Definition:
Tacit knowledge is the kind of knowledge that is difficult to transfer from one person to another by means of writing or verbal. This term is attributed to Michael Polanyi in 1958. Tacit knowledge can be defined as skills, ideas and experiences that people have but are not necessarily easy to express. With tacit knowledge, people are not often aware of the knowledge they possess or how valuable to others.
Effective transfer of tacit knowledge generally requires extensive personal contact, regular interaction and trust. David in his Blue book, mentions complexity in knowledge-work problems grows exponentially with the quality of work-in-progress, whereas human brains struggle to cope with all this complexity. Knowledge transfer and information discovery in software development is tacit in nature, created during collaborative sessions, face-to-face. The information is verbal and is in visual format, stored in mind which can fail to recall precise details and make mistakes. So co-located teams always available for each other. this memory loss can be corrected through repeated discussion or tapping the shared memory of a group of people which helps in retain tacit knowledge for longer duration. Tacit knowledge depreciation can be minimised by limiting work-in-progress, resulting in higher quality.
Further Reading:
Book: KANBAN Successful Evolutionary Change for Your Technology Business by David J Anderson
https://en.wikipedia.org/wiki/Tacit_knowledge