Transformative Demands for ERP Functionalities: Knowledge

Management in Customized Manufacturing

Birute Mikulskiene, Birute Pitrenaite, Egle Galiauskiene and Eligijus Tolocka
Mykolas Romeris University, Vilnius, Lithuania
Birute.mikulskiene@mruni.eu
b.pitrenaite@gmail.com
caronkute.egle@gmail.com
eligijus.tolocka@vgtu.lt

Abstract: Customized manufacturing requires completely new technological solutions and long and careful prototype
development and testing. The new requirements increase production costs, extend manufacturing time and entail frequent
errors in the product quality. So far, knowledge management framework provided by ERP systems still has not responded to
the customized needs even though ERP’s provide plenty of innovation solutions for prognosis, trending, etc. Additionally,
high uncertainty of customization could be managed better by employing diverse expertise of employees if their knowledge
could be empowered together with rigid knowledge about the customized order. The goal of this paper is to determine
customized manufacturing demands for functionalities of knowledge management systems that can be incorporated in ERP.
The research is based on a case study conducted in an SME type company settled in Lithuania. Extended interviews on
different issues, including the decision making system, problem solving, strategic decisions and ERP implementation and use,
have been conducted during the last 2 years (from June, 2016 to March, 2018) with company leaders, managers, constructers
and production workers. Although, one may expect to accrue experience and improve abilities with every new order, the
company is still facing difficulties in coping with uncertainties of incoming orders even after ERP was implemented and
launched. In conclusions, customized manufacturing is intensively looking for new knowledge management solutions that
meet strictly defined requirements with new ERP functionalities that could be explicit as system based on employee
participation and machine learning. The main functionalities could be listed as following: 1.) to make prognostic price
estimations for customized and unique orders; 2.) to classify new orders specifying what additional capacities are require to
develop the product; 3.) to recognize and accumulate any data that can be stored in the system for future solutions; 4.) to
provide guidelines for knowledge management at all stages of knowledge acquisition, transformation and application.

Keywords: knowledge management, functionalities, machine learning

1. Introduction
Customized production, although subject to the same manufacturing principles, entails a personalization
demand, which turns manufacturing into a complex task difficult to solve automatically. Customized
manufacturing requires completely new technological solutions and long and careful prototype development
and testing. The new requirements increase production costs, extend manufacturing time and entail frequent
errors in the product quality. To maintain sustainability, companies need support instruments (Bagchi 2003),
allowing an immediate reaction to the content of a customized order and proper evaluation of manufacturing
procedures, costs and deadlines (Gawroński 2012; Møller 2006) So far, the knowledge management framework
provided by ERP systems still fails to respond to the customized needs even though ERP’s provide plenty of
innovation solutions for prognosis, trending, etc. (Notes et al. 2008). Additionally, high uncertainty of
customization could be managed better by employing diverse expertise of employees if their knowledge could
be empowered together with rigid knowledge about the customized order.

The goal of this paper is to determine customized manufacturing demands for functionalities of knowledge
management systems that can be incorporated in ERP.

A two year long qualitative case study has been conducted in to dig into processes of customized manufacturing
within a sample company with the purpose to figure out how companies recognize uncertainties, how they cope
with the uncertainties and what additional improvements in knowledge management they feel are necessary.

2. The overview of the KM and ERP issues

Nowadays organizations face many new challenges to be dealt with in order to survive in the competitive market
and protect their businesses against newly emerging threats. These challenges demand higher intensity of
innovation and opportunities granted by advanced knowledge management systems (KMS) (Handzic et al. 2008;
Li-Su et al., 2011). In the light of organization competitiveness, knowledge can be defined as ‘the process of

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