Learning Curve
A learning curve is a concept that visually displays the connection between cost and production over time, usually to represent an employee’s or worker’s repetitious activity. In 1885, psychologist Hermann Ebbinghaus initially defined the learning curve, which is now used to analyse manufacturing efficiency and estimate costs.
In a graphic illustration of a learning curve, a steeper slope shows that early learning leads to bigger cost savings, but subsequent learning leads to slower, more difficult cost reductions.
The experience curve, cost curve, efficiency curve, and productivity curve are all terms used to describe the learning curve. This is due to the learning curve’s ability to assess and give insight into all of the aforementioned characteristics of a business. The concept is that each employee, regardless of status, spends time learning how to do a certain job or function. The time required to create the accompanying output is considerable. The employee then learns how to do the work rapidly when the task is repeated, reducing the amount of time required for a unit of output.
As a result, the learning curve begins with a downward slope and ends with a flat slope, 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 drops at first before levelling off as it becomes more difficult to improve the efficiencies obtained via learning.
The Learning Curve’s Advantages
Companies can calculate the cost of generating a single unit of output based on the number of hours required since they know how much each person earns per hour. Over time, a well-placed employee who is set up for success should help the organisation lower its expenses per unit of production. Businesses may utilise the learning curve to plan production, anticipate costs, and arrange logistics.
The pace at which learning transfers into cost savings for a corporation is represented by the slope of the learning curve. The greater the cost reductions per unit of production, the steeper the slope. The 80 percent learning curve is the most common learning curve. It demonstrates that for every doubling of a company’s production, the new output costs 80% of the previous output. As a company’s production grows, it becomes more difficult to double its prior output, as seen by the slope of the curve, implying that cost reductions reduce with time.
Things to Keep in Mind
The learning curve depicts the cost per unit of production over time quite well.
The learning curve is a graph that shows how long it takes to gain new skills or information.
The slope of the learning curve in business refers to the pace at which acquiring new abilities results in cost savings for a corporation.
The larger the cost reductions per unit of production, the steeper the learning curve’s slope.
The phrase “learning curve” is used in this context.
The phrase “learning curve” has two different meanings:
- Generalized
The term “learning curve” is often used in everyday conversation to represent the amount of time and effort necessary to learn something difficult.
The application might be wide and generic, such as expressing the reading learning curve. A graphical depiction based on mathematics is not used to describe learning development in these instances. As a result, the phrase is employed to describe the qualitative growth of learning across time.
- Measured
The term “learning curve” is often used in quantitative contexts, when mathematical models are used to indicate the pace at which a task is mastered.
This learning curve model is only useful for calculating the actual rate of progress toward finishing a job against the clock. The job must be repeatable, quantifiable, and include just one variable within a technique; it cannot be used to measure the whole operation.
Where should the learning curve be used?
Many factors influence the pace of advancement in learning and are not properly represented in the learning curve model.
The factors in learning to read, for example, might include phonetics, vocabulary, kind of reading material, instructional techniques, motivation, prior knowledge or experience, practise quality, and much more.
The learning curve approach necessitates the tracking of a single variable across time, which must be repeatable and quantifiable. Individual motivation, for instance, is difficult to assess. Learning to read is a complicated process with a lot of variables that isn’t ideal for a learning curve.
A quantifiable job, such as a factory worker learning to operate a new equipment that needs particular, repeated actions, is an example of where a learning curve might be used. The worker grows quicker and more adept at operating the machine as he learns to follow the procedural stages. This pace of advancement and mastery would be measured by a learning curve.
The learning curve concept is most typically used in organisational or industrial management to boost production through enhancing the human workforce’s performance.
When it was discovered that the cost of aeroplanes fell as manufacturing performance increased during World War II (WWII), the concept was extensively used. The industrial and corporate sectors eventually adopted it for a range of performance enhancement applications.
Application of the learning curve hypothesis in the real world
Because of its vast range of applications, the learning curve is known by a number of names.
The following are examples of terms used to describe the learning curve:
- The learning curve
- Curves of cost
- Curves of efficiency
- Curves of Productivity
The model may be used to estimate how long it takes a single individual to master a skill or a group of people to produce a product. The “learning” in the curve is usually referred to as process improvement in most applications.
Let’s have a look at some current instances of how the learning curve is being used.
- Industry
The learning curve may be used to monitor manufacturing expenses in relation to labour performance. Instead of performance and the number of tries, unit cost, unit labour hours, and cumulative output in units might be used. The cost per unit frequently decreases when employees generate more output.
When manufacturing activities change, the learning curve may be used to estimate possible costs. Labor expenses, for example, are taken into account when determining the price of a new product.
When 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 expenses and markups.
But what if the production time is calculated based on the first few tries? What if, by the 100th time the product is manufactured, the time it takes to make it is cut to one hour? The product would be on the market at an exorbitant price, perhaps resulting in reduced sales. Using the learning curve as a planning tool might give further information.
- Business
The generalised technique or a measured analysis may both be used to apply learning curves to organisational performance. Whether or not the required performance can be directly assessed determines which technique to pursue.
Employees learning a tough work, such as how to utilise a sophisticated software programme, may exhibit low performance at first owing to the task’s intrinsic complexity. If the aim is for workers to be able to utilise the software in their daily duties, this may be difficult to quantify due to the many factors involved. Organizations might still benefit from using the learning curve idea as a foundation.
The learning curve may be used as a framework to assist businesses understand what is necessary to become competent in the programme in this situation. If training assistance and practise time are recognised as critical criteria, it is clear that workers who are provided help and practise time with the programme will perform better over time than employees who are not given support or practise time.
If the programme is critical for productivity, employee performance may suffer over time if workers are unable to utilise it efficiently. The organisations may then give any further assistance or resources that are required.
Organizations would need to pick a particular variable to study in order to use a measured learning curve. For example, a company attempting to enhance customer service performance can determine that implementing a new initiative (number of tries) would result in fewer customer complaints (performance). The company may keep track of and evaluate the initiative’s repeated practises over time to see whether customer complaints dropped over time.
- Medicine
Many surgical treatments will include the same repetitious chores for surgeons in the operating room.
The learning curve may be used to indicate individual development and performance over time since a surgeon is basically practising the same skill every time that surgery is performed. This not only provides insight into the surgeon’s progress, but also assists instructors in determining where further resources and help may be focused to enhance performance.