Improving outbound logistics in shipbuilding using Lean methods

Abstract

Shipbuilding operations have unique characteristics compared to the most manufacturing industries. Each ship is a unique project in which the design and production activities overlap, creating a complex operational environment. Outsourcing is therefore typical in this industry, where some parts like hull blocks are constructed and outfitted at the external subcontractors. The coordination between the subcontractors and shipyard makes efficient outbound logistic management extremely important. This research studies the outbound logistics process of a case company within the shipbuilding industry. The company noticed inefficiencies in their ETO material deliveries to subcontractors, as materials often arrived either too early or delayed. The objective of the study was to recognize the inefficiencies that prevent on-time delivery and to propose improvements for a more optimized future process. To achieve the goal of the study, the current state of the outbound logistics was built and analysed using Lean and JIT principles. These practises were selected as they offer a theoretical framework for enhancing process efficiency. Digitalization was also considered as complementary approach to further improve the efficiency alongside Lean and JIT. The study was conducted as qualitative research that includes a literature review and empirical study. Methods such as value stream mapping and pull principle were adapted from the literature. Value stream mapping was used to identify the necessary activities, while the pull principle supports the synchronized material deliveries with production demand. The current state was built based on the interviews and company’s existing documentation. Gaps between the current state and suggestions from literature were analysed, and improvements from literature were combined with suggestions from interviews into the future state. The research identified several challenges. Material flow was non-standardized, often following individual practices rather than common procedures. The required pull method for JIT deliveries was not implemented, and the process’ visibility was limited due to the inconsistent reporting and information sharing. Communication issues further prevent the efficiency in the process. The future state proposes methods to eliminate the Lean wastes by standardizing material flow and establish control points to support process tracking. JIT deliveries would be enabled through pull system, where subcontractors request materials as needed. Communication would be improved with better utilization of digital tools that enable real-time tracking. A common hub for information storing would reduce time wasted searching for critical information. During this study, several areas for future research were identified to deepen the knowledge of outbound logistics. Combining quantitative and qualitative data to gain an understanding of cost implications and potential cost savings. Examining the entire supply chain and its processes could expose further opportunities for improvement. Together, these studies would further enhance the understanding of outbound logistics in shipbuilding and identify the key factors that contribute to its success.