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KPO can be a basis for the analysis of developments in hardware systems to explore the implications of specialization in knowledge production for the organization and the boundaries of the firm.

The definition of boundaries of the firm in terms of the activities performed in house does not take into account that decisions to outsource production and other functions are different from decisions to outsource technological knowledge. The multi technology firms need to have knowledge in excess of what they need for what they make, to cope with imbalances caused by uneven rates of development in the technologies on which they rely and with unpredictable product-level interdependencies.

By knowing more, multi technology firms can coordinate loosely coupled networks of suppliers of equipment, components, and specialized knowledge and maintain a capability for systems integration. Networks enable them to benefit from the advantages of both integration and specialization. The production of useful knowledge, like the production of artifacts, has become increasingly specialized and professionalized , with the continuous emergence of new and useful disciplines and sub disciplines.
Knowledge specialization has profound implications for the evolution of companies’ cognitive and coordination mechanisms and the relationship between companies’ production and knowledge boundaries.

As the number of disciplines for the design, development, and manufacturing of products increases, companies need to rely on specialized suppliers of equipment as well as knowledge, to complement their in-house research & development efforts. It is therefore important to understand why some disciplines and components are developed and produced in-house and why others are contracted out.

KPO can provide the analyzed reasons why the companies maintain technological capabilities in a number of fields wider than those in which they decide to produce, and it explores the implications for companies’ boundaries and vertical integration decisions. Defining the boundaries of the company in terms of activities performed in-house does not take into account that decisions to outsource production and other functions are different from those to outsource technological knowledge.

Traditional explanations of companies’ boundaries, particularly those that rely on transaction cost analysis, therefore, provide only a partial explanation. To analyze the nature of the boundaries of the company, KPO focus on the linkages among companies that interact to develop, design, and manufacture multi technology products. Multi technology products are artifacts made up of components and embody a number of technologies.
Components are physically distinct portions of the product that carry out specific functions and are linked to each other through a set of interfaces defined by the product architecture.

Technologies are understood as the bodies of knowledge, or understanding and practice, that underpin product design and manufacturing.

Following are some the tasks that may be outsourced to KKPL :
  • Very Large Scale Integration (VLSI) Design
  • Chip Design and Development
  • Automobile Design
  • Models prototype design and development
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