Quantifying the value of knowledge within the context of product development

Knowledge management (KM) is recognized as a significant activity in order for enterprises to survive in today’s competitive environment, and one of the most challenging topics in KM is how to analyze the value of knowledge in a quantitative way. In order to avoid descriptive arguments, this paper restricts knowledge to the context of product development, and proposes some effective definitions and measurements of knowledge value. Based on these, the values of both tacit and explicit knowledge can be quantified, and finally, Knowledge Integrated Production System (KIPS) is introduced, which encompasses product development and knowledge evolution. In particular, KIPS enables the quantitative analysis of knowledge value, and the mutual impact of value addition between knowledge and product is revealed.