Knowledge Management in Supply Chain Networks

Abstract

This article reviews current research and practice of knowledge management (KM) and inter-organizational learning in supply chain networks. Knowledge management is the organizational process for acquiring, organizing, and communicating the knowledge of individual employees so that the work of the organization becomes more effective (Alavi & Leidner, 1999). Knowledge management is an increasingly important process in business organizations because “managing human intellect—and converting it into useful products and services—is fast becoming the critical executive skill of the age” (Quinn, Anderson & Finkelstein, 1998). Grover and Davenport (2001) state that KM becomes “an integral business function” when organizations “realize that competitiveness hinges on effective management of intellectual resources.” Grover and Davenport also argue that knowledge management works best when it is carried out by all the employees of the organization and not just KM specialists. Business organizations frequently partner with other firms to complement their core competencies. To collaborate effectively, partner firms have to communicate with each other information about business processes as well as share ideas of how to design or improve business processes. This phenomenon of knowledge sharing across organizational boundaries is called inter-organizational learning (Argote, 1999). Knowledge management, we posit, is necessary to facilitate inter-organizational learning and direct it in a way that supports the organization’s overall objectives. Supply chain systems are an example of business networks. Supply chains involve not only multiple corporate entities but also organizational units within a single organization. We present practices used in business organizations and networks of businesses to manage the information and knowledge sharing processes using the context of supply chain systems.