Study: U.S. Yards Must Focus On Technological, logistical Improvements To Be Competitive Internationally

Over the past decade, large U.S. shipyards involved in new construction have concentrated on the building of vessels for the U.S. government, primarily combatants and auxiliaries for the U.S. Navy. The merchant ships that have been built were for the Jones Act trade, in which foreign shipbuilders were precluded from competing. This workload was sufficient to maintain the industry during the buildup to the 600-ship Navy in the 1980s. Events after that have led to a dramatic downturn in shipbuilding for the U.S. Navy. As a result, U.S. shipyards must seek other customers in order to remain in business.

Since the U.S. merchant fleet is relatively small, U.S. shipbuilders will be forced to compete for shipbuilding contracts for foreign ship operators.

This puts the U.S. shipyards in direct competition with shipbuilders throughout the world. As U.S.

shipyards prepare to compete for merchant shipbuilding for export, it will be important for them to understand their worldwide competitive position.

Methodology A technological survey performed in 10 yards — five U.S., five foreign examined how up-to-date each shipyard's hardware and facilities were, the procedures used to operate them, and the methods used to plan and control the work and the production of engineering information. To start, each yard was assigned a level of technology, from Level 1 to Level 5. Level 1 is reflective of the shipyard technology level of the 1960s, with little mechanization, with outfitting characteristically carried out on board after launching. On the opposite end of the spectrum, Level 5 represents 1990s state-of-the-art shipbuilding technology, indicative of a yard that combines automation, integrated operating systems, the use of CAD, and effective quality assurance. Levels 2-4 fall in between respectively. By assigning each shipyard with a level, consistent assessments of the yards could be made by the three surveyors responsible for making yard visits and gathering relevant information.

Details on ship production, shipyard personnel, work patterns, manhours used in production, and financial information were collected.

The unit for measuring the relative output of merchant shipbuilding activity in this case was Compensated Gross Tonnage (CGT). The competitiveness of the U.S. shipbuilding industry was assessed in terms of the cost of producing a CGT compared with the same measure for its competitors. The five foreign shipyards visited were: AESA Sestao Yard, Spain; Harland and Wolff, U.K.; IHI Kure Yard, Japan; Kvaerner Govan, U.K.; and Odense, Denmark.

Survey Results It was determined that there are a number of areas of improvement that should be targeted by the U.S. shipbuilding industry. Critical areas in need of improvement are: business plans, shipbuilding policies, marketing tactics, design and engineering, quality management, material management, purchasing, outfitting, painting, and mixing naval and merchant ship construction. Additionally, among the other areas in need of development are: build strategy use, reduction in stock levels, treatment line, plate burn- ing and marking, block assembly, and production control.

Despite the need for significant improvements, there are some reasons for optimism contained in the results. Labor costs and average hours worked for U.S. yards are world competitive. Technology improvements needed are generally of the soft or management technology type, rather than facility or hardware type. Thus, major capital improvements are not required to produce major productivity improvements. Shipbuilding Policy Improvements Organization is key to improving several aspects of the yards. The shipyards must focus on the product range which they intend to build and determine their capacity, targeted output and build cycles. They also need to develop targets for costs and a pricing policy, as well as a well-organized marketing plan.

Total quality management (TQM) principles should be put into place, and accuracy control procedures should be adopted. U.S. yards should also learn to employ JIT (just-intime) logistics in order to avoid rework. The yards need to build up a database of suppliers of equipment of merchant ships, together with the means of recording their performance for future use. Continuing efforts to improve supplier relationships are critical for achieving worldwide competitiveness. Purchasing should aim for JIT delivery of materials and equipment to the shipyard in order to reduce capital tied up in stored goods and the storage area necessary.

Only one of the U.S. yards visited had collected data on an outfit manufacturing or installation procedure in order to have them analyzed as part of a self-checking statistical process control system. Outfit workshops should be organized on a group technology basis with groups of similar work being produced in dedicated workstations using standard procedures and tools. When a ship is in the water the required services should be led in planned routes, kept clear of the deck, and arranged in modular form to allow for removal or expansion without interruption to the remainder of services.

Painting should also be similarly organized so that finished painted blocks go to the ship assembly berth. Japanese yards are currently making large investments in painting techniques in order to improve productivity and quality.

In terms of yards mixing naval and merchant ship construction, strategic approaches must be adopted to ensure a yard's ability to compete effectively with yards that concentrate solely on specific markets for merchant ships.

It is hoped that these recommendations will provide a framework for U.S. shipyards to conduct internal evaluations to set a course for international competitiveness. These plans must be prepared and implemented in order to enable the industry to survive in the coming decade.

The preceding was exerptedfrom a paper that was presented at the Society of Naval Architects and Marine Engineers'(SNAME) 1995Ship Production Symposium in Seattle, Wash. The paper, titled Technological Survey of U.S. Shipyards - 1994, was researched and written by Richard Lee Storch from the University of Washington Department of Industrial Engineering, John Clark ofA&P Appledore International, Ltd., and Thomas Lamb of Textron Marine & Land Systems. The paper reports the results of a study on the international competitiveness of the U.S.

shipbuilding industry, based on a technological survey of five U.S. and five foreign yards.

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