Shipbuilding
The global shipbuilding industry has been on an upswing over the past few years. In the period between 2000 and 2005, the world shipbuilding output has grown at a compounded annual rate of 8.3% based on gross tonnage (GT), as opposed to a growth of 4.8% achieved in the past 20 years (1985 to 2005). Strong demand and capacity constraints has led to the world's shipping order book to sales ratio increase to 3.5 times in 2005, higher than the historical average of 2.1 (between 1982-02).
Shipyards remain fully booked in the medium-term with the delivery period, for the first time since the seventies, extending beyond three years. Since it is the waiting period, which new building prices closely follow as compared to freight rates, the strong new building prices are expected to be maintained over the medium-term. Also, the ships that have been currently booked at higher prices will have full impact on the shipbuilder's profitability in the next two to three years.
Demand drivers: Being a global industry, the fortunes of the shipbuilding industry are closely tied to the growth in world trade. The demand for ships can be classified into incremental demand and replacement demand. In case of incremental demand, growth in world trade increases the demand for vessels, which in turn leads to higher freight rates. The resultant higher freight rates trigger the demand for new vessels from the shipping companies. In case of replacement demand, the demand for vessels is dependent upon the age profile of the existing fleet as well as steel prices. Every ship has a useful life (25 to 30 years) after which it becomes uneconomical to operate them. Replacement demand is triggered when ships approach the end of their useful life. Higher steel prices also decide the extent of replacement demand as they lead to an increase in value of ships to be scrapped.
Business Drivers
Specific Functional Requirements
Project Manufacturing
Shipbuilding Companies generally produce large price tag products to customer specifications. Each customer order or contract is managed as a project with budgets, resources and profitability. Individual work orders are linked/related to the overall project.
Quote Management
Bidding for an order from a customer usually goes through a lengthy quote and specification process. Need to track and update quotations with link to customer requirements and then convert to customer order for execution once order is confirmed.
Collaborative Design & Engineering (PLM)
Because each order may have customer specific requirements, many Shipbuilding companies use a collaborative design & engineering process to collaborate with the customer and some of their key suppliers to work out the final product spec/design for the customer. This requirement may range from a simple CAD interface, to more functional Product Data Management to even more sophisticated Collaborative Design & Engineering PLM functionality.
Engineering Change Management
Shipbuilding Companies produce many variants of their products according to customer specification and need to keep accurate track of past, present and future build specifications plus 'as designed' and 'as built' records for every final product produced.
Job Costing
Related to the project manufacturing management requirement to track costs and profitability for each project including the design, product and services components.
Service Management
There are two key aspects to this requirement:
- Installation and commissioning - in many cases the end product has to be assembled, installed and commissioned at the customer site, requiring skilled people, machines and resources to be scheduled and management for this activity
- Maintenance, Repair & Overhaul (MRO) - customers contract with the OEM manufacturer to provide these services after the product is completed and installed.
Compliance Management
Regulatory and compliance requirements related to worker safety, environmental impact, food safety (if the equipment will be used to produce food or beverage), waste, etc. must be managed.