Leading Organizational Learning

Managing the “Returning” Knowledge

Managing the “returning” knowledge properly is the customer’s
responsibility. For example, are these expectations of increased
knowledge from the supplier to the customer made known to the
supplier up front? Are resources, both human and capital, in place
to ensure that the knowledge transfer is not one way, from cus-
tomer to supplier, but also that improved knowledge will be taught
to the customer? After all, the supplier is facing its customer and
knows its market demands and challenges, and the supplier’s prod-
ucts and services will improve and continue to be competitive if
there is a symbiotic relationship.
A good example of this symbiosis is Flextronics. Although its
revenue has diminished from its high growth increases of the past
decade due to recent economic slowdowns, its market share con-
tinues to increase as it moves into becoming the outsourcing sup-
plier for design and logistics management. Flextronics epitomizes
the outsourcing supplier knowledge transfer competency. As the
outsourcing provider for Motorola, Casio, Ericsson, and Nokia,
Flextronics seamlessly incorporates the needs of its customers. Flex-
tronics is learning from its customers while at the same time edu-
cating them about how to integrate their services more effectively.
The result is that the ultimate customers don’t realize that they may
be interfacing directly with a Flextronics factory or logistics system
rather than the branded company (Nokia, for example).

Supply Alliances Expense Versus Return

Many supply alliances are all expense during the initial stage. Costs
include hiring people to do research and investigation; putting in
capital to support the infrastructure of pilots; hiring, training, and
testing; and the initial launch of the program, then remediating
and relaunching it as new learning is achieved. It may be some time
until the highest-margin, lowest-cost results are seen, and only then
can they be incorporated into the overall relationship. It may be in

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