ABC Shipyard Plant Location and Design
Write a review of ONE of the following books, with reference to at least TWO of the social
theories (at least one from Marx, Weber and Durkheim, plus at least one from feminism and
postmodernism), and to at least ONE of Morgan�s metaphors (from Images of Organization). The
Morgan metaphor chosen can be any of the metaphors featured in the book. It can be, but does not
have to be, the one covered in the first seminar.
. This paper focuses on the shipyard of ABC Shipyard on the east coast of India. The
primary role is to identify how the shipyard organizes the cutting and fabrication of its
steelwork, equipment of ancillary, large module welding and how they are welded together to
form a complete ship. Shipyard location and design are one of the emerging business
opportunities for organizations to invest. ABC Shipyard on the east coast of India plans on
setting up a modern shipyard facility to meet the highly growing demand of shipbuilding
Plant Location and Design 2
needs in India. In this review, we identify the design through which the company plans to
optimize the space, cost and ensure technologically capable organization through planning,
designing and developing shipyard system which can handle equipment and control systems
indigenously. The shipyard company is faced with space problem as semi-finished steel
plates have filled the steel shore such that the company cannot meet the need demand of five
shipbuilding order.
The advantages of plant design and layout can never be overlooked. This is because
they provide irreplaceable safety factor during the plant life and good layout achieve an
economic balance on the environmental, operations and construction requirement. Besides
god layout allow future expansion and other production related requirements. The lack of free
space within the ABC Shipyard initiates implications, and the chief officer fears the company
may fail to meet the new order of five ships. Therefore, spatial arrangements of plant
resources or components are the essential feature in designing the facility space and any
running or erection of block costs.
Rayul Pitamber, the ABC Shipyard chief operating officer, was faced with the critical
decision for the company in the October 2014. The main argument revolved by ensuring the
shipyard company delivered ships in 2 years for the five large naval carriers of bulk. Besides,
the chief operating officer was faced with global shipbuilding market that had a boom
increasing the number of shipbuilding orders. However, the current layout of the company
was of concern to satisfy the timeline of the emerging order and remain socially accepted in
its operations. The main goal of Pitambar was to find options that expanded the throughput to
ensure the company accepted the marine logistics order and took advantage of the booming
shipbuilding market. Also, the shipyard company aims for the attractiveness of the Indian
coast which attracts global shipbuilders and ship owners. The shipyard is well linked with
Plant Location and Design 3
highway connections and large river to the seafront. The ABC Shipyard had delivered ships
of various varieties for over 15 years of operation with complex and bulky ship products.
The ABC Shipyard company had a manufacturing strategy that divided the ships into
small interim portions called the ‘blocks’ which helped in managing the large production of
huge and complex products. Besides, the shipbuilding project had stages of completing
blocks as well as the production assembling at the bottom forming the backbone of the ship.
This backbone was joined together with the interim blocks to form a competing ship. The
company requires spatial resources to manufacture both the interim and final bulk product.
These resources include the huge cranes and large blocks in the erections areas and the docks.
Therefore, the manufacturing process of the ABC Shipment involved a vast amount of
manual labor, especially during the assembling stage. Furthermore, the ABC Shipyard layout
was designed in such way that the company optimizes the existing spatial resources and the
facilities of waterfront to minimize the operational cost efficiently. In so doing, the shipyard
company ensured that the process was focused on the arrangement of steel, pipe, paint and
the general purpose shops. Hence, the new demand requires organizational changes that will
adhere to main objectives and goals of the company as well as achieve the new global
demand of shipbuilding. The managers are faced with the critical decision of free up space
for the new orders. The main problem why the shipyard steel store is filled with the semi-
finished plates is that they produce steel plates of the same thicknesses. This is a problem
which runs from the design office. It is evident that the company lacks clear communication
and sharing of information within the departments. There should be a flow of information and
better communication to ensure that plates are produced on demand.
Therefore, to critically understand the functionality of ABC Shipyard from the
emerging demand for organizational changes, we have to review the structure of the company
and the areas that need reorganization. The role of the organizing manager is to ensure that
Plant Location and Design 4
the company operates efficiently and effectively to maximize shareholders wealth. Therefore,
our main review will focus on the steel handling and fabrication of the ABC Shipyard which
so much disorganized to meet the current order for five new ships. Thus, the chief operating
officer must make compete redesigning of the department to handle the new organizational
changes to meet the required timeline by the customer. The objective of the paper is to assess
how the ABC Shipyard will rearrange its main facilities and deliver the customer order in
time. Besides, the company has steel shop and shop store far apart making it costly to transfer
part of the semi-finished steel plates to the free space in the paint shop. This shows poor
designing of the shipyard layout to accommodate new demands for new orders.
The shipyard company has an existing layout not costumed to hold the new order. The
existing layout runs through the process of steel-cutting to commissioning. The company
layout is the steel-cutting, sub-assembly, panel fabrication, outfitting preparation, painting,
pre-outfitting, block erection, and block assembly, launching, final fitting and then
commissioning. The steel facility works on the steel plates which are stored in the stockyard.
The stored plates are transferred to steel shop for preparation. The steel is functioning under
its capacity; however, the steelyard and shop share an overhead gantry crane of 150 tonnes of
steel plates per day. The steel-cutting optimal utilization of the steel uses the nesting diagram
from the design office. The steel processing also consumes a lot of space for the flat and
curved sections. The shipyard flat blocks of constructing a ship use the midship which
demands flat sections of steel. Besides, this consumes 70% of steel processing.
According to the steel shore manager, the current state of block erection operation area
is fully occupied for the next 18 months. Therefore, this means that the shipyard is faced with
space issue for operating the new customer order of delivering the five new ships. The block
erection area is fully occupied with almost semi-finished blocks due to the current or on-
going ship orders. The steel shop manager is faced with the space problem. The chief
Plant Location and Design 5
operating officer must deliver the new order in time; therefore, must assume the
responsibility of free space for new ship orders. The main problem with the steel shop space
is due to lack of continuous supply of steel plates required for the steel shop. Despite the high
volume of the semi-finished blocks, the manager thinks the constant preparations of steel
plates at a high throughput make the shop rate them as work in progress. The argument is that
the semi-finished steel plates will be consumed by the block erection activities in the
stockyard. Besides, the steel cutting is facing the problem of less consumption of steel plates
due to multiple productions of blocks.
Besides, another key problem is that the steel shop fails to produce steel plates
according to the erection requirements. Thus, this becomes an area of main concern as the
new order of ships may require different block erection requirements which will undoubtedly
create space complication. The manager only loads steel plates according to the computerized
numeric controlled machines with large batches of same profile and thickness plates making
it complex to handle the new order in time. According to steel shop manager, using the CNC
machines allows the shipyard to minimize the time for set-up and maximize the shipyard key
performance indicators. Subsequently, the focus on the steel shop key performance indicators
is the main cause of the department problems off lack of free space. Therefore, the shipyard
loses the main overall focus and goal of completing a whole ship.
The organizational structure of the steel shop is of main concern. The production of
steel of same thickness reduces the opportunities for the shipyard to produce other steel plates
of different thickness to complete new orders or completing on-going blocks. It is costly to
halt production of blocks currently at semi-finished state to start new blocks with the
available steel plates. According to Emile Durkheim theory of functionalist, the micro-level
of an organization structure must operate uniformly to maximize opportunities available and
make super profits for shareholders (Tiryakian 2016, p.87). The current organizational
Plant Location and Design 6
structure of the steel shop is of critic due to focus on only the key performance indicators and
failure to produce steel plates at different thickness. Emile believes that it is critical for an
organization to function as a whole for its stability (Durkheim 2016, p.4). This is the main
reason the chief operating officer is demanding for the steel shop to produce steel plates of
different thickness to take advantage of the new orders. Therefore, it is evident that the steel
shop operates independently making it hard for the ABC Shipyard to envision its main
objectives. Thus, it seems other ship production areas will have to adapt to meet the demands
of the new order due to the steel shop failure of producing steel plates of different
thicknesses. The functionalism theory believes that order and consensus must exist in an
organization or society to have stability. Besides, disorganization of a structure such as a
layout may cause organizational changes of various components to achieve new objectives or
demands.
In addition, the entire block area is filled up with semi-finished plates preventing the
erection of new blocks. The shipyard, therefore, faces reduced consumption rate of the
available plates of steel amounting to increased work-in-progress. I believe this is the vicious
circle which continues to impact the overall performance of the ship production projects.
Furthermore, there is the poor facilitation of communication and information to the other
departments which make steel shop to cut similar plates. The shipyard should improve
facilitation of communication and flow of information to allow the steel shop cut plates on
demand which are required for block erections. I think this will highly reduce the WIP
problem and establish congruence between the output of the steel shop and block erection
input requirements. Therefore, these become the constraint of the steel shop organizational
layout. The manager must address the various challenges before starting producing the new
order. Since the layout is fully occupied with semi-finished steel plates, the steel shop
manager must focus on cutting plates on demand and of different thicknesses to reduce work
Plant Location and Design 7
in progress as well as allowing efficiency in production. The use of imagery metaphors by
Morgan can help in the practical applications and diagnose the steel shop problems and
develop the appropriate changes for new demands. The imagery metaphor will provide
insight into the complex issue and provide the organizational change that will solve the
problems. The shipyard faces the problem of departmental lack of shared responsibilities. The
design office fails to share the information of current shipbuilding orders with the steel store
and shop leading to the production of plates of the same thickness. This fills the space as the
manager is only focused on the key indicators of the steel shop.
The product-focused layout allows manufacturing factories to arrange equipment
according to the needs of the end product as well as in the same sequence as the operations
from the start to the end point of the production process (Ata and Mieghem 2009, p.115). In
addition, each line of production or assembling layout must have the sufficient and stable
demand to ensure full utilization of equipment and continuous or regular raw materials and
components supply. Failure to adhere to the supply of any piece of equipment will lead to
complete production stoppage which can amount to high disproportion losses.
In this case scenario, the product-focused layout is critical to solving the current
demand for the five orders. Furthermore, considering that the existing steel shop layout is
disorganized to meet the new demand for the company, the manager must establish product-
focused layout. This will ensure that steel plates are produced according to requirements and
that the WIP will be reduced significantly. It is the mandate of the steel shop or store manager
to coordinate with the other production departments to establish their specification for the
demand which will ensure a continuous flow of steel plates. Besides, the shipyard company
can adopt a virtual cell concept to solve the current space problem. This will ensure grouping
of resources virtually in the short-term for incremental benefits from the new ship order
Plant Location and Design 8
manufacturing. However, in long-run, the company can incorporate shut-downs in its
production to plan for schedule and gradually configure the steel shop.
The theory of constraints justifies virtual cells to meet the new demand of the five ship
orders. In addition, it will establish a mutual relationship which is beneficial to the two
departments. The shipyard should establish a positioning process which will be focused on
the shops’ relativity to each other based on the shipbuilding process. I think this will highly
resolve the problem and meet the demand of the new orders accordingly. The constraint
theory gives the methodology to identify the essential limiting factor that constraints the goal
of a company (Woeppel 2016, p.10). The constraint theory systematically provides the areas
for improvement and obliterating the constraint. In manufacturing the limiting constraint is
called a bottleneck. The theory links multiple activities in manufacturing as well as
identifying the most constraining factor in the entire system. Therefore, the constraint theory
helps manufacturing companies to make a profit in both short term and long term by
providing powerful tools to achieve the goal. The theory helps to focus on permanent
identification and elimination by analyzing and solving the problems (Şimşit, Günay and
Vayvay 2014, p.930). In addition, the theory provides methods for measuring performance
and guiding decisions by management. This theory is essential in helping the chief officer to
identify the constraint which is steel plates’ space and fabrication, exploiting the constraint,
synchronizing the constraint, elevating constraint performance and repeating the process for
efficiency.
Pitambar believes the adoption of the virtual cell will temporally resolve the issue by
virtually grouping the resources. He also proposes that a scientific approach should be used to
establish how the existing layout deviates from the design requirements for shipbuilding
process. Thus, the shipyard will achieve the ideal linear flow of materials. Consequently, the
designed layout will ensure better flow of materials, reduced shipbuilding cycle time,
Plant Location and Design 9
enhanced throughput as well as prepared handling of increasing order book due to the
booming shipbuilding market. The problem will be the relocation of shops and high
investments.
The areas that need rearrangement are the steel plate shop and the fabrication areas
which require critical evaluation according to Pitambar.
These areas need great considerations such as;
Look for reasons of the large size WIP
Create a suitable size for inventory buffer to solve the constraint through the
schedule and continuous operations
Implementing on-going reviews for plant floor shifts to establish tactical actions
for improvement
Implementing setup program for reducing the productive time lost during the
changeover.
Eliminate virtually all inventories
Follow customer pace
The relationship chart ensures that the company has effective communication and
sharing of information with the shipyard. This creates a continuous flow of inventory. In
addition, steel plate production is of the correct thickness and according to shipbuilding
requirements.
Redesigned-REL
1 2 3 4 5 6 7 8 9 1
0
1
1
1
2
1
3
1
4
1
5
1
6
Design Office A
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Supporting
Activities
A
Warehouse A
Medical Centre A
Canteen A
General Purpose
Shop
A
Outfitting Shop A
Steel Shop A
Steel Stockyard A
Paint Shop A
Sub-Assembly Area A
Pipe Shop A
Panel Fabrication
Area
A
Block Erection
Area
A
Dock A
Quay A
Redesigned-REL
1 2 3 4 5 6 7 8 9 1
0
1
1
1
2
1
3
1
4
1
5
1
6
The reason why some relationship in the chart is more important is to ensure efficiency
and flow of production is achieved. The design office and the supporting activities must
establish continuous communication with steel stockyard to ensure that the steel plates
produced are according to demand or requirement of the shipbuilding. This will ensure
reduced work in progress as blocks will be erected efficiently without creating virtual cells
for inventory. Communication and sharing of information are the main targets according to
the theory of constraint. This important for the system to function as a unit and ensure no
conflict of responsibilities.
I believe the shipyard company can meet the order by considering the proposals
discussed in this paper. The company should establish virtual inventory cells to allow
reduction of work in progress and create virtual space for the new orders. The chief officer
Plant Location and Design 11
and the steel store manager have to communicate with the design office to establish the best
flow of information for the new order requirements. In addition, without the right
communication channels within the system, it will be highly challenging to pass the correct
information to steel cutting office. The system should work as a unit and provide the
specifications of the customer orders to ensure shipbuilding is efficient. In addition, the steel
plates can ship to other shops such as paint shop despite the long distance between the two
shops. The steel cutting and sub-assembly should work closely to ensure that the block
erections work efficiently. The existing warehouse should work closely with the design office
as well to ensure that the company materials are stocked according to shipbuilding
requirements. I believe with improved designing and flow of information, and the shipyard
will meet the demands of the new order.
References
Ata, B. and Van Mieghem, J.A., 2009. The value of partial resource pooling: Should a service
network be integrated or product-focused?. Management Science, 55(1), pp.115-131.
Greve, L., 2017. Using metaphor as a management tool. The Routledge handbook of
metaphor and language, pp.13-27.
Plant Location and Design 12
Şimşit, Z.T., Günay, N.S. and Vayvay, Ö., 2014. Theory of constraints: A literature
review. Procedia-Social and Behavioral Sciences, 150, pp.930-936.
Tiryakian, E.A., 2016. Émile Durkheim and Social Change. In For Durkheim (pp. 81-86).
Routledge.
Woeppel, M., 2016. Manufacturer’s guide to implementing the theory of constraints. CRC
Press , pp.10-20.
