implementing knowledge management. The experience of Partners HealthCare provides an example for the technological approach [53]. A problem common to physicians is the quantity of information as there are almost 10,000 different diseases and syndromes, 3000 medications, 1100 lab tests, and over 400,000 articles added yearly to biomedical literature. Errors resulting from updates and the complexity are many and costly. A report from the Institute of Medicine indicated more than a million injuries and as many as 98,000 yearly deaths are attributable to medical errors. To combat this problem, Partners created an order entry system to double-check physicians’ prescriptions against a database of patient history, a database of drugs, and a medical expert system. Physicians’ knowledge and judgment are still important and can override system recommendation, but the system and other knowledge management systems have significantly reduced wasted resources and enhanced customer service quality. By embedding knowledge delivery process in the customer service process, Partners HealthCare has demonstrated that flexible and efficient knowledge systems can be easily implemented.
6. Leveraging information into knowledge: synergies for mass customization strategic success
Information and communication technologies make it possible to both leverage and integrate approaches more quickly, helping organizations respond to customer wants [54]. Knowledge management implementation is facilitated by organizations’ capabilities in implementing e-commerce applications. Likewise, implementation of e-commerce applications can benefit from experience acquired from knowledge management practices. A reinforcing effect results from the shared characteristics of e-commerce and knowledge management. These effects includes:
6.1. Internet utilization
Both e-commerce and knowledge management rely on the Internet and the related technologies (such as the WWW, search engines, shopping activity tracking programs, and software agents). For e-commerce, not only are the online storefront operations relying on the browser-based user interface, but the back-office systems must also be integrated through Internet-based communication protocols to create attractive customer value (guaranteed fulfillment, consistent quality, and competitive price) all while keeping operational costs within acceptable ranges. Similarly, knowledge management projects involve using the Internet to link knowledge buyers, knowledge sellers, and knowledge brokers in a knowledge market [44]. Thus the Internet is providing a convenient and affordable infrastructure for enterprise knowledge management activities and this infrastructure is necessary for mass customization.
Using Web 2.0 services, customers and product/service providers are viewed as equal parts of the team. They share opinions, perceptions, preferences, and comments throughout the product life cycle. Deployed properly, Web 2.0 services hold potential for supporting mass customization because they serve to capture a large volume of customer feedback, both positive and negative, in a real-time environment. Used effectively by organizations, this data on their products and services and those of the competition can be included in the strategic planning and new product and service development process. With feedback on customer preferences in hand, companies know which product and service components or variables are appropriate for customized offerings. Customization is not limited only to the order placement and processing stages, but includes planning, design, manufacturing, and after-sale services. Communication ensures maximum accommodation of customers’ needs and desires [34] and since customers control the content, the more they participate, the more deeply their participation becomes [55]. To please customers, firms must maintain a rich repository of customer profiles. These profiles allow firms to understand customers’ preference and experiences in using their products. Such comprehensive user profile results from meaningful interactions [53].
Grenci and Watts [56] agree providers will be differentiated by their ability to employ powerful Web-based interfaces to support a strategy that develops customer-controlled customization processes. Thus the need for e-commerce and supporting knowledge management systems must be in place for mass customization success. Dietrick et al. [57] support information systems as needed to manage product and process compliexity in mass customization and call for context-specific IT services as a prerequisite for successful mass customization.
Facing a massive amount of information, customers’ attention will be drawn to websites offering innovative, unique values. Knowledge management supports e-commerce by enabling a company to put its entire organizational knowledge base behind major business processes including new product development, customer service, and supply chain management. The infrastructure constructed for e-commerce applications also provides valuable mechanisms for the implementation of knowledge management.
6.2. Intangible assets emphasis
While such tangible resources as capital, distribution channels, technology, and warehousing facilities are necessary for successful operations, intangible assets (customer trust, brand image, value and innovation capabilities) are even more important for a successful e-commerce business. The capability of organizational members to be actively engaged in knowledge acquisition, knowledge updating, and knowledge exchange is an essential condition of implementing mass customization initiatives and innovation. The rich knowledge information and knowledge content, according to Wolfinbarger and Gilly [58], represents an important motivating factor by providing online shoppers with freedom, control, and enjoyment. These intangibles are difficult to quantify but are important to users.
Chu et al. [59] found software enhancements including the ability to configure 3D parts in a regular web browser, conduct an on-line evaluation of a car's interior using a digital human model, and even Internet-based design review systems that allow designers and others involved to change a prototype without access to CAD systems are changing collaboration for mass customization.
6.3. Integration requirement
Both e-commerce and knowledge management must be tightly integrated with major business processes. The experience accumulated via e-commerce indicates both internal and external processes must be streamlined and seamless. Knowledge management emphasizes the importance of integration with major business processes, such as new product development, customer service, and quality assurance and important for mass customization. Grover and Davenport [44] agree the ultimate succes
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