Transferring knowledge in the relocation of manufacturing units

Author： Cheng Yang Madsen Erik Skov Liangsiri Jirapha

ISSN： 1753-8297

Source： Strategic Outsourcing: An International Journal, Vol.3, Iss.1, 2010-01, pp. : 5-19

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Abstract

Purpose ‐ The global spread of production makes companies relocate their manufacturing units frequently. Not only equipment, systems, and facilities, need to be moved, but the transfer of operational knowledge and experience seem to be a major challenge. However, discussions on knowledge transfer are derived predominantly from a cognitive perspective and normally focus on the organizational level and are rarely linked with outsourcing. Thus, from the perspective of operations management, the purpose of this paper is to explore how to transfer production know-how on the shop-floor level when manufacturing units are relocated and indicate which means can be used to support this intra-firm transfer process. Design/methodology/approach ‐ Four cases are identified from research in three Danish companies. Observations and 77 semi-structured interviews have been made over a time period of two years. Surveys of documents, questionnaires, and the Delphi method have been used to supplement the research. Findings ‐ Four cases are analyzed from four aspects. By doing so, different relocation situations are identified; different types of transferred knowledge are recognized; and different groups of means for knowledge transfer are introduced and classified according to their usage. Practical implications ‐ A framework is summarized to integrate all the elements discussed in this paper, which provides strong support and clear directions to industrial managers when they need to transfer knowledge in the relocation projects. Together with the framework, a process to help managers implement their knowledge transfer is also proposed. Originality/value ‐ Besides the framework and process, this paper also indicates that absorptive capacity of a production unit depends not only on the level of technical competence at its site, but also on whether real manufacturing environment has already existed or not. Two means for establishing virtual manufacturing environment are suggested.