Learning by Doing in Multiproduct Manufacturing: Variety, Customizations, and Overlapping Product Generations

Extending research on organizational learning to multiproduct environments is of particular importance given that the vast majority of products are manufactured in such environments. We investigate learning in a multiproduct facility drawing on exceptionally rich data for a manufacturing firm that is a leading producer of high-technology hardware components. Weekly data for 10 years from the firm’s production and human resource tracking systems are augmented by surveys of managers and engineers and by extensive firsthand observation. We find that productivity improves when multiple generations of the firm’s primary product family are produced concurrently, reflecting the firm’s ability to augment and transfer knowledge from older to newer product generations. No significant transfer of knowledge is evident between the primary product family and other products. Productivity is, however, adversely affected when the production facility is faced with extensive within-product buyer-specific customizations. We develop the implications of these findings for theory and practice.

This paper was accepted by Serguei Netessine, operations management.