Conquering the Curve - Managing Learning Curves in Factories by Creating and Transferring Knowledge

The learning curve is an empirically known and tested phenomenon to describe individual or organisational learning rates. It has been implied in some circles that the only way to accelerate cost reduction is to accelerate production volume, yet some say it is the rate of learning that actually constitutes sustainable competitive advantage. In this 2004 Shingo Research Prize winning paper, Michael Lapre and Professor Luk Van Wassenhove investigate learning rates within an industry scenario, and offer facts and figures highlighting the need to manage the curve and optimise learning in the factory context.

by Luk Van Wassenhove, Michael Lapré

The 'learning curve' has entered into everyday usage. We hear that somebody has a 'steep learning curve' when they need to take up new knowledge, particularly when dealing with a new job or activity. At an organisational level, studies in learning rates can orient companies towards the best ways of learning, to boost economies of scale or unit cost reductions. Inversely, such studies can show where an organisation has gone wrong and how initiatives relying on learning to succeed may fail due to a misguided focus on where and how learning takes place.

In this 2004 Sjhingo Research Prize winning paper, Managing Learning Curves in Factories by Creating and Transferring Knowledge, published in the California Management Review, INSEAD's Henry Ford Chaired Professor of Manufacturing, Luk Van Wassenhove and his former Phd student and now Vanderbilt University's Assistant Professor of Operations Management, Michael Lapre, carry out a thorough analysis of the learning process at NV Bekaert SA, the world's largest independent producer of steel wire. Within a research project spanning a number of years, learning processes were studied within Bekaert's steel cord division. This section produces a third of the world's wire used in steel-belted radial tyres through a four-step production process.

The company's production people faced a number of hurdles to learning within the production process, including:

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