Towards Modern Ship Design and Shipbuilding in India


The commencement of construction of the Air Defence Ship on 11 April 2005 at the Cochin Shipyard Limited, Kochi marks the beginning of a new era of ship design and shipbuilding technology in India . We had to our credit the successful design and building of destroyers, frigates, corvettes, fast attack crafts and auxiliary vessels e.g. LST(L)s, survey vessels, fleet tankers etc. The building of an air defence ship brings India into the elite club of those very few nations in the world that can design and build all types of warships up to aircraft carriers. This paper reviews the developments in this field of ship design and shipbuilding and the future prospects in India .


Ship design and shipbuilding in India mainly pertains to warships.  We are one of the very few proud nations in the world who design and build warships for their Navies.  The Navy’s in-house design organisation has gradually grown into a fully computerised unit having the necessary special techniques for stealth, hydrodynamic, ship motion, structural and dynamic predictions.  We need to continue to move forward and update the design tools e.g. modern 3D computer software with allied application software to automate the design process with necessary checks and balances and transfer data and drawings securely to shipyards not only on magnetic media but also on-line without the need for duplication effort by the shipyard. 

The infrastructure available in our shipyards is ancient and not suited to modern shipbuilding at optimum cost, quality and time frames.  Nevertheless, we have built warships at defence shipyards.  These shipyards have delivered warships to the design specifications given by the Navy and met their specifications.  However, we are not happy because the manhours taken by our shipyards to build a frigate / destroyer is more than 10 times that taken by modern shipyards abroad.  Also, the calendar months taken by our shipyards to build a frigate / destroyer have been three times those taken by foreign / modern shipyards.  The excess calendar months can to some extent be attributed to delays in decision-making, indigenisation and delays in the availability of payload and other nominated equipment, which are beyond the shipyard’s control.  However the very excess manhours taken do account for the lack of productivity, which can be attributed to not so modern facilities available in our shipyards and also to room for improvement in ship production, management, working environment of Indian worker and lack of multi skilled work force concept.  In spite of this not so encouraging scenario, we still produce warships that are cheaper than those manufactured anywhere else in the world.  This is because of the relatively lower labour rates and also due to prices of equipment purchased from the former Soviet Union and Russia have been highly competitive and economical to us.  On an average, the shipyard effort in a shipbuilding programme is about 40 per cent of the total cost. If this 40 per cent component (having taken 10 times more man-hours) is still cheaper in India , we can foresee the enormous advantage in improving productivity to match the man-hours to international standards. We can then produce warships at costs that are most economical and even foreign shipyards will not be able to compete. This is possible because the shipbuilding labour rates in India are about one fifteenth of those in Europe , one tenth of those in Japan / USA and one fifth of those in Korea .

Therefore, what are we to do? Firstly, within the existing infrastructure, improve management of shipbuilding, provide the right environment, introduce multi skilled trade and improve worker productivity as defined in section 15 to 26 of this paper.  These suggestions, when implemented, will improve efficiency by at least 20 per cent and even with existing facilities, the man-hours taken will be 80 per cent of those taken now. 

Secondly, provide incremental modernisation of existing shipyards to enable high crane capacities, larger block construction, module workshops for advanced fitting out, wet basins and dry docks independent of too much dependence on dredging.  This  modernisation of infrastructure will of course have to be supplemented by modern concepts of lean manufacturing and total CAD/CAM.  These will improve productivity by another 30 per cent.  With modernised facilities and modern ways of working, the man-hours taken will be 50 per cent of those taken now with existing facilities.  Thirdly, in the long run setting up new modern shipyards with latest up to date facilities and layout will reduce man-hours by 70 to 80 per cent and will eventually catch up with man-hours as per international practice.  The capital expenditure involved in these recommendations will be more than outweighed by the reduction in the cost of the warships.  Therefore, we must continue to improve warship building and achieve self-reliance.  Moreover, our shipyards and the industry are urged to develop competence to provide comprehensive Integrated Logistic Support and performance warranty for warships as brought out in para 5 of the paper. 

We are also among the very few nations in the world which could design and build submarines. We built two submarines during the 1980s and suddenly the programme has halted for the last 15 years for reasons, which are not technical.  We need to revive submarine building at the earliest and also open a second line of submarine construction to catch up on lost time.  The special features of submarine building are briefly covered in section 6 of this paper.  The capability to design and build submarines indigenously exists in the country and needs to be utilised and nurtured.


As far as merchant ships are concerned, our country has lagged behind.  A few nations like Japan and Korea have virtually captured the entire market because of the excellence achieved by them in designing and building of ships (e.g. bulk carriers in 6 months and containerships in 12 months).  We have to seriously work hard to aim for achieving such standards. The Indian merchant fleet consists of about 200 ships (overseas going).  Taking a 20-year perspective, we shall need 10 ships every year for our own market.  In addition, we have 425 coastal ships and about 21 of these need replacement every year.  Therefore, there is a good case for reviving merchant shipbuilding within the country.

Our commercial shipyards have not kept pace with the technological developments in optimum production of ships.  We need to provide incremental  modernisation to these shipyards to make new merchant ship building economically viable in the country.  The remarks made for improving warship building in previous paragraphs are also applicable here.           The internal market need for producing 10 ships (seagoing) and 21 coastal ships every year should provide the necessary incentives.  Government can assist in providing income tax incentives, export incentive credits, tax incentives for money spent on training and facility improvement and free export or trade zone incentives (shipyards could import supplies free of duty for ships). The assured internal market, cheaper labour rates and Government incentives or support and prospects of producing ships cheaper than anywhere else in the world should encourage private industries to get collaboration or joint ventures with leading shipbuilders in the world and start a new shipbuilding wave in our country.  

The quest and zest for increasing productivity, reducing cost and improving quality in shipbuilding, warship building and submarine building continues in the world.  The latest trends are digital shipbuilding innovation brought about by software solutions for Product Life Cycle Management (PLM).  IBM and Dassault Systems are offering such solutions using software Catia, Enovia and Delmia.  This will improve collaboration / integration between design and manufacturing.  The next generation digital shipbuilding system will simulate and optimise the entire shipbuilding life cycle process in a virtual environment from the initial development stage to launch. The US Navy Office of Naval Research and Samsung Heavy Industries Co Ltd (SHI) are very actively pursuing the digital shipyard concept with virtual reality.  LPD 17 USS San Antonio is the first surface ship ever designed in virtual reality.  It is reasonable to expect substantial quantitative and qualitative benefits from investment in digital manufacturing.  Returns in the range of 10 to 1 are realistic with digital mock up, process re-engineering and as a component of an integrated Product Life Management (PLM) solution.  We must take cognisance of these futuristic developments and take them into account in our modernisation plans for ship design and shipbuilding both in military and commercial sectors as discussed earlier.  Joint ventures with sharing of initial investment, workload, and profits to mutual benefit of both sides will yield quicker results.  

Warship Design & Building

We are one of the few proud nations in the world, which designs and builds warships for tits Navy.  Credit goes to the Indian Navy who nurtured its in-house design organisation and credit also goes to the Ministry of Defence which motivated and encouraged our defence shipyards to take on the challenge of warship building.  The Indian Navy provided the trained specialist officers to manage these shipyards.  The indigenisation organisations set up by the Ministry of Defence provided the opportunities for indigenous development of equipment, which is fitted in warships.  Thus Indian industry participated in the Defence Sector by helping the Navy to gradually move from a buyer’s Navy to a builder’s Navy. This paper reviews the gradual evolution of this capability for the indigenous design and building of warships.  Although total self-reliance exists in design and building of warships, we are yet to become self reliant on weapon systems, gas turbine generators, control systems and allied special machinery and equipment.  The in-house design organisation of the Navy has been updating its resources and these are now almost fully computerised.  The shipyards need urgent modernisation to apply the latest techniques of large pre-outfitting and block construction.  Our existing shipyards can be modernised only within constraints of geographical locations and space limitations and water depths available.  In the long run, we do need to have a new modern shipyard to build warships in cost, time and quality competitive with international practice.  Indeed, in the meantime, we can analyse and focus on areas, which can improve our ship design, and shipbuilding practices in a most cost effective manner.  This will depend upon disciplined decision making at all levels and strict adherence to time schedules.  The reasons as to why we have not been able to adhere to such disciplined action also need to be analysed. 

Our dependence upon foreign sources for major weapon systems, our ambition to have the latest and up-to-date equipment, and our policy of complex multi-agency (directly and indirectly involved) participative management have prevented us from having clear-cut and firm cost and time programmes for shipbuilding.  But on the other hand, this has helped us to keep an edge in the overall performance and operational capabilities of our warships.

Warship Design: Warship designs are specific to the Navy and this fact was realised by the leaders in the Indian Navy in the 1950s and progressive steps were initiated to have the capability of warship design within the Navy.  In 1957, the Corps of Naval Constructors was set up to have specialisation in Naval Design and Construction.  The officers were trained in UK , USA , USSR and also the training programmes that had been established in India at IIT Delhi and with Naval training establishments.  Concurrently, postgraduate dagger  courses were introduced for the marine engineering and electrical engineering branches.  The idea was to have a composite design organisation with all disciplines i.e. Naval Constructors, Marine Engineers, and Electrical / Weapon Engineers qualified for the design of state of the art warships. 

The Navy’s design organisation has to its credit the design of many types and classes of warships.  These include the Delhi class destroyers, Brahmaputra class frigates, Kora class Corvettes, Godavari class frigates, Khukri class corvettes, Magar class LSTLs, Sandhayak class survey vessels and seaward defence boats etc.  The capability to design warships came about not only through trained manpower but also through collaboration with UK for building Leander class frigates during the 1960s and 1970s.  Subsequently, the design interface of FSU and Russian weapon systems on indigenous designs strengthened our capabilities.   

The Navy’s design organisation is fully computerised and has the necessary techniques for stealth (RCS, IR, noise) prediction, hydrodynamics, ship motion, structural, powerful and dynamic predictions.  We need to move forward and continuously update the design tools of 3-D type comprehensive computer software with allied application software to automate the design process with necessary checks and balances and transfer data and drawings securely to shipyards on both magnetic medium and online without any need for duplication of effort by the shipyard.  Of course, if we have to have complete self-reliance, then Indian industry must come forth to design and manufacture state-of-the-art weapon systems, gas turbines generators, control systems and other allied special systems for warships.            

 Warship building: The infrastructure available in our shipyards is ancient and not suited to modern shipbuilding within optimum cost, quality and time frames.  Geographical location of shipyards poses problems of dependence on tide and heavy dredging before movement of ships in and out of the shipyards.  The modernisation of shipyards with better and augmented facilities will be limited to availability of space and other constraints.  Nevertheless, we have built warships at defence shipyards.  These shipyards have delivered warships to the design specifications given by the Navy.  Within the constraints of existing facilities, are our shipyards efficient?  The answer is no.  We are unable to produce ships in quality and quantity in time even commensurate with existing facilities.  This, not so happy state of affairs is the cumulative effect of factors such as:


-        Order for series production of ships is not given and as such production lines are seldom fully loaded.

-              Administrative and bureaucratic hurdles and delays in sanctions for the ships, delays in sanction for model testing and delays in sanction for special design inputs.

-        Telescopic concept for design and production hampered by delays in decision-making.

-             Too many workers and too many trades in shipyards. Lack of multi skilled tradesman. Worker environment leaves much room for improvement.

-              Shipyards have to depend on other organisations for dry-docking. Too much dependence on tide and dredging for moving ships in and out from shipyard basins.

-              Crane capacities are small and no arrangements for advance fitting-out. Too much dependence on measurements at site to manufacture items. Less use of composite drawings for piping services. No facility for shot blasting and primer coating of weldment blocks.

-              Berths, jetties, dry docks not equipped with adequate and systematic services and welding points, gas outlets, power points etc.  This results in long cables, hoses etc all over the place leading to unhygienic shipbuilding conditions. 

-              Room for improving co-ordination in design, planning, materials, and production management in the shipyard.

-              Delays in availability of systems and need for accelerating indigenisation process.

We need to improve warship building systems and processes in India .  The time taken by our shipyards to build warships should have been commensurate with the infrastructure and facilities available in the shipyards.  The delays have also been due to delays in decision-making, delays in finalisation of contracts with other countries for supply of weapon systems.  Improving infrastructure to enable pre outfitting and manufacture of larger blocks and larger cranes to shift them to the slipway can of course, reduce shipbuilding time. Decision-making can be improved by having more indigenous systems and having disciplined action plans with suppliers that match the construction schedule.  Ship construction should only start when all inputs are nearly complete i.e. design is complete, systems have been selected.  Since shipyard slipways are free and workshops are idle, shipyards commence work without waiting for all inputs to come.  The shipyards should take on the responsibilities for detailed design and marry CAD/CAM fully in their shipbuilding process. The introduction of multiple trade system will reduce man-hours and save time by reducing man-days.  We should continue to seek means for productivity improvement.          

Unique Nature of Global Warship Building

All nations in the world have endeavoured that their Navies have a technological edge to face any threat.  As such, performance factors have hitherto always had precedence over cost factors.  However, in recent years, cost has become increasingly important. Rather than reducing the performance capabilities of their ships, the Navies are interested in reducing costs by adopting more efficient practices in the acquisition, design and construction processes. The design cost of US warships have been reported to be as below:

          DD651    in    US        6,000,000   man-hours

          DD173    in    Japan    1,200,000    man-hours

          DD963    in    US         5,000,000    man-hours

          D647       in    US       3,000,000    man-hours

Such figures for Indian design costs are not readily available.  However, there is always room for reducing design costs by adopting integrated CAD/CAM solutions.

The construction hours of some warships have been reported as follows:

Country Ship type keel Displacement Tonnes Time Man-hours to Commissioning
US DD651 8315 30 5,000,000
US FFG-7 3500 30 2,500,000


DD173 9485 34 2,036,000


DD158 4500 29 1,000,000


D-560 5400 42 -


F-215 4490 38 -


FFH300 5235 51 2,100,000


DD6280 5100 42 2,300,000


F230 4200 54 -


Godavari Class 3600 72 10,800,000


Delhi class 6500 100 18,200,000

The Indian shipyards take about 10 times the man-hours taken by Japanese shipyards and 3 times the calendar months.  There is a lot of room for improvement in modernising Indian shipyards and reducing build periods.   

Integrated Logistic Support (ILS) and performance warranty for warship


The prime contracts for the recent warships in the world include a comprehensive requirement for ILS, necessary to ensure that the ships are effectively operated, maintained and supported throughout the life of the warship.  The elements of the ILS package include maintenance planning, supply support documentation, manpower, training, technical documentation, facilities, storage and transportation of support and test equipment and computing support.  The recent contracts for warships, which include ILS performance warranty, the prime contractor has guaranteed an operational availability of 80 per cent for a period of 10 ship years.  These new contracts also include setting up of ship support centre to support the development and integration testing of both the platform control and monitoring system and the combat systems and to train the Navy personnel.  Our shipyards and industry should develop such competence and provide such services to the Navy.  This will be more economical and efficient and will increase teeth to tail ratio and enable the emerging lean Navy to perform better and achieve excellence in mission operations.

Submarine Design and Building

Although the Indian Navy has been operating submarines since 1960s, the indigenous design and building of submarines was realised with the designing and building of SSK submarines of Type 1500 in collaboration with Germany .  MDL Mumbai, the premier shipyard in the country, built two SSK submarines in the late 1980s.  We were among the very few nations in the world who could build submarines. The programme for continuation of submarine building in India came to a sudden halt due to non-technical reasons and the infrastructure developed at MDL Mumbai has been idle and unutilised for the last almost 12 years.  Efforts have been made to revive submarine building with more emphasis on indigenous development of systems in the Indian industry.  Such efforts are continuing for the last 12 years and persistence will bring success one day.  This will open up new avenues of co-operation and work for the Indian industry.  The design organisation is well equipped to undertake design and design-production interaction for submarines.  

Special features of submarine building

There are many changes necessary to adopt traditional shipbuilding methods to modern submarine construction technology. The complexity of modern submarines requires a high level of discipline from the submarine designer, submarine builder as well as those responsible for the design of machinery and equipment and the selection of materials. The strong links forged between the designer, shipbuilder and supplier of specialised equipment and materials are key factors in the technical success of a submarine programme. The total effort involved in modern submarine design, from concept, development and up to generation of working drawings is approximately 1,000 man-years over a 7-year period.  The cost of a full range of design and support to build tasks is equal to about one third of the construction costs of the first of the class.  Submarine design and building requires special efforts in weight control, ventilation and air-conditioning, mock up, modelling etc.  The steel for building submarines is to be high yield, low alloy, fine grain, fully killed, quenched and tempered.  Thicker and heavier plates are needed for the pressure hull requiring special fabrication and welding techniques.  The hull outfit in a submarine requires stricter standards.  The ability of the shipbuilder to produce pipe works to exacting service standards, configured within very restrictive space envelopes and in the quantities necessary, is one of the demanding parameters of a submarine programme.  1/5th scale three-dimensional models of each compartment are made with all relevant structure, equipment, piping and cabling represented.  Production information is also obtained from computer models.  The electrical outfit for an advanced submarine has to service the complexities of the propulsion systems, as well as, greatly increased electrical demand for DC and AC systems in a variety of voltages and frequencies to suit control, instrumentation, communication, navigation, weapon and life support systems.  The modern trend is to complete more outfitting in workshop rather than in the cramped confine of the submarines.  Nearly 80 per cent outfitting is completed prior to the launch of the submarine. 

ARM Technique  

Availability, reliability and maintainability are essential factors in the design of any modern warship and more so for submarines.  These must be considered at the earliest possible stage of design and modelling to assure optimum safety and service performance.  The ship availability modelling is a powerful tool used to assess the probability of a warship / submarine achieving given mission profile.  The assessment begins by producing a ship dependency diagram showing the relationship between the operational characteristics and the systems / equipment, which support them.  Each element is then examined to determine its likely failure rate, causes, and consequences (Failure Mode and Effect Analysis).  The results are applied to ship availability date for various mission profiles.  This approach is most useful in comparing the reliability of varying system proposals in the design stage.  By the use of models and mock-ups, equipment maintenance envelopes and removal routes are carefully designed, checked and then verified finally at ship.  Design decisions affect through-life cost and ARM techniques coupled with systematic design reviews offer a means of achieving an acceptable balance between procurement and upkeep costs and operational targets.  

Merchant Ship Design and Building

The Indian Scenario: The majority of the merchant ships owned by Indian companies have been designed and built abroad.  A few countries like Japan and Korea have virtually captured the world merchant ship market.  This is due to their excellence in design, quality and minimal shipbuilding times for delivery e.g. 6 months for bulk carriers and 12 months for containerships.  Indian shipyards have not been able to compete in the design and building of merchant ships.  The Indian merchant ship fleet consists of about 200 ships (overseas going).  Taking into account 20 years life, we shall need 10 ships every year for our own market.  There are, in addition, 425 coastal ships i.e. we need 20 such ships every year.  There is a strong case for reviving shipbuilding within the country.  The Indian shipyards have not kept pace with the technological developments in optimum production of ships.  We need to provide incremental modernisation to these shipyards to make new merchant shipbuilding economically viable in the country.  The internal market of 10 seagoing ships and 20 coastal ships every year should provide the necessary incentive.  We need to take major initiatives to improve productivity through technological automation, standardisation and rationalisation of design, engineering and production activities and reduction in work force.  Government can encourage, support and assist in providing income tax incentives, export incentive credit, tax incentives for money spent on training and facility improvement and free export on trade zone incentives and shipyards could be allowed to import supplies free of duty. The prospects of producing ships cheaper than anywhere else in the world should encourage private industry to get into collaborations with leading shipbuilders in the world and create a new wave of ship building in India .  

Worldwide Shipbuilding Industry 

The market for ships is a global market.  Ship operations, ship owners and shipbuilders freely cross national borders to obtain a price, time and technological advantage.  The shipbuilding industries of nations with comparative advantage, based on responsive markets, cheap labour, or superior technology would be expected to prosper.  The economics of nations that lack such an advantage would be expected to allocate resources to other activities.  This simple logic / model does not fit the realities of world shipbuilding.  This is so because most trading nations perceive the shipbuilding industrial base to be a vital national resource on other than strictly economic grounds.  The national policy of most trading nations reflects the primary requirement to maintain some degree of control over the resources needed to move their products to foreign markets.  They have, therefore, industrial policies aimed at assuring the existence of a nationally controlled fleet.  Some of these nations have supported their shipbuilding industries in order to provide the means of replacing the national fleet should it be threatened militarily or economically.  Other nations have supported the shipbuilding industry as a ‘hub’ industry for economic development.  Many nations also view their national shipbuilding industry as essential for defence purposes.  

The World Shipbuilding Market

The international market for merchant ships has historically been cyclical with nine major cycles.  With the closing of the Suez Canal in 1959 and the oil embargo in 1973, the cyclical curve had peaks and troughs with new extremes.  The first half of the 1970s was a boom period for the world’s shipbuilders.  Between 1970 and 1975, the world fleet deadweight tonnage increased by 70 per cent.  Much of this tonnage comprised supertankers built to carry crude oil from the Middle East to Europe and Japan .  In 1973, the world order book was equivalent in deadweight tonnage to 50 per cent of the world fleet.  After the Arab oil embargo in 1973, the entire world shipbuilding market contracted dramatically.  The worldwide order book declined from a peak of 242.3 m deadweight tonnage (dwt) in 1979 to 32.0 m in 1979.  Many of the marginal shipbuilders who were able to penetrate the market during the boom years went bankrupt or were nationalised.  The highly automated yards in Europe were either nationalised or restructured.  Even Japan suffered many bankruptcies and a reduction in shipbuilding capacity of 35 per cent.  Although some recovery occurred in the world shipbuilding market, its condition throughout the 1980s can be described as depressed.  However, there were modest increases in the 1990s.  The estimated installed yard capacity for shipbuilding worldwide is about 18 million compensated gross tonne (27 million dwt) of new tonnage per year.  The new shipbuilding requirements for the current period 1975-2010 have been projected to be of the order of 50 million dwt per year.  As such, the demand is almost twice the installed capacity.  Therefore, there will be pressure to expand world shipbuilding capacity during the early 21st century.  Japan became the world leader in commercial shipbuilding in 1956 and has continued to maintain that position.  South Korea , Spain , Taiwan and Brazil emerged as strongly contending shipbuilding nations in the 1970s.  In the early 1980s, the People’s Republic of China also began a serious entry into the world shipbuilding market.  During the 1990s, the percentage share in tonnage on order with the world’s leading shipbuilding nations are reported as follows:


39 per cent

South Korea

21.1 per cent


5.4 per cent


5.1 per cent


3.3 per cent


2.9 per cent


2.7 per cent


2.4 per cent

Great Britain

2.4 per cent


2.3 per cent


2.3 per cent


2.1 per cent
All others 9 per cent

          Total tonnage on order approximately 70 million dwt

To maintain their market share, the nations have followed a variety of marketing strategies, which have included subsidy schemes and major initiatives to improve productivity. Since 1979, the work forces have been reduced over 60 per cent in West Europe , and over 70 per cent in Japanese shipyards. These reductions have been possible by increasing the amount of automation, standardisation and rationalisation of design, engineering and production activities.

Dynamics of World Shipbuilding

The international shipbuilding scene is very dynamic.  Yards come and go, some are getting highly specialised and others diversify.  Since World War II, the shipbuilding industry has undergone dramatic changes regarding the countries and regions that dominate the industry.  There were dramatic increase in Japanese production from 1960 to 1975, crowding out the European manufacturers.  There was a similar growth of Korean shipbuilding from 1980 to 1985.  There has been a dramatic reduction in European shipbuilding from a position in 1960 controlling two-thirds of world shipbuilding output to a level of one-sixth today.  Japan has been controlling around half of world output for almost 30 years, but is now challenged by the growth of Korea .  Korea and Japan together now control over 60 per cent of world output.  One main reason that Japanese shipbuilding has been able to remain competitive for over 30 years is the ability of the industry to constantly upgrade productivity, and find ever-new ways of cutting costs.  This is done partially through investments in modern production technology though use of latest materials, administration and supply chain management are also key factors.  In Japan , one finds production of marine equipment located close to the shipyards.  This enables yards to adopt efficient just-in-time practices and reduce inventory costs.  In addition, the suppliers often act as flexible sub-contractors, making labour cost more of a variable cost element, adjusting to changes in the market.  We believe that in order to remain competitive in the future, shipyards will have to make alliances with the suppliers and sub-contractors. 

Performance indicator

A shipyard may have a highly productive shop floor workforce, but be disadvantaged by heavy overhead staffing.  This reflects a problem that is likely to be met by shipyards attempting to combine naval and commercial work.  The high staffing inherent in naval work must be separated from commercial work to avoid an unsustainable level of economic inefficacy.  

The unit of output most commonly used for comparisons between shipyards is the compensated gross tone (CGT).  CGT is effectively a measure of work content.  

          Productivity   =   Man years/Unit output (CGT)

          Cost              =  Total cost/Man years

          Cost Competitiveness  =   Productivity x Cost = Total cost/Unit output (CGT)  

Comparison Of Shipbuilding Productivity

(Relative man-hours / compensated gross tonnes)

            Japan                European         US               India

             1                         2                4               10

Country Relative labour rates




0.5 to 1.5


Hongkong 3




  U.K.    10
































In some countries, the labour costs associated with building a ship vary between 35 and 60 per cent.  In countries advanced in shipbuilding, the labour percentage is significantly lower at 20-35 per cent only.

Hourly Relative Labour Rates For Shipyard Workers Worldwide

Therefore, in many cases, the differences in labour productivity are absorbed by the differences in shipyard labour costs.  

Industrial Revolution In The Availability Of Marine Systems & Equipment  

We are building warships for the Navy indigenously.  Soon submarine building too will be revived.  There is also a proposal to open a second line of submarine construction in India .  This is bound to bring about industrial participation in a big way.  In view of the large domestic market for merchant ships and the relatively low labour rate, there is a good case to take bold initiatives to modernise our merchant ship building as stated earlier.  We need to come up to the expectations of the merchant marine to design and build merchant ships to international competitive standards. The indigenous building of warships, submarines, and merchant ships can bring about an industrial revolution in the country for the manufacture of marine systems and equipment.

Importance Of Comprehensive Build Strategy Towards Economic & Efficient Shipbuilding

There is room for substantially improving the build strategy document to be prepared by our shipyards.  Before commencement of production, our shipyards need to prepare a comprehensive document on ‘Build Strategy’ which should encompass approved and agreed designs, engineering, material management, procurement of long lead items and other items, production tests and a trials plan.  All these need to be prepared before work starts with the aim of identifying and integrating all necessary processes.  The ship build strategy should emerge from the shipyards’ business plan, shipyards shipbuilding policy and ship definition policy.  To meet the targets set in the build strategy a set of decisions are required on facilities development, productivity targets, make or buy or subcontract and technical and production organisation. The build strategy document should define relationships with yard’s business plan, policy, introduction, ship description, contractual matters, design and engineering, procurement, planning and production, accuracy control, tests and trials, personnel, weight control and quality assurance. The build strategy is used to facilitate and strengthen the communication links.  The build strategy serves as an effective tool by giving participants the opportunity to work out all their needs together, in advance of taking up the task.

Improving Shipbuilding Efficiency Through Lean Manufacturing

The purpose of lean manufacturing is to improve product cycle time, cost competitiveness, and quality, by eliminating any waste / wait in the manufacturing process through continuous improvement by a motivated work force.  It preaches the importance of creating continuous material flow, standardising processes and eliminating waste.  The idea is to give to the customer what he wants with minimal lead-time by eliminating waste / wait.

An efficient shipyard would use relatively standardised, modular designs to create what some call ship factories / workshops i.e. factories / workshop in which there is a constant flow of basic and intermediate products, built in most cases on moving lines and material is carefully sequenced and shifted through the yard in a carefully orchestrated flowing patterns – just-in-time (JIT).  There is need to develop people to be flexible, motivated and highly capable professionals.  In lean manufacturing, waste is anything that adds to the time and cost of making a product but does not add to the product from the customer’s point of view.  Lean thinking focuses on value-added flow and the efficiency of the overall system.  A component sitting in a pile of inventory is a waste and the goal is to keep products flowing and add value as much as possible.  The focus is on the overall system and synchronising operations so that they are aligned and producing at a steady pace. 

The seven wastes that need to be avoided in Lean Manufacturing include over- production, producing defective products, inventories, motion, extra processing, transportation and waiting.  The five Ss for a well-organised work force for Lean Manufacturing for eliminating waste have been identified as Sort (what is needed and what is seldom used), Stabilise (orderliness), Shine (cleanliness), Standardise (create rules), Sustain (self discipline).  The purpose of the 5 Ss is visual management, which touches every part of the yard from markings on steel to equipment gauges, to amounts of inventory, and to the appropriate thing to work on next. 

The lean principles used in shipyards include, Just-In-Time deliveries, lean flow using takt (meter) time (targeted pace of production), staged materials; dedicated process lanes for major processes, such as built-up profiles, sub-assemblies, flat blocks and curved blocks; built-in quality, visual control, the people systems such as continuous improvement, multi-skilled workers and multiple machine / task assignment.  Other important factors in the lean manufacturing principles include standardisation, one piece flow, flow smoothing, focus on elimination of waste, group technology (structured block construction with advanced and zone outfitting) and part families, dedicated interim product lines, and multi task assignment for employees. 

Productivity in Indian shipyards is one tenth of that in modern shipyards abroad.  Moreover, Indian shipyards take at least three times more time to build ships. There are many things that could and should be done, but one way that could significantly help, is to adopt lean manufacturing principles. It is anticipated that implementing lean manufacturing principles in shipbuilding could improve productivity by at least 50 per cent and shorten build times by at least that amount. Such improvements would certainly assist Indian shipyards to improve their prospects for the future. Lean manufacturing leads to Just-In-Time shipbuilding. Individual blocks are scheduled so that they will be complete Just-In-Time to construct grand blocks, which will complete Just-In-Time for final ship construction in dry dock.  The machinery, equipment and system will arrive in shipyard just-in-time for fitment.  It is often cost effective to purchase whole blocks from outside, in which case, the suppliers of those blocks must fit into the precise timetable of the shipbuilder – just-in-time.  Lean production also leads to cost reductions via eliminations of unnecessary operations, waiting times and inventories.

For lean manufacturing, the efficient and timely information flow in a shipyard is essential.  In order to build each compartment of a ship correctly the first time and on time, the craftspeople not only require the right material and tools at the right time, they also need the correct information just-in-time.  This information includes drawings, material-lists, bills and manufacturing aids. To explore the benefits of lean manufacturing in ship construction, it is essential to apply lean concepts throughout the programme of design construction enterprises.

Competitive Shipbuilding

Every shipbuilding firm needs to pursue ship design excellence, high build quality, quick delivery and cost effectiveness.  Yards must become innovative not just in product and process technology but also in management and operation.

Labour Productivity

Shipyard workers need to be competent, creative and hard working.  There are problems with workers who live very far from the work place and spend 4 to 5 hours commuting for an 8-hour work shift.  We cannot expect such workers’ productivity to be competitive with those who spend less time (less than 1 hour) of commuting.  The age of the workers also contributes to productivity.  Indian Shipyards need to resolve and reconcile these issues for improving labour productivity.  In most cases, the problem of low productivity is not with the worker, it is with the environment in which the worker performs. The principal factors influencing shipyard worker performance are discussed below.

Ship Production Management  

Ship production management includes planning, supervision, inspection and physical facility / equipment provision. With incompetent and inexperienced management, the material and production process flows are not effectively coordinated.  Tools, equipment and material (raw material and material in process) are not delivered just in time to locations where they are required.  The same is also true for personnel, inspection and facilities.  We need to improve ship production management with lean and just-in-time principles.

Worker & Manager Training

Training in shipbuilding, as in all manufacturing, must be a continuous                                    process, where worker and managers regularly undergo training to update their skills.  Successful yards abroad spend 1 per cent to 1.5 per cent of revenues on training.  This amounts to an average of 8 to 10 days per year as full-time training of everyone.  TQM requirements of training need to be fulfilled fully.  Indian shipyards need to implement such training schemes to keep up to date with technology and innovative techniques.

Working Conditions

The working conditions in our shipyards and in ships under construction leave much to be desired.  The workers and supervisors often dress in inappropriate clothing.  Shipyards must provide white or other colour overalls to their work force.  The working conditions need to be clean and hygienic.  Basic needs of clean changing rooms, lockers, tea snack, lunch, afternoon tea need to be provided in a dignified manner and in adequate / surplus supply to avoid queuing and thus avoid workers tendency to leave work spots much before scheduled breaks.  This will improve worker morale, work safety and self esteem.  Workers will treat equipment very much like the way they are themselves treated.

Multi-Tiered Hierarchical Line Organisation

We need to avoid too many levels between workers and yard manager.  The shipyards need to have flat, free-form, flexible organisations, with some matrix characteristics, which empower workers at all levels and assume proper feedback and feed forward of information.  Decision functions and responsibilities must be delegated to the lowest competent levels.  This assumes not only better and more timely decisions but also assumes proper sharing and transfer of information resulting from and required for such decisions.

Casual Labour  

A casual-labour environment where people are hired and fired all the time, instead of being allowed to move from one department or job to another to safeguard the use of their work skills as well as loyalty, needs to be carefully examined.  The latter is more beneficial provided a multi-trade work force concept is accepted in the shipyard.

Other Worker Incentives  

Financial incentives such as profit sharing, year-end bonuses and general recognition of contributions made by individuals should be introduced.

Workers-Personal recognition  

Workers should also be given an opportunity to relate to the customers, learn about the expected use of the vessel and the conditions under which the ship is expected to be used.  Workers must not only feel financial satisfaction but also pride of ownership, personal recognition, and peer acceptance.

 Multi Skilled Work Force  

We have too many trades in our shipyards and each trade has a mate / helper concept. A multi-skilled worker should be able to do all the jobs like plating, marking, welding, engine fitting, pipes fitting, etc.  Such a multi skilled worker should be designated as ‘ship mechanics’.  This simple factor if introduced, implemented and accepted, will improve productivity very substantially.

 Revival of Indian Shipbuilding

The shipbuilding industry needs a radical structural change.  It must reinvent itself to become a mean, lean, productive and creative ship production industry unhampered by government rules and restrictions.  It must be able to work in joint ventures with any one worldwide. The three important factors of shipbuilding competitiveness i.e. Labour Productivity, Technology and Capacity need to be advanced with innovative and bold solutions.  This will lead to series production of ships with repeat orders and the learning curve effects will benefit the shipyards.  The facts and figures given above make a strong case for revival of Indian shipbuilding.

The government can assist the shipbuilding industry in improving its productivity in many ways. There can be income tax incentives; the government can allow free export or trade zone incentives (where shipyards can import supplies free of duty);  the shipyards may be given export incentive credits;  government can also introduce tax incentives for money spent on training and infrastructure facility improvement etc.  

Clients For Shipbuilding Industry

The Indian Navy is a major traditional client of shipyards for building of warships and submarines and the Navy will continue to support indigenous warship and submarine construction.   With innovative infrastructures, the shipbuilding industry can also woo the domestic market of 10 seagoing merchant ships and 20 coastal ships per year.

The aim is to bring about radical changes in the shipbuilding industry, where we learn to better utilise our existing facilities, create incremental, modern, update technology, and work on joint ventures.  Such radical changes will make the industry world market oriented, and operationally independent.  

Futuristic Digital Shipyards and Virtual Reality with Product Life Cycle Management (PLM) in Shipbuilding

Future ship design and construction will be influenced by advances in both manufacturing techniques and technologies, along with improvements in the ship design environment, resulting from greater use of computer based databases and graphic tools. Digital shipbuilding innovation can be brought about by software solutions for Product Life Cycle Management (PLM) from world renowned companies like IBM and Dassault System including CATIA, ENOVIA and DELMIA software. Digital shipbuilding will improve collaboration / integration between design / engineering and shipbuilding manufacturing.  The combination of software like CATIA and DELMIA would provide unique opportunities to connect their two main domains. Several computer models can be developed to automate essential shipbuilding processes and these can be applied to the modern, scalable architecture that is the foundation of CATIA, DELMIA and ENOVIA.

Delmia Corp., a Dassault Systems Company is engaged in a full-scale research project to develop a digital shipbuilding system for the Samsung Heavy Industries Company (SHI). Delmia is the leading three-dimensional product life cycle management (3D-PLM) solutions provider for Lean Manufacturing process engineering. DELMIA’s IGRIP & QUEST will be implemented to develop the next generation digital shipbuilding systems integrated with industry best practices. These digital shipbuilding systems will simulate and optimise the entire shipbuilding lifecycle process in a virtual environment from the initial development stage to the launch. This will increase productivity, reduce costs and improve quality. The aim is to develop an integrated shipbuilding management system with digital simulation, which can improve productivity of the shipyard, optimise production line layout and evaluate production efficiency in practical details.  Computer software now available is reported to be a good 3D digital representation tool to simulate the whole shipbuilding process.

It is reported that the US Navy office of Naval Research has awarded research funding to DELMIA for a digital shipyard.  DELMIA software, together with CATIA and as part of the global Dassault System 3D PLM (Product Lifecycle Management) can be used to model a digital shipyard.  The focus will be to find ways for reducing the building costs of US Naval warships and commercial ships.  Shipbuilding involves complex resources and processes.  Thus for the efficient modelling of PPR (Product, Process and Resource) data of a shipyard, we need very powerful simulation based tools to achieve our goal.  It is reported that DELMIA provides such fine tools i.e. IGRIP, QUEST & ER60. 

LPD – 17, USS San Antonio is the first surface ship ever designed in virtual reality.  This was possible through digital manufacturing solutions provided by DELMIA. It is common for a ship design to be only 20-30 per cent complete when production starts, however, the design of LPD-D was over 80 per cent complete before any steel was ever cut.  This effort involved a new level of visualisation for participants to clearly see the work being done at each stage.  Much of the modelling and simulation work was done by Delmia’s Envision and Envision / Assembly computer-aided part of Delmia’s process planning and digital manufacturing tools portfolio.  On the LPD 17 Project, no steel was cut or welded until every step had been proven by simulation, thus avoiding rework, cut apart and reweld. The ship is assembled on screen, block by block, to make sure that everything fits and that the sub-assemblies and components would go together as planned.  Each section is disassembled in the reverse order, with simulation keeping track as it was pulled apart, and then put back together again, with each sub-assembly and component going back in the correct sequence, location and orientation.  Each ship zone is run five or six times to get the errors out and end up with a ship that could be built the way it was planned.  The US Navy has reported that the use of DELMIA tools and other processes contributed to savings of over $370m in total cost in the LPD surface ship programme.

It is reasonable to expect substantial quantitative and qualitative benefits from investment in digital manufacturing.  Returns in the range of 5 or 10 to 1 are realistic when it is implemented in combination with digital mock up, process re-engineering, and as a component of an integrated PLM solution.   

3D digital mock up tools have been used in USS Holland submarines project from 1992 to 2000.  The Royal Navy, UK has undertaken virtual future Aircraft Carrier studies through System Engineering and Assessment Ltd using DELMIA’s Envision to analyse short take off and vertical landing (STOVL) vs conventional take off and launching (CTOL).  

The above integrated product data environments and the reality of digital / ‘virtual shipyards’ have made it possible to produce very good definitions of the intended product that can be shared between the customer, the prime contractor and subsystem producers right down the supply chain to discrete equipment manufacturers.

Our design organisation and shipyards have to take note of digital shipbuilding with virtual reality and take it into account in our modernisation plans.


India has made substantial progress in the design and building of warships for the Navy and we are proud of the self-reliance being achieved in this sector.  We need to continue to update our design techniques and modernise our shipyards towards efficient competitive warship building.  We have to revive submarine building and also open a second line of submarine building to catch up with lost time in this field.  Our shipyards and industry need also to develop competence to provide comprehensive Integrated Logistic Support and Performance Warranty for warships.

A majority of the merchant ships in the Indian Fleet have been designed and built abroad.  We should not allow this situation to continue.  We have more than enough domestic demand to sustain merchant shipbuilding.  We need to utilise the existing facilities in the shipyards in a better manner and also take initiatives to modernise our yards and be competitive.  It is not very difficult, keeping in view that our labour rates are relatively very low. The prospects of producing ships cheaper than anywhere else in the world should encourage private industry to set up joint ventures with leading ship builders in the world to the mutual benefit of both sides.

Digital shipbuilding and virtual reality in product life cycle management in shipbuilding are moving in at a fast pace.  These innovations will fully integrate the design / engineering and building / manufacture.  The USS San Antonio LPD 17 has been the first ship designed in virtual reality.  Implementation of digital shipbuilding and virtual reality has saved $370m for the LPD programme.  It is reasonable to expect substantial qualitative and quantitative benefits from investments in digital manufacturing.  We need to bring in digital shipbuilding with virtual reality in our ship design and shipbuilding programme and reap the benefits thereof and thus remain competitive in the world market, both for military and commercial sectors of shipbuilding.

Our national policy should aim at assuring the existence of a nationally controlled fleet for strategic reasons.  The government should support the shipbuilding industry in order to provide the means to replace the national fleet, should it be threatened militarily or economically.  We should view the shipbuilding industry as a ‘hub’ industry for economic development.  The national shipbuilding industry will be an asset for defence purposes.  Also, this will bring in a new industrial revolution for the manufacture of marine systems and equipment to support shipbuilding. This will be in the interests of our national pride.   

For warship building, we also need indigenous weapons and sensors. Self-reliance in the field of defence is important. The need to keep up with the technology, to have the best and better than your adversary, is even more essential. These objectives can be rapidly and more economically and optimally met by involving the Private Sector in the development of weapons and sensors. The technology, expertise, skills and talent available in the private sector can make innovative contribution and can sustain it by updates as newer technologies become available. The Private Sector can either be given independent programmes to develop, manufacture and continuously update in consultation with the user, or and the private industry can support DRDO or Public Sector in accelerating the rate of progress in defence systems. Thus, the involvement of the Private Sector is a total win-win situation and defence preparedness shall benefit enormously.  

This article first appeared in the Indian Defence Review Volume 20-1, Jan- Mar 05 and has been reproduced here with the permission of the editor.