Job Design, Work Methods & Job Design, Work Methods & OrganizationOrganization

Job Design, Work Methods & Job Design, Work Methods & OrganizationOrganization

A. Job DesignA. Job Design

B. Methods Analysis & ImprovementB. Methods Analysis & Improvement

C. Work StandardsC. Work Standards

D. Work Observation & MeasurementD. Work Observation & Measurement

E. Work EnvironmentE. Work Environment

F. Organization Of WorkF. Organization Of Work

G. Learning & Experience CurvesG. Learning & Experience Curves

A. Job DesignA. Job Design

Job Job • set of tasks & responsibilities of workerset of tasks & responsibilities of worker

Job descriptionJob description• taskstasks• responsibilitiesresponsibilities• performance expectationsperformance expectations• work conditions (time/place)work conditions (time/place)• general skillsgeneral skills

Job ContentJob Content

Specialization & task varietySpecialization & task variety Job enlargementJob enlargement Job enrichmentJob enrichment Job rotationJob rotation Cross-trainingCross-training Customer focusCustomer focus

Job SpecializationJob Specialization AdvantagesAdvantages

• workers can develop greater skills & establish workers can develop greater skills & establish work rhythm which increases productivitywork rhythm which increases productivity

• lower level of basic skills required, lower lower level of basic skills required, lower wageswages

• easier to train & supervise workerseasier to train & supervise workers DisadvantagesDisadvantages

• monotonous & boring work, absenteeism, poor monotonous & boring work, absenteeism, poor qualityquality

• no worker control & autonomy over workno worker control & autonomy over work• scheduling flexibility is limited, hard to move scheduling flexibility is limited, hard to move

staffstaff

Job Enlargement & EnrichmentJob Enlargement & Enrichment

Original job:Install gauges

on dash

Installdashboard

frame & cover

Install audioequipment

Suggest process& designchanges

Train dealermechanics on

repairs

HorizontalWide variety of similar tasks

Vertical: Higher level responsibilities

Jobenlargement

Job enrichment

Responsibility For Quality & Responsibility For Quality & Process ImprovementProcess Improvement

Workers are becoming more Workers are becoming more responsible for qualityresponsible for quality

Part of job enrichmentPart of job enrichment Consider during job designConsider during job design Workers know products & processesWorkers know products & processes Key source of improvementKey source of improvement

AutomationAutomation

Use of mechanical or electrical Use of mechanical or electrical machinery to perform tasks usually machinery to perform tasks usually done by workersdone by workers

Machines best suited for tasksMachines best suited for tasks• which are well-structured and repetitivewhich are well-structured and repetitive• needing considerable force or speedneeding considerable force or speed• performed in dangerous or performed in dangerous or

uncomfortable conditionsuncomfortable conditions• requiring intricate sensingrequiring intricate sensing

AutomationAutomation

AdvantagesAdvantages• productivityproductivity• uniformityuniformity• qualityquality• workers avoid hazardous, monotonous jobsworkers avoid hazardous, monotonous jobs

DisadvantagesDisadvantages• cost of machinerycost of machinery• limited flexibilitylimited flexibility• lack of feedback to improve processlack of feedback to improve process

B. Methods Analysis & B. Methods Analysis & ImprovementImprovement

Identifying & implementing good Identifying & implementing good work methods meanswork methods means• observing work & measuring efficiencyobserving work & measuring efficiency• analyzing existing work methodsanalyzing existing work methods• applying good work methods principlesapplying good work methods principles• instituting & utilizing work aids & good instituting & utilizing work aids & good

ergonomic designergonomic design• training employeestraining employees

Methods AnalysisMethods Analysis

Analytic approach to task choices & Analytic approach to task choices & performance methodsperformance methods

Includes:Includes:• system & subsystem analysissystem & subsystem analysis• worker & task-level analysisworker & task-level analysis• worker-machine coordinationworker-machine coordination• group coordinationgroup coordination

System & Subsystem AnalysisSystem & Subsystem Analysis

Use process flow diagram & process Use process flow diagram & process chartchart

AnswerAnswer• what is done & whywhat is done & why• when in process is task donewhen in process is task done• where is task donewhere is task done• how is task donehow is task done• who does task who does task

Worker & Task-level AnalysisWorker & Task-level Analysis

Focus on worker & tasks they performFocus on worker & tasks they perform Taylor’s methodTaylor’s method

• identify most productive workeridentify most productive worker• teach their methods to all workersteach their methods to all workers

Gilbreths’ methodGilbreths’ method• study fundamental motionsstudy fundamental motions• identify best way to perform motionsidentify best way to perform motions• develop overall proceduredevelop overall procedure

Simo Chart -Assemble 3 Washers & Simo Chart -Assemble 3 Washers & BoltBoltLeft handLeft hand Right handRight hand

TLTL Carry assy to binCarry assy to bin TLTL Reach for washerReach for washerRLRL Release assyRelease assy SL/GSL/G Select & grasp washerSelect & grasp washerTLTL Reach for bolt Reach for bolt TL TL Carry washer to boltCarry washer to boltSL/GSL/G Select & grasp boltSelect & grasp bolt PP Position washerPosition washerTLTL Carry bolt Carry bolt A/RLA/RL Put washer on bolt & Put washer on bolt &

releasereleasePP Position boltPosition bolt TETE Reach for steel washerReach for steel washerHH Hold bolt Hold bolt SL/GSL/G Select & grasp washerSelect & grasp washerTLTL Carry assy to binCarry assy to bin TLTL Carry washer to boltCarry washer to boltTLTL Release assyRelease assy PP Position washerPosition washer

A/RLA/RL Ass. steel washer & releaseAss. steel washer & releaseTETE Reach for rubber washerReach for rubber washerSL/GSL/G Select & grasp washerSelect & grasp washerTLTL Carry washer to boltCarry washer to boltPP Position washerPosition washerA/RLA/RL Assemble washer & releaseAssemble washer & release

Worker-machine CoordinationWorker-machine Coordination

Most jobs involve machinesMost jobs involve machines Worker-machine chart shows worker & Worker-machine chart shows worker &

machine activitiesmachine activities If worker idle If worker idle

• add tasksadd tasks• add machinesadd machines

If machine idleIf machine idle• reduce machines tended by workerreduce machines tended by worker• reduce number of tasksreduce number of tasks

Worker-Machine ChartWorker-Machine ChartMachine operatorMachine operator Time (min)Time (min) PressPress

Time (min)Time (min)Setup machine (642A)Setup machine (642A) 20 20 Idle-being set Idle-being set

upup 2020Load blanks in feederLoad blanks in feeder 5 5 IdleIdle 55Start-upStart-up 10 10 StampingStamping 1010Semi-idle, monitoringSemi-idle, monitoring 15 15 StampingStamping 1515Remove finished partsRemove finished parts 5 5 IdleIdle 55Load blanks in feederLoad blanks in feeder 5 5 IdleIdle 55Semi-idle, monitoringSemi-idle, monitoring 20 20 StampingStamping 2020Remove finished partsRemove finished parts 5 5 IdleIdle 55Remove scrapRemove scrap 10 10 IdleIdle 1010Setup machine (811E)Setup machine (811E) 15 15 Idle-being set Idle-being set

upup 1515Idle waiting for blanksIdle waiting for blanks 44 IdleIdle 44Load blanks in feederLoad blanks in feeder 4 4 IdleIdle 44Start-upStart-up 9 9 StampingStamping 99 • • •  •  • • • • • • • •

Summary Of ChartSummary Of Chart

OperatorOperator MachineMachine

Idle/semi-idleIdle/semi-idle 61 min61 min Idle Idle 109 109 minmin

WorkingWorking 120 min 120 min WorkingWorking 72 min72 min

UtilizationUtilization 120/181=66.3%120/181=66.3%Utilization Utilization 39.8%39.8%

Elapsed time for 642A = 95 minElapsed time for 642A = 95 min

Elapsed time for 811E = 62 minElapsed time for 811E = 62 min

Revised Worker-Machine ChartRevised Worker-Machine ChartMachine operatorMachine operator Time (min)Time (min) PressPress Time (min)Time (min)Setup machine (642A)Setup machine (642A) 12 12 Idle-being set upIdle-being set up

1212Load blanks in feederLoad blanks in feeder 5 5 IdleIdle 55Start-upStart-up 10 10 StampingStamping 1010Find & transport (811E)Find & transport (811E) 88Semi-idle, monitoringSemi-idle, monitoring 7 7 StampingStamping 1515Remove finished partsRemove finished parts 5 5 IdleIdle 55Load blanks in feederLoad blanks in feeder 5 5 IdleIdle 55Prepare for next set-upPrepare for next set-up 1010Remove scrap Remove scrap 10 10 StampingStamping 2020Remove finished partsRemove finished parts 5 5 IdleIdle 55Setup machine (811E)Setup machine (811E) 7 7 Idle-being set upIdle-being set up

77Load blanks in feederLoad blanks in feeder 4 4 IdleIdle 44Start-upStart-up 9 9 StampingStamping 99 • • •  •  • • • • • • • •

Summary Of ChartSummary Of Chart

OperatorOperator MachineMachine

Idle/semi-idleIdle/semi-idle 7 min7 min Idle Idle 60 min60 min

WorkingWorking 125 min 125 min WorkingWorking 72 min72 min

UtilizationUtilization 94.7%94.7% Utilization Utilization 54.5%54.5%

Elapsed time for 642A = 77 minElapsed time for 642A = 77 min

Elapsed time for 811E = 43 minElapsed time for 811E = 43 min

Group CoordinationGroup Coordination

Improve efficiency by improving Improve efficiency by improving teamworkteamwork

Team-activity chart documents Team-activity chart documents processprocess

Use to study process & make Use to study process & make changeschanges

Team-activity ChartTeam-activity ChartWorker 1Worker 1 Time (sec)Time (sec) Worker 2Worker 2 Time (sec)Time (sec)Take orderTake order 2525 IdleIdle 2525Collect payment (C 1)Collect payment (C 1) 2020 Gather food Gather food

(C 1)(C 1) 2020IdleIdle 1515 Fill drink (C 1)Fill drink (C 1) 1515Take order (C 2)Take order (C 2) 2020 Gather food (C 1)Gather food (C 1) 2020IdleIdle 1010 Bag food (C 1)Bag food (C 1) 1010Check food (C 1)Check food (C 1) 55Collect payment (C 2)Collect payment (C 2) 2020 Gather food Gather food

(C 2)(C 2) 2525Take order (C 3)Take order (C 3) 2525 Fill drink (C 2)Fill drink (C 2) 3030Collect payment (C3)Collect payment (C3) 2525 Gather food Gather food

(C2)(C2) 2020IdleIdle 1010 Bag food (C2)Bag food (C2) 1010Check food (C2)Check food (C2) 55 Gather food (C3)Gather food (C3) 4545 ...... ... ...310 seconds to serve 4 customers310 seconds to serve 4 customers

Revised Team-activity ChartRevised Team-activity ChartWorker 1Worker 1 Time (sec)Time (sec) Worker 2Worker 2 Time (sec)Time (sec)Take orderTake order 2525 IdleIdle 2525Collect payment (C 1)Collect payment (C 1) 2020 Gather food (C Gather food (C

1)1) 2020Fill drink (C 1)Fill drink (C 1) 1515 Idle waiting for foodIdle waiting for food 1010Take order (C 2)Take order (C 2) 2020 Gather food (C 1)Gather food (C 1)

2020IdleIdle 55 Bag food (C 1)Bag food (C 1) 1010Check food (C 1)Check food (C 1) 55Collect payment (C 2)Collect payment (C 2) 2020 Gather food (C Gather food (C

2)2) 2525Fill drink (C 2)Fill drink (C 2) 3030 Gather food (C 2)Gather food (C 2)

2020Bag food (C2)Bag food (C2) 1010

Check food (C2)Check food (C2) 55Take order (C 3)Take order (C 3) 2525 IdleIdle 3030......280 seconds to serve 4 customers280 seconds to serve 4 customers

Simple Principles Of Job DesignSimple Principles Of Job Design

CoprocessingCoprocessing Back-haulingBack-hauling Designing human activities to be Designing human activities to be

compatible with the human bodycompatible with the human body Continuous improvement & worker Continuous improvement & worker

consultationconsultation

Principles of Human MotionPrinciples of Human Motion

Using human body the way it works bestUsing human body the way it works best

1. Arrange work to provide natural rhythm1. Arrange work to provide natural rhythm

2. Consider symmetric nature of body2. Consider symmetric nature of body• simultaneous arm motionsimultaneous arm motion• opposite & symmetrical arm motionopposite & symmetrical arm motion

3. Employ full capabilities of body3. Employ full capabilities of body• neither hand should ever be idleneither hand should ever be idle• distribute work to other parts of bodydistribute work to other parts of body• observe safe design limits of bodyobserve safe design limits of body• employ humans at “highest” useemploy humans at “highest” use

4. Arms & hands as weights are subject to physical 4. Arms & hands as weights are subject to physical laws & energy should be conservedlaws & energy should be conserved• momentum should work for peoplemomentum should work for people• smooth continuous ballistic arc is most efficientsmooth continuous ballistic arc is most efficient• minimize movement distancesminimize movement distances• task should be done by machinestask should be done by machines

5. Simplify tasks5. Simplify tasks• eye contacts should be few & grouped togethereye contacts should be few & grouped together• eliminate unnecessary actions, delays, idle timeeliminate unnecessary actions, delays, idle time• reduce degree of control & precisionreduce degree of control & precision• minimize individual motions & number of minimize individual motions & number of

muscle groups involvedmuscle groups involved

Arranging workplace to assist performanceArranging workplace to assist performance

1. Definite place for all tools & materials1. Definite place for all tools & materials

2. Locate tools, materials & controls close to point of use2. Locate tools, materials & controls close to point of use

3. Locate tools, materials & controls for best sequence & 3. Locate tools, materials & controls for best sequence & path of motionpath of motion

4. Gravity feed bins deliver items close to point of use4. Gravity feed bins deliver items close to point of use

5. Workplace should be fitted to task and humans5. Workplace should be fitted to task and humans Using Mechanical devices to reduce human effortUsing Mechanical devices to reduce human effort

1. Vises & clamps hold work precisely where needed1. Vises & clamps hold work precisely where needed

2. Guides can assist in positioning work without close 2. Guides can assist in positioning work without close worker careworker care

3. Controls & foot-operated devices can relieve hands of 3. Controls & foot-operated devices can relieve hands of workwork

4. Mechanical devices can multiply human ability4. Mechanical devices can multiply human ability

5. Mechanical systems should be fitted to human use5. Mechanical systems should be fitted to human use

Work Aids & ErgonomicsWork Aids & Ergonomics Using tools & equipment to reduce Using tools & equipment to reduce

human effort & improve performancehuman effort & improve performance ErgonomicsErgonomics

• design tools & work area to increase design tools & work area to increase productivity while reducing stress, injury & productivity while reducing stress, injury & fatiguefatigue

• design gauges to be easy to readdesign gauges to be easy to read• prevent carpal tunnel syndromeprevent carpal tunnel syndrome

Arrange workplace for convenienceArrange workplace for convenience Poka-Yoke: mistake proofingPoka-Yoke: mistake proofing

TrainingTraining

Employees must be trained wellEmployees must be trained well Training is an investment, not an Training is an investment, not an

expenseexpense Change is constant so re-training is Change is constant so re-training is

neededneeded Benefits accrue to firm for yearsBenefits accrue to firm for years

C. Work StandardsC. Work Standards

Work standards specify output or time for Work standards specify output or time for tasktask

Standard time is time for normal worker to Standard time is time for normal worker to perform task considering breaks, delays, perform task considering breaks, delays, etc.etc.

Uses of standard time & work standardsUses of standard time & work standards• employee evaluation & compensationemployee evaluation & compensation• personnel & production schedulingpersonnel & production scheduling• product costing & pricingproduct costing & pricing• process design & capacity planningprocess design & capacity planning

D. Work Observation & D. Work Observation & MeasurementMeasurement

Motion & time studyMotion & time study Elemental standard-time dataElemental standard-time data Micro-motion & predetermined Micro-motion & predetermined

motion-time datamotion-time data Work samplingWork sampling

Motion & Time StudyMotion & Time Study

Formalized process to observe & Formalized process to observe & time workertime worker

Low cost, flexible, adaptableLow cost, flexible, adaptable Workers may change behavior when Workers may change behavior when

observedobserved Record running time on data sheetRecord running time on data sheet

Time Study Data SheetTime Study Data SheetWork cycleWork cycle

StepStep 11 22 1010 TotTot MeanMean PRPRNTNT STST

AA RR 0:160:16 2:002:00 ...... 18:2018:20TT 1616 1515 ...... 1616 169 169 16.916.9 110110 18.618.6 20.8220.82

BB RR 0:400:40 2:222:22 ...... 18:4218:42TT 2424 2222 ...... 2222 239239 23.923.9 105105 25.125.1 26.7726.77

CC RR 1:021:02 2:462:46 ...... 19:1119:11TT 2222 2424 ...... 2929 236236 23.623.6 105105 24.824.8 27.7827.78

DD RR 1:301:30 3:153:15 ...... 19:3819:38TT 2828 2929 ...... 2727 265265 26.526.5 100100 26.526.5 29.6829.68

EE RR 1:451:45 3:313:31 ...... 19:5419:54TT 1515 1616 ...... 1616 161161 16.116.1 110110 17.7117.7119.8219.82

Using Time-Study Data To Using Time-Study Data To Compute Standard Times Compute Standard Times

standard time = normal time x (1+ allowances)standard time = normal time x (1+ allowances)

wherewhere

normal time = average observed time x performance normal time = average observed time x performance ratingrating

oror

normal time = total elemental task time or total normal time = total elemental task time or total predetermined predetermined task timetask time

and and

allowances = time allowances for unavoidable delaysallowances = time allowances for unavoidable delays

(breakdowns, personal, fatigue) expressed (breakdowns, personal, fatigue) expressed as as fraction of total work timefraction of total work time

Example ContinuedExample Continued

Average observed task time = 16.9 Average observed task time = 16.9 secondsseconds

Estimated performance rating (PR) = Estimated performance rating (PR) = 110%110%

Normal time = 16.9 * 1.10 = 18.59 Normal time = 16.9 * 1.10 = 18.59 secondsseconds

Allowances = 12% of normal working timeAllowances = 12% of normal working time

Standard time = 18.59 x (1+0.12)= 20.82 Standard time = 18.59 x (1+0.12)= 20.82 secondsseconds

Elemental standard-time dataElemental standard-time data• use historic data from firmuse historic data from firm• more accurate, workers average outmore accurate, workers average out• avoid cost & disruption of actual time studiesavoid cost & disruption of actual time studies

Micro-motion & predetermined motion Micro-motion & predetermined motion time datatime data• decompose tasks into basic movements, decompose tasks into basic movements,

therbligs therbligs • Methods time measurement (MTM) has Methods time measurement (MTM) has

tabulated times for therbligstabulated times for therbligs• useful for structured, repetitive jobsuseful for structured, repetitive jobs

Work SamplingWork Sampling

Estimate percent of time spent on Estimate percent of time spent on wide variety of taskswide variety of tasks

Take random observations over timeTake random observations over time Easy & inexpensive to performEasy & inexpensive to perform Can be used to develop time Can be used to develop time

standardsstandards

Work Sampling ProcedureWork Sampling Procedure

Identify purpose of studyIdentify purpose of study Compute number of observationsCompute number of observations

e = maximum absolute errore = maximum absolute error

z = 1.96 for 95% confidence levelz = 1.96 for 95% confidence level

Determine when & how to observeDetermine when & how to observe

number of observations = N = 2z p (1 p ) 2e

where p proportion of time spent on activity

Sample Size ExampleSample Size Example

Estimate proportion of time spent Estimate proportion of time spent waiting on customers to within 0.03 waiting on customers to within 0.03 of the actual proportion with 95% of the actual proportion with 95% confidence. Currently believe the confidence. Currently believe the actual proportion = 0.40.actual proportion = 0.40.

N = [1.96N = [1.9622(0.40)(1-0.40)]/(0.03)(0.40)(1-0.40)]/(0.03)22 = = 1024 1024

Timing ObservationsTiming Observations

50 observations during 8 hour day50 observations during 8 hour day Generate random numbers on Generate random numbers on

computercomputer Multiply by 480 minutes per dayMultiply by 480 minutes per day Resulting value is time to observeResulting value is time to observe Random number = 0.2946Random number = 0.2946 Time = 0.2946 x 480 = 141.4 Time = 0.2946 x 480 = 141.4

minutes after shift beginsminutes after shift begins

E. Work EnvironmentE. Work Environment

Environmental factors affecting Environmental factors affecting worker performanceworker performance• cleanlinesscleanliness• illuminationillumination• temperature & humiditytemperature & humidity• noise & soundnoise & sound

Safety & HealthSafety & Health Key consideration of job designKey consideration of job design Dangerous & unhealthy environments Dangerous & unhealthy environments

reduce productivityreduce productivity Also costly to companyAlso costly to company

• accidentsaccidents• work disruptionswork disruptions• disability claimsdisability claims• safety violationssafety violations• lawsuitslawsuits

AccidentsAccidents Caused by unsafe acts or unsafe Caused by unsafe acts or unsafe

conditionsconditions Collect & analyze existing dataCollect & analyze existing data Observe workersObserve workers Eliminate or reduce hazardsEliminate or reduce hazards Signs on Signs on specific safe behaviorsspecific safe behaviors are are

effective effective • Wash your handsWash your hands• Keep safety guard in placeKeep safety guard in place

General signs are not effectiveGeneral signs are not effective• Be alert, Be safeBe alert, Be safe

F. Organization Of WorkF. Organization Of Work

Sociotechnical systems Sociotechnical systems • create compatibility among workers, create compatibility among workers,

equipment & technologyequipment & technology• more productive systems resultmore productive systems result

Organized around autonomous work Organized around autonomous work groupsgroups• self-directed work teamsself-directed work teams

Benefits Of Autonomous Benefits Of Autonomous GroupsGroups

Job satisfactionJob satisfaction Process improvementProcess improvement Product qualityProduct quality Productivity improvement & cost Productivity improvement & cost

reductionreduction Flexibility & responsivenessFlexibility & responsiveness

Job Flexibility In Time & LocationJob Flexibility In Time & Location

Working at homeWorking at home• save on office & work spacesave on office & work space• save commuting time, more productive work save commuting time, more productive work

timetime• employees who can’t work fixed schedules employees who can’t work fixed schedules

can work at homecan work at home Flex-timeFlex-time

• easier to care for children & errandseasier to care for children & errands• arrange commuting to avoid traffic jamsarrange commuting to avoid traffic jams• people work better at different times of the people work better at different times of the

dayday

Compensation & IncentivesCompensation & Incentives

Time-based compensation systemsTime-based compensation systems• easy for employereasy for employer• many employees prefer the securitymany employees prefer the security• no incentive for individual maximum no incentive for individual maximum

performanceperformance• many jobs don’t fit output based systemsmany jobs don’t fit output based systems

Output-based compensation systemsOutput-based compensation systems• pay according to amount & quality of workpay according to amount & quality of work• good when amount of work can be good when amount of work can be

measuredmeasured

Incentive compensation systemsIncentive compensation systems• reward employees for effortsreward employees for efforts• Scanlon plansScanlon plans• Lincoln planLincoln plan• gain sharinggain sharing

Company profitability becoming new Company profitability becoming new basis for incentive plans basis for incentive plans

UnionsUnions

Active in Active in • job designjob design• work rules & organizationwork rules & organization• safety & healthsafety & health

Management-union partnerships Management-union partnerships developingdeveloping

Unions cooperate if treated as equalsUnions cooperate if treated as equals

G. Learning & Experience CurvesG. Learning & Experience Curves

As number of units produced As number of units produced increases, the time to produce units increases, the time to produce units decreasesdecreases

Refer to x% learning rate (curve) if Refer to x% learning rate (curve) if labor for 2nth unit is x% of time for labor for 2nth unit is x% of time for nth unitnth unit

Learning CurvesLearning Curves

.

Cumulative units

Hou

rs/u

nit

5 10 15 200 25 30 35

80%

90%

Computing Time For Nth UnitComputing Time For Nth Unit

TTnn = T = T11 x n x naa

wherewhere

TTnn = time to make nth unit = time to make nth unit

TT1 1 = time to make 1st unit= time to make 1st unit

a = ln x/ln 2a = ln x/ln 2

x = learning rate expressed as a decimalx = learning rate expressed as a decimal

Tables of TTables of Tnn and total time for n units exist and total time for n units exist

Learning & Experience Curve Learning & Experience Curve FactorsFactors

Learning rateLearning rate70%70% 80%80% 90%90%

UnitUnit UnitUnit TotalTotal UnitUnit TotalTotal UnitUnit TotalTotal11 1.0001.000 1.0001.000 1.0001.000 1.0001.000 1.0001.000 1.0001.00022 0.7000.700 1.7001.700 0.8000.800 1.8001.800 0.9000.900 1.9001.90033 0.5680.568 2.2682.268 0.7020.702 2.5022.502 0.8460.846 2.7462.74644 0.4900.490 2.7582.758 0.6400.640 3.1423.142 0.8100.810 3.5563.55655 0.4370.437 3.1953.195 0.5960.596 3.7383.738 0.7830.783 4.3394.33966 0.3980.398 3.5933.593 0.5620.562 4.2994.299 0.7620.762 5.1015.10177 0.3670.367 3.9603.960 0.5340.534 4.8344.834 0.7440.744 5.8455.84588 0.3430.343 4.3034.303 0.5120.512 5.3465.346 0.7290.729 6.5746.57499 0.3230.323 4.6264.626 0.4930.493 5.8395.839 0.7160.716 7.2907.2901010 0.3060.306 4.9324.932 0.4770.477 6.3156.315 0.7050.705 7.9947.994

ExampleExampleTT1 1 = 20 hours = 20 hours

TT2 2 = 16 hours= 16 hours

TT4 4 = 12.8 hours= 12.8 hours

80% learning curve exists80% learning curve exists

TT33 = 20 x [3 = 20 x [3(ln 0.8/ln 2)(ln 0.8/ln 2) ] = 14.04 person-hr ] = 14.04 person-hr

Table shows TTable shows T33 unit time for 3rd unit = 0.702 unit time for 3rd unit = 0.702

So 20 x 0.702 = 14.04So 20 x 0.702 = 14.04

Deriving A Learning CurveDeriving A Learning Curve

Collect production time dataCollect production time data Plot dataPlot data Use non-linear regression to compute Use non-linear regression to compute

learning ratelearning rate Or use approximate methodOr use approximate method

Actual Labor ContentActual Labor Content

.

Cumulative units

Hou

rs/u

nit

Derived curve

Actual data

Learning Curve CalculationLearning Curve CalculationUnitUnit Labor ContentLabor Content Ratio of Ratio of

labor contentlabor contentnono (person-hr)(person-hr) nn 2n2n For items 2n For items 2n

& n& n11 4141 22 44

26/34=0.76526/34=0.76522 3434 33 66

24/29=0.82824/29=0.82833 2929 44 88

21/26=0.80821/26=0.80844 262655 2424 Average = 0.807Average = 0.80766 2424 Approximately 80% so Approximately 80% so

use 80% use 80% 77 2323 for future calculationsfor future calculations88 2121

Choice of production unitsChoice of production units• unit of production might be 1000 or unit of production might be 1000 or

1,000,000 actual units1,000,000 actual units• base curve on meaningful, observable base curve on meaningful, observable

quantitiesquantities ForgettingForgetting

• workers can forget (lose) their skillsworkers can forget (lose) their skills• caused by interruptions in production caused by interruptions in production

processprocess

Curve With Discrete ChangesCurve With Discrete Changes

.

Cumulative units

Hou

rs/u

nit Process change

Actual data

Innovation

Experience CurvesExperience Curves

Other factors contribute to cost reductionOther factors contribute to cost reduction• process & equipment improvementsprocess & equipment improvements• better management & information flowsbetter management & information flows

Experience curves apply to entire Experience curves apply to entire organizationorganization

Apply like learning curveApply like learning curve Derive separately from learning curveDerive separately from learning curve Use strategically to undercut competitionUse strategically to undercut competition