®ShipbuildingProcess–ChallengesandOpportunitiesAnIBMProductLifecycleManagementResourcePaperFirstEditionMarch2002®ThiswhitepaperwaspreparedbyDeltamarinLtdforIBMProductLifecycleManagementasamarketing,salesandsupportresource.Itprovidesessentialbackgroundonthebusinessenvironmentandtrendsindesign-productionbeingimplementedatyardsworldwide.Whilethereareconsiderabledifferencesbetweenyards,mostfacecommoneconomicconditionsinaglobalmarket.Asaresult,yardsareputtinginplacenewinformationsystemstosupportgreatordesignflexibilityandmoreefficientproductionprocesses.Theirgoalistoimprovetheircompetitivepositionthroughinnovativedesign,increasedquality,fastertime-to-marketandtightercostcontrols.ThesegoalscreateI/Trequirementsforcollaboration,digitalmockup,simulation,changecontrol,shopfloorassistanceandproductioncontrol–forPLMSolutions.Althoughthispaperdrawsmostofitsexamplesfrompassengerandferrybuilders,theprocessesdescribedherearealsoapplicabletomilitaryandcommercialyards.Wehopeyoufindthispaperusefulinidentifyingmarketing,salesandsupportopportunities.Thisisthefirsteditionandwewelcomeyourcommentsandsuggestionsforfutureupdates.Pleaseaddressthemto:Dr.EdwardS.PopkoWorldwideMarketManager,ShipbuildingIBMProductLifecycleManagementSolutionsIBMCorp.MSP5402455SouthRoadPoughkeepsie,NY12601(845)433-2689FAX-9901e:mailpopko@us.ibm.comTheauthorsofthepaperare:MarkkuKanervaDirector,BusinessDevelopmentMattiLietepohjaDirector,DeltamarinRaumaOfficeProductManager,ProductionPlanningPetriHakulinenHeadofProjectDepartment,BasicDesignDELTAMARINLtdTel.+358-2-4377311Purokatu1Fax+358-2-4380378FIN-21200RaisioFinlandE-mail:info@deltamarin.comwww.deltamarin.com©CopyrightInternationalBusinessMachinesCorp.2002AllRightsReserved®SHIPBUILDINGPROCESS-CHALLENGESANDOPPORTUNITIES1.SHIPPINGANDSHIPBUILDING-MARKETANDECONOMICSITUATION1.1GeneralMarketSituationinShippingShippinghasexperiencedgoodtimessince1997.Mostshippingsectorshavebeengoingthroughanexpansionrarelyseenbefore,especiallyinthesegmentsofcontainer,LNGandcruiseshipping.Atthesametime,orderbookshavebeenwellfilledformostoftheshipyardsworldwideandanexpansionofshipbuildingcapacityhasbeenongoing,firstinKoreaandnowinChina.EvenmajorEuropeancruiseshipbuildershavenearlydoubledtheircapacityduringthepastfewyears.Shippingandshipbuildingcycles,ofcourse,dependverymuchontheworldeconomicsituationandconsumerbehavior,butalsoonmorespecificdevelopmentssuchasoilconsumptionintheWesternworld,automobileindustryproductionpatterns,paperconsumption,leisuremarketandholidayspending,etc.Butshippingandshipbuildingtendtoacceleratethesecycles.Inthewakeofagoodshippingmarketandhigherrates,ownersinmanyshippingsectorsover-orderedin1999and2000.Atthesametime,scrappingincreasedonlymarginally,meaningthatoldervesselswerekepttotakeadvantageofthepossibilityofquickreturns.Yardsstillhaveareasonableworkloadfor2002,butorderbooksaredryingup.Togetherwithincreasedyardcapacity,competitionfornewbuildingorderswillbefierce.Newbuildingpricesrecoveredinlate2000andearly2001,butitappearsthatover-capacityalreadyisleadingtopricecuttingbysomedesperateyards.Thebigquestion:Aretheverylowyardpricesgoingtobeirresistibleforownersoncemore?Ageneralpredictiononthemarketisthatshipbuildingpricesmaycontinuetofall,leavinganymajorrecoverytotakeplaceinautumn2002,attheearliest.Long-termpredictionsforscrappingshowanimprovementof30-35%comparedtolev...