The Potential impact of Information on the strategic direction of GE Healthcare
This report analyses how Information and knowledge is managed in GE Healthcare. It discusses concepts of what an Intelligent Organization is and how ICT and Knowledge management is handled in Customer solutions process of GE Healthcare. Information transfer is critical in this process as Turnaround time (TAT) and Quality are important factors for the stability of the process. This process is a part of the supply chain management industry, where knowledge and information of the entire supply chain is important for the development of the process. The Strength of the chain is only as strong as its weakest link, so the weak points and bottlenecks of the process are looked into. The SECI model introduced by Nonaka and Takeuchi (1995), will be discussed. The use of IT is an important factor in the exchange of information, where Database management and use of Graphical User Interface software's are very important for the efficient running of the process. We shall look into the various strategies (Value chain, Alignment perspectives and Importance of place) as applied to GE healthcare for the process improvements. Issues it faces with Information handling and technology are also addressed. The barriers and promoters of the supply chain industry are looked into and finally a Conclusion and some recommendations are provided.
An intelligent organization is someone which will be able to mobilize the various types ofknowledge within the organization to improve its performance.Itpursues its objectives in a changing environment by adapting behavior in accordance withknowledge about itself and the world that it flourishes in.An intelligent organization is therefore a learning organization which is skilled at creating,acquiring, organizing, and sharing of knowledge, and applying this knowledgeto plan behavior.Organizational learning depends primarily oninformation management, namely the ability to IT resources and IT facilities to supportorganizational development.Information management is a cycle of processesthat support learning activities of the organization: identification of information needs,acquiring information, organizing and storing information, developingproducts and services, distribution of information, and useof information."The analysis of each of these processes suggests new strategiesto maximize the value of information in organisms andreinvention of the role of information professionals, whether it is librarians,information providers, information technologists or information scientists” (Choo, 1995).
Data, Information and Knowledge
Michael Earl (1988; 2000) suggested that it is necessary for organizations to use information strategy as a means to support their business strategy. Customer Solutions team is a part of Diagnostic Imaging in GE healthcare which deals with procuring medical parts for the hospitals. Whenever there is a problem with a medical part in the hospital, a GE Field Engineer is contacted. If the part cannot be repaired he would place a “Sales Order” with the Customer solutions team. The Customer solutions team receives the Order in the Oracle Live screens and follows' the triage process where they look into the GE warehouses for the parts availability. If there is no stock available they will try to find a replacement or a used/refurbished part. If none of these work out, they will source the part from an external supplier by placing a purchase order. An automated request is sent to the carrier service (based on the FE's decision) and the part is picked up from either the warehouse or the supplier and delivered to the Hospital in due time. The Order's have different “Customer Temperatures” based on the urgency. There are various carriers and shipment types based on the delivery requirements. Special handling shipments deal with same day delivery, while “FedEx Priority” and “Next best available” deal with the Next day delivery. For non urgent orders, “FedEx ground” is available which will transport the parts on ground and will take a five day delivery time period and is cost effective. So we see that there is a lot of information which is being transferred around. Customer solutions team also deals with answering FE calls to update them regarding the status of their Back Orders. Information transfer and Communication is critical in this process as its passes through various mediums and teams. Once the parts are delivered and are set-up in the hospital the Order is closed by “dropping a receiver” which will have the supplier payment sent. Daft and Weick (1984) suggest that we can locate organizational ways of knowing which they term interpretive systems against two sets of assumptions.
Organizations as interpretation systems
(Daft and Weick, 1984)
Based on the above figure, Organizations with Undirected Viewing have un-analyzable assumptions about the environment and passively intrusive into the market (E.g. SME's). Organizations with Conditioned Viewing have analyzable assumptions about the environment and are passively intrusive (E.g. Public sector Org's). Enacting Org's have un-analyzable assumptions about the environment but are actively intrusive (E.g. Google, Skype, Sony, Apple). Discovering Org's have analyzable assumptions about the environment and are actively intrusive into the market (GE falls into this bracket). They have a formal search, questioning, surveys, data gathering and active detection of information.
The efficient running of a service organization is based on the feedback received by the Customer or the Client. There is the need to provide information rather that data, by actively taking into consideration the end user needs (Mutch, 1999). This is done by taking various surveys' with the customer's and using this information for the betterment of the process. The accuracy of the information received in these surveys is based on the right questions being asked. The Customer loyalty team is a dedicated team in GE Healthcare for taking survey's with Clients to improve its service quality. A lot of research is done in improving these surveys's as maximum information has to be acquired from the minimum questions being asked. The very busy clients generally do not find the time to keep answering survey's, but they are made to understand that these survey's are only a means to improve our service for their organization. There are various modes of Data Collection which include Telephone, mail and online surveys. The information gathered is sent to the “Analysis team” which in turn converts the scores to theory and sends the “Improvement strategy” to the various teams across.
ICT and Knowledge Management
Information and Communication Technology (ICT) in the rapidly changing world enables the hospital and engineers to participate. Rate at which problems are solved have increased by access to varied and developing technologies.One could say that ICT is and should be considered a technical version of the economic growth that meets the needs and desires of society over time. ICT tools to find, exchange, explore and present information in a responsible manner without any discrimination. “ICT can be employed to give users quick access to ideas and experiences from a wide range of people, communities and cultures” (Walsham, 2001).
Knowledge Management (KM) comprises a set of practices used in an organization to identify, create, represent, distribute and enable adoption of ideas and experiences.This knowledge and experience includes knowledge, whether incorporated or embedded in people to business processes and practices.
“An established discipline since 1991 (see Nonaka, 1991), KM includes courses taught in the fields of business administration, information systems, management, and library and information sciences” (Alavi & Leidner 1999). Other fields such as information and media, computer science, public health, and public policy have started contributing to KM research.
“Many large companies and non-profit organizations have resources dedicated to internal KM efforts, often as a part of their 'business strategy', 'information technology', or 'human resource management' departments” (Addicott, McGivern & Ferlie 2006). Many consulting firms also provide advice on strategy and KM for these organizations.
KM efforts typically focus on improving organizational goals such
Performance, competitive advantage, innovation, sharing lessons learned and continuous improvement of the organization.KM and Organizational learning go hand in hand but may be distinguished by the management of knowledge as strategic assets and focus on promoting the sharing of knowledge.
KM efforts often focus on organizational goals such as improving performance, competitive advantage, innovation, sharing lessons learned and continuous improvement of the organization. KM and organizational learning overlap, and can be distinguished from that with greater emphasis on knowledge management as a strategic asset and a focus on promoting knowledge sharing. “KM efforts can help individuals and groups to share valuable organizational insights, to reduce redundant work, to avoid reinventing the wheel per se, to reduce training time for new employees, to retain intellectual capital as employees turnover in an organization, and to adapt to changing environments and markets” (McAdam & McCreedy, 2000) (Thompson & Walsham, 2004).
The SECI Model in GE healthcare
Mintzberg (1994) states that, Managers scan their environment, they monitor their own units, and they share with and disseminate to others considerable amounts of information they pick up. A point worth emphasizing in almost every serious study of managerial work is that the formal information does not particularly play a dominant role here. Oral information and even non verbal information, forms a critical part of every serious managerial job.
Being a process trainer for the Customer solutions team, I have encountered how new employees tend to learn a lot about the organization and the process through Tacit and Explicit forms of knowledge.
Tacit - Tacit through socialization - At first the new employees generally understand a lot of procedures, styles, jargons and methodologies of an organization though tacit knowledge and socialization. Starting from simple things such as how to use a fax machine to complex activities of working on software's while on a customer call are quickly picked up through socialization and interaction.
Tacit - Explicit through Externalization - This is where my role as a process trainer comes in when a lot of questions are thrown at me about “Why this” and “Why that”. The newly hired employee's gain a lot of information though tacit knowledge but this knowledge gained is still unclear to them. They have to assemble all the pieces of info to make it a solid picture of understanding. When these mysteries are explained to them it all starts to make sense.
Explicit to Explicit through Combination - Process training is generally Explicit to Explicit where theory of how the process works in explained in a conference room. For the new employees, it all seems interesting like a history lesson until they hit operations. Explicit knowledge sharing is very important as it's the best means of making people understand the basic concepts of work. Henceforth even the education system is a form of Explicit to Explicit knowledge transfer where practicalities are looked into only in the later part of life.
Explicit - Tacit through Internalization - This is the final stage of the cycle, where the explicit knowledge gained in converted into practical working. The working on different software's and tools for the effective running of the process becomes very simple for the agent as he gains the tacit experience.
Value Chain for Customer Solutions
Value chain is a systematic approach to studying the development of competitive advantages. It was created by Porter in his book, Competitive advantage (1980). It consists of a series of activities that build and create value.The result of which makes the total value of the organization.The margin section shown in the diagram is the added value.The organization is divided into "Primary activities" and "Support activities” (Marketing teacher website, 2009).
Here goods are received from suppliers to GE warehouses based on demand forecast. They are stored until needed for production or on the assembly line.The goods move around the organization to fulfill Orders.
This is where Orders are received on Oracle live screens and based on availability; parts are released from warehouses against these Orders. If there is no stock in the warehouses, alternate options such as replacement parts or used/refurbished parts are looked into. If none are available, parts are sourced from a 3rd party supplier.
Once the parts are sourced, they need to be delivered to the Hospitals. Carrier services such as FedEx, BAX Global, AirNet, Sonic etc are contacted for the pickup and delivery.
Marketing and Sales
The organization prepares to meet the needs of target customers.This area focuses heavily on communications and marketing-mix to various hospitals across the world.
All areas of services such as installation, after sales service, complaint handling, training, etc. are included.
This function is responsible for all goods, services and materials.The aim is to ensure the lowest possible price for the purchases of the highest quality.It is responsible for outsourcing (components or operations which would normally be done in-house made by other agencies), and ePurchasing (using IT and Internet technologies for the achievement of procurement). This function is responsible for goods, services, and material.The objective is to ensure the lowest possible price to buy the best quality.This is usually done in the house with other agencies by subcontracting and is responsible ePurchasing (IT uses Internet technology and to achieve the employment). GE outsources its business to India and the IT systems used include Oracle, Mainframes, DBMS, Siebel, Cognos and Ms Office.
It is very important resources for competitive advantage. Companies to save costs and to protect themselves need to innovate to maintain competitive advantage. This includes the manufacturing technology, internet marketing, lean manufacturing, customer relationship management (CRM) and many other developments in technology.
Human Resource Management (HRM)
Employees are an expensive and important resource for an organization.An agency will manage the recruitment and selection, training and development, and the rewards and compensation.The purpose and goals of the organization is a driving force behind the strategic management of human resources.
This is driven by corporate or strategic planning.It includes the Management Information Systems (MIS), and other mechanisms for planning and control, such as accounting. The strategic alignment of GE healthcare is that of Technology Transformation where the strategy depends on changes in technology which place the focus on aligning technology infrastructures.
(Own work based on Lecture Slides)
Customer solutions and the Asset management are two teams which work for GE Healthcare. The agents of Customer solutions are represented by the blue squares in the above figures while the agents of the Asset management team are represented by the red triangles. In Fig 1, when the two teams had been placed separately there were a lot of unresolved issues in the process. In Fig 2, when the two teams were placed side by side there was a lot of information and best practice sharing which resulted in various process improvements and lean ideas.
Data Daily updates on prices of parts, non-releasable parts/warehouses etc
Software Process mapping and monitoring, automatic allocation of tasks.
Hardware Client server network.
During the first two years of working with GE Healthcare, I had the opportunity to observe and work with the existing system. The process has a lot of upgrades. I was always in touch with the latest software and was aware of working with a graphical user interface (GUI) used environment. In the office there was a lot of chaos, as the process updates were on a daily basis and usually a problem. The problem we faced was the number of errors done by the team on the quality front and had a decline in the credibility of the team. I acknowledged that the creation of a single site would not only dramatically improve the quality of our documentation, but also to increase productivity in the workplace. The presentation of the pros and cons for managing the development of this instrument was a very difficult task. I was asked to create an HTML page for easier access to the latest updates. Through a company-wide survey were from agents, and several one-on-one conversations their own preferences and solutions, I found that all wanted a common tool and also realize the need for training for the agents, because most of them are not familiar with the graphical interface. There were several training courses offered to private research in-house training courses for employees. After a detailed analysis, I submitted my report to the management at the next meeting. After I was given the green signal, the next hurdle was to co ordinate the Web tool implementation. To avoid disrupting the agents work, training were held after working hours. The upgrade was for a week and the training of agents within a further two weeks. While the benefits were not immediately tangible, a few months later, our customers recognize that the quality of work had improved significantly.
Barriers and Promoters
GE healthcare has its branches and warehouses at various parts of the world. One of the primary barriers' to the effective flow of information is the language and cultural differences. As the head office in Milwaukee, Wisconsin makes primary decisions on process changes, the information has to be transferred to its counterparts in France, China, and India. Due to some technical terminologies not translated in the right way there is discrepancy in the quality of information transferred.
Promoter's for the business is that GE has monopoly in the US healthcare industry and very few competitor's. Apart from that the reputation for the quality of service provided by GE has been unbeatable. Moreover, due to GE being a global company and having warehouses across the world, it has the ability to ship parts in the fastest means possible. The distribution of the medical parts is based on the requirement of parts in various locations of the world. This information is collected by the historical data available and the forecasting based on demand.
Conclusion and Recommendations
One of the primary recommendations for the process is that the various branches across the world do not work on the same GUI's. The American team in Wisconsin, European teams in England and France and Indian teams in Gurgaon and Hyderabad use Oracle as their Order sourcing software while the Chinese team in Beijing continues to use Mainframes and Native-Oracle in which the Order processing time is almost the double of the earlier. One of the main problems is shifting to Oracle is the transfer of the database which is Cost and Time consuming. This cannot be done at this point of time because the process transactions have to be put on hold for the transfer. This will cause an imbalance on a Global scale. This is causing a bottle neck in the process which is slowing down the entire activity. An I.T solution or an alternate platform for order processing must be discovered for continuation of the process activity while the transfer of the database takes place. This transfer is required as information flow will be a swift even flow when all the branches are using the same tools.
Another recommendation is that every Newly Hired Employee has to go through the entire process training before hitting production. This will minimize the number of error's which can take place. Generally, due to the high volumes of work, every newly hired employee is put into production before the training is complete. The transfer of explicit information is very important before the agent hits production. Quality can be assured with this and there will be no need for Quality control and re-trainings.
ALAVI, Maryam; LEIDNER, Dorothy E. (1999), "Knowledge management systems: issues, challenges, and benefits". Communications of the AIS 1 (2).
ADDICOTT, Rachael; MCGIVERN, Gerry; FERLIE, Ewan (2006), "Networks, Organizational Learning and Knowledge Management: NHS Cancer Networks". Public Money & Management 26 (2): 87-94.
CHUN, Wei Choo (1995), “Information Management for the Intelligent Organization: Roles and Implications for the Information Professions”. Information Today Inc, Chapter 8.
DAFT, R L and WEICK, K E (1984) “Toward a Model of organizations as interpretation systems”, Academy of Management review, 9(2):284-295
EARL, M. J. (1988), “Information Management: The Strategic Dimension”, Oxford. The Clarendon Press.
MCADAM, Rodney; MCCREEDY, Sandra (2000), "A Critique of Knowledge Management: Using A Social Constructionist Model". New Technology, Work and Employment 15 (2).
MINTZBERG, H (1994), “Rounding out the manager's job”, Sloan Management Review, 36(1):11-26.
MUTCH, A. (2008), “Managing Information and Knowledge in Organisations: A Literacy Approach”. New York, Routledge.
NONAKA, Ikujiro (1991), "The knowledge creating company". Harvard Business Review 69 (6 Nov-Dec): 96-104.
PORTER, M.E. (1979), "How competitive forces shape strategy". Harvard Business Review, March/April 1979.
PORTER, M.E. (1985), " Competitive Advantage: Creating and Sustaining Superior Performance". Free Press, 1998 (1985)
THOMPSON, Mark P.A; WALSHAM, Geoff (2004), "Placing Knowledge Management in Context". Journal of Management Studies 41(5): 725-747.
WALSHAM, GEOFF (2001), “Globalization and ICTs: Working Across Cultures”, University of Cambridge.
26 Jan 10, http://coarchitect.files.wordpress.com/2009/10/nonaka_seci_model_002.jpg, website.
26 Jan 10, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=239247, website.
5 Dec 2009, http://www.marketingteacher.com/Lessons/lesson_value_chain.htm, website.