Managing Learning Curves in Factories by Creating and Transferring Knowledge

The learning curve phenomenon is widely known. However, factories show considerable variation in learning rates and can change the rate of learning by managing deliberate learning efforts. Through an analysis of quality improvement projects conducted in one factory over a decade, this article identifies two dimensions of the learning process—conceptual learning, which yields know-why, and operational learning, which yields know-how. A production line at this factory that was specifically set up to create technological knowledge consistently produced both know-why and know-how. However, replication of this production line in other factories within the same firm fell short of expectations: neither creation nor transfer of such knowledge occurred. The evidence shows that a stable environment with continuity in resources (such as raw materials suppliers) enhances knowledge creation. Moreover, successful replication requires management buy-in and knowledge diversity.