Learning Curves

Cast your mind back to when you first began a
new job or project.
Do you remember grappling with the basics, and
taking a long time to get used to new processes and procedures?
Several months down the line, you're so adept at the job you
wonder why you ever struggled in the first place.
There is an explanation for this: If you find that your
performance improves with experience, and it takes less time and
effort to complete a task after you've done it a few times, then
you've experienced the 'learning curve' in action.
This learning effect was first described by aeronautical engineer
T. P. Wright in 1936, as he studied the time it took to produce
airplane parts. He found that as workers gained experience, they
were able to produce the parts faster. As workers' experience
grew, there was a continuous decrease in the time needed to
complete a task. However, the time savings eventually flattened
out at a certain point. This indicated that learning was
'complete.'
This is an important concept for business. You can build on this
principle so it has a positive impact on the workplace, because
working more efficiently saves time and money.
When you understand the learning curve, you can use it to forecast
your resource needs more accurately over time. It also helps you
prepare for the initial period after you've introduced changes,
when productivity tends to be lower than desired. For example, if
you install new software, you can probably expect efficiency rates
to be low at first. Then, as people use the software more, their
productivity increases over time – until their learning rate
reaches a plateau.
You can also use the learning curve to identify and establish
improvements in processes and procedures. In a manufacturing
context, for example, as staff learn to do their jobs more quickly
and efficiently, this is likely to lead to qualitative
improvements in the way products are designed and engineered.
Business consultancy The Boston Consulting Group studied the
learning curve, and concluded three things:

The time needed to perform a task lessens as a task is
repeated.
As more units are produced, the amount of improvement decreases.
The rate of improvement is consistent, and you can create a graph to use as a prediction tool.

Understanding the Tool
The learning curve can be illustrated in a graph showing the time
it takes to produce a unit on the y-axis, and the number of units
produced on the x-axis (see below). You then get a curve with a
downward slope (Figure 1).


The slope of the line shows the rate of learning. The higher the
rate of learning, the steeper the slope. Figure 2 (below) shows a
higher rate of learning than Figure 1 – in other words, the time
it takes to produce each unit decreases at a faster rate.




There is a misperception that the term
'learning curve' implies a positive slope. Some people may
talk of a steep learning curve when describing a task that's
hard to learn at first. Mastering this task then produces
huge gains. However, an actual learning curve is the the
negative, or inverse, slope seen above.

The formulas used to create the curve are helpful when you want to
forecast how production times and costs will decrease over time as
you start making new products. However, in more general business
situations, there's usually no real benefit to determining exact
numbers for activities such as producing a new weekly report, or
calculating month-end figures.
Applying the Learning Curve
Other ways of speeding up learning include developing effective
training programs, and ensuring that adequate support is
available.

The learning curve can also help you and your team prepare for the
effects of change. When you use the learning curve to describe the
effect on efficiency, you can help people deal with the
difficulties of learning something new. It also helps workers
understand why their efficiency gains slow down over time.
For example, sometimes teams become negative when they see their
productivity gains decrease after an initial period of huge
increases. Using learning curves, you can explain in advance what
they should expect.
If you've introduced new systems or technology, then it pays to
invest in an extensive training program, and ensure that adequate
support is available. This will help speed up workers' rate of
learning.
It is also a good idea to create a project team, with a brief to
identify and capture the benefits and improvements gained by
workers learning quickly. This team can then make sure that these
improvements become embedded in everyone's way of working.
This is also a great time to emphasize why continuous improvement
is so important to a healthy organization. There's a limited
amount of efficiency that you can gain from one new initiative. To
keep moving forward, you need to look constantly for new ways of
doing things.

Limitations of the Learning Curve

The learning curve idea assumes that taking less and less time to
do something is always a good, and possible, outcome. Typical
applications are manufacturing, construction, and document
processing. Sometimes, however, the learning curve doesn't apply,
especially if the following is true:

Production is irregular.
Production quantities are small.
Products are highly customized.

In situations like these, workers can't usually benefit as much
from learning and experience. That's because each situation
presents a new learning challenge, and people don't necessarily
repeat the same tasks.
Another point to consider is the cost of investment. Before using
the learning curve to justify implementing a change, make sure
that your savings from faster learning will be higher than the
cost of the investment. Doing something faster may be better – but
only if there's a financial benefit associated with it.

Key Points
Learning curve theory is mainly about learning by doing.
Mathematical models have shown that experience gained over time
leads to improved performance, so costs may decrease as production
progresses. This helps you gain a competitive advantage by finding
ways to speed up the learning within your organization. To take
advantage of these benefits, look for better processes – and
implement those processes as soon as you can.