Innovation and New Product Development Case Study

Knight Transportation Incorporated in 2004

OR

Abstract:
Knight Transportation Inc. (KTI), a US based trucking company has figured in the Forbes list of ‘200 Best Small Companies in the US’ for ten years in a row (1995-2004). In an industry whose fortunes are dictated by the growth of the economy, KTI has emerged as the market leader in the short-to-medium haul category. Under the leadership of Kevin P. Knight, KTI is following a business model characterised by high asset utilisation and a disciplined operating system. The effective use of low emission engines, intelligent vehicle technologies and Pre-Pass scheme has provided definite cost advantages to KTI. By adopting better pay packages for its drivers, KTI is performing better than industry standards in the area of driver retention. But of late KTI is planning to enter unfamiliar terrains in the northeast dominated by a competitor. The case is designed to help students to analyse the steps taken by KTI to maintain low operating expenses, to evaluate the importance of integrating technology into its operations to remain profitable, and to examine whether a change is needed in its business model when facing heads on competition with an established player. The case can be used as part of the operations management curriculum for MBA students.

Pedagogical Objectives:

• To understand about the tracking industry in the US
• To understand how knight’s operating model worked
• To discuss how knight used technology in its path towards excellence.

Keywords : Transportation; Trucking industry; ICC regulations; Competition; Innovation Management Case Study; Shipment payments; Operating model; Cost Control; Freight volume; Truckload freights