Let’s challenge the conglomerates

The February 2006 issue of the U.S. Naval Institute Proceedings features two articles by senior executives in the U.S. shipbuilding industry: American Shipbuilding an Industry In Crisis by Mike Petters, President of Northrup Grumman Newport News and People, Product, and Performance: The Strengths of Shipbuilding by Michael W. Toner, Executive Vice President for Marine Systems at General Dynamics. Boiled down, the authors’ objectives include increasing subsidies, both direct and de facto, and building more ships for the U.S. Navy as a way to insure survival of their shipyards. I do not entirely disagree because my pertinent opinion, first published nearly three decades ago as a comment in the June 1977 issue of the Proceedings, remains unchanged, “The Navy needs American shipbuilders because their experiences and facilities are indispensable elements of U.S. sea power! And, the Navy is needed because it could provide stability to the American shipbuilding industry.”

After observing shipyard performances since that time I am now compelled to add, “Not at any cost!”

My reason is derived from the inadequate ways that some U.S. shipbuilding firms reacted to the disclosures of the world’s most effective, and most copied, shipbuilding methods that were described in U.S. Maritime Administration National Shipbuilding Research Program (NSRP) publications commencing in 1979. The highly effective methods so described are those developed and applied by Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) of Japan for both naval and merchant ships and for end products other than ships.

The IHI methods feature a number of proven industrial disciplines—product organization as advocated by the management guru Peter Drucker, statistical control per the teaching of Dr. W. Edwards Deming, and group technology. All had been well documented in English-language textbooks for many years but not in the context of shipyard operations. IHI’s unique contribution was to put them together as one fabulous, constantly self-improving manufacturing system.

Simply put, the improved methods feature construction planning before each design phase rather than afterwards. That approach enables shipbuilders to shift much outfitting and painting work from on board to organized work flows inside shops before hull erection. Safety and productivity are significantly enhanced.

Implementation by A.L. Bossier, Jr., then the President of Avondale Shipyards, for both naval and commercial vessels was just about instantaneous. Photographic evidence is available in the Shipbuilding Pictures Database.

Other shipyards that followed soon afterwards include Bath Iron Works (BIW) and National Steel and Shipbuilding Corporation (NASSCO). All employed consultants made available by IHI. All made admirable progress in what may be simply described as a shift from system-by-system to zone-by-stage organization of people, information, and work. Work packages so organized, when further classified according to the work problems they impose, facilitate simultaneous construction of naval and merchant ships of different designs and end products other than ships. But now twenty-five years later, no U.S. shipyard approaches IHI’s effectiveness. I’ll give two examples, the first is important because the U.S. Navy is now considering all-electric ships. Safety and productivity are greatly improved when electric cables, even large-diameter power cables, are pulled on an upside-down block (picture pops) inside a shop. Where such practice exists there is incentive for workers to innovate (picture pops). In U.S. shipyards the labor-intensive traditional practice prevails wherein most such cable is pulled into place after a hull is erected.

The second example pertains to the use of statistics, as advocated by the famous management guru W. Edwards Deming, for control of production processes and to effect product improvement. The NSRP disclosed in the widely distributed February 1982 publication Process Analyses Via Accuracy Control (A/C), how statistics is applied for controlling hull construction processes in IHI shipyards and also for the purpose of producing accurately constructed ships, a military requirement. Few seem to have noticed that following the suicide-bomber attack on USS COLE (DDG-67) on 12 October 2000, the first attempt to land seriously damaged COLE on a heavy-lift ship failed. Per Heavy lift brings USS Cole home, by Richard O. Aichele (Professional Mariner, Issue #55, April/May 2001), “Despite the careful planning there were a few glitches during the lift…. The planning had been done based on Cole’s construction drawings, but the ship turned out to be slightly shorter in length than the drawings indicated…. Because of her slightly shorter-than-expected length, Cole’s two screws did not drop into the holes previously cut in Blue Marlin’s deck.” Coles’s departure from a dangerous region was delayed accordingly.

Now, twenty-four years after publication of Process Analyses Via Accuracy Control (A/C), I am unaware of any evidence that any U.S. shipbuilder commands the discipline. Nor am I aware that any of the Navy’s Supervisors of Shipbuilding or even the Naval Sea System Command (NAVSEA) insisted upon compliance when a pertinent requirement was included in specifications for building DDG 51-class destroyers:

“Statistical evidence of quality control of all fabrication and assembly processes which impact product quality shall be established and maintained.

“Data shall be maintained by the contractor throughout the contract to demonstrate that the processes remain within statistical control.”

The NSRP A/C publication, called “a great piece of work” by Dr. Deming, specifically advised:

“Accuracy measurements are needed simply because they are reliable indicators of how work processes are performing. Incessant analyses of accuracy measurements and other relevant variables are the means used by the most competitive shipbuilders to constantly perfect organization of work.”

“…high productivity comes from appropriately trained workers performing highly organized work”

“…A/C, because it always deals with analytical methods and the entire shipbuilding process, provides opportunities for real performances in a climate that excludes apparent performers.”

I could go on and on, but I think that the foregoing is sufficient to justify my suggestion for the authors to combine their requests for more government aid with commitments to achieve specific productivity goals, perhaps per bonus penalty clauses in shipbuilding contracts. As a starter I recommend that in-process accuracy of hull components and of completed hulls serve for establishing the targets.

One thought on “Let’s challenge the conglomerates

  1. tswift wrote:
    I think this latest article is exactly right. Also, take a read of the Washington Post Editorial “Ship of Pork” at http://www.washingtonpost.com/wp-dyn/content/article/2006/05/21/AR2006052100948.html
    posted at 07:34:11 on 05/23/06

    Foreign student of Naval Architecture wrote:
    Thanks to all authors of The Afterguard for good insight in this article and others.

    In addition to IHI, two more comparisons come to my mind: Chinese yards and Finnish yards.
    From Finland we sell cruise ships bigger than aircraft carrier for about 95% cheaper than aircraft carrier. (assuming that aircraft carrier costs $12bn and cruise ship $0.6bn)
    http://www.akerfinnyards.co

    And china? It’s only a matter of time when “their experiences and facilities are indispensable elements” of chinese sea power. They already are a major builder of merchant ships, and when they get to higher level of technology, they will be more efficient in building war ships too.

    So open up your market, buy some military equipment overseas and shapen up your shipyards by renegotiating employment contracts. Because thats what we are doing here overseas.
    posted at 14:46:52 on 06/28/06

    Lou Chirillo wrote:
    To the student of naval architecture

    The only thing that an aircraft carrier has in common with a cruise ship is that both are oceangoing vessels. If you compare displacement tonnages for lightship conditions you would be surprised to learn that such tonnage for a modern carrier, such as the USS Ronald Reagan (CVN-76), is significantly greater than that for the largest cruise ship.

    The greater displacement is due to such features as an armored flight deck, more watertight divisions such as the multiplicity of longitudinal bulkheads that comprise the torpedo-protection system, armament, extensive electronic equipment (much more than fitted in any cruise ship), elevators that lift heavy aircraft at surprising speed, powerful catapults, arresting-gear engines that stop landing aircraft, many duplicate and separated vital systems, high-impact shock protection, nuclear propulsion, etc. Also, construction of a modern aircraft carrier requires an infrastructure of many material suppliers, subcontractors and high-tech manufacturers’ representatives that is unique for carriers; it is very different and much larger than the excellent infrastructure for cruise ships that serves European shipyards.

    What you said about the Chinese shipbuilding industry is true, but you will be surprised to learn that in terms of organizing shipyard people, information and work, the Chinese managers significantly benefited from their translation of the descriptions of IHI’s shipbuilding methods as disclosed by the U.S. National Shipbuilding Research Program. The Chinese-language publication “Group Technology in Shipbuilding,” 1984, ISBN7-313-00798-1/U-66 refers.

    The U.S. already buys some military equipment overseas, but to my knowledge for warships such procurements are for large-size subassemblies and for products that are characterized by innovation. However, a multi-billion dollar contract for an entire aircraft carrier is simply too much defense potential to commit to a shipyard in another nation. The only sensible option Americans have is to continue to challenge the U.S. shipbuilding conglomerates concerning the need to improve their productivity.

    Further, serious debate has already begun about the future of aircraft carriers; the increased accuracy and remote control of modern-missiles and drone-aircraft are reducing the need for them. See “Aircraft Carriers are on their way out,” by Admiral Stansfield Turner, U.S. Navy (Retired), U.S. Naval Institute Proceedings, July 2006, p. 16.
    posted at 17:15:07 on 07/15/06

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