Management of the learning curve: a case of overseas production capacity expansion

Abstract

Purpose – This paper focuses on the management of the learning curve in overseas capacity expansions. The purpose of this paper is to unravel the direct as well as indirect influences on the learning curve and to advance the understanding of how these affect its management. Design/methodology/approach – The paper builds on the offshoring, capacity expansion and learning curve literature. The existing scholarship often lacks detailed insights into the factors surrounding the globalisation of production, and how constructing and operationalising new capacities overseas should be implemented. The paper employs qualitative methodology and draws on a longitudinal, factory-level analysis of an in-depth case study of a Danish wind turbine manufacturer. Findings – This study goes beyond a simplistic treatment of the lead time and learning required to establish a new capacity. The authors examined the dimensions of the learning process involved in a capacity expansion project and identified the direct and indirect labour influences on the production learning curve. On this basis, the study proposes solutions to managing learning curves in overseas capacity expansions. Furthermore, the paper concludes with measures that have the potential to significantly reduce the non-value-added time when establishing new capacities overseas. Originality/value – The paper uses a longitudinal in-depth case study of a Danish wind turbine manufacturer and goes beyond a simplistic treatment of the lead time and learning required to establish a new capacity.