Knowledge Supply Chain and Enterprise Innovation Capacity
Ying-chun Song
Business School of Shandong University
No.180 West Culture Road Weihai, 264209,China
(songyingchun@sdu.edu.cn)
Abstract- The essence of the business competition is the
competition of knowledge innovation, to maintain and enhance
the competitive advantage of enterprises must be based on
improving enterprise innovation capacity. Referring to the
thought of material supply chain, building knowledge supply
chain can effectively eliminate the gap between enterprises and
universities and research institutions, optimize knowledge
flow, enhance enterprise innovation ability in the process of
the knowledge formation, development, transfer and
application , so enterprises can maintain and enhance their
competitive advantage.
the common market objectives. In this way, it will promote
technical and economic development with sharing benefits.
Application of mature experience accumulated by the
enterprises in the materials supply chain management to
knowledge flow management, forming knowledge supply
chain, can effectively enhance enterprise innovation
capability. Knowledge flow refers to the knowledge
formation, development, transfer and application .
Keywords- Knowledge Flow, Knowledge Supply
Chain(KSC), Enterprise Innovation Ability. Introduction
Knowledge formation is the process of creating and
discovering new knowledge[4]. The scientific research
result of the technology research and development is a
typical way to the formation of new knowledge and the
accumulating experience of the members from different
departments and posts within the organization in the
activities of participating in organizations is another way to
form new knowledge. At this stage, the new knowledge
may only be a few elements, has not yet formed an available
technology or product, so it is called "indigenous
knowledge".
I.
INTRODUCTION
The essence of the competition is the competition of
knowledge innovation[1]. With the knowledge increasing in
the development of economy, the competition between
enterprises has been changed from the product to the
knowledge and technology-driven competition; organization
operation which their core is the knowledge and value flow
attracts more and more people attention. Knowledge supply
chain as an important research field of the knowledge
management combines the idea of systematic thinking and
supply chain management, provides a new way of thinking
to add value in the knowledge transferring and enhance
enterprise innovation capacity.
II.
KSC AND KNOWLEDGE FLOW
Knowledge is the source of technological development,
new knowledge is the enterprise's unique source to maintain
a competitive advantage, it is the basis of the technology
innovation, productivity enhancing and the customer need
meeting [2].
Knowledge supply chain(KSC) means, around one core
subject, oriented towards customer needs, through activities
of knowledge flow that is knowledge innovation, connect
the knowledge suppliers, innovators and users with each
other, centralize and systematize knowledge advantage of
the different subjects, in order to provide information and
methods for enterprises to improve business operation
benefit and innovation capacity[3].Universities and research
institutions themselves are producers of knowledge, and
enterprises are end-users of knowledge supply chain,
through the joint of the production and research, each
achieve their goals effectively in the process of achieving
A. The Formation of Knowledge
B.
The Development of Knowledge
Knowledge development is a process of deep processing
of the indigenous knowledge to make it become an
identifiable, transferable and transmissible finished
product[5]. For example, the members of the organization
make their indigenous knowledge formed in the processes
of working conceptual, logical, systematic, expressed in the
standard and clear words, so that other people can
understand and apply it. This developed knowledge can be
seen as a "knowledge products", the difference between the
knowledge products and the indigenous knowledge is the
maturity degree of the knowledge, the development process
can make knowledge from imperfect to perfect.
C.
The Transformation of Knowledge
Knowledge transformation is a transformation or
dissemination of knowledge in different ways, which make
other people able to absorb new knowledge and effectively
use it[6]. The knowledge transformation or dissemination
ways include enterprise organization internal AC, training,
cooperation between enterprises and producers of
knowledge, their essence is "an knowledge trade and
knowledge products occupation ", has a directly or
indirectly commercial nature, which determines that
enterprises should pay attention to take appropriate
incentive mechanism in the process of business activities,
make every member has enough enthusiasm to participate in
implementation of enterprise target, to realize the
"commitment" that individuals make to their organization
.
D.
The Application of Knowledge
Knowledge application is the process of apply knowledge
to meet the objective requirements[7]. Sometimes, new
knowledge is the final product, but in most cases, only
synthesize new knowledge and the existing knowledge can
produce new technologies, new products and services, the
essence of knowledge application can be seen as a
"consumption and investment in knowledge", through the
application of knowledge to obtain greater returns. If the
application does not completely meet the customers’
demand or desire, all or part of the above process will be
repeated.
The process of the knowledge formation, development,
transformation and application of is not isolated, but closely
contacted with each other. In general, for a relatively simple
invention, the process includes only one person or a group
as a whole, then the knowledge flow of this technical
innovation is continuous; but when the innovation refers to
a wider range , having a great applications foreground and
many users, in most cases, the knowledge system
integration degree is very poor. Because each department
(or innovative stage) tends to regard their work as "final
product", lack of common goals, this is a passive, promotion
activity. And it is this old-fashioned, isolated, fragmented
concept leads to a low level of commercialization of the
research results, technology innovation lagging, and
inability of turning knowledge into productivity. If
enterprises want to promote technical innovation
effectively, they should establish a continuous flow of
knowledge; transfer the pushing technological innovation
activities into the market demand technological innovation
activities.
III.
FROM MATERIAL SUPPLY CHAIN TO KSC
principles is: (a) material supply chain is a continuous and
integrated system; (b) run in accordance with the formation
of an integrated product set oriented by end-user demand;
(c) each member of the chain can share benefit;(d) protect
information flow and knowledge flow smoothly, eliminate
barriers and misunderstanding; (e) utilize and integrate each
member's expertise to optimize the entire process; (f) test
products in accordance with clearly defined requirements.
Knowledge supply chain is different from the material
supply chain; it is abstract, dynamic and complex. But in the
production process the value of knowledge is constantly
processed and value-added as same as material resources.
This determines knowledge supply chain and material
supply chain have much in common: (a) they both have
different stages of the production, development, transfer and
application, (b) begin with the concept (or imagined),
through the increase of the added value to formulate output,
which is product and knowledge that can be used, (c )
Needs to transfer from the concept ( or imagined ) to a
status that users could consume,;(d) in the value-added
process rely on continuous, effective and complete
information and knowledge flows; (e) typically involves a
number of different individuals, departments, or units. This
similarity allows us to apply the principles of material
supply chain management to the management of the
knowledge supply chain, to accelerate development of
technology innovation.
Reference to material supply chain management, the
main management principles of knowledge supply chain is
as follows: (a) technology innovation is an integrated
system, needs close tie and coordination of all sector to play
their maximum role; (b) each sector and member of the
chain understand which knowledge can meet end-user
needs, and different features and formation of knowledge
transformation, who is end-user, when they need using this
knowledge; (c) information flow is open to every link in the
knowledge supply chain, each link understands how to
make the knowledge supply chain realize the maximum
value-added, and take into practice; (d) establish feedback
between the knowledge suppliers and users, make
information exchange more effective; (e) each link can feel
the system and share it benefit, realizing that itself is an
indispensable and important link in the chain.
IV.
The goal of establishing material supply chain is to
enable enterprises to improve the quality and functionality
of the final product through total quality management and
time management , reduce total cost, shorten production
cycle and delivery cycle to quickly launch new products, so
that all members will jump out from narrow vision and
activities, make greater contributions as a whole, and share
more interest[8]. To achieve this goal, all the links and
process in material supply chain should be seen as a
continuous, integrated system to manage. Its main
EFFECTIVE WAYS TO BUILD THE KSC
As successful experience to combine technology with
economy in the world today, the learning with production
and research cooperation is the best way of transforming
scientific and technological achievements into the
productivity[9]. In the process of technological innovation,
universities, research institutes, enterprises are playing
different roles. Universities produce some certain
knowledge products, but enterprises need the knowledge
products and service with use value, from the view of
current situation, they have not been established up the
close contact with each other, exist some gaps and
barriers[10].For example, only when enterprises have
problems in production, will they contact with Universities,
and
Universities
themselves
for
impulse
of
"income-generating" want to contact with enterprises
practical activities, but often find no "market". To build
knowledge supply chain, we can refer to the experience of
the material supply chain management, realize real joint of
the learning with production and research, and gain the
similar social and economic benefits as the material supply
chain. Its knowledge supply chain management model as
figure 1 below.
New knowledge
new talents
The formation and
development of
knowledge
R&D Co-operation
Venture Capital
New knowledge
Knowledge application
Customer needs
Customer feedback
Knowledge
transfer
University
A: New knowledge to
meet the production
needs
B: The competitiveness
and learning ability of
enterprises
Subject Construction
Venture Capital
Curriculum
New talents
Social needs
Standards of talent
Enterprise
Knowledge
transfer
Application of
knowledge
Integrated technological innovation process
Learning organization and knowledge supply
Figure 1: Research combined knowledge of supply chain model
From figure 1,we can see that universities is the main
producer of knowledge, turn indigenous knowledge into
new knowledge to meet the production needs, and then
transfer to employees or provide services to enterprises.
Employees apply new knowledge in the production, and
develop new products or processes. On the other hand,
universities convey new talents to enterprises through
training, to help enterprises improve learning ability or
competitiveness.
V.
THE BASIC STEPS FOR BUILDING KSC
KSC is a tool to integrate the existing activities that is
relented to technology innovation. Just as material supply
chain, knowledge supply chain establishment does not need
to start from scratch, all elements are already there, but
these elements are isolated at present. The role of
knowledge supply chain is that bringing limited links
together, making contribution in specific areas of
knowledge around one limited objective. Therefore, the
establishment only needs to update concepts, unify their
thinking, sign a cooperation agreement, and coordinate
relationships and interests.
KSC, after all, is a new concept, its establishment should
be generally seen with system concepts of technological
innovation projects, start with solving specific problems,
create and accumulate experience to be successful.
Knowledge supply chain should therefore follow a five-step
process: (a) clear specific content and form of knowledge
which user requires, first of all provide a supply chain
between knowledge suppliers and users;(b) identify the
obstacles and find solutions which influence the knowledge
supply chain establishment. For example, enterprises often
think universities are out of practice, universities think
enterprises ignore the value of intangible assets, investment
is too small and the commercialization requirements too
high; (c) confirm the basic principles of supply chain
management fully used, in particular solidarity, mutual
understanding, establishing common objectives, sharing
risks and interests;(d) identify whether the initial supply
chain is able to meet the needs or not, if it can't, extend to a
third knowledge provider. For example, when universities
can only provide the indigenous knowledge, then we need a
broker transform indigenous knowledge into knowledge
products;(e) when all the links are satisfied, make the
knowledge supply chain standard, form a relatively fixed
union, and share experience with other knowledge supply
chains.
VI.
meet all requirements of the end-users; (d) universities help
enterprises to establish a system of further education, make
the workers of different levels be able constantly to raise
their knowledge level, and then accumulate the intellectual
capital for the enterprise;(e) enterprises provides long term
support for universities in terms of resources and their
laboratory construction.
B. Promote the Flow of Knowledge and Information
TWO BASIC PRINCIPLES OF KSC OPERATIONS
A. All Participants for the End-users
Clearing who are the end-users is one of the important
principles of knowledge supply chain success. Because only
the end-users can come up with the ultimate goal, establish
the criteria to measure the entire process, find focus, drive
the entire process and evaluate the implementation
result[11].To be further defined: who are the representatives
of end users? Who is going to determine the "knowledge
product specifications"? What criteria should follow when
exchanging knowledge? Who will determine whether meet
these specifications?
Facing the end-users does not deny participant benefit,
but rather an affirmation, and it is the only way to guarantee
participant benefit continues. Responsibility of the
end-users is to make the entire system focus on a unified
and clear objectives, each participant will naturally try to
achieve their own goals and use the part instead of the
whole. In order to make knowledge supply chain successful
and sustainable, enterprises should ensure that each of the
participating organizations and individuals can benefit from
it. First of all, for enterprises, meet their business needs
(through the introduction of new talent and technology to
increase profits, reduce costs, increase efficiency and
shorten cycle), and enhance their labor flexibility. Second,
individual should get real and potential economic return,
such as cash income, access to lifelong employment due to
the knowledge and capacity improvement, opportunities for
further education and improving qualifications in the
process of building knowledge supply chain. Finally,
universities are not necessarily limited to the obvious
economic benefits, in the process of the establishment and
operation of the supply chain, enterprises and universities
may achieve mutual benefit through the following areas of
cooperation:(a)Universities transfer related knowledge to
enterprises will greatly enhance the competitiveness of
enterprises; (b) the enterprises put scientific and
technological achievements of the universities in production
test and feedback the availability and the value of the new
knowledge
to
researchers;(c)
researchers
After
understanding the availability and value of new knowledge,
researchers take further improvements and innovations to
Compared with material supply chain, knowledge supply
chain is characterized as including more different kinds of
units and entities. In order to ensure the smooth flow of
information and knowledge, partners should understand
each other, sincerely cooperate, accept and participate in
such diverse union.
Enterprises and universities are different in character and
task, inevitably there are differences and gaps between
them. On one hand, scientific research project of the
universities is mainly funded by the government, their
outcome is often indigenous knowledge. Because they are
not funded by the enterprise, it's hard to truly provide
knowledge products available for enterprise. On the other
hand, the enterprise highlights short-term effects, does not
fully recognize the importance and urgency of knowledge
for competitiveness, is lack of the long-term strategy,
considers that theory is far from practice, not willing to
invest in long term projects. So they are lack of exchange of
information and knowledge, lack of understanding and
mutual support. In order to change this situation, enterprises
and universities need to work together. Enterprises must
understand that knowledge is an important production
resource, they should always send their problems and the
urgent need of technical knowledge in the production to the
University. And universities should listen carefully to the
enterprises (especially the end user), regard the needs of the
enterprise as the goal of scientific research work, and
provide high quality knowledge products.
Establishment of knowledge supply chain is not to turn
universities into enterprises, or turn enterprises into
universities, their tasks are different, and the goal of the
knowledge supply chain is to better serve each other, make
use of their own advantages, through the practical use and
commercialization of the scientific and technological
achievements to make them gain more benefit. To achieve
this goal ,they should improve the limited joint mechanism
of the economy and the technology which enterprises only
promote scientific and technological achievements to the
enterprises, establish knowledge supply chain, in
accordance with the actual needs of the enterprise to form a
stimulating scientific mechanism .It means to turn the
knowledge supply process into an integrated, closely linked
chain, so that the process turns from disordered to ordered,
and intermit into a continuous flow, make all of the partners
can provide better services for the entire process according
to their required time and place, while ensure their interests.
Ultimately customers can gain intangible knowledge ,
service, and tangible products.
In the two above principles, "participants are for
end-users" is the soil that all links of the chain survive and
achieve self-interest, "promote the flow of information and
knowledge" is the water of life for the survival and
development of the knowledge supply chain. Only do a "soil
and water conservation", can knowledge supply chain
develop healthily.
VII. CONCLUSION
Through reference and absorption of essential thought of
material supply chain, following the principles of "all
participants are end-user-oriented " and "promote
information and knowledge flow", taking effective steps,
actualizing the joint of the learning with production and
research, constructing the knowledge supply chain,
enterprises can, contact with other knowledge subjects,
eliminate barriers, strengthen cooperation, optimize
knowledge flow, and make itself innovation ability
continually enhanced in the links of the knowledge
formation, knowledge development, knowledge transfer and
knowledge application.
ACKNOWLEDGMENT
The writing of this paper got my husband Dr.Jun Liang's
support, and the discussion with him let me got much
inspirations, he helped me polish the words in the text,
without his support, this paper could not be completed
successfully. At the same time, I also got my graduate
students Peng Jiang, Feng-qi Li and Na Zhou and other
fellow students various forms of help and support, they are
always well complete the work which I handed to them and
their excellent make me feel very proud. I want o express
my sincere gratitude to them.
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