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Effective Project Management Strategies in Shipbuilding Industries

Ahmed Islam,
Naval Architect
University of New Orleans
Abstract: The performance of the shipbuilding industry
essentially depends on how well the entire organization,
management runs their yard/production plant. Having a
strong management team and managers with valuable
knowledge of time scheduling, yard planning, workforce,
helps
achieve
maximum
profitability
for
a
shipbuilding/repairing yard. A specific set of operational
steps should be maintained in order to reach long and short
term economic benefits and advantages over other shipyards
in a competitive business like shipbuilding. Gathering
materials, storing, handling, scheduling material uses, and
maintaining smooth work flow can add up to the
performance scale and facilitate the progress of the shipyard.
Introduction
Ship design in any given shipyard is developed under a very specific set of design
environment. There is a set of infrastructure that most notable shipyards maintain to yield a high
productivity margin and make significant profit. Also there is a high demand for competent
shipbuilders, managers, supervisors and field technician in the maritime industry. In theory, a
good management can add a lot of value to the workplace and workforce system of a
shipbuilding yard. A capable shipyard should have a shipyard management system which can
understand the value of customers, integrate planning and scheduling, and maintain a great
workforce who can be sufficiently trained and properly utilized to achieve maximum
profitability.
Strategy
It is very important to have a set of Contracting Strategies in place to execute a successful
planning of the shipyard. According to Fisher Maritime (1) due to the lack of the comprehensive
contracting strategy, there could result unnecessary events including delays and monetary loss.
The naval architects, designers, marine engineers, project engineers, planning engineers are all
responsible for meeting all the contract requirements and specifications that the owners and the
shipbuilder has signed the contract upon. At this point, careful attention should be paid towards
the pre- and post-assessment of cost control, expense and labor budgets by different departments.

Effective Project Management Strategies in Shipbuilding Industries

Engineering Plan,
Owners'
Requirement

Building Strategy
For Shipyard

Project Schedule,
Time Scheduling

Work Order List,

Post Fabrication,
Outfitting

Assembly ProcessList of drawing,

Assembly packages,
NC-pyros,cut sheet

Design, Prefabrication,
Assembly planning

Fig: Shipyard Operations

Time Scheduling and Cost Control

Knowing the contract requirements bound by the owner and the shipyard, it is essential
for the project managers to have substantial amount of in-house engineering done quite early to
avoid time lapses. Project planning creates Ship Work Breakdown Structures known as SWBS,
apportioning tasks to different unit shops over various periods of time. The planning process
create time lines for management and critical paths such like Gantt charts, PERT charts or
similar. Subsequently production engineers are responsible for master scheduling, meeting
configurations set by the design office, checking lightship weight, stability, outfitting and
equipment functionality required and met and the overall work progress. A fine insight of job
completion, cost of unit production and procurement leftover can be deduced from overall time
and check in and out system of the payroll.
For the cost control of ongoing project the management should remember of two
essential things:
1. Man-hours spent this past week and the total hours to date
2. The percent done (labor) of the total to be done on the vessel under construction
The cost engineer in the management should have an intimate understanding of the
technical knowledge of the shipyard business, as well as have experience of the labor and
department, functions and operations expenses. Control should be placed on the budget available
for the tasks that are yet left to be completed. Thus different machine time and labor cost should
be always reported to the central system periodically so that the proper cost records are tracked
in the book balance. There areas that the management should be always striving to improve
which includes the general ledger, activity based on the overhead expenses and make-buy
analysis. Also the cost escalation due to the unit price increase of steel, materials, machineries

Effective Project Management Strategies in Shipbuilding Industries

should be taken into consideration.(4) The indirect costs such like the materials burden, handling
rates, sales tax and duty rates, changes in estimation are also required to be updated all the time.
Cost estimation has to be prepared for the following project expenses:
1.
2.
3.
4.
5.
6.
7.
8.

Assembly Plant
Production Complex
Operations, Business offices
Steel Shops
Paint and Blast Building
Storage, equipment supply rooms, electrical equipment room
Hazardous, waste treatment and storage units
Cranes, lift, transfer equipment.

Yard Layout Planning

Overall it is very important that ship yard layout the essential production chain in order to
maintain delivery schedules as well as meet every other intermittent deadlines. A capable
shipyard should maintain necessary time scheduling, and keep up with always changing
workplace practices due to various projects, constructions, repairs and other fabrication
functions. Due to the type of tasks that requires essential track recording, the responsible
personnel should maintain records and logs of the history and location of all new (even in any
minute scale) construction, repairs, replacement, inspection, and any other type of changes or
fabrication. Although the shop supervisors are always busy exhausting the operational
responsibilities, it is essential for them to know about the entire yard layout in order to
communicate and forecast the incoming and outgoing workflow. In U.S. many of the shipyards
have a general layout of different shops situated in such ways that they can be easily managed
and communicated.(3) Transferring units/blocks of constructed pieces from one assembly line to
another requires careful attention of the management. Transportation of units/blocks in between
assemblies would require risk free, time effective management handling.
Also the shipyard management should use different techniques to properly maintain their
yards as outlined by IMO, UN, US CFR, EU, etc. Some of them include shipyard planning and
maintenance identification and indications such like:
Open areas, partially enclosed areas, windbreaks, spray
curtains, for enclosure techniques in the yards
Surface preparation areas: dry blasting-open and close system, high pressure fresh water
jetting, blasting. Wet and slurry blasting, surface treatment areas.
Coating materials: Coating areas of solvent based coating materials, replacement of
solvent- water and high sold paints applying areas.
Corrosion treatment area.
Painting: Airless spraying, hot spraying, integrated air extraction areas.
Antifouling treating areas using biocides
Waste gas treatment
Waste water treatment, Waste management

Effective Project Management Strategies in Shipbuilding Industries

In addition to all this, shipyards should plan and manage material storage, buffer areas
management, etc. in such a manner that easy access, smooth workflow and process automation
can be made fast, reliable and well utilized. An example shipyard should include the following
important layout structure:

Fig: Layout Structure of a Shipyard

Workforce and Labor

It is essential to understand that the shipbuilding and repair industry has characteristics of
both a manufacturing industry and construction industry. Thus it requires several different sets
of skilled workers to do different sets of tasks. It is essential to know that the ship yards have less
automation dependencies compare to other big industries manufacturing small products. Behind
every big or small machine tools there has to be a large number of workforce to navigate the
building and repairing process. Thus it requires excellent workforce planning, managing and task
assignment. Communication among the workers and labors is also an essential part of effectively
managing the shipyard operations. A workers mental attitude, morale, enthusiasm and wellbeing
for the job and for the company adds real value to the management.(5)

Important Note about Environmental Management System (EMS):

It is required for the shipyards to comply with the U.S. EPA (Environmental Protection
Agency) and to maintain certain specific regulations that come into effect. Essentially EPA
guides the general groundwork to be laid out for EMS, which essentially facilitates the
application of structure and responsibility and managing the implementation of the
environmental policy. It also takes into consideration of the legal requirements, environmental

Effective Project Management Strategies in Shipbuilding Industries

aspects, creating modules for training, awareness, and competence. Also people working in the
shipyard management should be aware of and have a full understanding about:

Marine activities
Types of ships and other marine vehicles
Markets of ships
The shipyard business climate

The shipyard management has to pay special attention work place injuries that may occur
during the sub-assembly, assembly, outfitting, erection, and all other shipyard operations.
It is very important to understand that the shipyard management tasks are quite different
than the ship designers/ naval architects tasks. The design spiral which is mainly intended for the
naval architects and designers, cannot be fully applied towards the production of ships in naval
industries.

Fig: Ship Design Spiral (9)

The project managers should be fully aware of the concurrent stages of project tasks. This
includes the stages where basic product structure is developing the Hull Blocks, dividing into
Ship Zones and then outfitting with equipment and machineries. It is incumbent for the project
managers to know the product teams and their responsibilities. If one product is being handed
over from one team to the other, it should be approved with transfer notices as devised and
submitted. Machine operators are required to let the project managers know their status of task
completion and therefore if any further materials, labors, hours and workloads are needed then
they can be sequentially improvised.
Project management is also responsible for tracking the weight of steel that were
purchased prior to the production stage. This will minimize and cut down on risking the material

Effective Project Management Strategies in Shipbuilding Industries

and inventory loss. Not only weight of the steel, but the general rule to all material handling
requires that the project managers are aware of:
1.
2.
3.
4.
5.
6.

Knowledge about the kind of materials available in the market and shipyard
Analyze the Materials routing carefully
Demand and supply of the different work shops
Layout of the machineries before the installations
Re-arrange equipment systematically
Teach the installers and operators of different functionality and possibilities of the
equipment

Nevertheless it is very important that the operators and managers plan out synchronized
movement of the materials and group the production process. (2) If there is a team of people
working in one shop, there should be a balance of time, synchronization, divisible work load and
set of feedback to the management. Thus it develops the cost centric criteria which encourages
accountability by particular managers, measuring their performance based on the teams activity
feedback.
Upgrading the capacity analysis of the Shipyard
It is very important that the management run the capacity analysis of the shipyard on a
very frequent cycle. It is essentially a manual simulation of the shipyard layout and the
movement within it to assess the material transportation and access of the workers to the
workstations. The maximum capacity analysis can help understand the repair, construction needs
and then help identify the number of skillful workers availability, shared equipment like cranes,
explore the conflict areas like roadways or shops to find the constricting bottlenecks that slow or
inhibit the work.(8) Also the management needs to run the simulation analysis for different shops,
their time frame of delivering units or specific parts, the material in-out inventory, positioning
and direction of the assembly process/path, connective and dependency of other shops on the
workforce and workers. Similar analysis would allow the optimal locations to place the milling
machine, the pinjig, tool box, welding bed, cranes to erect and turn the units, keel layout, etc.
It was found that such studies can increase turnovers on the progress records. Integrated
planning, scheduling, information results in immediate confluence of parts, tools, instructions
and service equipment and qualified people such as welders, tool pushers, fitters, etc. (6) The
shipyard management has to realize that the workstations, workshops, assembly lines should be
planned such a way that it reduces the movement of workers and waiting time on workstations.
Also the planning should include the installed portable utilities, and services for the workers to
have fast and easy access. The planning of the assembly should include:
1.
2.
3.
4.
5.
6.
7.

Vertical-horizontal clearances for overhead cranes, doors, large removable hooks, etc.
Hand and portable power equipped tools
Striking tools, metal cutting tools, turning tools accessibility
Hydraulic and electric actuators for heavy loads
Power generators, fork lift, plate bending machine
Ventilation fans, compressors, chemical and gas supply
Winches, welding groove machine, welding machines, etc.

Effective Project Management Strategies in Shipbuilding Industries

Once all the construction, outfitting, painting, installation is done, the constructing
shipyard then starts the process of final approval by the surveyors appointed by the regulatory
bodies. The production engineer ensures that they comply and answer every possible inquiry
made by the surveyor.
Materials: In a shipyard, there are basically three types of material assessment methods of
analysis:
a) Material on hand
b) Material Fabricated
c) Material erected
The easiest method of measuring the progress of material used in the shipyard is by
keeping track of weight. For steel, each piece of metal going into the assembly should be marked
with paint and its corresponding weight will be recorded. Usually modern ship production
software like ShipConstructor, Nupas Cadmatic, etc have ways create bill of materials of parts
and pieces with numbers etched or engraved on the metal sheets. So any worker with assembly
drawing should be able to realize which piece of the sheet metal fits where in the assembled unit.
Thus it allows the shipyard or shop managers to keep the designated parts in place and the
weight can be controlled.(7) It is very essential to remember that shipyards have to pay a large
amount of weight penalty in case of weight increase. And in further measurement to reduce
accidental design and assembly mistakes, well known shipyards usually record the final
fastening step, either riveting or welding. The number of rivets driven or pounds of welding rod
deposited will be recorded daily and plotted against a schedule.
Piping: For the case of piping, the new software can guide the linear and bend length of
different piping system such like ballast, fuel transfer, bilge water transfer, sewage transfer, etc.
Shipyard management should also be familiar with the spool design and the related dependencies
inside the hull bulkheads and units. This is to ensure that sudden change in equipment locations
should not affect the piping run through. In case it is an unavoidable situation, the management is
responsible to inform the naval architects or the designers to resolve the issue keeping in mind
that there must be certain head or pressure level that needs to be maintained. Thus it is incumbent
that the shipyard and the designer work on spool manager, which easily lets the shipyard have a
visualization of cutouts, penetration, end treatment and regulatory regulations. While doing the
whole change order or repair, very careful attention should be paid that intermediate piping and
pumps are not getting affected which might lead to high lead times resulting in high labor costs.
Machinery: There are essentially few steps that can help the management to properly
ensure that the machinery purchased has been fully utilized. Utilization of the machinery can be
done based on the relative importance. The shipyard management should be able to follow the
installation plan with proper work integration within the shipyard time frame. For example,
during the engine installation it is essential that the other peripheral machinery such like shafts,
bushing, routing, gear box, bearing, etc. are all ready to come in together immediately after the
engine has been placed on the engine foundation. Space allocation, and other small machineries
and equipment are to be placed inside the engine room so that the engine installation might not
obscure the access of them. The engine installation requires that the engine must be level or nose
up during the coolant fill and engine start up so that the engine block and heads are completely
filled with coolant. Also a nose down installation of the engine causes the engine overheating
which must be avoided. Thus a routing plan, and installation plan, should strictly be followed in
Effective Project Management Strategies in Shipbuilding Industries

order to execute safe and sound installation of each and every equipment inside the ship. Also
exhausts, coolant fill up, heat exchanger must all be tested immediately so that any sort of leaks,
blockage can be detected and resolved. This whole process of engine and peripheral installation
should be done under total observation by the shipyard management.
Conclusion
To conclude, there are ideas that were addressed in this paper that gives the scope of
improvement for current statuses of different shipyards. As discussed, the cost control can reduce
the overhead expenses and the shipyard budgeting. Implication of the yard planning is to develop
a risk and hassle free industrial layout so that transportation of heavy equipment, material
handling, assembly pieces move in and out, etc. are more time effective. Workforce and labor
management and meeting the EPA regulations without any problems is an unavoidable
requirement for any shipyard. Material handling, piping, painting, outfitting discussions provide
insight on how to synchronize the construction process, and avoid major mistakes and errors in
the shipyards. Overall, establishing an effective management system is vital for the owner of a
shipbuilding industry to maximize profitability and revenue, while creating a healthy business
that can function with optimum quality and performance.

Effective Project Management Strategies in Shipbuilding Industries

Summary
The idea of effective project management of the shipyard is to equip a growing
shipyard with modern, effective management concepts. Considering the cost control,
time and labor scheduling, implementing new technologies and management system
to carry out unit productions faster in the shops are some effective ways that can be
improved in any given shipyard. The theories discussed have proven to remarkably
improve the project management skills for an individual manager working in a
shipyard or shipbuilding industry. As discussed in the paper, the engineering managers
should make sure the production of new units or repair work on existing vessel should
have enough budgets and they are not crossing the monetary limitations that was set
in the contractual terms. Also the efficient performance in shipbuilding as in
manufacturing, is to work ahead of time and provide continuity of material, electrical
and mechanical supplies. Inventory management, operational support, planning,
ordering required equipment, materials and machineries correctly is very crucial to the
management plan.

Remembering time is money, procurement and all other

supervisory duties that supports the production and the shops that work on the
assembly units should be administered and exercised promptly to avoid any delays.
The management administration should remember that inventories represent part of
the investment, and deliveries, moving units from shop to shop, welding and outfitting
have subsequent effect on the shipyard budget and investment. Maintaining the
labors/during the building and repairing process requires an excellent workforce
planning, managing and task assignment. The welder, foreman should now their
assigned duties and have experience on the scheme or procedure for coordinating all
the functions or mechanism of yard work. These concepts would essentially help a
shipyard reach long and short term economic benefits. The ideas discussed in the paper
adds value to the production system and thus allows the shipyard management to
foresee their lacking and the need for improvement.

Effective Project Management Strategies in Shipbuilding Industries

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Effective Project Management Strategies in Shipbuilding Industries