The Afterguard

06 August 2007

Useful Quotations


An anthology of truly great quotations, compiled by George Seldes and published by Castle Books as Great Quotations, suggests that something similar would both encourage and serve those who write about how to make shipyard management more effective. Thus, herein is a collection of quotations that I found useful. They address management of shipyards that build, modernize and repair ships, specifically including naval ships, and heavy construction other than ships.

Louis D. Chirillo
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Posted at 00:49:49 by Lou Chirillo - - link

04 May 2007

Richard D. Chirillo (1949 - 2007)

I once read that ancient scholars didn’t bother with eulogies because all they wanted to know was whether or not a deceased had passion. For Richard D. Chirillo, educated in logic by Jesuits, a teacher in Japan, and who for some years during his illness assisted in the search for more effective shipbuilding methods; that question is best answered by something he wrote more than twenty years ago:

Analytical Quality circles
Richard D. Chirillo
for the University of Washington
Ship Production Technology Course – 3 October 1983

Most people think that quality circles have their origin in human development studies. Nothing could be further from the truth. Quality circles were discovered as a by-product of other, even more profound, management innovations. True quality circles are part of an overall management system that relies on a product work breakdown structure (PWBS) and statistical control of manufacturing (SCM). Quality circles grew out of statistical techniques first introduced into Japan in the 1950s.

PWBS is highly organized work. Work is organized according to the problems inherent in manufacture. Using this principle, it becomes possible to arrange flow lanes for the many different things in varying quantities that shipbuilders must deal with, e.g., parts, sub-blocks, blocks, etc. Shipbuilding work becomes repetitive enough to yield significantly more meaningful measurement data. Work becomes susceptible to mathematical analysis.

But, simple arithmetic is not sufficient because of the existence of variation. How to measure variation is the key to production control. Statistics is the branch of mathematics that deals with the description and interpretation of variation.

In Japan, where PWBS and SCM were first applied to shipbuilding, an interesting thing happened. Management's system began to furnish supervisors and workers with meaningful and reliable indicators of how work processes perform. For the first time a sensitive barometer existed indicating the results of improvements in work processes. Spontaneously, supervisors and workers for each stage of a process began to discuss and suggest how to make improvements. Thus, the birth of real quality circles in shipbuilding, as in other industries, was a natural consequence of statistical methods. Subsequently, supervisors and workers were trained in basic statistical techniques to enhance their abilities to constantly improve their work. They have command of control charts, Pareto diagrams, cause and effect diagrams, etc.

PWBS, SCM and analytical quality circles are not culturally determined. If Suzuki can handle statistics so can Smith!

The challenge lies with U.S. shipbuilding managers!

[Read More!]
Posted at 11:41:16 by Lou Chirillo - - link

13 May 2006

Let's challenge the conglomerates

The February 2006 issue of the U.S. Naval Institute Proceedings features two articles by senior executives in the U.S. shipbuilding industry: American Shipbuilding an Industry In Crisis by Mike Petters, President of Northrup Grumman Newport News and People, Product, and Performance: The Strengths of Shipbuilding by Michael W. Toner, Executive Vice President for Marine Systems at General Dynamics. Boiled down, the authors’ objectives include increasing subsidies, both direct and de facto, and building more ships for the U.S. Navy as a way to insure survival of their shipyards. I do not entirely disagree because my pertinent opinion, first published nearly three decades ago as a comment in the June 1977 issue of the Proceedings, remains unchanged, “The Navy needs American shipbuilders because their experiences and facilities are indispensable elements of U.S. sea power! And, the Navy is needed because it could provide stability to the American shipbuilding industry.”

After observing shipyard performances since that time I am now compelled to add, “Not at any cost!”

My reason is derived from the inadequate ways that some U.S. shipbuilding firms reacted to the disclosures of the world’s most effective, and most copied, shipbuilding methods that were described in U.S. Maritime Administration National Shipbuilding Research Program (NSRP) publications commencing in 1979. The highly effective methods so described are those developed and applied by Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) of Japan for both naval and merchant ships and for end products other than ships.

The IHI methods feature a number of proven industrial disciplines—product organization as advocated by the management guru Peter Drucker, statistical control per the teaching of Dr. W. Edwards Deming, and group technology. All had been well documented in English-language textbooks for many years but not in the context of shipyard operations. IHI’s unique contribution was to put them together as one fabulous, constantly self-improving manufacturing system.

Simply put, the improved methods feature construction planning before each design phase rather than afterwards. That approach enables shipbuilders to shift much outfitting and painting work from on board to organized work flows inside shops before hull erection. Safety and productivity are significantly enhanced.

Implementation by A.L. Bossier, Jr., then the President of Avondale Shipyards, for both naval and commercial vessels was just about instantaneous. Photographic evidence is available in the Shipbuilding Pictures Database.

Other shipyards that followed soon afterwards include Bath Iron Works (BIW) and National Steel and Shipbuilding Corporation (NASSCO). All employed consultants made available by IHI. All made admirable progress in what may be simply described as a shift from system-by-system to zone-by-stage organization of people, information, and work. Work packages so organized, when further classified according to the work problems they impose, facilitate simultaneous construction of naval and merchant ships of different designs and end products other than ships. But now twenty-five years later, no U.S. shipyard approaches IHI’s effectiveness. I’ll give two examples, the first is important because the U.S. Navy is now considering all-electric ships. Safety and productivity are greatly improved when electric cables, even large-diameter power cables, are pulled on an upside-down block (picture pops) inside a shop. Where such practice exists there is incentive for workers to innovate (picture pops). In U.S. shipyards the labor-intensive traditional practice prevails wherein most such cable is pulled into place after a hull is erected.

The second example pertains to the use of statistics, as advocated by the famous management guru W. Edwards Deming, for control of production processes and to effect product improvement. The NSRP disclosed in the widely distributed February 1982 publication Process Analyses Via Accuracy Control (A/C), how statistics is applied for controlling hull construction processes in IHI shipyards and also for the purpose of producing accurately constructed ships, a military requirement. Few seem to have noticed that following the suicide-bomber attack on USS COLE (DDG-67) on 12 October 2000, the first attempt to land seriously damaged COLE on a heavy-lift ship failed. Per Heavy lift brings USS Cole home, by Richard O. Aichele (Professional Mariner, Issue #55, April/May 2001), “Despite the careful planning there were a few glitches during the lift…. The planning had been done based on Cole’s construction drawings, but the ship turned out to be slightly shorter in length than the drawings indicated…. Because of her slightly shorter-than-expected length, Cole’s two screws did not drop into the holes previously cut in Blue Marlin’s deck.” Coles’s departure from a dangerous region was delayed accordingly.

Now, twenty-four years after publication of Process Analyses Via Accuracy Control (A/C), I am unaware of any evidence that any U.S. shipbuilder commands the discipline. Nor am I aware that any of the Navy’s Supervisors of Shipbuilding or even the Naval Sea System Command (NAVSEA) insisted upon compliance when a pertinent requirement was included in specifications for building DDG 51-class destroyers:

“Statistical evidence of quality control of all fabrication and assembly processes which impact product quality shall be established and maintained.

“Data shall be maintained by the contractor throughout the contract to demonstrate that the processes remain within statistical control.”

The NSRP A/C publication, called “a great piece of work” by Dr. Deming, specifically advised:

“Accuracy measurements are needed simply because they are reliable indicators of how work processes are performing. Incessant analyses of accuracy measurements and other relevant variables are the means used by the most competitive shipbuilders to constantly perfect organization of work.”

“…high productivity comes from appropriately trained workers performing highly organized work”

“…A/C, because it always deals with analytical methods and the entire shipbuilding process, provides opportunities for real performances in a climate that excludes apparent performers.”

I could go on and on, but I think that the foregoing is sufficient to justify my suggestion for the authors to combine their requests for more government aid with commitments to achieve specific productivity goals, perhaps per bonus penalty clauses in shipbuilding contracts. As a starter I recommend that in-process accuracy of hull components and of completed hulls serve for establishing the targets.
Posted at 13:44:11 by Lou Chirillo - - link

19 April 2005

Buy now, pay later Navy

So it came up before Congress. The Navy can't afford to buy ships from US shipbuilders. This morning, the New York Times ran an article ("Navy of Tomorrow, Mired in Yesterday's Politics" by Tim Weiner) which cited critics describing the US shipbuilding industry as "19th-century monopoly capitalism and 20th-century state socialism on top of 21st-century American politics." No kidding!

So the Navy's solution to this problem: change the acquisition strategy for DDX to a winner-take-all procurement contract. Let me get this straight: you can't afford to buy ships from 2 companies because there is no competition, so you are going to buy ships from one source because it is less expensive? Wouldn't you have learned a lesson from buying $13B aircraft carriers and $2B submarines?

Congress' decision will probably have more to do with political payback and revenge than with smart buying. Maine, Connecticut, and California were not very supportive of this administration, so maybe putting the heat on them will change things. The good 'ol boys in the south will be happy with all the work.

The shipyards all claim the problem is the Navy is not building enough ships. They argue that you build more ships and the per-unit cost goes down. Buy two, get one free? Buy now, and mail in the rebate for a discount? What if the customer doesn't need or can't afford your product? Where are the free-market Republicans? Seems to me they'd be right out in front on this one. Oh, they are: let's get that money to the team players.

Wouldn't it make more sense to, say, shop around and buy ships from Germany or Japan? You could limit that acquisition to team players and skip Germany, but buy from Korea, Russia, or Australia.

But wait! Take a look at Paul Allen's mega-yacht Octopus and see what $200 million buys you: 414 feet length over all, 8000 nautical mile range, cruise speed of 20 knots, a permanent crew of 60, two helicopters, seven smaller boats carried aboard, a 10 man submarine with the ability to support 8 people underwater for two weeks. What does $200 million buy you at GD or Northrop Grumman? Maybe an LCS, but if previous overruns are any indication it will be 2-3 times more expensive. Recall the MHC-51 was originally priced at $75 million per ship, but 4 years later was well over $200 million per ship.

Now some might argue that naval vessels are more sophisticated than a mega-yacht even if it has a submarine, 2 helicopters, and a crew of Navy SEALs. But then, serving aboard a mega-yacht might be pretty good duty. You'd have no problem with recruitment with that kind of Navy.
Posted at 14:09:58 by Tom Swift - - link

18 February 2005

Building ships for the sake of building ships

Two articles appeared on NSnet in the last week that caught my attention. The first was "US shipyards unhappy with defense budget," which originally appeared in the Virginian-Pilot. In this article, Cynthia Brown from the American Shipbuilding Association criticized the Bush administration's defense budget for cutting back funds for shipbuilding. She said "We don't advocate building ships for the sake of building ships." But that is exactly what she is advocating.

US blue-water shipbuilders long ago abandoned international commercial work. They focused on the more profitable and secure Jones Act vessels and Navy building. To protect these markets, they have relied on political influence more than meeting the needs of their customers. Just like the American auto industry which makes larger profits on SUVs and luxury cars, US shipbuilders make more money on large programs and projects like nuclear submarines and aircraft carriers.

The American auto industry has managed to lose an opportunity as its customers start to turn away from conventional auto engines to hybrids. The Japanese have come to the market with products and technologies that position them for fundamental changes in the transportation infrastructure, like alternative fuels and fuel cells. The Europeans are taking another tack and looking at more efficient diesel engine technologies. What is the first product to be offered by an American auto manufacturer? Well Ford is offering a hybrid-powered SUV. What are the others doing? Building the same products while trying to hit a hydrogen-powered homerun.

What's this got to do with shipbuilding? Well another article appearing in NSnet should be a wake-up call to shipbuilders: "The new look for the US Navy" (from The This article describes how the Navy is redefining what it needs in the new defense environment. The Navy wants classes of ships that are smaller, faster, and cheaper. They want them to be able to operate in shallower coastal areas, the green water.

So guess what? The customer has changed what they are looking for. The big cold war ships are more expensive and less effective in a changed defense environment. NG and GD should get a clue: the market has shifted and they're missing it. What's more, I'm also not sure I like the idea of the shipyards telling the Navy what it is going to buy regardless of what the Navy says it needs.

Now smaller shipyards and manufacturing operations are the competition. The Navy will still need a blue water fleet, but as they say, just not as many of the big ships as we have currently. Lots of little ships should help the numbers game: for one $12B aircraft carrier we could build 50 smaller ships. If we do that, then the number of ships in the fleet goes way up. Think of all the communities and districts that would benefit from the construction and home-porting of all those smaller ships. There goes the political support.
Posted at 13:54:51 by Tom Swift - - link

01 February 2005

GD Electric Boat doing commercial work?

I couldn't help reading the article "Sub builder to explore commercial options" with just a little bit of cynicism and a whole lot of skepticism. I have to say that I think it is highly unlikely that EB will be doing "commercial" work.

First, EB doesn't have the commercial work culture. Building nuclear submarines is a bureaucratic, risk averse, conservative process. This is deeply entrenched in the EB culture that evolved to meet the requirements of their customer, the submariner folks in the Navy. This legacy of Admiral Rickover was intended to make US submarines safe and reliable. This is a good thing for nuclear submarines, and the US Navy has not lost a submarine since the Scorpion. That said, one could also argue that Navy submariner and EB cultures have stifled innovation. A culture that is good for building submarines may not be the best for competing in a commercial market.

For example, while the US has been building nuclear submarines at $1B - $2B each, other countries like Germany have been building boats with air-independent propulsion (AIP) systems (see "Air-independent Propulsion"), selling them for about $300M. These quiet boats operate in littoral waters, the US Navy's current strategic and tactical focus. They are relatively inexpensive, quiet, faster to produce, and — when armed with newer, high technology undersea weapons — pose a threat to US surface and submarine operations in those littoral waters. (So this should tell you where to start spending some time and money: shallow water detection and undersea weapon countermeasures.)

Looking at these AIP boats, one can also see the commercial potential in production of electric power: fuel cells come to mind. Nuclear propulsion gave us the US (ahem) nuclear industry. There was once a US commercial fuel cell power industry, but that was generally shelved in favor of "clean" coal fired power generation. Lou Chirillo probably remembers a paper at the 1991 NSRP Ship Production Symposium where the topic of shipyards diversifying into other industries such as fuel cells was presented.

So will GD EB be able to play in the commercial world? An earlier foray in the 60's was to build LNG tanker submarines to serve the gas fields in Alaska and the east coast via the then iced-over Northwest Passage. But global warming seems to have solved that problem, and, besides, the Navy was unhappy with GD thinking commercial. I'm also not too sure that the market for tourist submarines is all that large.

Maybe EB isn't too late to the AIP party. Howaldtswerke-Deutsche Werft AG (HDW) which builds the Class 212, an AIP submarine, is owned by Chicago-based One Equity Partners, a Bank One Corp investment firm. Northrop Grumman, which at one time was in the nuclear submarine business before it bought Newport News, was interested in buying a 70% interest in HDW (see's story on HDW). This would give them access to AIP technologies which in turn would have a commercialization potential. Oh, and it would position NG to compete with EB in the unlikely event the Navy decided to buy those smaller submarines (a littoral class submarine to go with the LCS?). Could GD EB beat them to it?
Posted at 14:53:40 by Tom Swift - - link

25 January 2005

"Lean" is not a survival strategy

Let's talk about "lean" manufacturing, or rather the re-branding of "new" technology which was itself a re-branding of "good" management. It should be compared to the highly profitable diet industry. There is the South Beach diet, the Atkins diet, Weight Watchers, and on. But the fundamental fact of losing weight is "don't eat more calories than you expend." But these fads sell books and programs making a few folks rich.

Those involved in "new" technology should see through "lean" as a jargon-laced fashion in management consulting. How many other fads were there? John Micklethwait and Adrian Wooldridge in their 1996 book The Witch Doctors debunked and exposed earlier management fads like "lean." (Is it time for another debunking and exposé?)

"Lean" shipbuilding (or any other manufacturing) is not a new silver bullet for improved profitability. It is an old silver bullet called market driven competition. How do you successfully survive in competitive markets? You compete by giving your customer the best perceived value for his dollar. How do you do that? You manage your business well.

Look at the Koreans again. They are responding to their customer's demands by building ships using an inefficient process. But they needed the capacity. This is hardly "lean" as described by the gurus of lean.

Now I'm not saying that shipbuilding management is gullible or stupid. On the contrary, I think that, in general they are pretty smart and incredibly clever. I believe in the evolutionary nature of business: competition results in species suited for survival in a particular environment.

Look at NG and GD: they are well adapted to the protected market created and maintained by their customers. The Navy, Congress, NG and GD stockholders, and other political entities have a strong desire to build ships in the US. This does not create a competitive market, rather a controlled economy. The resulting products have a perceived value to all of the stakeholders. The products are not just the ships delivered, but the jobs, votes, and profits.

Now if I were the customer and truly believed in free market concepts, I'd be looking to an open market. I'd be thinking about buying ships from anybody that could build them, not just from domestic sources. If this were the case, then I'd have changed the environment and shipbuilding management would either adapt to survive or become extinct.

But then, sometimes, like when food is scarce, being lean is not a survival strategy.
Posted at 12:48:31 by Tom Swift - - link

13 January 2005

Ground launch - big deal

The article was "First ship built using "on-ground build" method." The details appear to be that Hyundai Heavy Industries (HHI) has invented a new way of building ships by building them on a flat patch of ground, then sliding them to a barge and floating them out. Big deal. Been done (as Lou Chirillo pointed out, Brunel's Great Eastern was launched this way, albeit unintentionally). GD-BIW and NG-Ingalls do essentially the same thing.

What is more significant is that HHI's order book is so full they don't have the traditional facilities to handle the throughput. Moreover, China is getting ready to eat Korea's shipbuilding lunch (see "World shipbuilding production"). Patenting building on land may be a pre-emptive strike to slow the competition through legal means. This is interesting since Korea and China have a terrible record on protecting intellectual property and routinely violate intellectual property rights.

In the meantime, Kvaerner has figured out how to access the protected US market (that Jones Act thing) and get paid to do it (see "Kvaerner Philadelphia Shipyard remains afloat"). I'm surprised the Japanese didn't figure that one out and open a couple of yards. They did it in the auto industry and heaven knows there are a few US facilities available.

How about Massachusetts Heavy Industries (MHI)? I'm sure MARAD might give Mitsubishi Heavy Industries (the other MHI) a pretty good price and terms. Or how about GD selling NASSCO to IHI? Let's make it a two-fer and a Japanese builder could buy both? Who knows? Maybe the Koreans would be interested? HHI could buy MHI (the Massachusetts one), GD-NASSCO, and NG-Avondale?
Posted at 15:12:42 by Tom Swift - - link

02 November 2004

Interviewing a foremost shipbuilder

I was Chairman of The Society of Naval Architects and Marine Engineers' Panel SP-2 when I was asked to interview Dr. H. Shinto, then the recently retired President of Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) of Japan. Dr. Shinto and I had no prior notice, not even time to prepare notes, thus the questions I asked in behalf of Panel SP-2 and the responses recorded in a nominally edited transcript, were extemporaneous. (For the complete transcript, click on the 'Read More' link at the end of this blog.)

Dr. Shinto’s statements continue to be timely, even now more than 20-years later, because they counter myths such as: Japanese shipyards were destroyed during World War II and rebuilt with U.S. government money, IHI builds only standard series ships, and IHI’s approach is not applicable to overhauls and naval-ship construction.

However, another of Dr Shinto’s responses remains especially timely because it proposes that ship-owner/shipbuilder partnerships should compete for government subsidy rather than have ship owners and shipbuilders separately lobby for subsidies. His idea was meant to stimulate innovation. An example he gave was a ship that carries both iron ore and wood chips from South America to Japan.

The need to identify vessel designs that they can build in series in sufficient numbers to reach adequate economies of scale, as often urged by the U.S. Maritime Administration, would accomplish nothing toward improving competitiveness of U.S. shipbuilders on the world market. The same economies of scale would also work for the Chinese and other competitors. What is needed is reward for innovation leading to ships for new trades such as the Pasha Hawaii Transport Lines/VT Halter partnership for a Pure Car Truck Carrier service between California and the Hawaiian Islands.

One wonders what it is about the combined innovative capabilities of Austral and its customer that resulted in the design and construction of the 417-foot trimaran aluminum ferry BENCHIJIGUA for operation on the other side of the world from Australia.

[Read More!]
Posted at 14:36:22 by Lou Chirillo - - link

02 October 2004

Pursuit of a product work breakdown structure (PWBS)

In 1971, Panel SP-2 was created under the aegis of the Ship Production Committee (SPC) of The Society of Naval Architects and Marine Engineers. Since it was the last of such panels formed during the first phase of the National Shipbuilding Research Program (NSRP), Panel SP-2 was assigned a catchall group of projects and was given the title Outfitting and Production Aids. The SPC was then dominated by people who had experience only in traditional U.S. shipbuilding operations, particularly during World War II. Within eighteen months after the U.S. entry into the war, they were producing merchant ships faster than German U-boats were sinking them; at the same time, they were producing many warships. Thus, their achievement significantly contributed to the winning of the Battle of the Atlantic that one writer described as, “the only battle during World War II that the Allies could not afford to lose.”

During that period, and even in the decade following World War II, many new methods and facilities had been introduced, and with rare exception, without shipyard managers critically examining overall operations with the intent to rationalize, that is, bring reason to, how their shipbuilding systems were performing. They had much to be proud of but that pride may be the reason why they were not at least curious about how and why such rationalization was taking place in some Japanese shipyards during the 1950s.

As a consequence, the projects initially assigned to Panel SP-2 by the traditionalists in the SPC were mostly hardware oriented. They seem to constitute a wish list, for example, “We could improve our productivity if we had a better pipe joint…if the regulators would let us use electric-cable splices…if we had ventilation-duct standards, etc.”

The ensuing research overseen by Panel SP-2 produced significant results and necessary changes in the Code of Federal Regulations administered by the U.S. Coast Guard, in the American Bureau of Shipping Rules, and in the standards maintained by the Institute of Electrical and Electronic Engineers. But during the progress of the research, Panel members were beginning to suspect that in order to significantly improve outfitting, there had to be improvement in how outfit work was organized, managed, and analyzed. That understanding crystallized when Robert E. Thomas (1926–1978), a member of Panel SP-2, reported after his prolonged stay in Ishikawajima-Harima Heavy Industries’ (IHI’s) Kure Shipyard (as a member of a group sent there by Newport News Shipbuilding), that he had observed an extremely effective shipbuilding approach that he could not explain. His exact words were, “There was something profound in Kure Shipyard and we missed it.”

Because of Bob Thomas’ input, the Panel prepared a research specification in the context of its outfitting mandate that required investigation abroad. Per U.S. Maritime Administration (MarAd) policy at that time, the project had to be given to a U.S. shipyard for implementation. I accompanied the individuals who investigated in more that one Japanese shipyard and who then submitted a draft about traditional industrial-engineering that did not reflect any insight into what we observed in Japan. Their services were discontinued and the resources that remained were assigned directly to IHI.

College-educated Charles S. Jonson, who had significant shipyard planning experience and who fortuitously became available, returned to Japan with me. Chuck Jonson immediately captured the key logic shift, that is, the shift from system-by-system organization of people, information and work, to zone-per-stage. Then he made sure that I understood it and shared with me the arduous chore of rewriting IHI drafts in what I call Jinglish into English. Thus Chuck Jonson is the first shipbuilding researcher in the West to discover the “something profound” in the East that many others had missed. The resulting publication, Outfit Planning–December 1979 (NSRP-0096) had immediate beneficial impact, particularly in Avondale Shipyards as described in the Shipbuilding Pictures Database at

A few months before Outfit Planning was published, Panel SP-2 met in Campbell Marine, a shipyard in San Diego that built large fishing vessels. Gary Higgins, the yard’s General Manager, participated in the meeting and in a discussion about what should logically follow, Gary advised, “What our shipbuilding industry needs is a product work breakdown structure.”

Since none of the Panel members had heard that term before, Gary produced a copy of, A Study of Shipbuilding Cost Estimating Methodology dated 20 January 1969 that was prepared for MarAd by Engineering & Management Sciences Corporation. The then 9-year old publication addressed the most important thing in shipbuilding, that is, how to analyze, yet it seemed to have been totally ignored by U.S. shipbuilders. The publication emphasized the need for a product work breakdown structure. Following the one and one-half day Panel meeting, Chuck Jonson, Edward T. Antkowiak (then the head of the U.S. Navy’s Computer Applications and Development Office), and I spent an afternoon in a San Diego restaurant where we wrote the research specification Product-Oriented Work Breakdown Structure.

Even today, I am amazed at our collective foresight. The specification we produced required application to ships and end products other than ships, it defined interim products, and it required their classification per the problems inherent in their manufacture as needed to create effective work flows. Also, the specification required methodologies for converting product-oriented costs in order to fulfill accounting and estimating needs.

A 16-months project was assigned to IHI. The ensuing publication, Product Work Breakdown Structure – November 1980,” because of great demand, was republished as Product Work Breakdown Structure–Revised December 1982” (NSRP–0164). U.S. shipbuilders were thus informed of how IHI organized and smoothly operated work flows, even for a mix of one-off ships of different designs, while simultaneously engaged in heavy-construction other than ships, that is, IHI’s classic exploitation of Group Technology.

Louis D. Chirillo


To the best of my knowledge, Product Work Breakdown Structure–Revised December 1982” (NSRP–0164), is the only NSRP publication entirely incorporated in a report of Hearings by a U.S. Congressional Committee (See Hearings before the Subcommittee on Merchant Marine of the Committee on Merchant Marine and Fisheries, House of Representatives, 98th Congress, Serial 98-57, U.S. Government Printing Office, Washington, D.C., 1985)

The disclosure of IHI’s PWBS was followed by additional Panel SP-2 research specifications and the following IHI-prepared publications:

Process Analysis Via Accuracy Control – February 1982 & Revised
August 1985 (NSRP–0214)
Pipe Piece Family Manufacturing – March 1982 (NSRP–0147)
Line Heating – November 1982 (NSRP–0163)
Integrated Hull Construct, Outfitting and Painting – May 1983 (NSRP–0169)
Design for Zone Outfitting – September 1983 (NSRP–0179)
Pre-Contract Negotiation of Technical Matters – December 1984 (NSRP–0196)
Product Oriented Material Management – June 1985 (NSRP–0210)
Flexible Production Scheduling System – April 1986 (NSRP–0238)
Flexible Production Indices – April 1987 (NSRP–0260)

The aforementioned NSRP publications were also quickly exploited by shipbuilders in the United Kingdom, in Canada and in some naval shipyards as described in the Shipbuilding Pictures Database at

A substantial amount of the information contained in the publications, including photographs and diagrams, is reproduced in, Ship Production, Cornell Maritime Press, 1988.

Some of the publications have been translated into Chinese by China State Shipbuilding Corporation’s Shipbuilding Technology Research Institute and published in 1990 as the book Group Technology in Shipbuilding. Some have been translated into Spanish by Astilleros Espanoles (now IZAR) of Spain.
Posted at 14:56:19 by Lou Chirillo - - link

29 August 2004

Elmer L. Hann (1901 - 1990)

During the September 1992 Society of Naval Architects and Marine Engineer’s Ship Production Symposium in New Orleans, the first annual Elmer L. Hann Award was given for the best paper presented the year before. I suspect that some people, including some of the Award recipients, wonder, “Who was Elmer Hann?”

That question is answered best by the following extracts from the eulogy that was presented at Elmer Hann’s memorial service by a friend and colleague:

“Born in California into a family of modest means, Elmer had a reasonably normal childhood in a family of active boys, living in a rural environment. Elmer had only a limited formal education; but that did not deter him in the least. While he started his working life at an early age using his hands, it was his mind that developed into the keen instrument by which he achieved success.

“His early working days at Craig Shipyards in Long Beach, California were only a preparation for later success at the Kaiser Shipyards in Swan Island, Oregon where he became General Production Manager. This Master Shipbuilder and Production Genius performed miracles in masterminding the construction of T-2 Tankers and Liberty Ships in a short time at low cost at a critical period for the United States in World War II.

“After the Great War, Elmer remained with the Kaiser Group as a Manager of the Kaiser Industrial Plant in Bristol, Pennsylvania. While there, he sustained a severe heart attack, but during recovery he exercised the self-discipline that so characterized his entire life. After recovery from his heart attack, Elmer joined D.K. Ludwig's National Bulk Carriers as General Manager of Mr. Ludwig's Welding Shipyard in Norfolk, Virginia. From Norfolk, Elmer traveled to Kure, Japan in 1951 where he established the Kure Shipyards Division of National Bulk Carriers, Inc.

“It was at Kure that Elmer went on to his greatest business success and it was there that he became a legendary figure in shipbuilding of worldwide reputation. In recognition of his introduction of pioneering methods, techniques and systems of welded ship construction of large ships and overall contributions to shipbuilding in Japan, including the training of hundreds of younger future supervisors and managers of other shipyards in Japan, the Emperor of Japan awarded him the distinct honor of The Third Order of the Sacred Treasure of Japan. He was only the second non-Japanese to receive this prestigious award.

“The superb combination of creative engineer and sagacious businessman permitted him to excel in management of enterprises other than shipbuilding including the transportation, marketing and distribution of salt from Mexico; coal mining in Australia and the JARI Forest Products Project in Brazil. Elmer Hann could and would accept any assignment and succeed with it if that assignment was doable.

"Elmer did much to promote understanding between Japan (and its people) and America - both in business and social life. He respected and liked the Japanese and they in turn reciprocated.

“Elmer possessed a most remarkable and admirable character in addition to a keen and observant mind. Elmer was creative, determined, thorough, loyal, thoughtful and considerate of others, respected the dignity of his fellow man - and had a priceless sense of humor. Elmer never forgot his humble origin. Many times he showed his concern for those who performed the more menial tasks of life, such as the maids at a hotel, restaurant waiters and waitresses, and the cleaners in his office. A kind word of encouragement meant a great deal to these people and Elmer was generous in his praise.

“One of Elmer's more praiseworthy characteristics was his scrupulous honesty - both in business and personal life. Although his senior executive position might have provided an opportunity for personal advantage, he never took that opportunity. His business expense accounts were models of honesty and clarity.

“Elmer provided sage advice and good counsel to those who sought it and there were many who did so. He was truly a giant among men. I have no hesitation in saying he was one-of-a-kind whose like we shall not see again. I am grateful for having had the opportunity of knowing and working with Elmer.”

Frank Joyce
Executive Vice President
National Bulk Carriers
16 March 1990

I met Elmer Hann in Ishikawajima-Harima Heavy Industries’ shipyard in Kure, Japan; he was then the Vice President, Far East Operations for National Bulk Carriers. In subsequent correspondence he supplemented his appreciation of the work performed by the Society’s Ship Production Committee Panel SP-2 with sage advice, for example in a 7 January 1983 letter to me he wrote: “Your ‘Line Heating’ is by far, the best publication on the subject matter, that has come to my attention. It should be in the hands of all shipbuilders and steel fabricators, whose managers should be made aware, that a practiced eye in viewing welded components for further assembly, can immediately determine the quality of their finished products by the conditions of such components. If such weldments are not neat, without weld distortion, further problems will persist and cost control will be difficult.”

That is typical of how Elmer Hann complimented, encouraged and instructed.

Louis D. Chirillo
Posted at 15:25:13 by Lou Chirillo - - link

07 July 2004

Management is not just for managers

Someone asked me for a particular passage that I wrote about decentralized management. I scanned my published papers in order to locate the requested quotation. The scan disclosed that I revisited that subject often and that the collection of some pertinent quotations that follows this paragraph may help others understand the importance of decentralized management. The need for such understanding has never been greater than it is now since many retired naval officers occupy relatively senior management positions in major U.S. shipyards. They come from a culture where apparent performance is as good as real performance. They have been brought up in a system in which competition with each other is a foremost preoccupation. Thus, decentralized management such as in the world’s most effective shipyards, is apt to be regarded by some of them as shining light on others.

“A unique feature of the work flows facilitated by applying Group Technology to a product work breakdown, is that the lowest level of work classification can be established as a cost center. Where implemented, because of the immediate focus on product cost, a supervisor of a single work flow, for example, has to think and act as a general manager of a single-product factory. Of course, each person in charge at a higher summary level has to think and act as a general manager of a multi-product factory.”

“Per master budgets and schedules imposed from above, monthly budgets and schedules are prepared by shop managers, biweekly by foremen, weekly by assistant foremen, and daily by workers. Each level is responsible for implementation and analysis accordingly. Thus, a schedule or budget lapse automatically triggers a response from a level of management that is commensurate with the problem.”

“…success should be measured by the cumulative affect of bit-by-bit improvements throughout the manufacturing system and the service systems that support manufacturing. Any one such improvement would not be worthy of notice. Utopia is reached when such improvements regularly require that estimating and marketing people be notified of the manufacturing system’s new capability and availability. In this way, many relatively small adjustments in design details and in work methods are captured as corporate experience and so contribute to constantly advancing technology.”

“Nothing in the definition of TQM implies that only people with the title ‘manager’ can provide excellent supervision. In fact, workers are eminently more qualified to make the largest percentage of required manufacturing-cycle decisions.

“Nothing in the definition says that workers in heavy industry should not make the same kinds of decisions for which management is responsible, for example, planning, scheduling, implementing, and evaluating decisions. In fact the most important feature in world-class shipyards, is the ‘management created climates in which each worker routinely uses ‘his own mind and his own experience to improve his own job, the product, the process, and the quality’ just as IBM's Watson achieved for light industry.

“Exploiting the thinking abilities of workers for management cycle decisions makes sense for some of the reasons given by behaviorists. But there is also an extremely practical reason that behaviorists do not mention.

“8th Axiom: There are a hell of a lot of small-scope decisions to be made, and there are a hell of a lot more workers than there are managers.

“Everything said about workers in the foregoing also applies to assistant foremen, and foremen. Constant improvement of a manufacturing system is enhanced when responsibility and authority are decentralized from the top in decreasing size spheres of influence commensurate with each level's capability.

“9th Axiom: Numerous small-scope management decisions, continuously made, have more productivity improvement potential than the collective experience vested in a few top, department and shop managers.

“10th Axiom: TQM cannot exist unless workers at each work stage in a work flow are given instant feedback about how their own work is performing, particularly regarding man-hour costs, schedule adherence and quality.

“11th Axiom: Allowing anyone access to information prepared for people at higher summary levels, doesn't pass the test of common sense.”

“Decentralization—Scientific management maintains the same knowledge of how a manufacturing system is performing in different summary levels. The effect is like having the same knowledge "diced" in a large-frame sense (relatively few groups), in an intermediate-frame sense (moderate number of groups), and in a small-frame sense (many groups). Further, scientific management requires that the same kinds of planning, scheduling, implementing and evaluating decisions be made at each level. TQM is mostly dependent upon how well such decisions are made at the lowest level. Since there are an overwhelming number of small-scope decisions to be made, workers must be trained to participate in decision making. Otherwise, the need to make numerous small-scope decisions is ignored. TQM cannot possibly exist.”

“For most matters for which standards are useful, there is no time to achieve general agreement. A modern manufacturing system features unrelenting analyses that constantly identify even minute improvements. Authority, custom or general consent applies to acceptance of the system for constant improvement and not to the improvements per se. The latter are automatically incorporated in the forever-changing standards.”

Posted at 19:12:40 by Lou Chirillo - - link

07 June 2004

This looks like a job for the LCS

Gregg Easterbrook may have been right when he suggested back in September that the Littoral Combat Ship would be used to defend new oil fields on the Western coast of Africa. Although the Pentagon hasn't confirmed specific plans, the BBC's Nick Childs reports that a US defense official has acknowledged the US Navy is planning to deploy an aircraft carrier off Nigeria and neighboring countries in the Gulf of Guinea (see his June 4 article, US navy 'plans W Africa exercise'). Apparently there may be emerging terror threats in the "ungoverned areas" in the region. Childs only hints at the possible reason for the deployment: he mentions the oil, he mentions "Summer Pulse 04" (the Navy's current exercise to prove it can respond quickly to world events), and he makes the rather enigmatic statement "A senior navy official said recently that a deployment to the Gulf would send a message."

What message is that?

That the region's oil will be easier to defend than oil in the Middle East? That an aircraft carrier is a bad tool to use in defending coastlines? With Congress still unsure of the program, this exercise could be just the push the Navy needs to get the LCS back on track.
Posted at 08:38:11 by The Editor - - link

06 January 2004

A Dry-Dock Shop: Something to think about

A few months ago, a representative of a large shipping company in the Near East asked if I thought that it was appropriate for him to propose that his alma mater solicit “dissertations on a product-work-breakdown-structure approach for dry docking a vessel from a ship-operator’s prospective.”

I replied as follows: “Yes, of course. I’ll give you an example. About twelve-years ago I was retained, about every six weeks, to teach at a school for naval officers. The school was located near a naval dockyard.

”One day, I was asked by a friend to visit the naval dockyard in order to determine why the dockyard lost interest in purchasing an all-weather escalator. You may have seen them because in some shipyards that build and/or overhaul large tankers, such as your company operates, escalators are employed to lift workers on board. As I recall, the escalator considered was designed to accommodate 1-1/2 of the weight of a typical worker so as to provide for tools and/or material.

”I spoke with the dockyard’s industrial engineer who had made the inquiry. He advised that, per his estimate, usage of the escalator would save 4% of the man-hours required for work that necessitated access to the dry-dock floor. He added that all of the traditionally organized shop managers desired it, but none trusted the dockyard’s public-works department, already responsible for such facilities as yard cranes, for the escalator’s timely installation and removal per docking and for its maintenance. Furthermore he advised, no one of them wanted to accept those responsibilities if the others also benefited. For those two reasons, the escalator was not purchased.

”Now consider if the work was addressed per a product work breakdown and the product was converting an undocked ship into a docked ship. Then the docking would be addressed as a single cost center and one product manager would be in charge of all of the various required workers regardless of what shops they came from. A product manager in charge of a dry-dock shop would readily absorb the costs for installation, removal and maintenance of an escalator in order to achieve the estimated 4% man-hour reduction.

“As a practical matter, the dry-dock shop could have a few permanent workers and would be assigned temporary workers from other shops as needed per docking. Also, as you seem to be already thinking, that same product manager would be responsible for work packages that could be classified by problem category per group-technology logic and that would be implemented zone/stage. Such measures facilitate virtual-work flows, minimize different trades interfering with each other, and so ensure very-accurate cost returns.”

Posted at 22:42:26 by Lou Chirillo - - link

12 November 2003

The Ghost of Admiral Rickover?


During the summer of 1989 I was asked to prepare a discussion for a paper scheduled for presentation at a National Shipbuilding Research Program (NSRP) symposium.[1]

I was especially pleased because the paper was one of a succession of such papers by naval shipyard personnel and was an account of an extraordinary application of the zone logic that I helped introduce to private and public shipyards in the United States and elsewhere. The following excerpts are from what I presented:

“…the application of zone logic described in this paper is impressive for its scope as indicated by its intense electronic nature and its requirement for twenty miles of electric cable. The entire effort, in terms of planning, material marshaling, and production, is in the order of that for building a high-tech ship of modest size.

“…the word ‘kit’ is being used as some zone-oriented shipyards use the word ‘pallet’ for the purpose of providing an information link. This extremely beneficial concept is the basis for organizing resources and for directing detail designers and material-marshaling people to work per the same sequence planned for production. First things are first! There is no counterpart concept in traditional system-by-system operations.

“Also, the challenge to do in seven months with zone logic, the same ship alteration that heretofore required fourteen months with the traditional system-by-system approach, is also impressive. The seven-months expected gain is a seven-months contribution to scheduled readiness for a nuclear-powered aircraft carrier.

“Even if the goal was a scheduled savings of only two or three months, in the context of readiness the impact of zone logic would still be profound. Just imagine the war effort that an enemy would have to apply in order to take NIMITZ off the line for two or three months!

“I think the authors and their associate innovators deserve the highest order of commendation because theirs is a bottom-up approach stemming from a production/industrial-engineering initiative. Puget Sound Naval Shipyard (PSNS) has other bottom-up limited and successful zone-logic experiences, but they originated within the production/design sphere, e.g., a Close-In Weapons System in the aircraft carrier RANGER, a large portion of a Tomahawk Missile System in the cruiser TEXAS, and much work for extensive electronic alterations and overhaul of ballast tanks in SSN-637 Class submarines.”

Needless to say, I was surprised and concerned when it was announced at the Symposium that the excellent paper was to be presented only verbally per instructions to the authors by the naval officer commanding their shipyard. No copies would be distributed to attendees nor would the paper be published. Two-weeks later, in hopes of provoking an explanation, my 28 September 1989 letter to the PSNS commander included the substance of my discussion as quoted in the foregoing. He did not reply.

Months afterwards, during a conversation with a then recently retired naval shipyard commander, I brought up the subject. He responded, “Don’t you know what happened? Each of us received a letter signed by an admiral that ordered that such management initiatives be discontinued.”

He didn’t want to tell me more, but during a subsequent conversation with another former naval shipyard commander, I was advised that the letter was sent by “OP-08, Admiral McKee.” He added, “I know Admiral McKee. Had he been advised correctly, the Admiral would not have signed that order.”

Furthermore, I knew that Admiral Kinnaird R. McKee, who succeeded Admiral Hyman G. Rickover as Director, Naval Nuclear Propulsion, inherited an organization that was described by a former Chief of Naval Operations as “…un-American and autocratic. It was, to be blunt about it, a system of spying and intimidation.”[2]


The following is a plausible account of what might have provoked OP-08’s order that stopped the application of improved naval-shipyard management methods and caused the discontinuance of writing about such methods:

Simultaneous with the use of zone logic for planning the installation of a Naval Tactical Data System (NTDS) in the nuclear-powered aircraft carrier NIMITZ by PSNS, a commander of another nuclear-qualified naval shipyard was emphasizing Total Quality Management (TQM). The staff person assigned to head the effort advocated a dedicated infrastructure piled on a regular organization in the form of a special office and various committees. Barely afloat amid that promotion of TQM, was the simple truth, “quality improvement comes from process improvement.”

In addition to the way TQM was being advocated, the term "empower the workers" alarmed the on-site naval officer nuclear inspector. Per the system created by Admiral Rickover, the on-site inspector reported directly to Admiral McKee, in effect, "We cannot have that kind of liberalism in our nuclear spaces."

Because of lack of understanding, other relatively new terms such as "product work breakdown structure" and "zone technology" were included in the complaint.

Had Admiral McKee been properly advised, he would have understood that the zonal approach yields improved management control, thus enhancing safety and productivity. Apparently, none of the naval shipyard commanders and senior officers in the Naval Sea Systems Command (NavSea), at that time and since, dared advise OP-08 of the successful zone-technology accomplishments in RANGER, CONSTELLATION, TEXAS, 637-class submarines, etc. and for the NTDS in NIMITZ.

Thus, it seems to me that the NSRP freed the genie who could grant wishes for improving productivity, and that the Commander of NavSea and all of his naval shipyard commanders did nothing when OP-08, perhaps unintentionally, slammed the genie back into the magic lamp.

The current commanders of NavSea and naval shipyards could rectify the situation by at least:

• avidly encouraging their civilian and military personnel to resume writing about shipyard managerial methods, and

• recognizing such authors whose papers are published by professional societies and insuring that pertinent notices are entered in officer fitness reports and their equivalents for civilians.

[1] Paper No. 5, NSRP Ship Production Symposium, 13-15 September 1989; Title: A Zone Outfitting Project at Puget Sound Naval Shipyard; Authors: Albert J. Caputo, Gary M. Walters and Thomas S. Luis of Puget Sound Naval Shipyard, Bremerton, WA (presented only verbally).

[2] Elmo R. Zumwalt, Jr., Admiral, USN (Ret.), “On Watch,” The New York Times Book Co., new York, ISBN 0-8129-0520-2, p. 112.

Posted at 15:43:13 by Lou Chirillo - - link