Applying Knowledge Management to Build-to-Order Processes in Manufacturing and Service Companies

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Chapter 3: Research Methodology:

The impact of knowledge-management strategies on the build-to-order process delivers significant operational and financially-based gains over time. Being able to design a specific build-to-order process so that it can deliver the maximum results possible is predicated on understanding several critical factors in a business adopting this approach to unifying selling and production. To attain the highest perfect order accuracy, companies adopting the build-to-order process as a selling and service process must first concentrate on the role-based use of knowledge management throughout their enterprises.
Role-based use of knowledge alleviates the potential for errors in order processing and reduces the churn of incorrect orders that must be corrected by a median of seven or more times, and increases the accuracy of long-term product planning and new product launching (Columbus, 2008). The Perfect Order metric captures the extent to which role-based knowledge is being shared throughout an organization. The greater the agility, accuracy, and speed with which a company is using role-based knowledge, the greater the Perfect Order accuracy, operations, and financially-based performance it attains.
The intention of this methodology is to factor the use of role-based knowledge in the build-to-order process, and thereby determine how enterprise, legacy, and previous isolated systems are optimized for performance. Dashboard and the hierarchy of supply-chain metrics are excellent metrics for measuring the broader trends impacting a company over time to be implemented with an internal framework which can quantify performance gains over time. Therefore, this methodology also concentrates on creating this framework of measurable performance gains that are directly attributable to a more accurate and efficient build-to-order process over the long term. Chapter 3 offers a brief description of the adopted research methodology activities, such as research design, research question and sampling strategy, research instrument, data collection procedures, and data analyses.
Research Question:

How is knowledge management being used today to streamline and make more efficient the service strategies of manufacturing and services companies? [.].
Research Design:

The research design includes detailed plans on what, where, and how data are to be collated (Creswell, 2009). In creating this research design, several key assumptions have been made about the use of knowledge-management strategies within the build-to-order process.
At first, knowledge management must be role-based to be as effective as possible in automating the build-to-order process. As previous research has shown, the greater the role-based use of knowledge management, the greater the accuracy, efficiency, and transaction velocity achieved (Hofman, 2004; Columbus, 2008).
The second assumption is that the contributory effects of knowledge management are not linear, but follow an experience curve effect, gradually increasing over time as enterprises gain greater insights into how to align resources to needs. This assumption that growth is not linear is also fundamental to evaluating the impact of role-based knowledge being applied to the build-to-order process. It can be reasonably assumed that the elasticity of knowledge is greater the more rapidly an organization attempts to launch new products and gain market share. This is correlated to the experience effect and points to the need to understand the elasticity of knowledge by role to understand how the build-to-order process can be optimized over time.
The third assumption is that the legacy, internally-developed, and enterprise-wide ERP systems have a significant effect on the overall performance of the build-to-order process. For this study, the ERP systems in use by respondent organizations will be considered and analyzed as part of the results. ERP system integration is also one of the most potentially costly and challenging tasks, for enterprise-system development in support of strategies. This study will encompass the role of ERP systems as a catalyst of greater build-to-order process accuracy, performance, precision, and resulting profitability. ERP system designers have also become more attuned to the need for the role-based use of analytics and knowledge management, creating workflows that also align with the needs of the build-to-order process. Further, ERP vendors will often provide a series of references to their systems in the hope of winning new customers. Capitalizing on these references, this research study looks to gain insights into how these systems contribute to a more effective build-to-order process.
Population and Sample Strategy:

The sampling frame for this research is defined as those high-technology manufacturers who rely on build-to-order, configure-to-order, and engineer-to-order workflows as part of their main selling strategies. The respondents will be CFOs and the heads of accounting and finance, as these members of a management team will have insights into the performance of build-to-order, configure-to-order, and engineer-to-order strategies from a profitability standpoint, and have data available for calculating the Perfect Order metric for their companies.
During the literature review process, it was determined that the majority of Chief Information officers (CIOs) report to the CFO of the organizations of which they are members. As a result, the CFO is the primary respondent for this study. The factors supporting this decision to have the CFO as primary respondent rather than the CIO are as follows. First, the CFO has a clearer view of the results being attained by all complex business strategies and processes. A CFO's responsibility is to evaluate the performance of IT investments in terms of their ROI as well. This vantage point, and the access to strategic data on the performance of all strategies, specifically those which are complex and in need of orchestration as build-to-order, also make the CFO the ideal candidate to be the primary respondent for this study. Secondly, the CFO will be more attuned to early adopter results and the evolving set of best practices in the role-based use of knowledge management, and the nascent area of role-based business intelligence which, as was discovered during the literature review, is a critical element in build-to-order strategy success. Thirdly, CFOs are often called on by CEOs to enable the build-to-order process across the entire enterprise. This also includes working with the Chief Marketing officers (CMOs) to complete the entire strategy from the channel and selling side, through manufacturing, to fulfillment. From the literature review, when the CEO appoints the CFO to work with marketing and sales to track the performance of the build-to-order strategies being completed, there is higher accountability and performance over time. As a result of all these factors, the CFO is the primary respondent for this study.