Knowledge Management and Innovation in Networks

Knowledge Management and Innovation in Networks

Edited by Ard-Pieter de Man

As an ever-increasing amount of innovation takes place within networks, companies are collaborating in developing and marketing new products, services and practices. This in turn requires knowledge to flow across company boundaries. This book demonstrates how companies encourage this knowledge to flow in networks that can involve dozens of partners. Substantiated by five in-depth case studies of innovative networks, the authors identify and analyse the solutions implemented by companies in order to meet the key knowledge management challenges they encounter. Theoretical and management implications of the study are then defined.

Chapter 4: Meeting Moore’s Law: High Velocity Knowledge Development in the Supplier Network of ASML

Irene Lammers, Pim Eling, Ard-Pieter de Man and Arjan van Weele

Subjects: business and management, knowledge management, organisational innovation, innovation and technology, knowledge management, organisational innovation


1 Irene Lammers, Pim Eling, Ard-Pieter de Man and Arjan van Weele SUMMARY One of the reasons for the success of ASML, a producer of lithography systems headquartered in The Netherlands, is its management of its extensive supplier network. ASML works with about 500 firms that supply about 90 per cent of the costs of a lithography system, leaving ASML with the task of integrating these modules and parts into the final tool. In order to meet the technology roadmap of the high velocity semiconductor industry (Eisenhardt, 1989b), the pace of innovation in the ASML network is high. An important approach that ASML uses to secure innovation as well as to spread the risk of development in the network is their supply chain management philosophy of value sourcing. This philosophy implies that for each technological competence, multiple suppliers are used to decrease dependencies. Existing partners are constantly monitored in terms of improvements in their knowledge base, as well as their control of processes. These and other practices have enabled ASML to develop into the technology leader in the chip lithography market. By drawing on four embedded case studies of innovation projects conducted within ASML’s supplier network, we present both the theory and the practice of ASML’s supply chain management approach. We conclude that ASML’s approach to managing its network of suppliers is notably different from approaches in less dynamic industries such as the automotive industry (Dyer and Nobeoka, 2000). The modularization of the network means that knowledge is integrated...

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