05 October 2000
Government investment and collaboration with suppliers could give a much-needed boost to the UK shipbuilding industry, says David Arminas
To stave off the decline that has been the hallmark of the UK shipbuilding industry for the past 20 years, companies in the sector are pulling together.
Business organisations in the sector have welcomed the Department of Trade and Industry's (DTI) Link research project grant of £2.8 million to fund academic research into the way the industry works. These groups acknowledge the need for a vision that links suppliers and buyers more closely in an effort to confront competition from foreign shipyards.
First, the industry must look at the lay of the land. According to Tom Dougherty, assistant director of the Shipbuilders and Shiprepairers Association (SSA), this is where the DTI's cash injection comes in.Hindered by tradition
Improved cross-sector performance will be difficult, however, because this is one of the few older industries that has yet to re-invent itself for the 21st century, according to David Jeffrey, chief executive of the British Marine Equipment Council (BMEC). "It's traditional. It doesn't want to see itself as a sunset industry," said Jeffrey. "When you go through a bad patch, it's harder to keep up with innovation than if you are successful."
Part of that re-invention, he says, will be the planned amalgamation of the SSA and the BMEC, which represents about 200 companies, many of them small-to-medium-sized enterprises, some major shipbuilders.
Jeffrey, who was appointed last May, understands the importance of supply chain efficiencies in creating competitive edge. He is a former director of the armaments and management services in the Royal Navy Supply and Transport Services. After 32 years there, he retired in 1986, moving to the Port of London as chief executive where he saw privatisation through.
The BMEC is talking with the DTI about developing a major Internet project that would be available to shipbuilders and suppliers as a first contact. Jeffrey wants to see increased communication between suppliers, builders and repairers before a bid has gone in to tender.
That's easier said than done, however. Stanley McCabrey, procurement manager at Belfast-based shipbuilder Harland & Wolff, whose competition lies mainly in the Far East, believes suppliers have to review their practices. Some builders complain that suppliers sell their products more cheaply to overseas shipbuilders and repairers than to UK-based builders.
Harland has been attempting a rapprochement with its suppliers. "Over the past four or five years we have run supplier development programmes with some success," McCabrey said.
Relations between steelmaker Corus and Harland are much improved, McCabrey said, mainly because they sat down face to face and engaged in straight talk. "Performance is now much improved," he added.Suppliers-side equation
Harland has also been trying to bring suppliers and contractors into the design process sooner, "but only with a selected groups of suppliers". Heating ventilation and air-conditioning (HVAC) contractors are brought in very early and Harland is now working more closely with Siemens on entire electrical designs for roll-on/roll-off passenger ferry contracts.
However, shipbuilders themselves must get to grips with any new way of relating to suppliers, says McCabrey, an engineer who has been in shipbuilding for 28 years. "There's an attitude from our ship designers that they know best, but I ask them why they are bothering to design HVAC systems when we have a supplier."
There is a beacon of hope. The SSA's interyard collaboration group met for first time earlier this year. It was agreed to expand the group and invite the SSA general membership. Later this month, more than 50 companies will meet at the Pallion Engineering yard in Sunderland to discuss co-operation.
Any renaissance of shipbuilding in the UK will depend on such co-operation.