Measured in traditional shipping terms (CGT)Europe has about 15 per cent share of the worldwide commercial shipbuilding new orders – which in 2004 were 70percent higher than in 2003.
If measured in dollar revenuesEurope actually has a 30percent share of the world market.
Europe constructs more sophisticated vessels with higher value: for example cruise shipswhich are on average 10 times more costly and sophisticated than tankers. Europe is the leader in this market and also holds a strong position in the equally sophisticated naval market.
To continue to benefit from this positive trend the European shipbuilding industry needs to increase its efficiency within its current major constraints: one-of-a-kind productionhigh labour costsand high cost of space.
Another key dynamic is production versus manpower. Over the past 20 years production in the European shipbuilding industry has increased by more than 40percentwhile manpower has shrunk by over 35percent. This trend is almost entirely technology-driven. Since the mid 1980s European shipbuilders have been taking on CAD (computer-aided design) systems. Now CAD technology is almost universal and often dated. Twenty years is a long time in IT.
The challenge for Europe is the new competition from Asiaand especially China. For Europe’s shipbuilders to respond effectively to that challengethey have to make the very most of their resources. This means that the past improvements in efficiency are not enough: a step change is needed.
Technology is the key. The next generation of emerging shipbuilding technologybased on data-centric and rule-driven software solutionsfully supports and facilitates the revision of working processes. It streamlines shipbuilding designpreserves existing data and makes it re-usable for future projects – vital for European shipbuilders needing to improve their productivity and cost-competitiveness within current constraints.
This is much more than simple CAD. The technology has the capability to support flexible ship designproductionand life cycle management within a single integrated environment. It offers shipbuilders better decision support for global design and production – ultimately making their yards more competitive.
The new technology wave bursts through the barrier imposed by traditional design technology. Rather than being about simply delivering design (as with CAD) it focuses on delivering the best designmore productively and within shorter project schedules.
The future (herenow) is a truly multidisciplinary environment where all designs are fully visible to all parties; where the design tasks are made simpler and faster for the user; and where manual rework and checking are eliminated.
Importantly for Europe’s more collaborativemulti-party and joint venture-orientated industrythis next-generation technology allows ship designersshipyardssubcontractors and suppliersauthoritiesand others to manage and execute projects across company borderscutting costs and shortening project schedules.
In the new IT environment drawings and reports can be generated automaticallyreducing the cost of design and ensuring accurateup-to-date documentation. Beyond thatnew and existing design knowledge can now be saved and re-used in the futurepreserving corporate knowledge in the face of a shrinkingaging workforce.
In a recent paper my colleague Michael A Poliniwho is also a member of GRAD (Global Research and Development Corporation)a consortium of world-class shipbuilding companiesidentified six strategic issues facing the industry. He concluded that: the trend in shipbuilding is towards lower cost relative to volume; quality vis-à-vis any service requirement is now non-negotiable; workforce expertise – both design and production – is diminishing; environmental issues will impact shipyard producersowners and operators; the availability of – and ability to use – technology will be a significant competitive differentiator; competition will be fierce and based on priceavailability and quality.
He observed that one way to deal with these issues was to formulate a vision or business model that could be used to guide the organisation. Indeedthat is the approach that has been taken by Intergraph and GRAD. Their vision has driven process re-engineering at the GRAD member shipyardsdirectly affecting the development of software technology at Intergraph and influencing the plans and schedules for all parties.
GRAD has enabled the mapping of emerging new technologies in computing toolscommunicationscollaborative effortsdesign tools and working practices. It has provided an environment in which competitors can cooperate at ‘pre-competition’ levels to define best practice and work process improvements as the underlying requirements new technology.
The strength of a ‘combined consortium voice’ has been used to influence technology providersand allowed the joint selection of preferred partners. Beyond that itit has also enabled the formation of provider-consortium partnerships that reduce the risk for both parties.
Marzio Pierazzuoli is Vice President of Intergraph ProcessPower and Marine. For more informationvisit www.intergraph.com/shipbuilding"