Articulation and appropriation of collective know-how in the steel industry:
Evidence from blast furnace control in France
Nathalie Lazaric
LATAPSES CNRS,
250 rue A. Einstein,
06 560 Valbonne
Sophia Antipolis, France
Pierre-André Mangolte
CEPN-IDE CNRS
99 av J-B Clément,
93430 Villetaneuse, France
and
Marie-Laure Massué
;
Reims Management School,
59 rue Tattinger
51100 Reims, France
Abstract
In this article, weuse the implementation of an expert system to improve blast furnace control in the French steel industry to illustrate the problem of knowledge articulation/codification. Blast furnace related knowledge still largely takes the form of empirical know-how in general and expert know-how tied to specific individuals in particular. Therefore, the articulation/codification of knowledge in this field is a difficult task requiring the identification and selection of ‘best practices’ for the purpose of codification. This process, in turn, affects daily routines and creates new forms of non exclusive generic knowledgethat make use of local knowledge. These new forms of generic information reinforce the tendency to appropriate private knowledge currently prevailing in Usinor, a large French steel company, and contrast sharply with the tradition of knowledge sharing between firms that predominated until the end of the nineteenth century.
Key words : blast furnace, articulation, knowledge, codification, steel industry.
Acknowledgments : This paper has benefited from various discussions notably in EAEPE conference (Berlin, November 2000) in Nice “Knowledge workshop” (December 2000) and in Paris Sceaux “New Economy” conference (May, 2001). The authors are grateful for comments from M. Becker, W. Dolfsma, F. Tell, P. Nightingale, J. De Bandt, P.Petit and N. Greenan among others. Usual caveat apply.
“It will at once be evident that on this point the position will be different with respect to different kinds of knowledge ; and the answer to our question will be there fore largely turn on the relative importance of the different kinds of knowledge ; those more likely to be at the disposal of particular individuals and those which we should with greater confidence expect to find in the possession of an authority made up of suitable chosen experts. If it is today so widely assumed that the latter will be in a better position, this is because one kind of knowledge namely, scientific knowledge, occupies now so prominent a place in public imagination that we tend to forget that it is not the only kind that is relevant. It may be admitted that, so far as scientific knowledge is concerned, a body of suitably chosen experts may be in the best position to command all the best knowledge available-though this is of course merely shifting the difficulty to the problem of selecting the experts. What I whish to point out is that even assuming that this problem can be readily solved, it is only a small part of the wider problem” (Hayek, 1945, p. 521)
“Experts of any kind tend to look at the world in terms of a very limited number of variables-indeed, that is a reasonable definition of what it means to be an expert. The training and experience of experts equip them to deal with movement along some very particular trajectories, but not others. The old aphorism that an expert is a person who knows more and more about less and less conveys an important truth, one that has serious implications for the understanding of technological change” (Rosenberg, 1986, p. 23)
Introduction
Much attention has recently been paid to the articulation and codification of knowledge (Cohendet and Steinmuller, 2000; Cowan and Foray 1997; Cowan, David and Foray, 2000;), on the grounds that "the increase in the stock of useful knowledge and the extension of its application are the essence of modern economic growth” (Kuznets, 1966). The debate, which has been very heated, is open to a variety interpretations as indeed are its implications (see Knudsen, 2000; Nightingale, 2001). Instead of reviewing the entire debate we will attempt to illustrate the degree and ways in which it applies to the French steel industry. We believe that sectoral differences are an important part of the story and could help explain the degree and potential of transforming different kinds of knowledge, be they scientific or empirical (Rosenberg, 1982; Pavitt, 1984; Balconi, 1993, 1999; Divry and Lazaric, 1998; Saviotti, 1998).
In the steel industry, the main challenge lies in decontextualising the local knowledge anchored in experts. Such experts often belong to different ‘communities of practice’. They therefore tend to use localised jargons and vary widely in the way they carry out their tasks and interpret technical phenomena. In order to shed more light on these issues we will focus on the different stages of knowledge articulation and codification and integrate organizational dynamic and social links as driving forces in the process and not as minor variables. The reason for this is that cognitive and political dynamics are interlinked and the nature of their co-evolution can be crucial to the evolution of the knowledge itself ( Coombs and Hull, 1998 ; Rochhia and Ngo Mai, 1999; Simon, 1999 ; Cohendet and Llerena 2001 ; Dosi, Nelson and Winter, 2001). Articulation and codification transform the way in which communities habitually represent knowledge and share it between their members at different levels: new knowledge representations come into play at both the individual and the collective level, while new objectives concerning knowledge accumulation and knowledge preservation enter the organizational level.
In this article, we first try to show the ways in which the articulation and codification of knowledge undermines traditional daily routines relating to the handling of blast furnaces. We emphasise the fact that the knowledge associated to the workings of the blast furnace is mainly empirical and difficult to master in its entirety. We also review the basic concepts of routine, knowledge articulation and codification in order to clarify them.
Secondly, we take our argument a step further by providing an overview of the French steel industry. Codification in this sector was directly related to its recovery. In this context, we examine Usinor’s organizational context and economic situation in some detail. Thirdly, we discuss the firm’s Sachem project, which saw the introduction of an important programme of knowledge articulation and codification in a number of stages.
Fourthly, we analyse the impact of this process, placing particular emphasis on the organisational and cognitive effects of generic knowledge implementation. The crucial role played by the blast furnace experts becomes apparent here. Similarly, the importance of human skills and tacit knowledge for the system in its present form but also in its evolution also become clear.
Fifthly, we turn to the debate on knowledge in order to discuss the different forms of knowledge involved in the process and to see whether this case study may demonstrate a change of behaviour within the steel industry involving a new and more centralized locus of cooperation. Finally, we conclude by reviewing the sectoral dynamic our case study highlights and the organizational and social forces involved in knowledge articulation and codification.
I) Articulation and codification of empirical know-how in the steel industry
We begin by discussing why blast furnace related knowledge is still largely empirical in its form, thereby increasing both the difficulties associated with its generalisation and the degree of uncertainty in process control. Any attempt to disentangle this knowledge from individual and collective practices by articulating parts of them disturbs daily routines. Articulation paves the way for codification and can only be achieved by making the relevant practices explicit within different “communities of practice”. We will examine these issues at both the empirical and the analytical level and then attempt to devise a theoretical framework with which to explain such changes.
1)Empirical know-how and the blast furnace
The blast furnace is used for smelting and is capable of producing different grades of steel. The procedure involves coke, charred coal, different types of ore, hot air and gas being introduced into the furnace and then smelted. Dross is then produced by a process of “decarburization” and “dephosphorization”. Since the contents of the smelted scraps varies, the melted metal must be analysed immediately in order to determine which gasses should be added to it and at what temperatures. Many of the thermal, chemical and mechanical phenomena taking place in this kind of large reactor are far from being well understood ( Rosenberg, 1982) .
Although some of the physical-chemical reactions inside the blast furnace have been described by mathematical models, scientific ways of describing the relevant chemical and physical reactions remain incomplete. However, the scope of such models is severely limited by the fact that most of the reactions cannot be observed. To summarize briefly, we can say that the blast furnace is a very complex structure that relies on empirical know-how and still represents a ‘black box’, in that very few physical or mathematical models have been developed to describe what happens inside it (Rosenberg, ibid; Steiler and Schneider, 1994). This lack of understanding enhances the importance of human judgement, tacit knowledge and labour skills. This last point is widely recognised in the literature:
“One might naively regard a blast furnace as a deterministic chemical system, but in fact, its behaviour is stochastic. Many aspects of a furnace, its interior lines, the placement of tuyeres, the quality of raw materials, the degree of scaffolding, etc –exert an elusive but consequential effect on fuel consumption. Consequently, if one builds a taller blast furnace it is not immediately obvious whether its coke rate indicates the systematic effect of increasing height or is distorted by unusual random circumstances” (Allen, 1983, p. 12)
Consequently, existing knowledge of the workings of the blast furnace may be difficult to generalise because it relates to a number of different technological artefacts. In the circumstances, any attempted generalisation is confronted with the problem of learning from partial experience involving great uncertainties- a considerable difficulty for knowledge comparisons. This also means that the day-to-day control of a blast furnace is based on a very costly trial and error process. Let us examine this point in more detail.
The conversion process carried out by blast furnaces is continuous and takes up to 8 hours from the introduction of the ores to the smelting stage. Any interruption is extremely costly and thus prohibited unless an emergency occurs. However, a blast furnace tends to work more or less as planned. Regular control is very important for both the smelting quality[1] and the working life of the blast furnace, which, on average, is 15 years.[2] If the flow of ores is not regular, it can provoke an above average erosion of the furnace’s internal brickwork and tank. It can also cause deficient casting due to an iron notch. A number of problems can arise during this process, the most notorious occurring when ores do not tap properly and flow on one side of the tank. This happens when ores are insufficiently fluid and therefore create a kind of dome preventing gasses from moving up the furnace’s throat. The ductility of the metal, which is affected by this problem, is a very important quality of the final product and depends on the ability to carry out timely additions of oxygen and other gases. If intervention is limited in any way, ores and smelt scraps can suddenly sink back and cause a number of other problems, including obstructing the tuyeres and triggering explosions or gas emissions. Two things must be checked continuously to ensure the smooth operation of a blast furnace:
(1)the quality of the smelting scraps and their proper repartition inside the throat;
(2)the temperature inside the tank.
Team operators responsible for the continuous control of the blast furnace must be able to solve problems and make quick decisions. However, this ability depends not only on the integration of many pieces of articulated knowledge but also on the operators’ understanding of what makes a ‘good process’ and what must be done to improve control. One way to achieve the latter is to reduce the uncertainties associated with the process. To put it another way, in order to gain a better understanding of what happens inside a blast furnace, the firm must open the “black box” and try to analyse the causal links between the various parameters coming into play in different contexts and situations.
2)Routinization, knowledge articulation and codification: a theoretical framework for understanding the blast furnace
The starting point of our attempt to come to grips with the operation of a blast furnace is provided by the concept of routine. In defining this notion, Nelson and Winter (1982) emphasize that a “routinized” organisation can be understood by reference to specific competencies. These encompass and embody different types of know-how, knowledge and part of the social context in which they are embedded. Different forms of know-how are memorised using a variety of mechanisms (different kinds of equipment, tools, procedures, data, human know-how, etc.). In order to illustrate the interplay between various forms of know-how we use the notion of “repertoire”: just as a more or less talented acting troupe interprets different plays in its repertoire more or less successfully, teams in the steel industry avail of and can mobilise different kinds of know-how. These can remain inactive or, when eventually activated, produce pig and cast iron.
An activated routine is an expression of the repertoire and can be judged on the basis of technical indicators such as casting delivery, steel quality, raw material and energy input and process fluidity. Collective activity involves procedures and rules and uses artefacts and know-how as well as skills. The collective ability to solve problems and co-ordinate different incidents is highly dependent on the existing repertoire. The co-ordination of different routines is sometimes compared to a “circuit” that must work “smoothly” (Lazaric and Mangolte, 1999). This means that some degree of cognitive coherence between different kinds of repertoires is necessary before they can operate successfully. Effective co-ordination also depends on the relevant “motivational/relational context” (Winter, in Cohen et al., 1995), which includes the “good will” of individuals, the prevailing interests and latent conflicts and the discretionary aspect of behaviour within organisations.
Social relations and potential conflicts can, in fact, disturb the smooth operation of routines and the expression of individual repertoires. Attempts to streamline individual behaviour in a hierarchical structure through the exercise of authority or on the basis of particular incentive structures have limited power, because forcing individuals to participate in a collective undertaking is difficult. Individual agents have a certain amount of autonomy over their actions as well as their own way of interpreting rules and modulating their effort, as Leibenstein (1987) put it. That is, although individuals may have the competence to solve a problem, they may fail to do so simply because they do not want to. In this case, a lack of individual and collective dedication can thwart cognitive co-ordination and prevent the circuit from working smoothly.
Overall performance in the casting process is highly dependent upon:
(a)the state of cognitive repertoires, that is the accumulated stock of knowledge, and
(b) the social and relational context in which the repertoires are activated.
Most firms in this sector have looked into technical solutions, such as the implementation of expert systems, in an attempt to improve blast furnace regularity. An expert system, however, involves the transformation of all the knowledge stored in a particular firm, including its previous repertoires, and therefore affects both organisational memory and routine activation. This raises a number of questions as to where this knowledge is stored, who its carriers are, how it can be extracted etc. As has been recently pointed out by a number of authors, this problem is far from trivial:
“It’s familiar enough that business firms and other organisations ‘know-how to do things-things like computers to fly us from one continent to another. On second thoughts what does this mean? Is there not a sense in which only a human mind can possess knowledge? If so, can this proposition somehow be squared with the idea that organisations know-how to do things? And if organisational knowledge is a real phenomenon, what are the principles that govern how it is acquired, maintained, extended and sometimes lost?” (Dosi, Nelson and Winter, 2000, p. 1)
Indeed the maintenance of collective knowledge through the articulation and memorisation of best practices is not neutral. It can generate specific assets for a firm by rendering the product of human experience more “manageable” and by contributing to the selection of routines and practices located within the organisational memory: “The degree of articulation of anything that is articulable is partially controllable” (Winter, 1987, p.174). Let us examine this point further: in line with the quote, we argue that knowledge is “articulable” and eventually “articulated” when the knowledge of some person or some organisation is made explicit by means of language. “Articulated knowledge” can be rendered explicit through language. Language, in this context, refers to a system of signs and conventions that allow the reproduction and storage of knowledge in such a way that it can then be communicated and transferred between individuals[3].
The process of articulation involves the extraction of knowledge from the person carrying it and the transformation of personal knowledge into a generic form (Winter, ibid; Mangolte, 1997). Although some forms of knowledge can benefit from it, parts of tacit knowledge may defy articulation and be poorly reproduced and communicated.[4] In other words, only a small fraction of articulable knowledge can in fact be articulated. Moreover, the degree to which articulation will actually be taken up as an option may differ radically between firms, depending on the associated costs and benefits accruing to a particular firm, on its strategic vision and the importance it places on the building of capabilities (Teece, 1998 ; Zollo and Winter, 2000).