Lecture 1

UFPE Recife: Shipbuilding Competitiveness
Key developments in enabling technologies

Paul Stott
July 2013
Building a ship
What type of industry is shipbuilding ?
Partly manufacturing but predominantly
an assembly industry
The shipyard assembles parts made in-house with parts bought in
from other manufacturers.
There may be 200,000 individual parts to assemble in a large ship.
Typically between 60% and 80% of the cost of building a ship is in
the cost of buying materials for assembly.
Other manufacturing / assembly industry sectors:
Motor cars
Aeroplanes
Computer manufacture
.....
Does shipbuilding have anything in common with these other
sectors?
Building a ship
Does shipbuilding have anything in common with automobile production?
Shipbuilding has a great deal in common with automobile

production and has learned much from automobile production in
the past 100 years.
It may surprise you to hear that the study of shipyard production
at Newcastle University starts with the study of automobile
production.
Common arguments against the automobile analogy

Ah, but.....
Automobile factories mass produce identical
products whereas ships are normally unique.

Ah, but.....

1. Cars are rarely identical, even from the same production line.
Engine options, trim options and optional extras mean there are
hundreds of potential variants passing through the line. Nissan UK
put ??? variants through one production line in Sunderland.

Ah, but.....

put 2,573 variants through one production line in Sunderland.

Ah, but.....

put 2,573 variants through one production line in Sunderland.
2. Large ships are normally built in long series numbering hundreds
of virtually identical products.
3. Small ships may also be standardised (e.g. Damens product
range)
4. Even where ships appear to be unique the parts from which they
are made (the interim products) are not.
Large ship production

Hyundai Heavy Industries at Ulsan is the worlds largest shipyard,
with capacity to build 12.6 million deadweight per year.
It is part of the Hyundai Heavy Industries Group, which has interest
in various engineering sectors, as well as owning several very large
shipyards.
High Volume
steelworking
capacity
Large
building
docks
Very large
cranes
(which are
essential for
productivity)
Large ship production

Ownership
Hyundai Heavy Industries, Public Company
Target markets
Large ship types with high steelwork content: large

container, LNG, large tankers, large bulk carriers
Size of business 104 ships in 2009 and around 3.2 million tonnes steel
processed
Employees 9,000 in 2011 plus subcontract and
suppliers (all shipbuilding)
Revenue estimated around $5 billion in 2011 (Ulsan
only)
Key aspects of
the business
model
High investment in pursuit of economic efficiency

through high volume
Focus on products with high steel content compared to
outfit
Strong domestic supply industry
Standardisation of products
Strong government support
What is a marine production business?

In 2009, HHI Ulsan yard delivered 109 ships. None were unique and
all part of long series. They were also all of a similar form: large
with high steelwork content.
11 capesize bulkers
12 VLCC
7 Suezmax
19 Aframax (7 crude 9 products)
4 LNG
14 LPG
42 CC: (in 6 size

classes from 2556
TEU to 11,300 TEU)
Small ship production

Damen of holland is the worlds leading small ship producer.
The family-owned business was established in Holland in 1927.
In recent years it has concentrated on standard small ship

products, which have a global reputation. Examples include the
range of STAN Tugs and COMBI Freighters
Damen only offers standard products
Tugs / Workboats: 55
Offshore Vessels: 5
High Speed Craft & Ferries: 24
Dredging & Specials: 19
Cargo Vessels/Inland & Coastal: 13
Naval & Yachts: 8
Output in 2011, using Damens

own product classifications
A limited selection of Damen products

Ownership
Private family owned business
Target markets
Small specialised ships
Size of business 124 ships delivered in 2011

6000 employees in 35 companies
Revenue 1.4 billion in 2011
Key aspects of
the business
model
Focus on small ship products with an established

brand reputation
Marketing and selling through Holland
Manufacture at low cost sites around the world
Subcontracting hull construction to low cost producers
for finishing at Dutch shipyards
Low key takeover of foreign facilities
Very clever strategy
A visit to www.Damen.nl is recommended

Ah, but.....
Ships are not built on an assembly line.

Ah, but.....
Ships are not built on an assembly line.
1. Whilst not normally a continuously moving line (Meyer Werft does

use a moving assembly line in cruise ship production) the work
flows through defined stages and work stations that constitute an
assembly line.
2. The concept of fixed workstations undertaking repetitive work gains
much of the benefit of a moving flow line.
3. Even when the work appears stationary the flow may be
constituted by movement of people.
Building a ship
Does shipbuilding have anything in common with automobile production?
Shipyards tend not to use a moving assembly line but work flows
none-the less.
The final products may not be identical in shipbuilding (but interim
products should be at least similar if not identical)
But the basic assembly process is the same:
Cut out steel parts
Shape the steel parts
Assemble steel parts
Paint
Install outfit
Shipbuilding has learned a great deal from the automotive sector in
terms of product, process design and organisation of work.
The shipbuilding process

How do you turn the pile of raw materials into the finished
product?
+
=
Shipbuilding production
How do you eat an elephant?
One bite at a time
Shipbuilding production
How do you eat an elephant?
One bite at a time
Break the work down in

a logical way into
manageable pieces
But, what pieces and in what order should you

put them together ?
Work breakdown structure

The way a shipyard chooses to go about constructing a
product is known as its build strategy or
shipbuilding strategy.
The way that work is broken down into manageable
pieces is known as the Work Breakdown Structure or
WBS.
The work breakdown structure defines the INTERIM
PRODUCTS from which the final product is built up.
A WBS is essential for the planning of activities and the
way work is broken down drives the shipbuilding
process.
The traditional shipbuilding process

Up to about 1950 shipbuilding was based heavily on
craft skill in a job shop environment.
Skilled workers undertook a 6 year apprenticeship to
learn their trade and took a lifetime to perfect it.
The construction of a ship was undertaken in a similar
way to the construction of a house.
Work was broken down by system.
All ships tended to be unique.
Many who do not know the industry still imagine it to
be this way.

Erect frames
Add shell plates
Add bulkheads and decks
Install outfit (by system)
The sequential installation of hull and outfit led to a long cycle time
Outfitting was forced to be done at the most expensive time
Demarcation between skilled trades led to disputes
Clashes of trades in small spaces was unavoidable, leading to
inefficiency and idiosyncratic products
Work tended to be done substantially in the open air, leading to
weather delays

Since the 1950s the industry has modernised. Modern shipyards
are no longer jobbing shops.
Key improvements have been:
De-skilling of work
Investment in automation
Multi-skilling of workers
Product standardisation
Process standardisation
Improvement in working conditions
In essence shipbuilding has adopted the modern scientific
management approach, following the example of the automotive
sector.

Significant changes started to occur in the 1960s and 1970s
Covered ship factory
Covered building dock
Significant improvements in processes

and automation
Ships constructed in blocks
Larger cranes at the building position

The first ship under construction in the new dock at Pallion in 1975

A modern shipbuilding block
HHI claims 90% work completion on block
Key enabling technologies
China becomes global

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII
Development of steel
shipbuilding in Europe / US
Development of mechanised
shipbuilding in Japan
Development of shipbuilding
to industrialise South Korea

1. Introduction of welding in 1940s:
Enabled pre-fabrication so
that all parts did not have to
be fitted at the most
expensive possible stage.
Reduced required skill levels.

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII

2. Introduction of numerical control to
burning machines in 1950s/1960s:
De-skilled the parts
production process.
Greatly improved accuracy of
parts AND MARKING.

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII

3. Automation and improved welding
processes (getting rid of sticks):
Improved accuracy, quality
and productivity.

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII

4. Introduction of network planning:
Facilitated a shift to higher
througput.
Enabled outfit and steelwork
to be integrated.

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII

5. Introduction of building docks and
goliath cranes:
Maximised the amount of
pre-fabrication and outfitting
that can be done in the
workshop environment,
minimising cost.
Powered up potential
throughput volume.
market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII
Very little changed

Modernisation
Welding
revolution
Very little changed

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII

Whilst there have been few
technological changes in the past 30
years, much has changed through:
Investment in economy of
scale
Standardisation of products
Implementation of lean
production management
Logistics
Planning and control
Very little changed

market leader
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
WWII
Strategy 1 (up to 1950)

Wooden shipbuilding in steel (Prof. G Bruce)
1. Steel erected piece by piece on a slipway
2. Outfit follows steelwork
1.
2.
3.
4.
Steel
Outfit
Total cycle time
Disadvantages
Highly craft skill dependent
All work undertaken at the most expensive
possible stage
Inherently long cycle time sue to the sequential
steel and outfit work
Low capacity of slipway (one ship every 1 to 2
years)
Strategy 2 (1950 to 1970)

1. Steel erected in prefabricated assemblies (enabled by welding) on
slipway, moving away from the piece by piece assembly
2. Integration of steelwork and outfitting and move away from system
breakdown
1.
2.
3.
4.
Advantages
Blocks built in workshops leading to lower cost of steelwork
Introduction of potential for automation and de-skilling
Integration of steel and outfit reduces total cycle time and
total cost
Slipway capacity increased (more than one ship per year
possibly 4 if the berth cranes are large enough)
Steel
Steel
Outfit
Total cycle time
Outfit
Total cycle time
Strategy 3 (1960 - 1970)

1. Block size increases
2. Slipway capacity enhanced by enabling the stern end of the
following ship to be started alongside the current ship
3. This is known as semi-tandem construction
Advantages
1.Slipway capacity significantly increased possibly up to 8 ships per year
2.Further automation and de-skilling of work
Steel
Steel
Outfit
Outfit
Total cycle time

Total cycle time
Steel
Steel
Outfit
Outfit
Total cycle time

Steel
Total cycle time

Steel
Outfit
Outfit
Total cycle time

Steel
Total cycle time
Outfit
Total cycle time
Strategy 3 (1960 - 1970)

Stern section skidded across for final completion on main slipway
Stern section fabricated and

engine installed
Semi-tandem slipways
Slipway
ship being
completed
Stern of next
ship being
fabricated
alongside
slipway
Semi-tandem takes account of the fact that

the stern has the greatest amount of work,
because of the machinery space
Completed ship is launched
Stern end skidded onto slipway
Follow-on ship stern end is started in parallel with

the completion of the previous ship
Strategy 3 (1960 - 1970)

1. Block size increases
2. Slipway capacity enhanced by enabling the stern end of the
following ship to be started alongside the current ship
3. This is known as semi-tandem construction
Advantages
1.Slipway capacity significantly increased possibly up to 8 ships per year
2.Further automation and de-skilling of work
Steel
Steel
Outfit
Outfit
Total cycle time

Total cycle time
Steel
Steel
Outfit
Outfit
Total cycle time

Steel
Total cycle time

Steel
Outfit
Outfit
Total cycle time

Steel
Total cycle time
Outfit
Total cycle time
Strategy 4 (post - 1970)

1.
2.
3.
4.
Final assembly capacity increased using large building docks

Block size increased by installation of heavy cranes
Multi-ship construction, including semi-tandem construction
Dock capacity can be further enhanced by blocking on the
cope at the top of the dock
Advantages
1.Assembly capacity significantly increased 20+
ships per year per dock
2.Heavy cranes mean that more outfit can be
included in the blocks erected in the dock
3.Larger blocks allow better productivity
Famous quotations by Henry Ford
1. Any colour - so long as it's black.
Any colour so long as its black

This is a statement of mass production
technology
Early industry was:
craft based
individual products
Job Shop manufacturing
Very expensive only available to
very rich people
Rolls Royce
Silver Ghost
Henry Ford introduced flow production and

this revolutionised manufacturing and led
to the motor car being available to the
masses
based on scientific management
standard products
assembly line manufacturing
Low cost
Model T Ford
1907
1908
This is a statement of mass production technology

The innovations made by Henry Ford were:
1. To standardise the product.
2. To divide the product into easily
produced interim products.
3. To invest in production facilities
that produced the interim products
and assembled the final product
with as little skill as possible.
4. To design workstations where
identical simple tasks were
repeated leading to high efficiency.
5. To design the way the work flowed
between work stations the mass
production line.
Rolls Royce
Silver Ghost
Model T Ford

The aim was to produce an automobile that anyone could
afford to buy not only a rich elite
Ford Model T came in 9 body styles but Henry Sloane of
General Motors realised that not everyone wanted the Ford
basic product. The development that resulted is summarised
in the following chart:
The machine that changed the world, James P. Womack

Mass production (Ford), 1914
Mass production (Sloan), 1920s
Lean production, 1970s
Craft production 1900
How far is this model applicable to shipbuilding?
How close has shipbuilding come to Ford-type mass

production?
The second world war Liberty Ship provides a good example of
what standardisation of product and production process can
achieve in shipbuilding.
How close has shipbuilding come to automobile-type mass

production?
The Liberty ship

10,000 ton general cargo ship
In November 1942, one of Kaiser's Richmond yards

built a Liberty Ship (Robert E. Peary) in guess.......
Note: it takes HHI on average about 9 months to build a ship at the

present time.
How close has shipbuilding come to automobile-type mass

production?
The Liberty ship

10,000 ton general cargo ship
In November 1942, one of Kaiser's Richmond yards

built a Liberty Ship (Robert E. Peary) in 4 days, 15
hours, and 29 minutes
They did this through welding (not riveting), standardisation and adopting mass
production techniques

The liberty ship was a standard product built in thousands
Is it possible to obtain the benefits of mass production with
a product that may vary?
To understand this it is necessary to review two key
changes in the shipbuilding business in the past 50 years:
1. The pursuit of volume
2. The standardisation of the product
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Million GT delivered
Development of commercial shipbuilding

120
100
80
60
40
20
Year
There have been two peaks in output over this period.

Lecture 1

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UFPE Recife: Shipbuilding Competitiveness

Key developments in enabling technologies

Shipbuilding has a great deal in common with automobile

Common arguments against the automobile analogy

Common arguments against the automobile analogy

Automobile factories mass produce identical

Common arguments against the automobile analogy

Automobile factories mass produce identical

Common arguments against the automobile analogy

Automobile factories mass produce identical

Large ship production

Large ship production

Hyundai Heavy Industries, Public Company

Large ship types with high steelwork content: large

High investment in pursuit of economic efficiency

What is a marine production business?

19 Aframax (7 crude 9 products)

42 CC: (in 6 size

Small ship production

In recent years it has concentrated on standard small ship

Output in 2011, using Damens

Small ship production

A limited selection of Damen products

Small ship production

Private family owned business

Small specialised ships

Size of business 124 ships delivered in 2011

Focus on small ship products with an established

A visit to www.Damen.nl is recommended

Common arguments against the automobile analogy

Common arguments against the automobile analogy

Ships are not built on an assembly line.

1. Whilst not normally a continuously moving line (Meyer Werft does

The shipbuilding process

How do you eat an elephant?

One bite at a time

How do you eat an elephant?

One bite at a time

Break the work down in

But, what pieces and in what order should you

Work breakdown structure

The traditional shipbuilding process

The traditional shipbuilding process

The traditional shipbuilding process

The shipbuilding process

The shipbuilding process

Covered ship factory

Covered building dock

Significant improvements in processes

The shipbuilding process

The shipbuilding process

HHI claims 90% work completion on block

Key enabling technologies

China becomes global

Key enabling technologies

China becomes global

Key enabling technologies

China becomes global

Key enabling technologies

China becomes global

Key enabling technologies

China becomes global

Key enabling technologies

Key enabling technologies