Experience curves in services: macro and micro level approaches

Abstract

Evaluates the benefits and problems of applying the experience curve in two very different service organisations. The first case shows how an experience curve has been calculated at a macro (organisation) level for British Airways over a 20 year period, including the time at which it was privatised. The second example shows an application over the first year of operation of a high‐volume paperwork processing operation within a financial services organisation. These studies demonstrate that experience curves can be applied to great effect in high volume service organisations, but a single measure of output needs to be established. The paper also shows how different phases and rates of learning may be linked to organisational and technological change, and discusses how an experience curve might be used to monitor improvement and establish future cost‐related performance objectives.