Characterizing the value of technological knowledge for lean manufacturing

Abstract

This paper argues that managing technological knowledge is the last frontier of lean manufacturing. An empirically grounded model of the structure of organizational technological knowledge allows manufacturing managers to determine the true value of lean manufacturing practices over lifecycle of their processes. The approach described in this paper also helps fab managers enhance profitability by choosing appropriate strategies organizational learning and problem-solving for three semiconductor businesses: VLSI, commodity components and specialty parts.

Organizational Learning and Capital Productivity in Semiconductor Manufacturing

“…Analysis of data from within the individual cases has revealed consistent patterns that illustrate how technical and financial variables have evolved over time within each venture (see, for example, [7]- [10], [14]- [20]). Comparing cases (cross-case analysis [23]) provides insight into how the external economic environment of each venture affected the venture's profitability and return on investment.…”

“…Data for this study have been obtained by deploying the case study research method [11], [12], an inductive, qualitative approach from the social sciences that has been implemented successfully in previous studies of the semiconductor industry (see, for example, [7]- [10], [13]- [20]). This method was chosen in part because semiconductor manufacturers are highly reluctant to make quantitative technical data and financial data available to outsiders.…”

“…"Learning in high technology industries is thus characterized by a sense of urgency [26]: it is in the interest of high technology firms to begin the learning process as early as possible and to ramp to production volume as rapidly as possible" [15, p. 1220]. "Process development occurs somewhat in parallel with product development" [27, p. 90], and organizational learning, to a large degree, transpires in parallel at the subsystem level (e.g., within production and process engineering departments [7]- [10], [14], [15], [28]). …”

“…Prior studies of the semiconductor industry [7]- [10] have observed three forms of organizational learning that occur at the subsystem level and pertain to quality. Production Quality Learning (PnQL) improves the quality of production by increasing the survival yield, S j (t).…”

“…In particular, the study explores how deliberate organizational learning activities impact the profitability and return on investment of semiconductor manufacturing ventures for the three fundamental strategic options that semiconductor manufacturers can pursue -leading-edge manufacturer (LEM), fast follower (FF) and slow follower (SF). Preliminary results of the study described in this paper have been presented in [7]- [10]. This paper's primary contribution is an empirically grounded theoretical framework of the cost and value of organizational learning (CoVaL), which can be applied to semiconductor manufacturing.…”