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 revenues, Europe actually has a 30percent share of the world market.

Europe constructs more sophisticated vessels with higher value: for example cruise ships, which 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 production, high labour costs, and 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 40percent, while 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 Asia, and especially China. For Europe’s shipbuilders to respond effectively to that challenge, they 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 technology, based on data-centric and rule-driven software solutions, fully supports and facilitates the revision of working processes. It streamlines shipbuilding design, preserves 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 design, production, and 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 design, more productively and within shorter project schedules.

The future (here, now) 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 collaborative, multi-party and joint venture-orientated industry, this next-generation technology allows ship designers, shipyards, subcontractors and suppliers, authorities, and others to manage and execute projects across company borders, cutting costs and shortening project schedules.

In the new IT environment drawings and reports can be generated automatically, reducing the cost of design and ensuring accurate, up-to-date documentation. Beyond that, new and existing design knowledge can now be saved and re-used in the future, preserving corporate knowledge in the face of a shrinking, aging workforce.

Industry co-operation

In a recent paper my colleague Michael A Polini, who is also a member of GRAD (Global Research and Development Corporation), a consortium of world-class shipbuilding companies, identified 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 producers, owners and operators; the availability of – and ability to use – technology will be a significant competitive differentiator; competition will be fierce and based on price, availability 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. Indeed, that is the approach that has been taken by Intergraph and GRAD. Their vision has driven process re-engineering at the GRAD member shipyards, directly 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 tools, communications, collaborative efforts, design 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 providers, and allowed the joint selection of preferred partners. Beyond that it, it has also enabled the formation of provider-consortium partnerships that reduce the risk for both parties. 

Marzio Pierazzuoli is Vice President of Intergraph Process, Power and Marine. For more information, visit www.intergraph.com/shipbuilding