On the move with excellerate
Although car manufacturing is of course a very different process from shipbuilding, Damen Shipyards Group has always regarded the automobile industry as an inspiring example. Car manufacturing is largely automated. That has produced efficiency gains, but has also given it a solid basis for the necessary innovation. Car manufacturers and their suppliers work together closely, with each one having a good understanding of the entire manufacturing process and the related costing. That may be going a bit too far in the more traditional segments of the shipbuilding industry, but in our segment and at Damen itself, we’ve already made considerable progress in that direction. That naturally calls for a fundamental change in our organisational processes. In other words, instead of ‘push’, with headquarters taking the lead, we’re moving towards ‘pull’, with the yards in the Group taking the lead. We’ve undertaken this process not only to continue standardising, uniformising and digitising our operational processes, but also to free up energy, time and capacity for innovation.
Kommer Damen’s approach was absolutely revolutionary in the 1970s: produce custommade ships using standardised parts. Damen manufactured the separate standardized components, making it relatively easy to assemble the ships. It meant that the company was and still is able to build a ship quickly and to its customer’s wishes. Or, as Kommer Damen put it, “It always surprised me that this philosophy wasn’t taken up by the shipbuilding industry. It’s absolutely normal in the auto industry or in bulldozer manufacturing.” Today, we’ve come up with a new twist on that approach: we call it ‘smart customisation’. Specifically, it means that we use a Damen Sales Configurator, for example on an iPad, to show our customers the various basic ship models and available options. That way they can design their own ship virtually in real time and to their own tastes and requirements.
Behind the scenes
Until 2000, we procured the majority of hulls for our ships from outside sources. Now, however, we’re producing more and more of them in house, leading to an enormous expansion in our organisation. As a result, the work carried out at our many shipyards has become much more diverse. Now that we’ve undertaken production ourselves, the outsourcing mentality that was our mainstay for many years is no longer suitable. Today, it’s crucial to think in terms of chains. That means that Damen Headquarters in Gorinchem no longer takes the lead; instead, the shipyards do. So our approach has moved from ‘push’ to ‘pull’.
Once that started, it was time for a change, and that change coincided with the rise of digitization in our industry and our organisation. That’s why in late 2014, we launched a programme known as Excellerate. Its purpose is to standardise and digitize the content of our shipbuilding process across the various disciplines by supporting chain-driven tooling and making the necessary shift to allow the shipyards to take the lead.
Customer-focused operational chains
To give the process of uniformisation and digitization an extra boost, we took a huge step in the first quarter of 2016 by overhauling the division responsible for designing and building new ships. The new set-up involves four customer-focused operational chains. Two of the chains are responsible for building small and larger series of standard (stock) ships and the other two specialise in more complex customisation projects for specific customers.
The Excellerate process has another advantage: it is gradually freeing up our ‘top’ people so that they can turn their attention to customisation projects and innovation. To do this, they need to have the necessary time and space. That’s why we deliberately chose to cast Excellerate in the form of a programme.
For one thing, it will not disrupt the shipbuilding process that way. For another, it allows us to focus on all the steps in that process, from engineering to procurement to actual shipbuilding. It helps us to take synchronised steps, leading to faster results.
Standardisation versus variation
Variation in a process naturally costs money, in shipbuilding as elsewhere. That is a good reason to remove variation where it isn’t necessary, i.e. from the process and the operational chains. In concrete terms, this means that we make digital templates of our standard series ships that we enter into our CAD and ERP systems. That way all the components are clear. Every discipline in the chain is linked to the ERP system, so that the template can be used to place orders directly and to start building straight away. Putting it simply, we’re creating a box of Lego parts for every ship along with strict digital instructions. Because there is little variety in the components, a logical outcome of the Excellerate standardisation exercise, we also know a lot more about each one of them, making it much easier to stock up worldwide on consignment, for example.
Lower cost prices, better quality, and shorter lead times are what Damen is after. Streamlining and serialising our standard shipbuilding work also has spin-off effects for our customisation projects, especially when we use standardised components. Our procurement will be much more efficient this way, and we can customise our services more. It also makes it easier to build up stocks of standard ships, so that we can respond quickly to customers. But even if a standard ship is not in stock, our digitized serial production chains can still produce a ship much faster for a customer in this way, even if the ship is semi-customised. Besides having an easier time keeping spare parts in stock, we can also give our Service staff more precise training. Not only will this streamline our services, it will improve them too.
All this makes long-cycle production of our standard ships possible. That is advantageous for customers who purchase them and for those who want to add some custom features. The underlying basis is continuous feedback from customers about materials, spare parts and ‘sailing characteristics’. We use their input to modify and innovate the shipbuilding process and to help us select products and materials. That’s how we’ve been able to improve the quality of our ships, year after year. The growing level of digitisation is accelerating this feedback loop. By designing our standard ships modularly in digital templates, smart customization is becoming simpler and more streamlined. That’s why we developed the Configurator App, which allows customers to assemble their own ship in a few easy steps on an iPad. Today, our Configurator App is a unique example of innovation in our industry.
How we see the future
We are a family business that takes a long-term view of our industry. We have the latitude to see things through to maturity. That’s clear from the Excellerate programme, which has demonstrated its usefulness and necessity in relation to uniformisation and digitisation after only a year. It’s not for nothing that we set up the organisation in customer chains for standard and new ships. That way we can continue to streamline our four operational chains to meet the needs of the customer and the underlying shipbuilding process. This has given us the necessary, solid foundations for the future. We believe that our organisation has to remain flexible at all times so that it can adjust quickly to the demands of our market and our customers. Being flexible is a proviso for successful entrepreneurship. Our approach also gives us the leeway to build our relationships with our suppliers, so that we can form genuine partnerships with them.
The principle of flexibility applies across the entire maritime industry to which our organisation belongs. If the Netherlands wants to remain successful in this field, then we must join forces so that we can continue to adapt to new trends and developments and to the ever-changing political and economic landscape. Alliances with other parties are naturally also crucial, for example with dredging and offshore companies, research institutes, banks and insurers. Government too plays a vital role, not only as a partner but also as a launching customer in many different areas.
FACTS & FIGURES
Start: November 2014
Purpose: Standardise, uniformise and digitise products, processes and tooling of our best-selling ships
Average time it takes to develop the template for existing ship models: 4 months
Number of ships with templates: 5 (per 1-5-2016)
Biggest challenge: Further reducing cost and lead times and improving overall quality by applying Excellerate to all Damen newbuild yards worldwide and by templatising standard vessels.