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The Blending Of Manufacturing And Service Sectors

By Mary Clarke, CEO of Cognisco Service additions, such as after-sales support and financing, put a greater emphasis on knowledge-based activities. This means manufacturers must put greater emphasis on their employees’ knowledge development if they wish to remain competitive.

In today’s economy, knowledge is a commodity. It is seen as a tangible item and is one of the most valuable products you can sell across a wide range of industries. Even industries traditionally rooted in non-knowledge-based functions have seen a dramatic increase in knowledge-based activity in recent years. The manufacturing industry is an excellent example of this, with more and more manufacturing companies offering knowledge-based services to accompany their products. As a result, the once clear line between the manufacturing and service sectors is becoming increasingly blurred.

The recent merge of the manufacturing and services sectors is the result of two broader trends in the global business world. First, the economy is becoming increasingly globalized due to the advent of improved travel and communication technology, as well as the increasing dependence on outsourcing as a business strategy. Companies that were once constrained to specific countries or regions can now more easily conduct business on a global scale -- opening offices, forming partnerships, and serving customers worldwide.

Second, today’s global economy is becoming ever more knowledge-based.  More and more companies are engaging in research and development activities, and advanced knowledge has become increasingly critical as products and services become more high tech and complex. Now, more than ever, having knowledgeable employees is critical if businesses hope to remain competitive in an increasingly global business world.

As a result, sectors such as the manufacturing industry have seen a dramatic change in their business plan. The introduction of additional services, such as after-sales support and financing, has put a greater emphasis on knowledge-based activities in an industry that has been traditionally rooted elsewhere. This means that manufacturing executives must now put a greater emphasis on their employees’ knowledge development if they wish to remain competitive in the changing industry.
One way in which manufacturing executives can gain a clear picture of their employees’ knowledge is to institute an assessment-based knowledge development program. Programs such as these present employees with job based scenarios that they are likely to encounter on a regular basis, putting particular emphasis on situations where the correct action may not be completely clear. The assessments are customized to every company and job role to deliver meaningful results. They also measure employees’ confidence as well as their knowledge and competence, providing a critical second layer of insight for executives. A measurement of confidence is important because if employees lack confidence in their skills or knowledge they are less likely to perform to their highest potential. Conversely, if they possess complete confidence in incorrect knowledge, they are more likely to pose a risk to the business.

For an industry beginning to increase its emphasis on knowledge-based services, assessments help ensure that employees understand their changing job roles and responsibilities. They can also help manufacturing executives identify which employees can be classified as the “high performers” who are most suited to help train and mentor others. By identifying this group of employees, executives can effectively utilize their skills in a leadership position and help reduce both training costs and costs related to employee misunderstanding, which often stem from lack of complete knowledge or misplaced confidence.

The identification of high performing employees is especially critical given the current economic situation, which has had a drastic effect on the manufacturing industry. Recently, manufacturing executives have seen significant reductions in both income and employee numbers. According to recent U.S. Department of Labor statistics, the month of June saw 1,235 mass layoff events in the manufacturing industry, which resulted in 159,310 initial claims.

Knowing which employees are capable of taking on more and adopting more leadership-driven positions is valuable insight in any economic climate, but in slim times it’s especially pertinent information for executives looking to streamline business operations and cut costs. Having a clear view of where the knowledge lies within a workforce also simplifies the often difficult decisions involved in making layoffs.

Assessments are also useful to improve and refine existing training programs. With new knowledge-based services, updated training programs will be a necessity to get existing employees up to speed. Even employees not directly involved in the support side of the company will likely feel the impact of these changes and should be aware of the new services offered. However, generic blanket training programs are rarely the most time and cost effective approaches to training.

Assessments serve as a valuable supplement to training programs because they provide insight into what employees are successfully retaining from basic training, as well as what areas need more attention or emphasis. Feedback such as this allows managers to continually improve their training techniques and reduce time and money wasted on ineffectual training programs.

Also, after using assessments with existing employees, executives will accumulate a set of standards that will prove helpful in the hiring process. By applying similar assessments to potential hires, executives can see which candidates are most likely to fulfill the job role and meet the standards of current successful employees.

The benefits reaped from assessment-based knowledge development programs are many and have far-reaching effects throughout the company. With the increasing globalization of the economy and the treatment of knowledge as a valuable commodity, industries traditionally rooted in non-knowledge-based activities have been forced to incorporate knowledge-based services to keep up with the curve.

With these additions comes the need to closely monitor employee knowledge development and confidence to ensure that new procedures are understood, standards are met and the company is not put at risk. An assessment-based knowledge development program provides executives with that needed insight. In today’s competitive business world, this added knowledge could be critical in saving both money and jobs, thus helping ensure that more manufacturing companies emerge from the recession with a bright future.

Mary Clarke is chief executive of Cognisco, a provider of custom built, online knowledge appraisal and learning solutions. For more information visit,