Shipbuilding Supply Chains Study
 
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Shipbuilding Supply Chains Study

      12/20/1999

US shipbuilders now hold less than 1% of the world market for commercial ships. In the 1970s US shipbuilders built an average of 20 seagoing commercial ships per year for US shipowner, now that number is less than two per year. It seems clear that the US shipbuilding industry cannot currently compete in the world market for seagoing commercial ships.

The two primary sources of this problem are low productivity, in some cases lower by a factor of 2 or 3 than the best in the world, and high material costs. High material costs are especially a problem since material and equipment represent more than 50% of the cost of a delivered ship.

The Shipbuilding Supply Chain Integration Project was designed to improve understanding of best practices in supply chain management in the marine industry. The report focuses on the problems of material costs, in particular as they are affected by relations with suppliers. It specifically focuses on US shipyards and suppliers, foreign shipyards and suppliers, and a construction industry. The intent was to obtain a baseline to show how the US marine industry compares to the foreign marine industry and a somewhat comparable non-marine industry in the US.

The Final Report for the Shipbuilding Supply Chain Integration Project is now available from the Center for Electronic Commerce at ERIM. The report describes 22 best practices in supply chain management that apply to shipbuilding. Detailed international case studies of 10 shipbuilders and 9 suppliers are included.
The report can be downloaded from the Center for Electronic Commerce website. If you would prefer a hard copy of the report, please contact Mitch Fleischer.

Mitch Fleischer
 







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