Chapter 6 Supply Chain

Learning curve

A line displaying the relationship between unit production time and the cumulative number of units produced

Learning curves can be applied to ____ and _____

Individuals;organizations

Individual learning

Improvement that results when people repeat a process and gain skill or efficiency from their own experience

Organizational learning

Improvement that comes both from experience and from changes in administration, equipment, and product design

Learning curve theory is based on 3 assumptions:

• The amount of time required to complete a given task or unit of a product will be less each time the task is undertaken

• The unit time will decrease at a decreasing rate

• The reduction in time will follow a predictable pattern

Two elements involved in an individual’s performance and rate of learning:

• The rate of learning

• The initial starting level

Sources of organizational learning:

• Individual learning of the employees

• Technology

• Structure

• Documents

• Standard operating procedures

2 reasons for disparities between a firm’s learning rate and that of its industry:

• Differences in operating characteristics between any 2 firms, stemming from the equipment, methods, product design, plant organization, etc

• Procedural differences are manifested in the development of the learning percentage itself

Organizations expect to benefit from individual and organizational learning at the same time

True

The ____ the production history, the more ____ the estimate

Longer;accurate

If production has not started, what can be used to estimate the learning percentage?

• Analyze the proposed startup and previous startups and develop a revised value that appears to best fit the situation

• Assume that it will be the same as it has been for the same or similar products

• Assume that it will be the same as it has been for previous applications within the same industry

A benefit of the logarithmic analysis is that it does not require complete enumeration of successive time-output combinations

True

Biggest benefit to organizations of organizational learning?

Competitive advantage

Highly automated systems typically have learning curves near 0

True

In order to enhance worker learning, there must be adequate ____ for the worker and organization

Incentives

If production has been underway for some time, ______

The learning percentage is estimated from production records

What 2 elements are involved in the factors that affect an individual’s performance and rate of learning?

• The rate of learning

• Initial starting level

General guidelines to improve individual performance based on learning curves:

• Proper selection of workers

• Proper training

• Motivation

• Work specialization

• Do one or very few jobs at a time

• Use tools or equipment that assists or supports performance

• Provide quick and easy access for help

• Allow workers to help redesign their tasks

Organizational learning is critical to sustaining a _____

Competitive advantage

2 reasons for disparities between a firm’s learning rate and that of its industry:

• Differences in operating characteristics between any 2 firms, stemming from the equipment, methods, production design, plant organization, etc

• Procedural differences are manifested in the development of the learning percentage itself

Managers should be aware of the following factors when using and interpreting learning curves:

• Individual learning and incentives

• Learning on new jobs vs old jobs

• Improvement comes from working smarter, not harder

• Built-in production bias through suggesting any learning rate

• Preproduction vs postproduction adjustments

• Changes in indirect labor and supervision

• Changes in purchasing practices, methods, and organization structure

• Contract phase-out

Learning curves are modeled using past data to create the trend line

True