Cycle time reduction and the learning curve

This study estimates the relationship between cumulative past NPD experience and cycle time reduction. The analysis is based on data from 169 completed product development projects from a single firm. The results show that cycle time declines? at a decreasing rate as the cumulative number of prior NPD projects increases. Moreover, we find evidence that new-to-the-firm projects do not differ significantly from their incremental counterparts with regard to their rate of learning from their own product group experience. However, new-to-the-firm projects benefit more from knowledge and experience transferred from other product groups in the organization than incremental ones. These findings suggest that the extent to which diverse sources of learning decrease cycle time display marked variation between incremental and new-to-the-firm projects.