Using Learning Curves

The "Learning Curve" is one of a number of formal tools which can come in handy in a small business. It's interesting that terms like this, while they have a formal basis, often enter into common use with completely different and often mistaken implications. The learning curve is a simple concept which can be used to predict the cost of work when workers are fully trained and the amount of time it will take to train them. Common use terms like a "steep" learning curve or a "flat" learning curve may be intuitively meaningful but are not much use in a formal context.

A learning curve plots the number of products completed versus the time it takes to complete them. If no learning takes place, the curve is a straight line going from zero up at an angle to the right. This means if one product takes three hours to produce, two take six hours, three take nine hours, four take twelve hours etc.

If learning takes place, making two products will take less than six hours and making four will take less than twelve. Not only that, the amount of time it takes to make a product keeps going down but it goes down more slowly as more products are produced. If this rate of decrease is constant, you get a learning curve.

Putting these values on a graph will produce curves which level out to almost a straight line. Where the line becomes almost straight and the values come close to the quantities you are actually planning to produce, you will get an approximation of the time required to produce the product when the workers have produced a certain number (and have learned from producing that number). This way, by starting out with figures obtained from the start of production, you can get a pretty good idea of how things will be going when fully trained workers are working at full potential.

For more background on the formal concepts behind the learning curve, try this link from the U.S. Federal Aviation Administration. I guess it's useful to know when pilot trainees are actually ready to fly a plane.

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