Apply_the_Learning_Curve_Theory

Apply the Learning Curve Theory As we draw even closer to a new decade there has been one constant about the world that everyone can agree on. That constant has been that technology keeps moving forward and rarely looks back. Businesses use new technology when they want to advance their company and save money on “other than personnel expenses”. Even with new technology people do understand they are not going to make a profit immediately. The corporate owners are looking more long term then short term and are willing to sacrifice money now to make it back in a few years plus interest. People that this new technology is introduced to need to learn how to use it and there is a learning curve associated with a learning a new task. This will also play a role on how soon a company can turn around an expensive purchase to lucrative income. Additional methods of helping to increase profit are by changing how business is done. Some of them include introducing six sigma tools and techniques. As well as adhering to a total quality management philosophy. When we are born we have to learn how to walk, talk, and even eat properly. We do this until we get the hang of it. Some people get the hang of it faster than other but you can generalize about when that occurrence will become second nature. Each time a person has the chance to do something over again they are learning to get it right. An example of this would be to introduce a new cutting machine to a lumber company. Each time a worker gets to use the new machine they become more proficient with it cutting down on time it takes to produce the product. In technical terms “Consistency in improvement has been found to exist in the form of a constant percentage reduction in time required over successively doubled quantities of units produced. The constant percentage by which the costs of doubled quantities decrease is called the rate of learning. The slope of the learning curve is 100 minus the rate of learning. For example, if the hours between doubled quantities are reduced by 20% (rate of learning), it would be described as a curve with an 80% slope.” (Unknown, 2009) Introducing new technology is just one facet of making a profit. You also have to keep the customers happy. Six Sigma techniques are all about customer satisfaction. As a matter of fact, anything that is outside of a customer’s specification is considered to be a defect and under Six Sigma rules you are only allowed 3.4 defects per million opportunities. Six Sigma give us a fresh perspective on how to look at solutions. Let’s say that we have an assembly line and after introducing our new cutting tool our all five lines are up and running. Our market demand is 20 but these are what the lines are giving us: at first glance you may say our best output is 13 units but that’s the furthest thing from the truth. We have a constraint in the system that makes our best output seven units. Using six sigma tools we need to take a closer look at why C is only producing seven units. So to fix this problem we have to use six sigma techniques: “1. Define: Identify customer needs and a project suitable for Six-Sigma effort. 2. Measure: Determine how and what to measure the performance of the selected process. 3. Analyze: Understand and determine the variables that create quality variations. 4. Improve: Identify means to remove causes of defects and modify the process. 5. Control: Maintain the improvement.” (Ehie & Sheu, 2009) In addition to this we now have the ability to focus on the constraints and getting to the root cause of the problems. After we are done with the first constraint then we work on the second. There is nothing like having an employee who does not feel like part of the system. Total Quality Management seeks to have all employees from the lowest to the highest invested in customer satisfaction and having the ability to do something about it. The new processes can continuously be improved by seeking feedback from employees, taking suggestions from unsatisfied customers to improve products, and continuing trainings on new products.   References Ehie, I., & Sheu, C. (2009). Intergrating Six Sigma and Theory of Constraints for continuous improvement: A Case Study. Retrieved 12 21, 2009, from Pinnacle Strategies: http://www.pinnacle-strategies.com/articles/Integrating%20Six%20Sigma%20and%20ToC%20case%20study.pdf Unknown. (2009). Guidance: Pricing Handbook The Learning Curve. Retrieved 12 21, 2009, from Federal Aviation Administration: http://fast.faa.gov/pricing/98-30c18.htm