Knowledge Management as Competitive Advantage in the Textile and Apparel Value Chain

Given the global nature of competition and the emphasis on cost, U.S. textile producers typically are unable to compete strictly on a price basis. The failure of many textile and apparel companies to differentiate themselves has had a negative effect on their profitability and viability throughout the value chain. The ability to store, capture and disseminate knowledge within and across organizational boundaries has challenged managers for many years. However, as product lifecycles have decreased and environmental complexity and volatility have increased, the textile industry’s need to manage knowledge is intensifying. This project examines the process of acquisition, retention, maintenance, and retrieval of knowledge both within the firm through organizational memory and across the value chain. During the first phases of the grant, we developed case studies to examine how firms manage knowledge internally and externally through relationships with downstream partners across a single value-chain within the textile industry. Qualitative interviews were used to assess the “state of the industry” regarding knowledge management systems. Based on the information gathered from the case research interviews, and our review of the literature, we developed a survey instrument to measure internal and external knowledge activities across the value chain. The survey was officially launched on September 28 and is being sent out in waves. The preliminary results from the first respondents show that there are gaps in how both internal and external knowledge is managed within the industry. GOALS Our goal is to fundamentally enhance the process of acquisition, retention, maintenance, and retrieval of knowledge both within the textile firm through organizational memory and across the firm’s value chain to gain competitive advantage. Using the case studies as an exemplar, our work (1) explores the relationship between low-cost and differentiation firm strategies on firm performance, (2) seeks to understand the relationship between firm strategy and use of different knowledge management systems, and (3) examines the impact of knowledge management systems on firm performance. INTRODUCTION Firms view knowledge and knowledge management as part of their strategic orientation. Lowcost strategies may emphasize knowledge that can be used to cut costs, lower prices and shorten cycle times whereas differentiation strategies may emphasize knowledge that adds value to a National Textile Center Annual Report: September 2005 NTC Project:S03-AC01