When producing units for your nation, you will receive a Gearing Bonus for each unit you produce in serial. This represents the specialization and tooling of factories to produce large production runs of a given type. As you produce more units of the same type, the amount of time required to produce each consecutive unit is reduced. Anything that can be built in a long run can benefit greatly from the gearing bonus. You might even want to start all unit production in a very long series and then cancel the series when it's no longer needed; this will ensure that you have the option to keep on getting the gearing bonus.
The gearing bonus only affects time to producing units, not the Industrial Capacity cost associated with the unit. It also does not apply to non deployable province improvements produced in serial. Province improvements than can be deployed such as province AA benefit from the gearing bonus; improvements like factories than can not be moved do NOT benefit from the gearing bonus.
A little more info about the effect of gearing.
For comparison here is a short tab of a serial production of BB ships; first column is with full drafted army, second with full standing army setting:
Drafted Army Standing Army Days for Days for # Days for Days for series ship series ship 1 584 584 1 584 584 2 1139 525 2 1139 525 3 1664 497 3 1664 497 4 2161 467 4 2161 467 5 2628 438 5 2628 438 6 3066 409 6 3066 438 7 3475 379 7 3504 438 8 3854 351 8 3942 438 9 4205 321 9 4380 438 10 4526 321 10 4818 438 11 4847 321 11 5256 438 12 5168 321 12 5694 438
For the first 5 ships the bonus is the same, the gearing bonus maxes out at the 9th ship (with slider setting for army in the middle this is the same, at the 9th ship bonus is maxed).
While having the drafted army slider maximized is great for gearing, there are other benefits that make the standing army preferable in most circumstances. Standing army gives more organization and less upgrade time and cost. The last 4 standing army positions also give newly produced units experience.