Worldwide Shipbuilding Productivity Status and Trends

UNIVERSITY OF MICHIGAN
DEPARTMENT OF NAVAL ARCHITECTURE AND MARINE ENGINEERING
Pan American Conference of Naval Engineering,

Maritime Transport and Port Engineering
WORLDWIDE SHIPBUILDING
PRODUCTIVITY STATUS AND
TRENDS
Thomas Lamb
Emeritus Research Scientist and Adjunct Professor
Innovative Marine Product Development, LLC
425 742 2348
nalamb@umich.edu
October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 1

SHIPBUILDING RESEARCH
• Different countries use different approaches.
• In Japan there is considerable cooperation between
all shipyards to develop basic research and then
groups of shipyards work together to implement it –
for example CIM.
• Korean shipbuilders are so large that they do not
cooperate.
• European shipbuilders work together through joint
EU funded programs.
• I will focus on shipbuilding productivity research.

STATUS OF SOME PERFORMANCE METRICS BY

AREA/COUNTRY
METRIC EUROPE JAPAN KOREA CHINA
CGT/Employee Year incl. SC 25* - 140 125 – 205 95 – 121 22 -39
Productivity - Man Hrs/CGT incl. SC 12 - 15 9 – 15 16 - 21 52 - 103
Steel Tonnes/Worker Year incl. SC 8 - 36 100 -270 33 – 56 15.6 - 30
Steel Tonnes/Shop Area m2 0.48 – 0.52 1.7 – 2.8 1.9 – 3 1
2
CGT/ Shipyard Total Area m 0.28 – 0.78 0.3 – 0.8 0.4 – 1.25 0.18 – 0.5
Production Workers (incl. SC)/Total 0.7 – 0.79 0.72 – 0.83 0.7 – 0.9 0.83 – 0.93
Employees
2
Total Employees/Total Area m 0.003 – 0.011 0.001 – 0.003 0.0043 - 0.01 0.01 – 0.016
2
Annual CGT/Shop Area m 1.12 – 2.04 3–6 3 – 8.5 0.5 – 1.41
CGT/Building Berth Area 7 - 14 3 - 10.5 10.5 – 17.5 6.24 – 10.9
Note: The low of 25 for European shipyards is due to cruise ships

SC – Inhouse Subcontracted Labor

PRODUCTIVITY
• It can be seen that shipbuilding productivity
varies from company to company and country
to country.
• Why is this and what are the factors that are

impacting shipbuilding productivity?
• I will try to answer these questions.

PRODUCTIVITY (Continued)
• What is PRODUCTIVITY?
• How is it measured?
• How can it be compared across industries and
countries?
• If we can not answer any of these questions we
cannot measure or compare our performance with
others at a specific time or ourself over time.
• Therefore there has been research into productivity
in most industries for many years

• Productivity is the amount of output achieved for a
given amount of input.
• The definition is easy, measuring it is not.
• Input could be materials, manpower and energy.
• Problem is that it is desirable to have a
dimensionless measure.
• This can be achieved by converting all output and
input to dollars.
• However, there are useful Productivity Metrics that
are not dimensionless

• The continuing challenge that most businesses face for the
foreseeable future is improving productivity.
• It is a broad strategic issue. As such it must be of concern
to government, management, and workers.
• However, it is management’s responsibility to set and take
the necessary action to accomplish productivity goals.
• In the 1940s and 1950s, the measurement of productivity
focused on output, or the production of as much as possible
for a given input.
• In the 1960s and 1970s, quantity was no longer as
important as efficiency, or production at lowest cost.
• Today, productivity is effectiveness, which is a combination
of right product, right time, quality, and efficiency.

• Productivity focus is usually on direct labor, but
management, engineering and indirect labor
productivity has biggest leverage for improvement.
• Must develop ways of measuring management,
engineering and indirect productivity.
• Labor productivity is a combination of labor
performance, labor utilization, process efficiency,
and planning effectiveness.
• Of the four, only the first one is directly controlled
by the worker.
• The other three offer the greatest potential for
productivity improvement and are solely dependent
on management.
SHIPBUILDING PRODUCTIVITY
• Research has shown that the main reason for
shipbuilding low productivity was inadequate work
organization.
• Design for Production can help but if the work for

the improved designs are not correctly organized
the benefit will not be achieved.

SHIPBUILDING PRODUCTIVITY (Continued)

• Again research has shown that highly productive
shipyards are characterized by:
Good work organization
Clearly defined objectives and policy
Short build cycles
Overlapping and integration of structure construction
and outfit installation
An awareness and use by management of productivity

measures
Engineering documentation prepared to suit production

SHIPBUILDING PRODUCTIVITY (Continued)

• Good work organization is characterized by:
High utilization of area
Clearly identified workstations
Clearly identified interim products
Packaged (Kitted) material
Relevant and timely technical information
Simply but effective planning systems
Visual work station performance metrics at each
station
Worker self-measurement
Good maintenance
Good Housekeeping

PRODUCTIVITY MEASUREMENT
• A metric that could be called Overall Productivity is:
Annual Sales ($)/Cost of Doing Business ($)
where cost of doing business includes labor, fringe
benefits, overhead, material, utilities, facility and
capital.
• Prefer to call this Business Transformation Efficiency
• Both of these measures can be obtained from a
company’s annual financial report
• However, as it includes many factors it is difficult to
uses as a apple to apple comparison metric

PRODUCTIVITY MEASUREMENT (Continued)

• So a number of researchers have suggested that the
best productivity measure is how much Value Added
is produced for each dollar of input cost, as it focuses
on cost directly controllable by the shipyard.
• The Value Added metric could be:
Annual Added Value in $/
Annual Cost to produce the Added Value
(Annual Sales – Annual Purchases)/
(Number of Employees x Average hours worked
annually x fully burdened labor rate in $)

PRODUCTIVITY MEASUREMENT (Continued)

• However this type of information is NOT readily
available to researchers, thus not a good metric.
• Also, however attractive Added Value/Man Hour
appears, it has problems when comparing different
• countries with different consumer prices and labor
costs.
• It is better to use a metric which has output and
input measures that are internationally consistent.

PRODUCTIVITY METRICS
• Before performing any research into productivity it is
necessary to develop an acceptable Productivity Metric.
• There is no universally accepted productivity metric.
• A metric should be based on a readily available parameter.
• Potential candidates for shipbuilding are Steel Weight,
Lightship Weight, Displacement, and Gross Tonnage.
• The first four are all weights and would give similar results.
The final candidate is a volume.
• Research and Experience has shown that weights are not a
good parameter on which to base a productivity metric and
volume fairs little better.

USE OF DWT, GT AND CGT AS METRICS
Country No. of DWT GT MH/DWT MH/GT MH/CGT
Man Hours Delivered Delivered

Japan 114,000,000 19,000,000 14,000,000 6.02 8.17 14.3
Korea 91,000,000 21,000,000 14,000,000 4.33 6.50 21.7
Using 1994 Compensation Coefficients

PRODUCTIVITY METRICS (Continued)

• To over come this problem the concept of Compensated
Gross Tonnage was developed. The compensation is to
take into account ship type (complexity) and size.
• The concept has been developed by the Association of
West European Shipbuilders and the Shipbuilders
Association of Japan since 1967 and was adopted by
OECD in 1974 as a parameter on which to base national
shipbuilding output comparisons.
• Compensation coefficients have been developed over
many years through negotiation between major
shipbuilding countries. They have been developed for
most types of commercial ships BUT NOT FOR NAVAL SHIPS

GROSS TONNAGE (Cont.)

• The Gross Tonnage of a ship is a measure of its volume.
• Another name for the process is Admeasurement, which
originated in England in the 16th century as a way to
measure the earning capability of a ship, so to assign dock
fees and taxes.
• It developed over the years into a very complex set of rules
with exemptions and deductions, but not the same in every
country.
• So the old measurement processes were replaced by an
international measure in 1970 by IMO.

GROSS TONNAGE
The International Gross Tonnage is given by:
GT = K1 x V
Where K1 is a coefficient and V is the

molded volume of all enclosed spaces in
the Hull and Superstructure

COMPENSATED GROSS TONNAGE

• The Compensated Gross Tonnage is given by multiplying the
Gross Tonnage by a Compensation Coefficient.
• The Compensation Coefficient normalizes the Gross
Tonnage to that of a 15,000 ton Deadweight General Cargo
Ship
• Compensation Coefficients have been agreed by OECD and
were presented in a table for different ship types and sizes
• New values and a new approach were published in 2006 and
cgt is now an equation:
Cgt = A x GTB

COMPENSATED GROSS TONNAGE

REDUCTION IN WORK EFFORT (SERIES EFFECT)


• The CGT has been used as the output measuremnt for a
productivity metric in the form of:
Manhours/CGT (this is actually the inverse of Productivity)
CGT/Man Year
• It was originally used for aggregate measures such as
countries, but it has been refined to apply to individual
shipbuilders.
• So it is recognized and accepted by many as a very
important metric. However, its acceptance and use in some
countries is very limited.
• This may be due in part to the fact that some of these
countries build only naval ships and there are no universally
accepted compensation coefficients for naval ships.


• How effective is the CGT approach as a productivity metric?
• If it was precise, for different ship types and sizes
constructed in the same shipyard, the man hours per CGT
would be the same.
• It can be seen from the next table that it is not precise, but it
is a significant improvement over Steel Weight.
• It is acknowledged that compensation coefficients could be
developed for steel weight, but this has not been done and
any independently developed values would not have the
international acceptance of the international shipbuilders
such as is the case for CGT.
• Why use the Gross Tonnage? Because it is a readily
available data point for every ship built in the world and with
the International Tonnage convention it is standard in every
country.

COMPARISON OF PRODUCTIVITY METRICS

SHIP TYPE MH/ST. WT. MH/CGT
VLCC 16 32
SuezMax Tanker 19 22
Product Tanker 27 20
Chemical Tanker 46 36
Bulk Carrier 19 20
Container ship 4400TFEU 19 22
Container ship 1800TFEU 28 22
Reefer 43 34
General Cargo 56 29
Ferry 51 39
Ocean Tug 105 31

PRODUCTIVITY VERSUS TECHNOLOGY
• Technology is only one part of the Productivity

equation.
• Productivity is influenced by a combination of the
following factors:
Competition
Technology
Facilities
Planning
Management capability
Work organization
Work practices
Worker motivation
Worker skills
PRODUCTIVITY VERSUS TECHNOLOGY (Cont.)

In the 1978 Study Report it was stated:
“Probably the single most important requisite to making
major investments in facilities, is to have orders supporting
economies of scale. High level technology calls for
purpose designed jigs, fixtures and equipment, heavy lift
capability, etc., which are not readily adaptable to small runs
of different ship types, at least not efficiently. Thus if the
market does not provide a basis for long range
programming, individual shipyards must determine whether
the highest level of technology is economical for them.”
THIS IS EQUALLY TRUE TODAY
It is impossible to have the best world class
productivity without adequate and sustained
orders (annual throughput)

WHAT IS TECHNOLOGY
• Technology is the knowledge and processes used to
provide products for human use.
• Technology is thinkware, software and hardware as well
as their application processes.
• In shipbuilding it is the practices used to design and build
ships and other marine products.
• Advanced technology shipbuilding is associated with
production oriented design, block construction, very short
berth erection times and ships that are virtually complete
at launch.
• Advanced technology alone does not assure the
production of internationally competitive ships.

TECHNOLOGY (BEST PRACTICE) LEVELS

LEVEL PRACTICE
1 Traditional shipbuilding practice (Pre 1960) - move to
completely welded ships, combination of blocks and assembly
at erection, multiple berths, small cranes
(<50t) , most outfitting after launch, and manual
operating systems
2 Improved Traditional shipbuilding practice (1960-65) –
modernized facilities, numerical controlled burning
machine(s), fewer berths or a building dock used, larger cranes
(>50t <250t), some pre-outfitting, computer
based lofting, and some computer based operating
systems

TECHNOLOGY (BEST PRACTICE) LEVELS (Cont.)

LEVEL PRACTICE
3 First Modern shipbuilding practice (1962-65) – new
shipyard with large capacity cranes (>350 t), single dock,
covered steel fabrication through block construction
shops, large degree of mechanization and extensive use of
computers for design and planning
4 Second Modern shipbuilding practice (1975-85) - very
large shipyards, very large building docks, covered building berths,
continuous improvement, Grand Block construction, large lift
capacity Goliath cranes (>800 t), advanced & zone outfitting with
ship virtually complete at launch.

TECHNOLOGY (BEST PRACTICE) LEVELS (Cont.)

LEVEL PRACTICE
5 Computer Based shipbuilding practice (1970-95) – developed
from level 4 through application of computers enabling
integration of operating systems, effective use of CAD, CAPP and
CA material planning, improved quality control through mastering
dimensional and/or accuracy control and increased automation
(robotic welding/ automated pipe shops).
6 2000 World Class shipbuilding practice (2000 –present)
– refurbished or new shipyard (some completed covered)
with material movement by conveyors minimizing crane
lifts, large Grand Blocks and even ULTRA Blocks to
3000t, maximum use of robotics for welding and part
assembly, innovative solutions to overcome
challenges.

TECHNOLOGY BENCHMARK ELEMENTS
A. Steelwork Production
B. Outfit Production
C. Other Pre-erection
D. Ship Construction & Outfit Installation
E. Layout & Environment
F. Facilities
G. Design, Drafting, Production Engineering &
Lofting
H. Organization & Operating Systems

TECHNOLOGY BENCHMARK
Element Typical Component Values
Europe Japan Korea China
A. Steelwork Production 2.91 3.9 3.4 2.8
B. Outfit Production 3.30 4.2 4.0 3.5
C. Other Pre-Erection 3.83 4.3 4.0 3.2
D. Ship construction 3.18 4.5 3.98 3.1
E. Layout & environment 2.94 4.0 3.31 2.5
G. Design, Drafting, etc. 3.45 5.0 4.33 3.5
H. Organization/ Operating 4.04 5.0 4.67 2.5
OVERALL LEVEL 3.40 4.43 4.00 2.88

PRODUCTIVITY PREDICTIONS
A shipbuilding productivity predictor based on readily
available shipyard characteristics was developed and has
been modified to suit new CCGT and the shipyards visited
for this project as follows:
PD = 150 BP -3.00 TE0.27 PR0.60 DP0.41 VI -0.66 ST -0.08
This equation would predict the world class productivity

that a shipyard should be able to attain based on its values
for the parameters.
It could also show how much improvement in its Best
Practice Rating a shipyard would need to attain a specific
productivity, keeping all the other parameters the same.

PRODUCTIVITY PREDICTIONS (Continued)

PD = Predicted Productivity CGT/MH
BP = The Best Practices Rating of the shipyard
TE = The total number of employees (TE) includes everyone employed by the
shipyard from President to janitor and where in house subcontracted
labor is used it includes them also.
PR = The Production Ratio is the ratio of total number of employees (TE)
divided by the number of production workers (PE).
VI = Vertical Integration is the ratio of value added by the shipyard versus the
total ship value and is defined by the percentage of labor cost to total cost.
DP = Dual Purpose Trigger = 1 if a shipyard is building commercial and naval
ships only, and the value is DP=2 for a yard producing commercial as well
as naval ships.
ST = Ships delivered/Ship types, is a parameter that takes into account the
number of total ships built compared to number of “series” ships built
over
a given time, such as three years.

PRODUCTIVITY PREDICTIONS (Continued)
COUNTRY SHIPYARD PARAMETERS PD=MH/CCGT PD=MH/CCGT

TE PE BP VI DP ST PR TL Pred Eq RDJEM Actual
Japan 1405 1100 4.3 0.4 1 12.8 1.28 10.7 11.0
Korea 15300 11000 4.9 0.4 1 12.3 1.39 14.3 24.0
Korea 26638 22500 4.4 0.4 1 13.3 1.18 21.2 25.0
Japan 900 750 4.2 0.4 1 12.0 1.20 9.4 13.0
China 15000 14000 4.0 0.5 1 12.0 1.07 25.3 61.0
China 10000 9000 3.6 0.5 1 13.0 1.11 32.0 174.0
Korea 6000 5000 4.4 0.4 1 11.0 1.20 13.7 26.0
Japan 1500 820 4.7 0.4 1 12.0 1.83 10.0 13.0
Europe 924 475 4.0 0.3 1 5.5 1.95 11.4 30.0
Europe 3520 2675 4.0 0.3 1 1.0 1.32 11.3 33.0
Europe 1200 700 4.2 0.4 1 4.7 1.71 11.7 27.0

RECENT STUDY RESULTS
SHIPBUILDING PRODUCTIVITY VERSUS TECHNOLOGY LEVEL

2006
250
200
PRODUCTIVITY MH/SCGT
EUROPE
JAPAN
150 KOREA
CHINA
CRUISE SHIPS
100 FMI ORIG CC
FMI NEW SCGT
TL MOD FMI
50
0
0 1 2 3 4 5 6
TECHNOLOGY (BEST PRACTICE) LEVEL

DISECONOMIES OF SCALE
ECONOMY
DISECONOMY OF SCALE
OF SCALE


COPPE BENCHMARK MODEL TO EVAULATE

A SHIPYARD’S PRODUCTIVITY
This recent research (2006) investigated what
characteristics could be used to evaluate a shipyard’s
productivity.
It was performed by COPPE for the Brazilian Minister of
Technology and TRANSPETRO.
The method takes into account shipyard indices that
measure capacity, technology level, shipbuilding
environment, production time, and quality, resulting in the
productivity measure CCGT/MH using the new CGT
compensation coefficients which take into account series
production.

COPPE BENCHMARK MODEL TO EVAULATE

A SHIPYARD’S PRODUCTIVITY (Continued)
Comparing the efficiency of shipyards is a difficult task due to the
complexity of different shipbuilding approaches and organization models.
The fact that shipyards are subject to specific environments also
contributes to increase the difficulty of efficiency comparisons.
This research objective was to develop a model to benchmark shipyards’
relative productivity based on Data Envelopment Analysis (DEA) technique.
DEA is a technique originally presented by Charnes et. al. (1978) to
evaluate the relative efficiency of Decision-making Units (DMUs) through
the consideration of multiple inputs (i.e. resources used) and multiple
outputs (i.e. products and/or performance obtained).
The technique is based on Linear Programming (LP) where the efficiency is
defined as the ratio of the weighted sum of the m outputs to the weight sum
of the n inputs

CONCEPTUAL BENCHMARK MODEL
Shipyards’ Benchmark Model

Capacity Productivity
Technology Production Time
Industrial Environment Quality

BENCHMARK MODEL STRUCTURE

Benchmark Model
BCA
(controlled)
CCGTMH
Input TLI Output

(controlled)
PTI
SIEI Output oriented

(non-controlled) Constant returns of scale

SHIPBUILDING INDUSTRIAL ENVIRONMENT INDEX (SIEI)

The methodology used to estimate the SIEI was based on AHP technique as
commented above.
An example of the pair wise comparison. For each element of the AHP model
a pair wise comparison was applied.

HIERARCHICAL STRUCTURE OF AHP MODEL

MODEL FINAL DATABASE

1000 CCGT/MH PTI BCA TLI SIEI
16,4 1,4 86.728 3,7 0,141
41,9 2,5 07.780 4,9 0,287
33,7 1,7 7.200 4,2 0,107
40,2 2,4 229080 4,8 0,287
5,7 0,9 42.220 3,1 0,141
30,4 2,2 40335 4,4 0,107
94,6 2,0 42.000 4,1 0,276
78,5 1,8 42.525 4,3 0,276
37,9 2,5 45.770 4,2 0,287
76,8 2,2 88.400 4,5 0,276
37,4 2,1 8.900 4,3 0,107
4,6 0,6 6.400 2,7 0,141

CALCULATION OF PRODUCTIVITY FOR

DIFFERENT SERIES SHIPBUILDING
hours/ production ccgt
workers cgt/vessel vessels/year mh/cgt mh/ccgt ccgtmh
year profile factor
3800 1788 36500 3 1,2,3 62,0 0,91 68 14,7

3800 1788 36500 3 1,1,1 62,0 1,00 62 16,1
3800 1788 36500 3 11,12,13 62,0 0,64 96 10,4
Note: CCGT/MH values shown are 1000 x CCGT/MH
The production profile indicated as 1,2,3 means the first three vessel of a
series of similar ships and CCGT correction factor for this situation is
equivalent to 0,91.
The production profile 1,1,1 means that the shipyard is building different
ships, or on other words, that series production is not being considered.
For this situation there is no corre
ction to be made and the CCGT factor equals 1.
The production profile 11,12,13 means that the shipyard is building the
11th, 12th and 13th vessels of a series of similar ships and the CCGT is
equivalent to 0,64.

PRODUCTIVITY REQUIRED TO MEET THE

KOREAN ISO-COST CURVE
CCGTMH
labor rate serie serie serie

mh/cgt
US$/h 1,1,1 1,2,3 11,12,13
6 43 23,3 21,2 15,3

8 32 31,3 28,5 20,6
10 26 38,5 35,0 25,3
Note: CCGT/MH values shown are 1000 x CCGT/MH

RECOMMENDED REFERENCES
“Productivity in Shipbuilding,” Vaughan, R., NECIES, 1983
“Improving Productivity in a Japanese Shipyard,” Sekiya, O., NECIES 1990
“The Role of Industrial Engineering in Shipyard Production Services”, Todd, F. B.,
WEGEMT 1980 – Managing Ship Production
“Flexible Production Indices”, National Shipbuilding Research Program, U.S. Department of
Transportation, April 1987
"EEC Shipbuilding Industry Study on Costs and Prices," Arthur Anderson, November 1993
"Report of a Study into the Competiveness of European Community Shipyards," KPMG
Peat Marwick, October, 1992
“Productivity Measures as a Tool for Performance Improvement,” Bruce, G. J., and Clark,
J., RINA Spring Meeting 1992
“An Assessment of Brazilian Shipbuilding Competitive Potential,” Pires, Jr., Dr. F. C. M.,
Journal of Ship Production, May1999, 15:2

RECOMMENDED REFERENCES (Continued)

“A Review of the use of Compensated Gross Tonnes for Shipbuilding Performance
Measurement,” Bruce, G. J., Journal of Ship Production, 22:2, May 2006
“Requirements and Assessments for Global Shipbuilding Competitiveness,” Storch, R.,
Clark, J., and Lamb, T., 1995, NSRP
“A Productivity and Technology Metric for Shipbuilding”, Lamb, T., 1998, SNAME Great
Lakes & Great Rivers Section Meeting, Cleveland, Ohio, January
“A Shipbuilding Productivity Predictor,” Lamb, T, and Hellesoy, A., 2001, Ship Production
Symposium, June 13 - 15, Ypsilanti, Michigan
“Methodology Used to Calculate Naval CGT Factors”, Craggs, J., Bloor, D., Tanner, B., and
Bullen, H., Ship Production Symposium, 2004
“Naval CGT Coefficients and Shipyard Learning”, Craggs, J.,
Bloor, D., Tanner, B., and Bullen, H., Ship Production Symposium, 2005

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UNIVERSITY OF MICHIGAN

DEPARTMENT OF NAVAL ARCHITECTURE AND MARINE ENGINEERING

Pan American Conference of Naval Engineering,

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 1

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 2

STATUS OF SOME PERFORMANCE METRICS BY

Note: The low of 25 for European shipyards is due to cruise ships

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 3

• Why is this and what are the factors that are

• I will try to answer these questions.

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 4

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 5

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 6

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 7

• Design for Production can help but if the work for

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 9

SHIPBUILDING PRODUCTIVITY (Continued)

An awareness and use by management of productivity

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 10

SHIPBUILDING PRODUCTIVITY (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 11

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 12

PRODUCTIVITY MEASUREMENT (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 13

PRODUCTIVITY MEASUREMENT (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 14

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 15

USE OF DWT, GT AND CGT AS METRICS

Country No. of DWT GT MH/DWT MH/GT MH/CGT

Man Hours Delivered Delivered

Korea 91,000,000 21,000,000 14,000,000 4.33 6.50 21.7

Using 1994 Compensation Coefficients

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 16

PRODUCTIVITY METRICS (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 17

GROSS TONNAGE (Cont.)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 18

The International Gross Tonnage is given by:

Where K1 is a coefficient and V is the

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 19

COMPENSATED GROSS TONNAGE

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 20

COMPENSATED GROSS TONNAGE

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 21

REDUCTION IN WORK EFFORT (SERIES EFFECT)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 22

PRODUCTIVITY METRICS (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 23

PRODUCTIVITY METRICS (Continued)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 24

COMPARISON OF PRODUCTIVITY METRICS

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 25

PRODUCTIVITY VERSUS TECHNOLOGY

• Technology is only one part of the Productivity

PRODUCTIVITY VERSUS TECHNOLOGY (Cont.)

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 27

October 22-26, 2007 XX COPINAVAL RESEARCH INTO SHIBUILDING PRODUCTIVITY 28