A Study of the Factors affecting Ship Production Times - An Empirical Analysis of the European Shipbuilding Industry
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Lead time is a key competitive factor in any Engineer-to-order (ETO) company. In shipbuilding, lead time can decide the win or the loss of a contract, especially in the current challenging market situation. Therefore, it is valuable to know which factors affect the production time of a ship, and to what degree. Preceding studies have mainly explored shipyard performance by assessing a yard s efficiency compared to other yards, but lack information on causes. This work aims to gain insight into the relationship between the factors affecting the lead time and the lead time itself. The research goal was guided by two main objectives:1. to identify factors that are expected to affect the production time of ships2. to test the relationship between the identified factors and the ship production time The identification of relevant factors was conducted through a thorough literature review. A research model and corresponding hypotheses were formulated and further operationalised into measurable elements. The ten factors expected to affect production time and thus included in the model were: market situation, industrial environment, product variety, ship size & complexity, customisation, yard size, offshoring, building practices, assembly technology and technology & practices. In order to test the model and hypotheses, data was gathered from European shipyards through a survey and complimented by secondary data from online databases. A questionnaire was constructed and distributed among 117 shipyards, and resulted in a response rate of 25,6%. The preliminary analysis of received answers revealed the need for adaptations of the research model. Among other adjustments, customisation was removed as a factor. Multiple regression analysis was employed to perform the statistical analysis on the data gathered. The analysis results suggested that the variables market situation, industrial environment, product variety and yard size have an extending effect on production time. Diversely, the variables ship size & complexity, offshoring and building practices were shown to have a shortening effect on production time. The variables building dock and technology & practices were found to have no statistical significance on the lead time.Several of the factors showed an effect on the lead time opposite of what had been theorised based on the literature review. However, these results could for the most part be explained by the lack of accurate population representation, multicollinearity and weaknesses in the measures. The result of the study indicates four implications for practice. Firstly, it is proposed that less variation in product portfolio, and thus longer production series of ships of similar design, should be attempted to reduce lead time. Secondly, yard sizes should not be increased if an extended lead time is undesirable. Thirdly, offshoring practices should be applied in order to reduce production time of ships. Fourth and finally, the outfitting of blocks should be done to a great extent before ship erection, and the practice of concurrency should be reduced.