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Managing learning curves in factories by creating and transferring knowledge

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The learning curve phenomenon is widely known. As factories gain production experience, productivity and quality improve at a decreasing rate. Yet, factories show considerable variation in learning rates. The authors study how factories can change the rate of learning by managing deliberate learning efforts. Analyzing all quality improvement projects conducted in one factory over a decade, they identify two dimensions of learning processes - conceptual learning which yields know-why and operational learning which yields know-how. They link the accumulation of knowledge through projects to the factory's learning rate. Only 25% of the projects - which acquired both know-why and know-how - accelerated the learning rate. The other 75% of the projects either slowed down or did not affect the learning rate. A production line specifically set up to create technological knowledge consistently produced both know-why and know-how. Replication of this production line in other factories within the same firm fell short of expectations. Their research suggests that successful replication requires organizational factors such as management buy-in and knowledge diversity to solve interdepartmental problems. Finally, a stable environment with continuity in resources such as raw materials suppliers enhances knowledge creation.

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