Resource title

Accelerating learning in factories by introducing knowledge into the learning curve

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The learning curve phenomenon is widely known. As organizations gain experience with production, productivity and quality improve at a decreasing rate. Early empirical studies showed that the logarithm of unit cost decreased with the logarithm of the cumulative number of units produced at a uniform rate – the learning rate. The disappointing managerial implication of most learning curve studies is that the only way to accelerate cost reduction is to accelerate cumulative production volume, which may not always be desirable or feasible. Yet, experts such as CEO Ray Stata of Analog Devices have argued that "the rate at which individuals and organizations learn may become the only sustainable competitive advantage." The importance of managing learning rates becomes all the more apparent when we consider variation in learning rates. Learning rates exhibit considerable variation across industries, within industries, within firms, and even across workers within a factory. Some factories reduce unit cost by 50% after doubling cumulative production volume, others do not learn at all. Consequently, there is an opportunity to manage learning rates. In this article, the authors show how managerial interventions can change the rate of learning. Specifically, they look at the impact of deliberate learning activities in quality and productivity improvement efforts on learning curves.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2001/2001-86.pdf

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Copyright INSEAD. All rights reserved