You are on page 1of 12


The Canadian Government has identified a need to rebuild and replenish the Canadian naval fleet as well as the fleet of the Canadian Coast Guard. Over the next 30 years a significant number of vessels will be designed and built to meet this need. A plan to develop the capability to perform this work in Canada is being prepared.

In order to develop a plan for developing a sustainable shipbuilding industry in Canada, the Government Shipbuilding Forum has requested a series of proposals from the industry. However, it is believed by the authors of this proposal that the approach being followed will lead to proposals that outline a plan that will allow the industry to do more of what it has always done. In order to truly develop a sustainable industry this proposal will outline a solution which will allow the industry to do what it needs to do more effectively. In doing so this proposal will answer a series of questions posed by the Government Shipbuilding Forum by outlining a platform of modern shipbuilding technology that includes: advanced shipyard production techniques, modern shipbuilding design and production software, educational initiatives to create a sustainable workforce, online collaboration initiatives for Canadian equipment manufacturers, and R&D programs to allow for continued improvements in technology. The specific questions to be answered are: What do we - government and industry - need to do better to acquire ships for the navy? How can we shape our acquisition strategies to deliver better value for Canadian taxpayers? How do we ensure sustainable benefits for the individuals and communities that build and support our ships? How do we identify dynamic, innovative and effective ways to build ships in Canada? What will constitute a new approach that works for all Canadians in the 21st century? What needs to be in place to ensure a sustainable industry?

In order for Canadian shipbuilders to remain viable there will be a requirement to take on commercial work in addition to the available government contracts. While there will be a certain amount of work that these shipbuilders will be able to garner from new Canadian commercial vessels, there will likely be a requirement to build international commercial vessels to ensure long term sustainability. A protectionist policy similar to the Jones Act in the United States will therefore not be a suitable response. Such as policy would make Canadian shipbuilders completely reliant on Canadian contracts as it has done in the US. Due to the relatively high labour costs in Canada compared to those in the emerging shipbuilding markets, it will be necessary to be highly efficient in order to compete on the international stage. In true Canadian fashion we believe that the answer can be found through innovation and technology.

SSI has been developing CAD and PLM tools for the shipbuilding and offshore industries in Victoria, BC since 1989. Among the 68 employees currently employed by SSI are marine designers, engineering managers, mechanical

engineers, software developers, and IT specialists. A management team with over 40 combined years in creating and managing CAD/PLM systems provides the necessary oversight. SSI has grown substantially in recent years with annual revenues quadruple what they were just four years ago. To date SSI has been involved in the implementation of over 300 CAD/PLM systems in the shipbuilding and offshore industries. SSI’s involvement in these implementations ranges from direct involvement with corporate customers, to indirect involvement through its subsidiaries in the USA and Singapore or its international network of resellers. SSI’s flagship product, ShipConstructor, works hand-in-hand with many of the products developed by Autodesk Inc., the world’s largest CAD software company. Recently, this partnership has extended into joint marketing and sales efforts as well.

To be truly successful, the implementation of a shipbuilding standard for Canada will require the application of international experience in naval and commercial shipbuilding. Currently the Canadian government is requesting a proposal from the Canadian shipbuilding to a problem that is international in scope. SSI has extensive experience over the last few decades in both commercial and naval shipbuilding in every major shipbuilding market.

Over the last ten years ShipConstructor has leveraged its dominance in US commercial shipbuilding to build a significant presence in the US naval shipbuilding market. Today more US Navy vessels are being designed and built using ShipConstructor than with any other marine software. As project schedules become more demanding and naval shipbuilders are required to build faster and more efficiently than ever before, the number of these shipbuilders turning to ShipConstructor is steadily increasing. With SSI’s increased presence in US naval shipbuilding it makes sense that the company has been an active participant in the US Navy National Shipbuilding FIGURE 1 NUMBER OF US NAVY VESSELS PLANNED Research Program. This program is a US government funded program created to increase the effectiveness of US shipbuilding through research and development initiatives. Naturally a significant part of this program is centered on shipbuilding software technology. However, SSI has been an active participant in many projects in areas outside software development due to extensive expertise in the shipbuilding process.

SSI has garnered experience in the commercial shipbuilding arena in most, if not all, of the world’s most productive shipbuilding markets. With implementations in nationally protected markets like the US, emerging markets with low cost of labor like Brazil and India, and experienced markets with high labor cost like Japan, SSI has seen a wide range of market forces at play, and has seen shipbuilding powers come and go. With this experience has come an

understanding of the commercial shipbuilding process and an appreciation of the factors required to be competitive in this market.

Canada has a few key indicators that will allow our country to be successful in a bid to be commercially competitive at an international level. The first of these is a proven track record in other industries, usually accomplished via innovation and technology. The second is a number of shipbuilding industry leaders, in addition to SSI, already operating in the marine industry in Canada. Each of these industry leaders is an end user of the ShipConstructor software. Genoa Design International Ltd. is a marine production design company based in St. John's, Newfoundland and Labrador, Canada. Genoa provides production lofting and detail design services to marine and offshore industries around the world. Established in 1994 as a three-person operation, Genoa has experienced steady growth based on a solid reputation as an innovative firm that pursues quality and efficiency on behalf of its clients. Many of Genoa's employees are graduates of the Marine Institute, a recognized world leader in naval architecture and marine systems technology training. The Marine Institute of Memorial University of Newfoundland, popularly referred to as the Marine Institute (MI) or simply Marine, is a post-secondary ocean and marine polytechnic located in St. John's, Newfoundland and Labrador, Canada. It is affiliated with Memorial University of Newfoundland. The Marine Institute is considered the most comprehensive institution of its kind in North America, with unique facilities such as a full ships bridge simulator and the world’s largest flume tank. It offers degrees, diplomas, certifications and industry training for the maritime sector. In recent years the Marine Institute has also begun teaching marine engineering course using ShipConstructor. Robert Allan Ltd. is Canada's oldest privately owned consulting Naval Architectural firm, established in Vancouver, B.C. in 1930. The company has earned an international reputation for innovative, successful designs for a wide range of ships and has been a leader in creating cost-efficient vessels for service in the marine transportation industry. Its experience includes designs for hundreds of vessels of almost all types, from small fishing boats to ocean-going ferries, however the firm is best known for its work in the fields of tug and barge transportation, ship-assist and escort tugs, fast patrol craft, fireboats and shallow-draft vessels.

In order to develop a sustainable Canadian shipbuilding industry the Canadian government will need to offer guidance to ensure a standard approach is followed across the industry. In terms of production efficiency and modern shipbuilding practice, many of the same principles can be applied regardless of whether the shipyard in question is building naval or commercial vessels. On the navy side there are a number of challenges that must be overcome to ensure a sustainable, competitive industry can be built that will ensure accountability to the Canadian taxpayer during the procurement process. A recently released United States Government Accountability Office (GAO) report ( underlines many of these challenges and will be cited here.

A summary of the findings in the GAO report matches what SSI has seen on Navy programs in the US and abroad. Cost and schedule overruns are representative of naval shipbuilding and stem from a lack of certainty and risk mitigation during the initial procurement stages of a program. This lack of certainty comes from a desire to develop new technologies in concert with design and construction of the ship hulls, as well as from external political factors. Table 1 illustrates the cost overruns on recent Navy programs which have spurred the generation of the GAO report.
Table 1: Cost Growth in Recent Navy Lead Ships and Significant Follow-ons Dollars in millions Ship Initial President’s a budget request $3,260

Most recent President’s budget request $3,752 2,740 538 1,758 2,196 631 636 5,843

Cost growth as a percentage of initial budget

SSN 774 SSN 775 T-AKE 1 LPD 17 LHD 8 LCS 1 LCS 2

15 25 10 84 16 193 147 17

2,192 489 954 1,893 215 257 4,975

CVN 77
Source: GAO analysis of Navy data.
a b c

Estimated cost from the President’s budget submission for year of ship authorization. SSN 775 is the second Virginia-class submarine, but is the first hull delivered by Northrop Grumman’s Newport News shipyard. LCS 2 remains under construction

To avoid similar cost overruns on the required Navy programs, the Canadian government will need to be an active participant in a solution. Many of the changes that should be made to ensure that the required fleet is built in a financially responsible manner require the introduction of tried and true practices from the commercial shipbuilding industry. The end goals of a Navy shipbuilding program are primarily ones of performance and capability. As the end goals of the commercial shipbuilders are centered on profitability and schedule, there are certain behaviors they exhibit that can be introduced into naval shipbuilding to reduce cost and avoid schedule delays. The Canadian government should strive to create a naval shipbuilding program that: 1. 2. 3. 4. 5. Eliminates technical uncertainty of new technologies before a contract is signed. Reduces risk by agreeing to capability and performance criteria before a contract is signed. Ensures that the design, including specific technology and equipment vendors, is stabilized before construction begins. Look to modification and reuse of existing proven designs to reduce risk and cost. Introduce fixed price contracts in order to share risk with the builder. This assumes that uncertainty and risk are sufficiently mitigated by the other approaches to make this a possibility.

These changes are more important to the effectiveness of a naval shipbuilding capability than improvements in the design and construction process. Taking another page from the commercial shipbuilding industry the GAO report notes,” Representatives of one major commercial ship buyer we visited noted that project management, yard supervision, and having a strong working relationship with the shipyard are more important factors than yard facilities and equipment when making a build decision.”

The cost-to-buy versus cost-to-own dilemma has been one which the navies around the world have been dealing with since their inception. The In Service Support (ISS) cost of a vessel around manning, repair, refit and maintenance are a significant part of the cost of any vessel. Key decisions made during the procurement process have a substantial impact on long term cost. In addition there are certain costs that can be incurred during the procurement phase which will reduce costs during the total lifecycle of a navy vessel. Many of these long term costs can be reduced through introduction of a few changes to the RFP process. These changes are common place in the commercial shipbuilding industry and involve the specification of two key deliverables in the RFP: 1. 2. An as-built 3D CAD model with associative production output for each hull in the class. A virtual reality model with intelligent attribution of components for each as-built model.

The first deliverable will significantly reduce costs during maintenance, repair and refit activities over the lifetime of the vessel. Once the as-built model has been delivered to the shipyard that is awarded the ISS contract, any design changes due to these activities, no matter how subtle, will be made in the as-built model of the vessel ensuring that they are done correctly. Additionally the associated production output can be referenced and automatically updated from those design changes. This results in significantly reduced man-hours during repair, maintenance or refit activities. There is another often overlooked aspect of performing future design changes with the as-built model available. Without the 3D model changes that are made are made in isolation from the rest of the design. Steve Carmel, Senior Vice President, Maritime Services at Maersk Line, Limited (MLL) and a keynote speaker at the US Naval Logistics Symposium said, ”We must treat the ship as a system and recognize that changes to one component will impact operating efficiency and costs elsewhere.” Modifications of any extent could have adverse effects on performance and cost if individual changes are not placed in the context of the whole vessel. Carmel noted, “Optimizing individual components of a system does not always optimize the system itself, and we are mindful of that… We must treat the ship as a component in a larger system and remember the ultimate objective is to optimize the network, or larger system.” It is certainly important to note that a new key deliverable for all ISS contracts will be introduced as the result of this change to the procurement RFP process. This new deliverable is the same maintained as-built model of the ship required during the initial procurement. This allows the Navy to maintain these cost savings even as the ISS contract changes hands, or during the decommissioning of a vessel when this as-built model can be used to determine the current state and composition of the vessel. The second deliverable is closely related to the first, and consists of a lightweight, easy to use virtual reality model of each hull. The virtual reality model would contain information extracted from the ship product model, as well as information gleaned from manufacturers and suppliers about individual components such as maintenance intervals. This virtual reality model must be updated whenever the design changes to ensure that it remains relevant. Like the as-built model, it must be specified as a deliverable for ISS contracts, not just during procurement of the vessel. For a casual user the virtual reality environment is significantly easier to navigate than a CAD/CAM environment, making it far more suitable to certain portions of a vessels lifecycle, including on-board maintenance, crew and maintenance personnel training, simulation, and more.

Most emerging shipbuilding markets have both a significant source of natural resources and a low cost and mobile source of manpower. As a result these shipyards are not as focused on production efficiencies and technology as their counterparts in developed markets. Manpower is one of the two largest costs for any shipbuilding project (material, which is market driven, being the other). These emerging markets and their cheap labour are very difficult to compete with internationally under ordinary circumstances. There are two major avenues by which markets with high labour costs can successfully compete with the emerging markets. Two of the three leading shipbuilders in the world, namely Japan and Korea, are able to compete by producing tried and true vessel types with very repeatable designs and a high degree of production efficiency. The other shipbuilders who manage to compete or thrive in the industry are those that have a high degree of specialization in designing and building specific types of ships. Austal Ships in Australia building and designing aluminum high speed vessels and Royal Huisman Yachts in the Netherlands building ultra-luxury yachts are examples of this type of shipbuilder. Regardless of the mechanism by which they compete, all of these shipbuilders have a few things in common: 1. 2. 3. 4. 5. A high degree of efficiency in the overall design and construction processes. A fully refined design process driven by the latest technology. A high degree of repeatability in the designs, allowing for optimization of the construction processes. A relatively high degree of automation which can reduce manpower requirements. A strict adherence to schedule and performance.

As Canada has much higher labour costs than the emerging markets against which we would be competing internationally, we will need to replicate these key characteristics in order to develop a sustainable shipbuilding industry of our own. Rather than focusing on describing the overall shipbuilding process, which readers of this proposal are likely already very familiar with, the proposal will instead focus on a few key practices and technologies that will be critical to the success of this endeavour and aren’t prevalent in the Canadian industry today. Modular Construction – This is the practice by which individual components are fabricated and combined with other fabricated components. These larger assemblies are then combined to create larger and larger assemblies until the largest block that can be handled by the shipyard has been reached. Equipment and mechanical systems (Pipe, HVAC) are included at the earliest possible stage. This level of pre-outfitting is a fundamental requirement in developing a cost effective modular shipbuilding approach. The standard 1-3-8 rule-of-thumb indicates that if a component takes one hour to install at the correct stage it will take 3 hours if it is done further on in the assembly sequence and 8 hours if it is installed once the ship is complete. Some shipbuilders, especially smaller shipbuilders without sufficient facilities, or those with lower labour costs overlook this type of construction, but those with higher labour costs cannot afford to do so. An integral part of this process will be the introduction of a panel line at each modernized yard to ensure that the flow of panel assemblies to the further stages of construction is uninterrupted. A panel line can introduce a high degree of automation with one-sided welders, dart welders, and such. A panel line, as part of the modular

construction approach allows for a level of process standardization and optimization that wouldn’t be available otherwise. NC Marking – One would be hard pressed to find one of the shipyards that are competitive despite higher labour costs, that don’t also apply a high level of marking to steel during the NC process. Japanese yards employ a level of marking that ensures that a single plate needs to be handled only once, and that the operations and processes that must be applied to it, including the next stage of assembly to which it belongs and its location in the ship, is self evident to the worker in the yard. In addition the location, identity and fitup of other parts and assemblies is clearly marked allowing for accurate assembly with little FIGURE 2 A PLATE PART WITH EXTENSIVE MARKING to no reference to drawings or measuring required. This level of marking is not prevalent in North American shipbuilding and a similar level must be introduced to ensure sustainability in our industry. As this level of marking is only effective when combined with processes and construction methods that utilize the information provided, it should only be implemented in the context of a larger program of process improvement. Production Automation – When surveying shipyards which have attained a high level of efficiency a common trend is in how well they utilize engineering information during production. While plate marking as described above is an example, other areas of the data can be used in a more automated fashion by production processes. As an example, many shipyards are moving to automated profile cutting robots to reduce the amount of manpower required to prepare profiles before assembly. This information exists in, and can be extracted from, any shipbuilding software which has a database at its heart. Automating this process reduces the need for costly, and error prone manual effort. FIGURE 3 A PROFILE CUTTING ROBOT

A sustainable workforce is the backbone of a sustainable industry. Currently Canada lacks a sufficiently large and sufficiently educated workforce of naval architects, ship designers, marine engineers, welders, fitters, and many other occupations required to sustain the type of shipbuilding industry that has been envisioned by the Canadian government. There will be a requirement to train a large number of people in a diverse set of skills for which Canadian institutions are not yet prepared.

If the Canadian government was to adopt the best proposals that came back from Canada’s shipbuilders it is possible we would be successful in creating a viable, internationally competitive shipbuilding industry in the coming years. Shipbuilding however, while sometimes slow, is an industry of continual improvement. To sustain the level of competition that is created initially an organized program of continual research and development will be required. It will not be sufficient that each shipbuilder is continually striving to improve. To remain competitive we will require a government led and funded research and development program where all advancements are shared with the entire Canadian shipbuilding industry.

The potential indirect benefits of a sustainable industry to the Canadian economy will far outweigh the direct benefits. The supply chain around raw materials, equipment, and services required to support an active shipbuilding industry are substantial. Effort should be made to ensure that as much of this supply chain as possible be founded on Canadian soil. This effort should include incentives to Canadian shipbuilders to use Canadian products and materials where possible, and programs to make connections between Canadian suppliers and shipbuilders.

The shipbuilding industry, as it has come into its own in the modern age, has made admirable strides in the adoption of technology. In the world’s leading shipyards, not a single piece of steel is cut or fabricated that doesn’t exist in a 3D model, in a Bill of Materials (BOM) in an ERP system, and in planning software. This technology has also begun making its way into the hands of ship owners and ship operators. So far we’ve discussed some key areas that the industry as a whole needs to address to ensure sustainability: 1. 2. 3. 4. As built 3D models for both ship construction and lifecycle maintenance. Workforce education and retention. Engaging the supply chain. Research and development to continually improve processes.

The answer for many of the world’s leading shipbuilding companies has been the adoption of a technology platform that allows them to address these issues directly. As a single organization, this is a manageable solution. As an industry we need an answer that goes beyond a single company. We need an answer that is suitable for an entire industry. The adoption of an industry-standard technology platform provides the same benefits that individual companies garner from this approach, but goes further for the following reasons: 1. The benefits of the delivery of as-built models, with associated production drawings, to the Navy can only be fully realized if the organizations to which the ISS contracts are awarded have the ability to use those models. The education of the required ship designers and marine engineers will be far more effective if they can be trained on a single set of tools that will be used throughout the industry. Integrating equipment and machinery manufacturers into the shipbuilding design process will be significantly easier if the delivery mechanism for equipment models and other CAD data is the same regardless of the shipbuilder involved. Key areas of research and development pertaining to design and construction technology can be applied to a common toolset across the entire industry rather than only being applicable to a small percentage of the shipbuilders involved.

2. 3.


The next section of the proposal will outline a standard technology platform that answers each of these challenges and will be a key piece of Canada’s sustainable shipbuilding strategy.

The Autodesk portfolio of products, as the most commonly used generic CAD platform in the world represents a strong foundation for a standard technology platform. The ShipConstructor software builds upon this foundation to provide a shipbuilding specific technology platform that can support and stabilize the effort to create a sustainable shipbuilding industry in Canada. For an in depth overview of the ShipConstructor system, and its Autodesk components, and the benefits it offers please see: The ShipConstructor software itself offers benefits to each and every Canadian shipyard and through standardization on a single platform the Navy will see significantly reduced costs through the lifecycle of a ship. However it is through the initiatives SSI has created around the platform itself that the industry, and Navy, will realize the greatest benefit.

As stated in the early parts of this proposal, creating and maintaining an educated, qualified workforce will be one of the biggest challenges facing the industry. As part of the US National Shipbuilding Research Program, SSI has developed a university curriculum targeted at the shipbuilding industry. The curriculum is designed to train an individual with little to no shipbuilding FIGURE 4 SHIPCONSTRUCTOR (BLUE) VS COMPETITORS (YELLOW) experience. The program is focused on marine production design including basic concepts, shipyard terminology, shipbuilding details, and the basics of creating a detail design of a ship. Practical application of the concepts explored is obtained via the ShipConstructor software system. The curriculum has been successfully deployed at the University of South Alabama, and at the University of Wisconsin at Marinette to train a workforce required for work on both commercial and naval vessels in those locations. The Marine Institute of Memorial University in Newfoundland has experience in training ShipConstructor and is an ideal candidate to implement the full curriculum in Canada. In addition SSI is in discussion with several institutes on the west coast in order to establish a training center there as well. The time required for a student to complete the curriculum can be counted in weeks, allowing Canada to build a workforce in far less time than would be possible with any other shipbuilding software. One of the key strengths of ShipConstructor is in the speed with which a person can become proficient. This not only allows for the efficient creation of the required workforce but substantially mitigates risk from employee turnover. It allows a casual user in both the Navy and organizations with ISS contracts to easily use the software when required.

ShipConstructor has developed an online collaboration site where equipment and machinery suppliers who are part of the shipbuilding

supply chain can provide intelligent models of their components for use by shipbuilders. These models can be directly inserted into a ShipConstructor project making any equipment on the site an ideal choice for shipbuilders. Downloading and using these models allows shipbuilders to save a significant number of man-hours during the design process for a particular vessel. Ideally Canadian manufacturers would be required to provide these 3D models to shipbuilders by placing them on the SC4D website. Shipbuilders would then be incentivized through availability of these models to use the components, thereby increasing the amount of Canadian content used in ships built in this country. This would ensure that Canada maximizes the benefits available as a spinoff of developing a sustainable shipbuilding industry.

One of the key components of a plan to remain sustainable over 30 years must be a mandate to continually improve the way we procure, design, build, support, and maintain ships in this country. This will not be accomplished via individual Canadian shipyards striving to improve in isolation. The international shipbuilding community is extraordinarily competitive and is composed of shipyards all independently striving to improve. ShipConstructor has been involved for the last 6 years in the US Navy National Shipbuilding Research Program. This program is designed to bring shipbuilding technology experts, consultants, ship designers, and shipyards together on projects targeted to improve the state of naval and commercial shipbuilding in the US. These projects are proposed annually by shipbuilders and software vendors, and approved by an industry panel for funding by the government. A core requirement of the program is a full divulgence of all details of the projects undertaken, including implementation details, results, and methodologies used. This Technology Transfer guarantees that the entire industry benefits from any projects which are awarded. SSI proposes that a program of this type is an absolute necessity to ensure that our shipbuilding industry is competitive internationally. A study on how to best implement a Canadian variant of the NSRP program should be undertaken and implemented as soon as is practical.

The Canadian government has identified a need to rebuild the Canadian Navy and Coast Guard fleets in a way that is accountable to the Canadian taxpayer. To do this effectively and in such a way that the naval shipbuilding capacity is sustainable will require the development of a complex support, resource, and supply infrastructure. As this required infrastructure will not be sustainable itself with just the demands placed on it by the required naval shipbuilding activity, there is a need to develop a sustainable commercial industry alongside the naval capability. To build a sustainable, internationally competitive shipbuilding industry will require a few major initiatives to take place: 1. 2. 3. 4. The development of an educated, qualified workforce. The development of a progressive, industry-wide research and development program. The development of modern, efficient, shipbuilding production capabilities by adopting best practice modern shipbuilding techniques from around the world. The development of initiatives to motivate and incentivize the Canadian supply chain.

For each of these initiatives to be successful across the Canadian shipbuilding industry will require the adoption of a standardized technology platform. This will allow the industry, and supply chain to focus these efforts towards a common goal and ensure that the effort spent, including R&D, applies equally to all involved. As a result of this standardization we will be able to compete internationally as an industry rather than leaving each of Canada’s shipbuilders to fight alone. This standardization on technology has even more immediate benefits in the naval shipbuilding arena. Lifecycle support will always be one of the largest costs associated with the procurement and operation of a naval vessel. Only through standardization on a single technology platform can organizations performing In Service Support contracts receive the information required to accomplish the task in the most cost effective fashion. The requirement for delivery of as-built models of completed hulls is still not commonly included in the RFP process. Adopting a standard platform for naval shipbuilding and requiring as-built models to be delivered on that platform would significantly reduce cost and risk associated with lifecycle activities. The ideal candidate for a standard Canadian technology platform for commercial and naval shipbuilding is ShipConstructor, a set of tools for the design and production of ships and offshore structures. ShipConstructor is developed by a Canadian company, ShipConstructor Software Inc. and therefore has a patriotic interest in this venture. SSI has been involved with some of the world’s most advanced commercial shipbuilding ventures. SSI also has extensive experience with the US Navy – over 80% of the US Navy’s planned vessels will be designed and built with ShipConstructor. In addition to the advantages inherent in using the technology provided by SSI, there are also many initiatives created around the ShipConstructor software which are a perfect match for what the Canadian industry will require. These include a university curriculum designed to create a workforce of trained marine designers who are fluent with ShipConstructor, a collaboration mechanism by which the Canadian supply chain can mobilize to support the shipbuilding industry and a nation-wide research and development program used by the US shipbuilding industry which would be a key part of the strategy going forward.