7 Metrics for the KM supply chain

The Supply Chain analogy for KM suggests several metrics we can use.

I have often used the analogy of the supply chain as one way of thinking about KM. This involves looking at KM as a chain of processes supplying knowledge to the user.

This analogy has the benefit of thinking about KM from the point of view of the knowledge user. You can ask “If a person in this organisation were in need of a specific piece of knowledge to make a specific decision, what system is in place to make sure that this knowledge a) gets to the person on time, and b) is of the correct quality?”

And like any analogy, it brings with it many other ways to think about KM. Can we apply “Lean Supply Chain” thinking to KM, for example? Can we remove waste from our Knowledge Supply Chain? Can we think of the Knowledge Manager as a supply chain manager?

Or – the subject of our blog today – can we use common Supply Chain metrics to help us understand how to metricate KM?

Here are 7 metrics from the supply chain world which might help us decide on metrics for our Knowledge Management Framework.

• Backorders – unfulfilled orders from the customer. In KM terms, these might be search queries, or questions to a Community of Practice, which receive no answers. These are indications of the need to create knowledge resources for the user, and the number of unfilled requests is a proxy of the completeness of your knowledge base (both tacit and explicit).

• Cycle time. There are many definitions of cycle time in the Supply Chain world, but for KM the crucial cycle time is how long it takes from the first observation of new knowledge, to that knowledge being embedded in the knowledge bases, training courses and community of practice resources. Or in lesson-learned terms it might be the time from “Lesson identified” to “Lesson closed”. In CoPs it might be the “question to answer” time.

• Defects – defective supplied material. This is a quality measure of your knowledge content, measuring how much of it is out of date, wrong, or unhelpful. You could measure the quality of lessons entering your lessons management system for example, or of articles published to a knowledge base, or of answers in a community forum.

• Fill Rate – the amount of ordered supplies filled on the first order. In KM, this might be the number of community questions answered by the first response, or the percentage of times the answer is found in the first search.

• Inventory costs – what it costs you to stock and manage your inventory (cost of stock, cost of warehouse, salaries of warehouse staff etc). In KM terms, this is the cost of operating your KM framework, including the cost of KM roles, the licence cost for KM software, and the time cost from populating the system. This represents the total costs to the business of operating KM.

• Gross margin return on inventory – the  gross margin divided by the inventory costs, a popular metric for retail stores. In KM terms, the gross margin would be the overall value of KM to the business, which you would track and estimate through success cases, value stories and metrics such as decreased costs or increased sales. It is in effect the KM ROI.

• Inventory turnover – the average annual use of your inventory; for example if a store carries 1000 items and sells 10,000 items a year, that’s a 10 times inventory turnover. In KM terms this would be applied only to explicit knowledge, and you would measure the number of reads of knowledge articles divided by the number of articles.  You could of course get smarter, and you could look at which articles get the most reads and which get none at all.

Hopefully that gives you some ideas of a few more metrics you can use to make sure your Knowledge Supply Chain is working – delivering valuable knowledge to the knowledge works in your organisation in an efficient, reliable and effective way.