Two Theories Associated with Less Than Continuous Improvement

Two theories, sequential and disjoint, address the issue of less than continuous improvement. Both theories maintain that the improvement slope is the same in production and development but that a step down in value occurs between the cost of the first prototype unit and the cost of the first production unit.

In sequential theory, cost improvement continues where the first production unit equals the last development unit plus one, but a displacement on the curve appears at that point. In disjoint theory, the curve is displaced, but improvement starts over at unit one rather than at the last development unit plus one. These displacements are typically quantified as factors. Because disjoint theory restarts learning, it usually results in significantly lower production estimates.

The continuous cost improvement concept and sequential and disjoint displacement theories assume the same improvement slope in production as in development. Plots of actual cost data, however, sometimes indicate that production slopes are either steeper or flatter than development slopes. In cases in which the historical data strongly support a change in slope, the analyst should consider both a step down and a shift. For example, changing from an engineering environment to a heavily automated production line might both displace the improvement curve downward and flatten it.