Deishin Lee is an Assistant Professor of Business Administration in Technology and Operations Management. Professor Lee studies how economic and environmental value can be created and captured by leveraging operational synergies to maximize natural resource utilization. Professor Lee received her Ph.D. from Stanford University’s Graduate School of Business. She also holds dual MS degrees in Mechanical Engineering and Management from MIT as a Leaders for Manufacturing fellow, and a BS degree in Mechanical Engineering from MIT. Before her doctoral studies, Professor Lee worked at Motorola in the Operations group within the Paging Products, Wireless Data, and Multi-Media divisions.
Transforming Manufacturing Waste into Profit
Every manufacturing process leaves waste, but Assistant Professor Deishin Lee believes much of this left-behind material can be put to productive—and profitable—use. Key concepts include:
- The concept of "by-product synergy" consists of taking the waste stream from one production process and using it to make a new product.
- Productively using waste instead of trashing it can cut costs by reducing disposal fees and opening up additional revenue streams through by-product sales.
- The greatest returns are realized when a company widens its scope to think strategically to consider waste processing as a joint-production process.
- In some cases, maximizing profit might mean, paradoxically, creating more waste.
For many firms, the ability to create, organize, and disseminate know-how is a key factor in their ability to succeed. But should all companies engage in formal knowledge management? If not, which companies derive most value from a formal knowledge system? Conditional on implementing such a system, should the company focus more on learning from successes or learning from failures? Should such knowledge systems simply capture all experience, or should they be more selective? This paper develops and applies an economic framework to examine these questions. Key concepts include:
- Supporting firms' focus on best practice, information about successes is typically more useful than information about failures. Past successes can guide future successes, while past failures only point out certain pitfalls.
- Recording mediocre know-how can be counter-productive by inefficiently reducing employees' incentive to experiment.
- Larger firms with high turnover potentially gain the most from knowledge systems, but should also be the most selective when encoding information.
- The framework in this paper can be used to explore other questions on knowledge management. As knowledge management continues to grow in importance, a systematic economic perspective may shed important insights.