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February 9, 2021

Even though the way we design and build ships today has evolved over the last few decades, many traditions and practices which are still woven into shipbuilding have not progressed. One such example is how we traditionally, and even currently, measure progress by how much of the physical ship is built. Understandably, this was a good measurement in the past. In today’s environment, where ships are much more complex, and we have the tools and capability to create a digital model that allows us to validate the design, it does not make sense.

The strategy of elevating the value of the digital model before the first piece of steel is cut is intriguing. This would eliminate a lot of the inefficiencies in today’s projects. There have been some attempts over the last few years on several programs, but many failed to achieve their goal.

This approach is part of a digital transformation, but it requires much more than digital technologies. It requires a business transformation, which also needs a completely different mindset and approach. Creating a digital model for today’s requirements is completely different from the digital model needed to validate design and production operations before the first steel is cut. Many of the digital initiatives that we are striving for today require us to think differently as we are not just digitizing what we are doing today. We are transforming how we conduct our business.

Where We Are Today

Shipbuilding is characterized as a conservative industry, which I agree with to a certain extent, but we also need to recognize that there are many activities that other industries are trying to copy and learn from shipbuilding. For example: providing a custom asset (the ship) to clients that is unique to the specific client and optimized for a specific task, and the ability to leverage modular construction.

Another activity unique to the shipbuilding industry is the ability to design, procure and manufacture all at the same time. It is not uncommon that the first steel is cut before 50% of the ship is designed, and that is being very conservative. This strategy came out of necessity and maybe a little bit of naive optimism that we would build ships faster this way by executing some of the phases in parallel. This was also a risk mitigation strategy from owners to ensure that the shipyard is making progress on their ship (since they measured progress via how much of the physical ship is built).

This supported and aligned the way contracts work in shipbuilding where most of the payment milestones were tied to a certain portion of the physical ship being built. This is the beginning of the challenge we need to overcome because since the milestone payment, which the shipyard needs to keep paying their staff, is tied to cutting steel, they will be incentivized to cut steel as fast as possible. This means they will continue to design as little of the digital model as possible for the portion of the ship for which they want to cut steel, which in theory has relatively low risk/cost changes.

I talk more about this in blog post What is the Biggest Challenge in Shipbuilding?

Change of Mindset: Value the Digital Model

What if we as an industry were able to change our mindset and truly embrace what we are declaring about the value of the digital ship.

a gif of a visual representation of the design, build, and maintain phases in shipbuilding.

Digital Shipbuilding

Get a first-hand experience of what the design, build, and maintenance phases are like in an increasingly digital shipyard.

Experience now

More companies than ever are saying they recognize the value of the digital ship throughout the lifecycle: including concept, design, manufacturing all the way to operations. However, it has yet to make a significant change in the real world on how we design and build ships. To make a change this ingrained into the fabric of how the business of shipbuilding works today, there has to be a shift to how we think of the digital model. The digital model cannot be thought of as a by-product of the design process. Instead, it should be considered a key asset required to ensure requirements are met, resources are optimized, issues are identified early, stakeholders’ undocumented needs are satisfied and costs are controlled. This change of thinking will directly and naturally adjust many aspects of how and what we do today to better align with the digital world.

A change that would confirm that our industry truly values the benefits of the digital ship would be programs that prioritize and compensate ship designers and builders for building a more complete digital ship model first. This does not require us to completely design and production engineer 100% of the ship, but it would at least require us to complete 100% of the basic and functional design – including final vendor-furnished information. This is a big but important step that will require several stakeholders to change the way they see and value the progress of the ship.

If you read any analysis of any segment of the shipbuilding industry, it will always mention that an inadequate design decision made early in the design because of a lack of information has caused substantial, time-consuming and continuous costly changes downstream. Late changes in any industry are very costly; however, with shipbuilding, because we are physically building the ship way before the design is complete, the impact and cost of change are extremely high. It is not just the cost of fixing the change, it is the downstream cascading effects on how it affects the schedules, operations and resources of the shipyard. With limited space and a Tetris schedule, one unexpected change can disrupt the whole shipyard and even other ship programs that share the shipyard’s precious resources (people, cranes, workstations, real estate, materials, etc.).

There are several benefits that positively impact the time and cost of building a ship. With a complete design, you will be able to leverage many tools that will allow you to analyze and validate your design. You will be able to identify issues with the various aspects of the ship from the ability to maintain your equipment, ensure the build sequence is viable, ensure certain critical functions and requirements are met and ensure that the client understands how it will spatially feel. Also, the ability to optimize the ship’s production sequence, maximize resources and minimize design changes. Quality will also increase as there will be fewer changes that require us to resolve them with less-than-ideal solutions. Finally, the model being more accurate to what is actually built would allow it to be used for operations and be the Digital Twin/Thread that enables operational excellence. See my post Tackling MRO Challenges to read more.

An Attempt to Change Without a Change in Mindset

There have been several attempts, mainly in defense (Navy & Coast Guard), to put more value on the digital asset for the design phase. The program starts with this innovative and ambitious goal of completing a significant portion of the design before the first steel is cut. However, during the program and after a few obstacles it transforms back to the “comfortable” and “known” traditional way where we are cutting steel with only a small subset of the digital ship designed.

The challenge is that we are trying to transform the way we do business by creating the digital asset first, but we are not adjusting the way we “think of” or create the digital ship. Creating a digital model as we do today, focusing on how we can cut steel as fast as possible, vs. creating a digital model when your focus is to validate the design and leverage many of the other benefits of having a digital asset are completely different. They both create a digital model; however, the fidelity and quality of that model are much more important for success when creating the digital asset to improve the overall design and construction of the vessel.

In most cases where this initiative has failed, the team has not changed their digital ship mindset. We cannot assume that performing our current activities will work if we change how we want to run our business. We need to think, “what do we need to do to achieve this new digital asset?” This will include changing how we engage with our hundreds of suppliers and partners as well as determining new effective milestones and how we want the deliverables. The first sign I have seen which signals that the program will go off track is vendor-furnished information that is not finalized in time. This is a current problem and does lead to many of the late changes in the way we work today, but we need to solve this if we want this initiative to succeed. Before the program starts, we need to rethink and engage with the suppliers and partners and determine how we can overcome this challenge. Using our previous processes and expectations will not align what we need with what we will get.

To achieve this early digital ship, we will have to re-evaluate all the critical criteria essential for our success and require changes from owners, suppliers, partners, designers, and shipbuilders.

Closing Remarks

There are so many digital innovations and technology initiatives that we are striving for which will require us to have a digital ship. In some aspects, we have been creating a digital ship model today; however, the digital ship of the future is different and requires us to change the way we think of what a digital ship is as well as the way we create it. The current digital model we create is different than the digital model we need for the initiatives we are attempting to achieve.

We will require a different mindset to align with what we know we can achieve with a higher quality digital asset. This progressive digital mindset will affect and change many aspects of how we conduct business. The payment for physical milestones will be a significant hurdle that we will have to overcome as the current structure incentivizes shipbuilders to stay with the status quo. Also, the ability to have a more complete design with basic and functional being 100% complete with final vendor-furnished information will require some changes to how we interact with our suppliers, partners, designers, shipbuilders and clients. We need to spend time re-evaluating and thinking about what we need to achieve this goal as it will be a difficult, but worthwhile, one to attain.

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