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Programme BSc Undergraduate Programmes

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Significance of Knowledge Management at Toyota &

Report/Assignment Title Role of RFID within SCM of Manufacturing firms

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Table of Contents

Introduction:....................................................................................................................................3

Current knowledge management plan of Toyota Motor Corporation:............................................4

Knowledge management:................................................................................................................4
Page | 2

Knowledge management involvement for Toyota Motor Corporation:..........................................5

Impact of RFID technology over operational excellence of SCM in manufacturing sector:..........6

One adoption challenge:..................................................................................................................8

One Success factor:..........................................................................................................................8

Conclusion:......................................................................................................................................9

References:....................................................................................................................................10

“Significance of Knowledge Management at

Toyota & Role of RFID within SCM of
Manufacturing firms”
Introduction: Page | 3

Professional and academic people in the present time have the knowledge, which is an
essential source of competitive use. It is the best source, which is beneficial for a firm because it
includes unusual, non-commutable, unique, and precious features. With every passing day, the
value of education is increasing; therefore, every other person is thinking about upgrading
business ideas. However, the new invention can be a process, technical, product, operational, or
strategic.
New inventions happening all over the world with Toyota Motor Corporation are because
of the knowledge-based organizations. This field, which is linked with knowledge management,
has come into being about the data related to governance, knowledge within an organization, and
the employing to get the benefits. Knowledge management solely depends on the tools and
procedures that help in sharing and captivating the data. Besides, it is also linked to the proper
use of knowledge related to the individuals present within the firm. From the past few years,
there has been a discussion on the benefit of knowledge management in society.
All the professionals like researchers, management sciences, and scholars agree upon the
substantial change, which has occurred due to which the management of knowledge has become
crucial. Because of the immense business loss and traditional operation modes, the importance of
education and its management has intensified. With the increasing competitive circumstances,
the linked planning concepts and KM has become an essential and vital component to show the
organization how to maintain and live their place in the long run (Dyer, and Nobeoka, 2000). 
It has become famous for the managers and executives to deal with KM and a detailed
master plan, because of the importance and benefits of KM. In the present time, it is a
precondition for getting flexibility and productivity in both the parts i.e., public and private
firms, because of the essential benefits. It also helps in making the best use of knowledge
management to manage several business operations and other procedures. Due to this service,
KM has become eligible in gathering, sharing, analyzing, and organizing its knowledge in
consideration of documents, the skill of people, and resources. 
Current knowledge management plan of Toyota Motor Corporation:
Page | 4

Toyota Motor Corporation has overgrown as compared to the starting and has faced several
problems related to the expansion of its management. Earlier, the production and sales and
purchase were limited only to Japan; however, with the increase in demand, it started globally in
the foreign markets too. Due to the rapid rise in production, sales, and purchase, the management
system got abrupt, and it became difficult to manage things and other resources. Therefore, the
company took the stand and opted for the knowledge management system to become aware of its
importance and need (Ichijo, and Kohlbacher, 2007). 
Later, the operations started increasing rapidly, and in this way, they made the use of other
new approaches, which included total quality management, and lean production, etc. All of such
criteria helped the company to get a better place in the upcoming market. Moreover, to these
approaches, the company itself understood the importance of knowledge and its use for the
company and the management of the employees. Properly implementing the understanding
among the organization is necessary, which the company understood. For this, the company
opted for several other knowledge management techniques like sharing networks, development
of knowledge, and use of tactic knowledge (Ichijo, and Kohlbacher, 2007).

Knowledge management:

The company is well aware of the fact that knowledge is a uniquely human process, which
cannot be decreased or changed quickly, and is not only the accumulation of information. The
management of the company has tried to transform data into the report, which can be used as
knowledge for all using organizing, collecting, analyzing, summarizing, making a final decision,
and synthesizing. Toyota management also knows that the effective management of experience
is necessary as it involves sharing, abandonment, creation, and security. All of this is possible by
enabling the context, which can be done with the help of knowledge enablers, which are as
follows (Dyer, and Nobeoka, 2000):
1. Launching a knowledge vision
2. Dealing with the conversations
3. Replacing the knowledge reformers
4. Making up proper context
 5. Proliferating local knowledge. Page | 5

Above mentioned knowledge enablers have been presented by Toyota, which approves the
knowledge management practices. However, Toyota Management has opted for an essential
approach for knowledge management and sharing knowledge. Still, it is not enough to manage
an understanding of the existing resources. However, the company is doing its operations in
different native markets; yet it has not improved the efficiency of its production and quality. This
is just because of people who do not have enough knowledge about knowledge management and
how to share knowledge.
Even after many attempts, the company management has not shown any kind of progress
regarding the fundamental issues of how to share knowledge or the learning through the
organization, which are the essential drivers behind the significant attainments of a firm. For a
confirmed success in the current time, the leader leading the organization must have intellectual
capital by gaining knowledge regarding knowledge creation and sharing it on an international
basis. For this, the company had to put all its effort to cope up with the knowledge sharing
method as it is the most critical and practical approach. The issue can quickly be resolved if the
management adopts such a practical approach. It will return as a competitive advantage as a
result (Matsuo, M., 2015). 

Knowledge management involvement for Toyota Motor Corporation:

Toyota Motors is Japan's biggest company, and the second-leading automobile company is
called as the paramount knowledge company of the world. However, compared to other brands,
Toyota has won the Global Most Admired Knowledge Enterprises. Besides, it is a five-time
winner of the Make Japan Survey. The award given was because of the unique practices in the
field of knowledge management. The awards were given because of the measures like
knowledge sharing, products, knowledge-based culture, and organizational learning. 
All these points were held and sorted out effectively; however, the company needs to make
some extra effort because it lacks some aspects of knowledge management. The main substantial
thing, which needs to be good, is sharing knowledge. This process can be done only if
knowledge management is done by using the knowledge management tool. The most critical KM
intervention, which can be used by Toyota Motor Corporation, is the use of the knowledge
management itself as a tool. The firm can quickly improve all the problems by using the| 6
Page
management tool about business tactics.
Moreover, to this, getting the idea of intellectual capital can be improved by the company's
knowledge management practices. The firm needs to get this thing that knowledge management
is an integral part of the vast area of expertise because knowledge management itself is based on
control of intellectual capital. Two terms can easily define the intellectual capital's concept i.e.,
measurement and strategy. The strategy helps in forming and making use of knowledge along
with the association between value creation and education.
Another point of intellectual capital is measurement ponders on the establishment of new
ideas and information systems, which are efficient enough to measure the data that is non-
financial besides the traditional financial data. The firm management must try to attempt to find
the creation and improvising of knowledge in a way, which can be fit in the given value. The
company can quickly improve exiting knowledge management practices and eliminate the flaws
by managing the intellectual capital of the company. This will help the firm in making the
perfect use of a knowledge management tool, which is necessary for making it beneficial in
every aspect of a business. 

Impact of RFID technology over operational excellence of SCM in

manufacturing sector:

RFID, Radio Frequency Identification is a tiny sized tag that constitutes of an integrated
chip, circuit and antenna and has the capacity of responding to the radio waves that are trans
mitted from the reader so the information can be sent, processed and stored. The system of RFID
technology comprises of three critical components – a RFID tag, a reader and data processing
equipment and infrastructure (Garfinkel, and Holtzman, 2006). A unique identification
information is embedded in the tag. The radio waves are emitted and received by the reader and
afterwards the information is saved relevant to the product. All of the data processing equipment
processes the data while this equipment can be basic to highly complex as a whole networked
enterprise management information system.
 Due to the conventional practices within supply chains such as utilization of Page
the bar
| 7 codes
there have been various recorded incidents where the physical inventory didn’t match the system
inventory which resulted in inconveniences and inefficiency. Due to advent of technology there
have been emerging trends which has led to ever growing complexities. As a result, business
tycoons are mandated to adopt innovational technology such as RFID – Radio Frequency
Identification Device within their supply chains as to identify the logistics issues and
streamlining of the operations (Garfinkel, and Holtzman, 2006).

RFID technology has transformed distribution centers on automate basis. This is evident in
the current warehouses with elevated levels of automation where the machines are picking the
transport bins of the supplies to the central sorting areas where they packed in boxes before they
can be returned to their respective location. Walmart implements the same technique to make
sure that the product location accuracy is up to the mark leading to supply chain and logistics
efficiency (Garfinkel, and Holtzman, 2006). This means that there are nil chances of lost
merchandise. Walmart places significant importance over the visibility of the commodities which
maintains transparency and accuracy as well. The implementation of the RFID technology
sustains the correct commodities and its correct amounts to be gathered and collected at every
point thereby having eliminating every single error in the conventional analog supply networks
(Wu et al., 2006).

Walmart, being the largest retailer within the globe has been handling more than 4 bn
cartons in 2004, and the amount increased up to 5 bn in 2005. Any escalation within the agility
of tracking of products in its global SC has resulted in remarkable profitability. Walmart believes
that RFID has declined their labor & inventory expenses but profitability generation is much
higher limiting out of the stock items throughout the chain stores all around the globe. Walmart
and US Department of Defense have both mandated that their suppliers to initiate the tagging
process of all the commodities that are delivered to their warehouses (Garfinkel, and Holtzman,
2006).

Coupled with self- automated driving trucks with ever expansion of the Internet of things
within the cloud, with the complete utilization of the RFID enabled technology, all of the
production information can be traced throughout the stages of the shipment, logistics, storage,
elevating efficiency, & accountability. The warehouses and other related departments have to
endure a specific amount of shrinking of their commodities in the past, but with complete
Page | 8
successful adaption of the RFID enabled system which determined the perquisition where the
products are at their respective times.

One adoption challenge:

Despite the potential opportunities exploitable through the adoption of RFID technology
within SCM, there are a wide array of challenges that have hampered the implementation of the
RFID technology. Literature indicates on various issues such as technological aspects, standards
problems, patent issues, cost based challenges, return on investment aspects and migration
challenges from barcode to RFID technology (Wu et al., 2006). Initially the manufacturing
companies that have started to gradually adopt the technology and infrastructure of RFID are
facing adoption challenges due to the already existing system of barcodes.

To date, the technology of RFID is still evolving; its standards and procedures are still
converging and expenses are still pledged down so that individual tags can be attached to
products of the consumers. The main challenge currently faced by the firms is that the barcode
system is entrenched on in-depth basis and there are minimal chances that it will be replaced
soon, anytime (Wu et al., 2006). This means that many manufacturing companies would have to
make its barcode and RFID adoption coexist but in parallel directions for a long time. The
migration of the firms from barcodes to RFID systems will not only escalate the demands on the
system compatibilities and capabilities but it will also increase the operational and maintenance
costs.

One Success factor:

Various researchers have indicated that RFID technology contributes productively to the
SC operations through its unique recognition of the real-time information and objects, thereby
RFID technology enhances the data accuracy, agility, fosters the processes, enables the visibility
and traceability of the commodities throughout the SCs, which elevates the speed of the physical
flows and decreases the inventories and work in progress (Angeles, 2005). The utilization of the
barcodes and RFID technology supports and facilitates the automation of the various processes.
It also enhances the operations management through decline of the workload and elimination of
the human errors. However, if compared with the barcodes, they are much more efficient.
Page | 9 The
data is stored in the tags, and are compatible for harsh environments including high temperatures,
chemicals, moisture, dirt and so forth (Angeles, 2005). Furthermore, the RFID technology is
capable to interact with a wide array of tags and receive information through the tags which is an
automated process. These RFID tags contain surplus and larger quantities of data as compared to
bar codes. According to the data gathered by the Eurostat, the most common applications of the
technology is evident in the following domains: 25 % of the RFIDs are used for payment
purposes, 29 % are used for product tracing and inventory tracking within SCM, 56 % is used in
the area of accessing control and person identification, 21 % is used for the monitoring of the
industrial manufacturing and 15 % for the maintenance of the information management.

Conclusion:

The assignment elaboratively focuses on the adoption and significance of Knowledge

Management within Toyota Motors and adoption of RFID technology within SC of the
manufacturing firms. Knowledge management solely depends on the tools and procedures that
help in sharing and captivating the data. Besides, it is also linked to the proper use of knowledge
related to the individuals present within the firm. Various researchers have indicated that RFID
technology contributes productively to the SC operations through its unique recognition of the
real-time information and objects, thereby RFID technology enhances the data accuracy, agility,
fosters the processes, enables the visibility and traceability of the commodities throughout the
SCs, which elevates the speed of the physical flows and decreases the inventories and work in
progress.

References:

Angeles, R., 2005. RFID technologies: supply-chain applications and implementation

issues. Information systems management, 22(1), pp.51-65.

Dyer, J.H. and Nobeoka, K., 2000. Creating and managing a high‐performance knowledge
Page | 10‐
sharing network: the Toyota case. Strategic management journal, 21(3), pp.345-367.

Garfinkel, S. and Holtzman, H., 2006. Understanding RFID technology. RFID, pp.15-36.

Ichijo, K. and Kohlbacher, F., 2007. The Toyota way of global knowledge creation the'learn

local, act global'strategy. International Journal of Automotive Technology and

Management, 7(2-3), pp.116-134.

Matsuo, M., 2015. Human resource development programs for knowledge transfer and creation:

the case of the Toyota Technical Development Corporation. Journal of Knowledge

Management.

Wu, N.C., Nystrom, M.A., Lin, T.R. and Yu, H.C., 2006. Challenges to global RFID

adoption. Technovation, 26(12), pp.1317-1323.