Turn knowledge into capital

Plant and equipment are considered capital, but without the knowledge required to make them manufacture your product, they cannot perform the intended tasks. Knowledge, when documented, becomes intellectual capital—something of value to your company. Conversely, when critical information only exists on notes tacked to the wall, tucked away in a little notebook in the operator’s tool...

By Jim Upchurch October 1, 2006

Plant and equipment are considered capital, but without the knowledge required to make them manufacture your product, they cannot perform the intended tasks. Knowledge, when documented, becomes intellectual capital—something of value to your company. Conversely, when critical information only exists on notes tacked to the wall, tucked away in a little notebook in the operator’s tool box, or worse, in his or her memory, the processes are owned by the workforce.

Ask yourself

Is your documentation in a tangible package? Can you go to where work is done and read instructions on how to work at a specific site and understand what a person is to do? If you cannot, then you probably don’t have a tangible package. Most materials called SOPs (standard operating procedures) tend to be very broad-based outlines of how to do the job with an image or two but fall far short of being a helpful tool.

Is the documentation transportable? One of the best tests of the “health” of a documentation system is its ability to stand on its own without additional support, for example, someone to explain it. If your boss asked for your documentation to start a duplicate line in another plant, could you deliver the materials in two days? If you answer “Yes,” then you’re in good shape. If you answer “No, but with a little extra time and work I could get them ready,” then your materials are not transportable. If the answer is “What materials?” then you need to start thinking about your exposure.

Are your materials exploitable? Good materials will serve as an excellent starting point for efforts such as continuous improvement, identification of best practices, constraint management, and cause and effect analysis.

Can your process documentation serve as training material? Well-done documentation will be similar to lesson plans and can be used for training new people. When effective, they teach how to do the work, include support information, and provide helpful graphics and images. The ability to use documentation for training is another test of the exploitability of intellectual capital.

Make knowledge into a product

Without the intellectual capital developed on how to make hamburgers, McDonald’s would still be just one restaurant in California.

Corning was once the largest manufacturer of fiber-optic cable in the country, but they decided to move to a business strategy of cutting back production themselves and selling the process technology to others. They exploited their intellectual capital as a product. Without well-defined process documentation, they would have no technology to sell.

Defining processes is good. Having written process documentation that stabilizes a business is better.

However, the highest level of value is when the organization considers the information part of its business. Intellectual capital can and should be owned, managed, and leveraged by the company. Software tools can help, but cannot substitute for good practices. Companies that do a good job of managing their intellectual capital at the plant floor will find hidden assets.

Author Information
Jim Upchurch is president of Upchurch and Associates, Canton, MO,

3 documentation failures

In the extreme, it’s reasonably apparent what not to do. Documentation failures include:

Informality: Is a tacked-up paper or sticky note the only plant record with optimal settings on a certain process?

Variability: In some processes, a restart can be uncommon and may vary widely by among three shifts and the operators working each.

Hidden knowledge: “How do you know?” someone might ask a long-time employee who can troubleshoot anything.