Learning Curve

A learning curve is a concept that visually displays the connection between cost and output over a set time period, often to represent a recurring operation performed by an employee or worker. Hermann Ebbinghaus, a psychologist, initially defined the learning curve in 1885. It is now used to assess manufacturing efficiency and estimate costs.

In the graphic depiction of a learning curve, a steeper slope shows that early learning results in bigger cost savings, but successive learnings result in progressively gradual and harder cost reductions.

The learning curve is also known as the experience curve, the cost curve, the efficiency curve, or the productivity curve. This is because the learning curve gives measurement and insight into all of the aforementioned areas of a business. The premise behind this is that every person, regardless of status, requires time to learn how to do a given job or function. The amount of time required to create the linked product is significant. Then, when the work is repeated, the employee learns how to accomplish it fast, reducing the amount of time required for each unit of output.

That is why the learning curve is downward sloping at first, then flattens out near the end, with the cost per unit on the Y-axis and total output on the X-axis. As learning progresses, the cost per unit of output first falls before plateauing as it becomes more difficult to improve the efficiencies obtained via learning.

Benefits of Using The Learning Curve

Companies know how much a person earns per hour and can calculate the cost of generating a single unit of output using the number of hours required. A well-placed employee who is positioned for success should reduce the company’s expenses per unit of production over time. Businesses may utilize the learning curve to plan production, anticipate costs, and create logistics timetables.

The slope of the learning curve shows the pace at which learning leads to cost reductions for a business. The steeper the slope, the greater the cost savings per unit production. The usual learning curve is referred to as the 80% learning curve. It demonstrates that every doubling of a company’s production results in a cost of 80% of the previous output. As production grows, it becomes more difficult to double a company’s prior output, as seen by the curve’s slope, implying that cost reductions reduce with time.

Points to Remember

• The learning curve accurately depicts the cost per unit of production over time.
• The learning curve depicts how long it takes to gain new skills or information.
• In business, the slope of the learning curve measures the pace at which acquiring new abilities results in cost savings for the organization.
• The steeper the learning curve, the greater the cost savings per unit of production.
• Use of the word “learning curve”

There are two uses for the word “learning curve”:

Generalized

The term “learning curve” is often used in colloquial conversation to express the time and effort necessary to learn something difficult.

The application might be wide and generic, such as defining the learning curve for reading. In these examples, learning development is explained without the use of a mathematical graphical depiction. As a result, the phrase is used qualitatively to describe the process of learning across time.

Measured

The term “learning curve” is often used quantitatively to develop mathematical models that indicate the rate of competency or mastery of a job.

This learning curve model is only useful when measuring the actual rate of progress toward finishing a given activity versus time. The job must be repeatable, quantifiable, and limited to just one variable within a technique; it cannot measure the whole operation on its own.

Where do I apply the learning curve?

There are several factors in learning that influence the pace of growth and cannot be fully represented in the learning curve model.

In the case of learning to read, factors might include phonetics, vocabulary, kind of reading material, instructional techniques, motivation, prior knowledge or experience, practice quality, and many more.

The learning curve paradigm demands that a single variable be monitored over time, repeatable, and quantifiable. Individual motivation, for example, is difficult to assess. Overall, learning to read is a complicated activity with numerous factors that is not conducive to a learning curve.

A measured activity, such as a factory worker learning to operate a new equipment that needs particular, repeated actions, is one example of how a learning curve might be utilized. As the worker learns to operate the equipment in accordance with the procedures, he gets quicker and more adept. A learning curve would be used to assess the pace of advancement and mastery.

The learning curve concept is most typically used in organizational or industrial management to increase production by enhancing the performance of human workers.

The concept was extensively used during World War II (WWII), when it was discovered that improving manufacturing performance reduced aircraft costs. It was subsequently adopted by the industrial and corporate sectors for a number of performance-enhancing purposes.

• Real-world instances of using the learning curve theory
• The learning curve is known by several names, according to its vast range of applicability.
• The terms used to characterize the learning curve are:
• Experience curve
• Cost Curves
• Efficiency Curves
• Productivity Curves

The model may be used to calculate how long it takes a single individual to master a skill or a group of people to produce a product. In most instances, “learning” in the curve refers to process improvement.

Let’s look at some various instances of how the learning curve is being used nowadays.

Industry

The learning curve allows you to monitor manufacturing expenses in relation to labor performance. Instead of performance and number of tries, the data might be unit cost, unit labor hours, and total output in units. As workers generate more goods, the per-unit cost often decreases.

The learning curve may be used to forecast possible costs when manufacturing jobs change. For example, while determining the price of a new product, labor expenses are taken into account.

If a product takes two hours to make, it is put on the market for sale at a price that represents the two-hour manufacturing time plus additional related expenses and markups.

But what if the output time was predicated on the first few attempts? What if manufacturing time is decreased to one hour by the hundredth time the product is manufactured? The product would be available at a much higher price, perhaps leading to reduced sales. Using the learning curve might give extra information for planning.

Business

Learning curves may also be used to assess organizational performance, either via a generic approach or a measured study. The technique to adopt relies on whether the intended performance can be directly assessed.

Employees learning a tough work, such as how to utilize a sophisticated software program, may perform poorly at first since the task is inherently difficult. If the aim is for workers to know how to utilize the software in their daily duties, this may be difficult to quantify due to the large number of factors. Organizations may continue to gain from using the learning curve idea as a framework.

The learning curve, as a framework, may assist firms in understanding what is necessary to become competent in the program. If training assistance and time to practice are recognized as critical criteria, it is clear that workers who are provided help and time to practice with the program will perform better over time than employees who do not get support or time to practice.

If the program is critical to productivity, employee performance may suffer over time if they are unable to utilize it efficiently. Organizations may then give extra help or resources as required.

To use a measured learning curve, companies must pick a particular variable to study. For example, a corporation looking to enhance customer service performance may determine that implementing a new program (number of tries) would result in fewer customer complaints (performance). The company might monitor and evaluate the repeated practice of this campaign over time to see whether customer complaints dropped.

Medicine

Many surgical procedures will need physicians to perform repeated duties.

Because a surgeon is basically practicing the same skill each time an operation is performed, the learning curve may be used to demonstrate individual learning and performance over time.

This not only provides insight into the surgeon’s progress, but also helps educators determine where extra resources and support may be focused to enhance performance.