Shaping knowledge for creating inter

SHAPING KNOWLEDGE FOR CREATING INTER-ORGANIZATIONAL
RESTRUCTURING PROCESSES OF MANAGEMENT SYSTEMS OF QUALITY
AND MANUFACTURING ORGANIZATION
LUDOSŁAW DRELICHOWSKI, JANUSZ MIERZEJEWSKI
Summary
The study describes the development of PESA Bydgoszcz S.A. The company can
serve as an interesting example of the transformation which involved substantial
changes in management and production organization. The development was very dynamic and using traditional benchmarking techniques to cope with the new challenges was not possible. Instead, knowledge creation and application procedures
were introduced. The study investigates four groups of actions which help to successfully apply knowledge in an organization. They can be used to create and verify innovative solutions, and improve the overall organization of a company. Sharing
knowledge to support business partners was an additional challenge achieved thanks
to advanced inter-organizational communication. All suppliers had to meet strict requirements regarding technology, organization and quality of their products.
Keywords: inter-organizational cooperation, quality management systems, knowledge creation for
supporting restructuring organizational processes
1. Introduction
The term “Knowledge-based economy” started to be commonly used in socio-economical literature in the late 20th and early 21st century [1], [4], [6], [7], [8], [11], [12], [16]. It accounts for
the fact that knowledge is the key to success but, at the same time, building, transferring or applying knowledge poses difficulty in many cases [3, 5, 7, 8 11, 18,]. In the case of PESA Bydgoszcz
S.A., building knowledge is essential to tackle problems resulting from the dynamic development
of the company, rapid changes and the necessity to maintain the gained competitive advantage.
Development of a company can be measured by the increase of production, sales and employment. However, it is crucial that a company decides which development factors would improve the flexibility of its management the most [2]. Therefore, it is necessary to determine strategic proportions which would limit the internal and external development factors. The most important ones include the scale of the employment increase and the amount of work to be outsourced. Increasing production to meet extra demand seems to be the obvious choice. One option
is to adopt a strategy that will make the company more independent by means of employing more
staff, using more advanced technology and improving work efficiency. The second option is to
outsource some of the work – this way the company remains flexible and can quickly react to new
orders and the changing product demand.
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Each of these strategies involves customer contact skills, creating innovative products, production techniques and integrated quality management systems. In the first scenario, when a company decides to develop its own resources in order to meet extra demand, it has to spend money on
new employees, invest in buildings, machines and infrastructure. All this can be expensive to
maintain in the times of stagnation. The hope that the potential to produce a particular line of
products is well protected against industrial espionage is misleading because reduced employees
can be hired by competition and reveal confidential information [16, 17, 18].
2. Production development – key factors
2.1. Brief history
PESA Bydgoszcz S.A. is a company with a 160-year-old tradition. Initially, the railway line
connecting Berlin and Warsaw provided work for “The Royal Works of Eastern Rail”. The workshop was renowned as the manufacturer of modern rail vehicles for the European and world operators. At first, the company hired only 21 employees, but the number increased to 2 280 in 1939. In
1920 the company changed its name to “Polish State Railways – Main Works in Bydgoszcz”.
From 1945–1965, the company employed 5, 000 people who repaired 10, 000 steam locomotives
and 200, 000 wagons. Diesel locomotives have been repaired since 1977 and electric multiple
units since 1990. In 1991, the company started to repair different types of passenger carriages,
which allowed the staff to gain the experience necessary for the future construction of its own rail
vehicles. From 1988–1998, employment fell from 3, 200 to 950 staff members with the sales
reaching 25 million euro. From 1998–2001, the company was reorganized and changed its name
again. The construction of a diesel-powered rail bus, designed and manufactured by PESA Bydgoszcz S.A., started the new chapter of successful development] 8]. The company focused on the
production of small diesel-powered rail vehicles, called “rail buses”. The electric versions soon
followed. The rail buses were sold in Poland and abroad. In 2005, PESA started the production of
modern trams designed for city traffic. The new products were bought by depots in Warsaw (200
units), Bydgoszcz, Czstochowa, Elblg, Gdask, and Szczecin. The trams also attracted foreign
customers from Szeged (Hungary) and Cluj (Romania).
Another strategic move was made in 2010. 2,700 employees worked on the construction of
multiple diesel and electric commuter/intercity units for domestic and foreign customers.
Figure 1 illustrates the sales dynamics achieved by PESA Bydgoszcz S.A. in the next few
years.
Interestingly, while most figures for 1997–2011 are soaring, a slight dip was recorded in 2009.
It suggests that the company must be prepared to deal with periodic lower sales without introducing any major changes to the organization of production; this is why some of the work is outsourced.
48
Ludosław Drelichowski, Janusz Mierzejewski
Shaping knowledge for creating inter-organizational restructuring processes of management
systems of quality and manufacturing organization
Figure 1. Total income for 1997–2011 (million PLN)
2.2. Developing product and quality systems in construction of new vehicles
Table 2: Development of new products in 2002–2011
Product type
1.
2.
Rail buses &
multiple
passenger
units
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
1
2
6
24
13
35
32
34
34
72
6
15
12
38
95
19
50
44
72
167
Trams
TOTAL
1
2
6
24
34
The above data clearly shows that in 2010–2011 the development of the company dramatically increased and the sales of new vehicles soared by 250 percent. The development was possible
thanks to the modern supply chain management, co-operation with suppliers and the introduction
of new technological measures. The success can also be ascribed to the newly implemented IT
systems such as ERP which is used to manage logistics, production, finance and projects. The
company also introduced the project- and process-oriented types of management, both involving
controlling principles. The Integrated Quality Support System, compliant with the IRIS:02, ISO
9001, ISO 14001, PN 18001, ISO 3834, EN 15085, DIN 6701 norms, and based on HTML Inter-
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Studies & Proceedings of Polish Association for Knowledge Management
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net browsers, has facilitated the fast exchange of information. Modern IT systems based on Internet browsers allow one to manage different aspects of quality, which can be grouped thematically
using the knowledge co-created with business partners. To participate in the knowledge creation
process, partner organizations must first undergo adjustment processes regarding information,
communication and quality management systems. The above requirements can be classified as
follows:
1.
Qualification processes regarding quality management (including documentation), supplier qualification system, preventive and corrective measures, quality analysis and audits.
PESA Bydgoszcz S.A. has introduced obligatory supplier qualification procedures for its own
workers and external providers. All potential suppliers have to submit a qualification request.
Typically, five candidates are reviewed every month. Then, they receive an IRIS-compliant questionnaire including the answers as well as the requirements they have to fulfil. Next, PESA workers visit a candidate’s head office and perform an audit. Reviewers evaluate if a supplier is competent enough and has the ability to provide parts for PESA. In the last three years PESA inspectors
have provided about 50 suppliers with technical and organizational assistance and helped them to
set up the quality certification schemes from scratch. A further 30 suppliers have been assisted in
the implementation and certification of the quality management in welding and gluing. PESA
quality advisors organize training programmes, show areas which need to be improved and generally help the suppliers to develop. The results are evident: the quality of the production process and
the products have been continually improving and the suppliers recorded an 80 percent decline in
the number of customer complaints. They also managed to increase the number of their own customers. In order to improve its supply chain management, PESA Bydgoszcz S.A. has launched
a website which makes it possible to book deliveries, forward orders and technical specification,
and publish the number of technical documentation (which includes the date of the document). The
website is also very useful for arranging delivery dates and performing deliveries. PESA Bydgoszcz S.A. co-operates virtually with about 300 suppliers who have signed the confidentiality
agreement.
Another website was set up to make it possible to forward complaints to suppliers worldwide.
As a result, the exchange of information now happens twice as fast as before and allows support
teams to respond within 12 to 48 hours, depending on the region (previously the response time was
5 working days). Suppliers can also use the website to check the feedback on quality of their products. The logistics department in PESA Bydgoszcz S.A. can also use the website to monitor the
corrective measures implemented by the suppliers.
2.
Use of machines and measuring equipment. FMEA and risk analysis.
PESA Bydgoszcz S.A. has introduced the Internet Machine Monitoring System which controls the proper functioning of several thousand machines and the production equipment. Now, the
machinery is automatically supervised and the service staffs is reminded about the overhaul dates,
necessary maintenance work, etc. The online database has cut the reaction time in the case of
a breakdown. It also holds records of all machines, which is very useful, e.g. it reminds one of
when an old machine approaches the end of its working life and needs to be replaced by a new
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Ludosław Drelichowski, Janusz Mierzejewski
Shaping knowledge for creating inter-organizational restructuring processes of management
systems of quality and manufacturing organization
one, or when the company has to hire a spare machine, etc. An emergency manual has been devised. Introducing the above changes resulted in lowering machine malfunction by 75 percent.
The database also holds records of monitoring equipment and electric tools used in the company. Thanks to the risk analysis, it was possible to identify items most likely to fail and eliminate
mediocre suppliers of such equipment. It helped to lower the cost of buying new equipment by
10% annually.
The database also contains instruction manuals and technical documentation for all machines,
which considerably improves servicing, maintenance work and resetting machines to their original
state.
The infrastructure database is essential for the FMEA evaluation of the production. It shows
the number of breakdowns, the time a machine was idle, and helps to rationalize the production
and prompts when equipment needs to be replaced. The existence of the database significantly
helped the company to achieve its financial success, and a fantastic 80-percent development in 12
months.
3.
Using inter-organizational knowledge proved very effective in managing the quality of
products manufactured by PESA Bydgoszcz S.A. and resulted in efficient processing of
customer complaints, which involves component diagnostics and defect monitoring.
When PESA Bydgoszcz S.A. sells a product to a customer, the agreement specifies the
RAMS/ LCC (Reliability, Availability, Maintainability & Safety/Lifecycle Costs) factors which
should be met by the product. In order to monitor these factors, as well as receive feedback from
customers, certain Internet systems and the integrated IFS application system have been introduced. Their central part is the information database, which collects data regarding e.g. faults occurring in vehicles produced by PESA Bydgoszcz S.A. The recorded data is then processed by the
FMEA analysis tools and used to eliminate potential faults in the future and improve the RAMS/
LCC factors. The RAMS monitoring is performed daily and the authorized PESA staff are presented with the results. They are also notified about any faulty parts delivered by suppliers.
The database produces interesting findings which are processed by the FMEA. Sometimes
suppliers and customers are also invited to help in finding a solution.
Currently, all PESA vehicles are fitted with a GPS transmitter, which enables live monitoring
of many parameters and guarantees immediate reaction of the support team in case of any major
problems.
The actions listed above helped to increase the RAMS factors (Table 3).
4.
Supporting innovation processes by creating ideas in the KAIZEN system, application of
the “5 S” system, managing internal audits, etc.
The following developments were introduced in PESA Bydgoszcz S.A. in 2009–2011:
The “5 S” system (Sort, Storage, Shine, Standardize, Sustain) was introduced in all areas of
production in PESA Bydgoszcz S.A. In order to increase discipline, internal audits are performed
monthly. The system allowed for full identification of products stored in work places and eliminates idle goods or equipment. Employees are personally responsible for the proper maintenance
of their workplaces. The system limited the number of internal faults by about 40 percent, the
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number of accidents at work by about 30 percent, and helped to generate a 30-percent savings. The
installation cost of the “5 S” system was amortized in six months.
The KAIZEN system (tools) has been used to introduce minor improvements in all areas of
production and eliminate waste. Special KAIZEN teams have managed to increase the efficiency
of production. On average, 120 new ideas are created and implemented in PESA Bydgoszcz S.A.
The benefits are apparent: employees apply creative thinking and the system brings actual savings
of about 50,000 PLN.
The KANBAN system – the screw and other component supply system was introduced to assist in the very busy period of serial production of 200 trams for the depot in Warsaw. The system
requires a perfect co-operation with suppliers to guarantee on time delivery and is synchronized
with the internal logistics of the company. The system allowed for the coordinated production of 3
to 4 trams weekly, on two assembly lines.
The introduction of the quality management solutions presented above was necessary. Vehicles produced by PESA Bydgoszcz S.A. meet the highest quality requirements, which are confirmed by the reliability factors (Table 3).
Table 3. Vehicle reliability
Average vehicle reliability
2006
90.5%
2007
92.1%
2008
93.8%
2009
95.4%
2010
96.8%
2011
97.5%
In order to continue the growth, the ERP and Internet systems must be integrated to increase
the speed and information content in the supply chain and production management. This task requires the use of the PDCA (Plan-Do-Check-Act) system – another step in development.
3. Conclusion
The study describes the dynamic progress of PESA Bydgoszcz S.A. which was possible
thanks to the use of modern IT solutions and information transfer. The organization of production
and the effective quality management can be set as examples to follow. Modern infrastructure
allows the company to conquer new and demanding world markets, and successfully develop
knowledge management.
In order to continue its dynamic development, PESA Bydgoszcz S.A. must ensure a continuous flow of component supply which has to meet strict quality standards. This task requires prior
supplier qualification. PESA Bydgoszcz S.A. only co-operates with suppliers who use modern
production management and organization systems, and guarantee the high quality of their products, which meet customer requirements. The procedures described in this study are stages in
achieving high standard of inter-organizational communication and standardization of products.
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KSZTAŁTOWANIE WIEDZY DLA TWORZENIA MIĉDZYORGANIZACYJNYCH
PROCESÓW RESTRUKTURYZACYJNYCH SYSTEMÓW ZARZĄDZANIA JAKOĝCIĄ
I ORGANIZACJĄ PRODUKCJI
Streszczenie
W pracy omówiono proces rozwoju organizacji PESA Bydgoszcz SA. Holding
jako niezwykle interesujcy przykład transformacji przedsibiorstwa zrealizowany
w ramach głbokich przemian własnociowych i organizacyjnych. Skala dokonanych
zmian i dynamika rozwoju organizacji powodowały, e sprostanie licznym wyzwaniom nie było moliwe poprzez uwzgldnienie popularnych działa benchmarkingowych a niezbdne stało si wdroenie procedur tworzenia i zastosowa wiedzy w organizacji. W pracy omówiono cztery kluczowe grupy działa, które stanowi istotne
elementy tworzenia i zastosowa wiedzy w organizacji stanowice podstaw do
wdroenia zmian umoliwiajcych efektywne tworzenie i weryfikacj nowatorskich
rozwiza zarzdzania przedsibiorstwem. Dodatkowe wyzwanie stanowice szczególnie istotn sfer tworzyło podjcie standardowych procedur dotyczcych wspomagania wiedz partnerów biznesowych w procesie ich dostosowywania si do spełnienia niezbdnych wymaga techniczno-organizacyjnych wypracowanych w PESA
SA zasad współpracy midzyorganizacyjnej.
Słowa kluczowe: współpraca midzyorganizacyjna, systemy zarzdzania jakoci, tworzenie
wiedzy dla wspomagania procesów restrukturyzacyjnych organizacji
Ludosław Drelichowski
Faculty of Management
University of Technology and Life Sciences in Bydgoszcz
e-mail: [email protected]
Janusz Mierzejewski
PESA Bydgoszcz S.A. Holding