The Process responsible for gathering, analysing,

storing and sharing knowledge information within an

Organisation. The primary purpose of Knowledge
Management is to improve Efficiency by reducing
the need to rediscover knowledge
It is...
A business model embracing knowledge as an organizational
asset to drive sustainable business advantage. It is a
management discipline that promotes an integrated
approach to create, identify, evaluate, capture,
enhance, share and apply an enterprise’s
intellectual capital.

Bottom Line: Getting the right information, to the right people

at the right time
and KM IS…
Using technology and process to…

Capture and accumulate knowledge of

people in an organization
Disseminate knowledge where and
when it’s needed
Enable people to re-use the knowledge
work of others
Provide an environment for
collaboration
BENJAMIN FRAN
SPENDING ON KM- INDUSTRYWISE
BUSINESS SERVICES
COMMUNICATIONS
GOVERNMENT
EDUCATION
FINANCIAL SERVICES
MANUFACTURING
HEALTH CARE
INSURANCE
RETAIL/WHOLESALE
TRANSPORTATION
UTILITIES/ENERGY
CHEMICAL
TECHNOLOGY
OTHERS
 KM SPENDING BY MANUFACTURING

2000000 1745389

1500000
1165896
1037188
1000000

500000

0
1999-2000 2000-2001 2001-2002
KM SPENDING BY 1037188 1165896 1745389
MANUFACTURING
 PERCENTAGE INCREASE

60

50

40
PERCENTAGE
30
INCREASE
20

10

0
2000-2001 2001-2002
KM in India-IDC report
Indian Market
As seen in 2001-2002…Rs 27.7 Crores
Expected in 2004-2005..Rs 152. 7 Crores
 Expected to increase by 5 times dispaying a
CAGR of 75.6 percent
KM in India-Growing
Markets
FINANCIAL SERVICES
TELECOM
PROFESSIONAL SERVICES ORGANISATIONS
MANUFACTURING
MAJOR ACCELERATORS
MATURITY OF SOME VERTICAL
SEGMENTS ON THE IT MATURE CURVE
GEOGRAPHICALLY SPREAD COMPANIES
EMERGENCE OF eBUSINESS
APPLICATIONS AND INFORMED
DECISION MAKING
UNDERSTANDING THE BENEFITS OF KM
BY TOP MANAGEMENT
INCREASING COMPETITION AND
CUSTOMER SATISFACTION AND THE
NEED TO HARNESS KNOWLEDGE ASSETS
MAJOR INHIBITORS
LACK OF COMPLETE UNDERSTANDING
OF KM
DELAY IN DECISION MAKING FOR KM
INITIATIVE
CHANGE MANAGEMENT ISSUES
LACK OF INCENTIVE FOR SHARING
INFORMATION
SECURITY OF THE INTELLECTUAL
CAPITAL
NON JUSTIFIABLE ROI MODEL
HIGH COST OF SOFTWARE & SERVICES
WHY KM IN MANUFACTURING ?
MANUFACTURING IS BECOMING MORE
COLLABORATIVE THAN EVER BEFORE
 SUPPLIERS, SUBCONTRACTORS, CUSTOMERS
WHY KM IN MANUFACTURING ?
MANUFACTURING NEEDS HISTORY OF
PREVIOUS PRODUCT RUNS/PROJECTS
 CONFIGURATION

 YIELD

 MACHINES

 ISO DOCUMENTATION
WHY KM IN MANUFACTURING ?

IMPROVED PRODUCTIVITY
 SHORTER CYCLE TIME
 OUTSOURCING

 COST CONTROL
WHY KM IN MANUFACTURING ?

NEED FOR EVERY ONE TO GET

CONSISTENT INFORMATION
 TIME TO SERVICE
DESTRUCTIVE REORGANISATION OF
PROFESSIONAL SKILLS
EXPERTS LEAVING THE COMPANY
NEW RECRUITS TAKING LONG TIME TO
ACQUIRE PROFESSIONALISM
WEAK COLLECTIVE LEARNING/CAPACITY
FOR INNOVATION
WHY KM IN MANUFACTURING - SUMMARY
WHY KM IN MANUFACTURING - SUMMARY
BY EFFECTIVE STRATEGIES
Strategies adopted in
manufacturing
1. Transfer of information and best practices
via IT systems.
2. Capture data about customers.
3. Leverage R&D into several applications.
4. Create more value from existing
intellectual assets.
5. Create strategy focused on individuals’
innovation and knowledge creation.
6. Commit to a “Knowledge Focused
Strategy”.
CASE STUDY
KM APPLICATION IN PHARMACEUTICAL
FORMULATION AS CASE STUDY
FORMULATION IS A CLASSICAL
MANUFACTURING ACTIVITY
NEED AND ARCHITECTURE OF KM
IMPLEMENTATION
Why in pharmaceuticals..

Importance of Healthcare and in emerging

WTO regime, the industry to be impacted the
most will be pharmaceuticals
Why in Formulation.. 

Enormous chances of replication (scope too)

and permits phased implementation in one
company itself (Dry powder parenterals I, II,
SVP…etc)
Formulation-A MANUFACTURING ACTIVITY

 Formulation is the process of mixing ingredients BOUGHT

FROM VARIETY OF SUPPLIERS in such a way as to produce A
STANDARD SET OF MEDICINES IN A HIGHLY COMPETITIVE
MARKET THROUGH WELL KNIT SUPPLY CHAIN AND
OCCASSIONALLY a new or improved product TO OBTAIN
COMPETITIVE EDGE AND MUST BALANCE THE DIFFERENT
MARKETING AND DELIVERABILITY REQUIREMENTS WITH
COST AND MATERIAL CONSTRAINTS TO COME UP WITH THE
BEST POSSIBLE PRODUCT DELIVERY METHOD AT THE BEST
PRICE, AS IN ANY MANUFACTURING ENVIRONMENT
PHARMACEUTICAL COMPANIES CHOSEN
FOR CASE STUDY
ABC
XYZ
 
 
ABC Company
Excellent IT Culture..

 Already certain level of maturity in IT

implementation
ABC Co.
Formulation Plant

Produces Tablets, Capsules, Injections,

Liquids and Powder

IT infrastructure in place

The company has around 500 employees

with a separate IT department
Need in ABC..?
Full fruits of IT not yet derived  
Visible areas of automation are not attempted
Essential functions are not automated as yet
IT enabling has been carried out sub-critically
Non conversion of data to knowledge
XYZ Co.
Formulation Plant

Produces Tablets, Capsules, Injections,

Liquids and Powder

No IT infrastructure

The company has around 300 employees

Need in XYZ..?
Inability to compete in the open market
Lack of GMP Certification
Variations in Yield
Sourcing Restrictions
Lack of Timely Information
Planning Constraints
Knowledge Drain
 Need in XYZ..?
 Dependence of Yield on the
Knowledge of Pharmacist
 Problems with managing raw
materials from different sources
 Difficulties in trying out new sources
 Inadequate Data for proper
Production Planning
 Down Time due to non availability of
inventory
 Difficulties in controlling Aseptic &
Sterile Room environmental
conditions
 Difficulties in implementing WHO
GMP
SOLUTION
“KNOWLEDGE ENABLING
MANUFACTURING PROCESS”
 KNOWLEDG
E
MANAGER

ERP PROCESS
SYSTEM TRACKER
ERP MODULE
ERP Modules
 Production Management
 Production Planning
 Products Promotion
 Quality Control
 Inventory Management
 Packing & Forwarding
 Purchase
 Maintenance
 Personnel & Payroll
 Finance
 Receipts & Payments
 MIS
PROCESS
TRACKER
Capture
It is a series of processes by which organisation
Identifies information and knowledge
Codifies, indexes, classifies, aggregates and discusses

 so as to enhance its knowledge base.

Transfer
It is series of the processes by which organisation
Distributes information and knowledge
Uses, transposes and integrates through a learning
process by the user.
Permits the user to incorporate, transform and
apply the accessible knowledge, turning
information into a value creating process.

 Knowledge management has to take care of this cost, which means

training people’s agility and learning capacity.
Renewal
It means that knowledge and information has to be
adapted, transformed, destroyed and renewed all the time
in the process.

Need for knowledge management to be sufficiently agile

to transform its own vision and knowledge.
KNOWLEDGE MANAGER
KM TOOLS IN KNOWLEDGE MANAGER
CONFIGURABLE INTERFACE
DATA INTEGRATOR
BUSINESS INTELLIGENCE
CONTENT & DOCUMENT MANAGER
KNOWLEDGE ENABLER
Benefits
 Creation of knowledge base of various
batches run(product category –wise),
yield % achieved, reasons for
improved/reduced yield, process
parameters/quality control measures
effected, etc.
 Tracking of production personnel
efficiencies, their training skills/needs
 Downtime analysis and categorization
and breakdown forecast, maintenance
scheduling and planning
 Production process simulation for a new
formulation
Benefits
 Capture production information
electronically
 Less load on production personnel
 Capturing whys? Hows ?
 Worker skill profile
 Electronic upkeep of SMP, SOP, BMR….
 Capture of all interactions with QAD,
production, PPC, FD etc. for future replay.
 Energy conservation
 Material Conservation
 Consistent Operation.
Benefits
 Implementing WHO GMP norms –
procedures, record maintenance
 Optimised Production Planning –
availability of raw materials, schedules
 Proper Inventory Management –
inventory carrying cost, dead stock
 Information at Finger Tips – QC reports,
SR, Production & Fund status
 Creation of Knowledge Base –
manufacturer dependent potency
variations, timing change, mixing ratios
Return on Investment-
ABC Co.
 Manufacture of a particular formulation
resulted in a yield of 99% for Batch A,
while batch B for the same formulation
resulted in an yield of 97% only. For a
target yield of 98.5% for this product,
achieving an increase of 1.5% in yield
will result in a saving of approximately
Rs 50 lakhs /year in ABC Co.

 Total ROI will be about 50 Lakhs per

year
Return on Investment-
XYZ Co.
 Reduction in Raw material cost due to
knowledge based process management (4
to 6% of 10 crore) : 40 to 60 Lakhs
 Reduction in Inventory Carrying Cost (20%)
& Production Losses(10%) :
10 to 15 Lakhs
 Export market margin due to WHO GMP
(20% of 2 crore): 30 to 40 Lakhs
 Improvement in yield : 20 to 30 Lakhs

 Total ROI will be about 100 Lakhs per

year
Formulation-A MANUFACTURING ACTIVITY
 Formulation is the process of mixing ingredients in such a way as to produce a new or improved
product. The formulations department must balance the different marketing and deliverability
requirements with cost and chemical constraints to come up with the best possible drug delivery
method at the best price.
 With laboratory results stored in legacy systems, it takes expert company knowledge and experience
to know which methods and suppliers are available, let alone to locate them quickly. In many cases

scientists find that it is easier to repeat an experiment than to find previous results. This situation is
compounded in global R&D set-ups, and after mergers and acquisitions.
 With an aging workforce, management watches skills and knowledge leave the company, with the
replacement prospects at best being expensive; at worst non-existent. Knowledge management

offers solutions to these problems. Storing information in a corporate database means that
scientists can access results and methods from anywhere in the world. They can use their time and
resources on new research, rather than repeating old work. Using computer technology to manage
an organization's knowledge also helps to plan for and minimize the erosion of skills, ensuring that

projects run smoothly and efficiently.