Research Article

A systematic approach of lean supply chain management

in shipbuilding
Niansheng Chu1 · Xiang Nie1 · Jiang Xu1 · Kunlin Li1

Received: 7 October 2020 / Accepted: 7 April 2021

Published online: 21 April 2021
© The Author(s) 2021  OPEN

Abstract
This paper presents a systematic approach for lean supply chain management in shipbuilding industry based on analysis
of the unique characters and processes of shipbuilding. The approach constantly improves productivity and retains low
costs. The system that covers seven sub-systems on three different levels is created based on the lean thinking and sup-
ply chain management theory. In the lean supply chain management procedure, the operational data of the shipyard
and suppliers are timely collected, monitored, and analyzed, and weaknesses in the supply chain are identified through
performance measurement to suggest improvements. With this approach the entire shipbuilding supply chain can be
continuously optimized and controlled. This approach is concluded and proofed functional with actual operation in a
leading shipyard in China, Shanghai Waigaoqiao Shipbuilding Company, guided by Shipbuilding Modeling 2.0 Program
of China state shipbuilding corporation.

Highlights

• To the best of the authors’ knowledge, they are the cesses, and then lead the practice and study of LSCM
first to present a systematic theory based framework, in shipbuilding to improve the efficiency and effective-
operational method, and recirculation approach for ness of shipbuilding.
optimizing lean supply chain management (LSCM) in • The authors are shipbuilding and supply chain manage-
shipbuilding. Although the theory of LSCM has reached ment experts from Waigaoqiao Shipbuilding Company
into a very mature stage in some traditional industry, (SWS), which is a leading shipyard in China. Because of
but it is still a greenfield in shipbuilding. their theory and practice based knowledge, they can
• Most experts and professionals in shipbuilding industry easily identify the key problems of shipbuilding opera-
would like to consider the production of ships and off- tion and have first-hand access to worldwide shipbuild-
shore products as a project due to its nature of unique ing performance data. In addition, the authors have
and single. But the basic theory and tool of LSCM can experienced the great transition and reform from tra-
still functioning after abstract the characters and pro- ditional to lean shipbuilding.

Keywords LSCM · Shipbuilding · Inventory · Performance measurement

* Niansheng Chu, [email protected] | 1Shanghai Waigaoqiao Shipbuilding Company, Shanghai, China.

SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

Vol.:(0123456789)
Research Article SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

1 Introduction The following sections of this paper presents a back-

ground analysis of the SCM characteristics in shipbuild-
Lean thinking is about determining how to deliver more ing, lists the difference between this and other industries,
value to society, individuals, and the environment; more and explains why LSCM has been chosen for shipbuilding
specifically, the methodology includes determining how and how this unique method can be implemented. Based
to align with value-creating actions in the best possible on these factors, a systematic approach for LSCM imple-
way, perform activities without interruption whenever mentation and pursue perfection with lean thinking and
someone requests them, and perform them more and endless circulation is presented. Finally, the key points and
more effectively [1]. Lean Principles and Practices claim important problems of this study are discussed, and its
to create value for customer with growth in every type of contributions are summarized.
organization in which they are implemented [2].Lean sup-
ply chain originate from the just-in-time philosophy, which
was first adopted by many American and European firms 2 Characteristics of SCM for shipbuilding
in the late 1980s and applied at Toyota’s Takaoka facility
[1, 3]. Since then, lean supply chain management (LSCM) One of the major differences between shipbuilding and
has played a crucial role and reached a matured stage with most other manufacturing is that the ship or the offshore
the development of new IT technologies in most manu- product is designed, developed, and built during the pro-
facturing industries such as the automobile, electronical ject development stage instead of being ready before the
communication, and aviation [4]. production. In mature manufacturing processes, the mate-
Although shipbuilding technology differs from that rial, technical details, type, suppliers, and components are
applied in, for example, automotive products [5] and can selected during the design stage; thus, the new design
be considered in many aspects similar to construction product is trial-manufactured and tested before the actual
technology in which the product is place-bound and the production [11]. Shipbuilding does not include such trial
site itself is a resource [6]. The processes and working flow manufacture and, is therefore similar to construction pro-
differ from those of most manufacturing methods stud- jects [6]. The shipbuilding industry is largely character-
ied in both LSCM and supply chain management (SCM). ized by the application of project-based approaches for
According to Aslesen and Sigmud [7], “The available litera- the building of ships, offshore products, submarines, and
ture on implementation of lean in shipbuilding environ- their repair and overhaul [12].
ment is quite restricted due to novelty and the restriction Saved for the requirement from the client, the ship-
of the concept. Lean shipbuilding is very specialized one building project normally starts from the basic design
and its application is considered to be one of the exten- stage compared with the complex final product. The basic
sions beyond lean construction”. Nevertheless to say, the design briefly specifies the major technical scope, perfor-
SCM for shipbuilding can be summarized and simplified mance, function, and systematic working method. Sub-
by analyzing the shipbuilding characteristics. sequently, the shipyard signs the contract with the client
Leading shipyards such as Kawasaki in Japan and Dae- [11]. The shipyard normally produces and delivers the ship
woo in Korea implement lean shipbuilding by successfully within approximately two years (the processes includes
applying lean principles and total quality management. detail design, engineering, procurement, construction,
SCM is essential for improving the efficiency of shipyards and test and trial).
in the I4.0 technologies [8, 9] and lean manufacturing;
how to combine SCM and lean manufacturing to improve 2.1 Short supply chain
the efficiency of shipbuilding has become increasingly
important. Figures 1 [13, 14] and 2 compare the general supply chain
SCM in the leading shipyard of China [i.e. Shanghai with that of the shipbuilding industry; the latter is typi-
Waigaoqiao Shipbuilding Company (SWS)] is part of the cally shorter because it does not contain the distribution
lean-thinking-based of Shipbuilding Modeling 2.0 Pro- of products to the customer; the supply chain ends with
gram [10] of the China State Shipbuilding Corporation the completion of the project. For example, the SCM pro-
(CSSC). The program has improved the building efficiency cesses for a floating production storage and offloading
and business performance of the company. The LSCM unit (FPSO) (which is used in the offshore oil and gas indus-
system presented in this paper represents the worldwide try for the production and processing of hydrocarbons and
shipbuilding development in leading shipyards and is for the storage of oil) for a certain client includes manag-
based on shipbuilding experts’ knowledge. ing a series of activities along the supply chain. Finally,
all materials and components (e.g. steel plate, outfitting,
cable, piping, machinery, etc.) from the suppliers must

Vol:.(1234567890)
SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z Research Article

be delivered to the correct place of the yard at the cor-

rect time with the correct price; in addition, the quality
of products must meet the requirements of the building
process in the shipyard. All these factors are not included
in the management plan for the delivery of FPSO unit to
the client. The shipyard functions as a turnkey contractor
that delivers the final product directly to the end-user or
owner [15] when all scopes in the contract have been met.

2.2 Low standardization ratio (LSR) Fig. 1  Generic supply chain

Compared to those of other industrial manufacturing pro-

cesses, the standardization ratio of the raw material and
intermediate components in shipbuilding is rather low
[16].
First, the ratio is determined by high degree of cus-
tomization instead of standardization. Except yachts and
some small ships less than 5,000 tons deadweight, most
ship types are not mass-produced. The number of vessels
with identical designs that are simultaneously or continu-
ally constructed doesn’t exceed 10 vessels in all the major
shipyards worldwide.
Second, the degree of standardization of raw material Fig. 2  Shipbuilding supply chain
is very low. The key raw material for shipbuilding is the
steel including the steel plates and profile bars, thereby
representing approximate 30% of the total cost of ship- professional party on behalf of the flag government and
building. Owing to the development of lean production other authorities), representatives of the yard and owner
designs, the three dimensional modelling has been used before the dispatch; the installation is followed by com-
to simulate all structures, equipment, fittings, and major missioning, docking and sea trial.
intermediate components with computer model before Based on the analysis above and estimation of several
construction. To increase the use and reduce the cost typical shipbuilding projects, the manufacture ratio of
and lightweight of the ship to allow the owner to carry standardized raw material and intermediate components
more cargo, the designers determine the optimal steel is approximately 20%; and the weight of standard material
grade and thickness for each structure; subsequently, and components is only approximately 5% of the ship. This
the exact demands of steel plates and profile bars are leads to problems when material of the inventory must be
defined. For example, the 5500 types of steel plates replaced in the event of a failure along the supply chain.
(which correspond to 14,000 steel plates) for the con-
struction of an FPSO unit in the SWS approximately 70 2.3 Complexity
thousand tons.
Furthermore, the suppliers of the outfitting for piping, Shipbuilding has the peculiarity that the different loca-
passageway, equipment installation, and cable way fab- tions in which each of the parts is made belongs to the
ricate them according to the production drawings of the same manufacturing center; nevertheless, the locations
shipyard. The shipbuilding industry committee and per are distributed over a large area, which complicates the
shipyard have established a set of standard for almost all processes [17].
fittings; however the standard set does not support the By nature, shipbuilding projects are huge projects
standardized production owing to the great number of with substantial jobs, a large numbers of products, and
types and uncertainty regarding the quantity, size, and a series of processes involved. For example, a FPSO unit
arrival date of each fitting type. construction structure can be broken down at least 5 lay-
The key machinery for the propulsion, anchor, power ers to achieve the completion of the project as shown
supply, and navigation can be standardized, however the in the Fig. 3. There are approximately 1000 kinds of raw
shipyard and ship owner still have customized require- material and products to purchase in order to complete
ments in the signed technical agreement. The equipment 50 thousand pieces of components and finally assembly
is normally shop tested with witness of the Class (i.e. a into the FPSO unit. Based on when the section, blocks,

Vol.:(0123456789)
Research Article SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

meg-blocks purposed to be ready, these material and • Technical specification Change Order comes from the
products engaged in the sections, blocks, and meg blocks client;
or directly mounted onboard are requested to arrive at the • Safety rules can be changed caused by the force of
Yard in the correct time according to building schedule related authorities and international organization;
[11]. • Technical updates made by the suppliers can lead to
The machinery, components, fittings, and raw materials unforeseen modification;
are produced by a great number of suppliers at different • The building schedule can be adjusted owing to
location and have different size, and typologies [8]. Thus, changes regarding the human resource, force majeure,
the supply and delivery must be coordinated according to and unpredictable technical challenge.
the technical specifications, test requirements, cost, quan-
tity, delivery standard, and schedule.
3 Analysis of LSCM in shipbuilding
2.4 Uncertainty
A common practice has been to carry a higher level of
Because trial-manufacturing is not existent in this field, inventory to compensate for greater uncertainty [3]. But
shipbuilding supply chain has in an enormous degree of it doesn’t work in SCM of shipbuilding owing to the LSR
uncertainty. Although predicting the exact required quan- and complexity. To some extent, the inventory of raw
tity, size, grade, and even characteristics of the material material and intermediate component in shipbuilding is
and products at the early project state is challenging, the not real a buffer between manufacturing and order fulfill-
shipyard must prepare contracts with the suppliers and ment. Inventory that is not in line with LSCM results in an
determine the required resource to ensure that supply inefficient and ineffective process flow. A safety stock of
plan meets the building schedule [11]. For example, most non-standard raw materials and intermediate components
fittings including the ladders, pipes, valves, and cables increases the waiting time and does not prevent the sup-
only can be defined during the detail design stage and be ply failure. For example, the steel fitting for block 642 can-
precise predicted the demand in production engineering not be swapped with the one for block 641; in addition, the
stage; therefore, it is almost impossible to order the right DH32 steel plate (12 mm thickness and 12,000 × 2600 mm
amount of material at the start of the project. size) cannot replace the DH32 plate with 12 mm thickness
Uncertainty and unexpected changes can also be intro- and a different size.
duced by the related stakeholders [11]. The following list Thus, LSCM is the optimal choice for shipbuilding sup-
presents a few examples: ply chain [17]. The principles on which the lean philosophy

Fig. 3  Structure of shipbuilding construction

Vol:.(1234567890)
SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z Research Article

is based on and its practices, make them ideal for the sup- [1]. A defective product found in the production line or
ply chain [8] of shipbuilding. even a later stage of shipbuilding will cause a delay and
increase the cost owing to the LSR and complexity. For
3.1 Intermediate products of SCM in shipbuilding instance, in one shipyard of China, one platform supply
vessel had to been returned to a dry dock; the struc-
Similar to the philosophy of to create modular structures, ture was cut in the aft body and the thruster was dis-
each functional part operates at a certain degree of inde- mounted for inspection owing to the leakage during the
pendence from the rest [18]. In the advanced shipbuilding sea trial of the ship. This additional repair caused a loss of
practice that deals with the complexity and LSR, a certain approximately one million RMB and delayed the delivery
part of a proper building stage is defined as an interme- of the ship for nearly one month. Even the discovery of
diate product. The scope of the intermediate products is a pallet of steel fitting with galvanized defects during
designed into a systematic structure that coverings all check-in inspection delayed the production of the block
necessary management elements during shipbuilding for at least one week; such event may delay the entire
(e.g. the blocks, meg-blocks, half ship of the hull part, shipbuilding schedule if the block is on the critical path.
building components of a module, fitting units, pallets, For a continuous building process without inter-
key machinery); in addition, the intermediate product can ruption caused by quality problems of the supplied
represent as a package of job as design, manufacturing, or products, all defective products must be identified and
purchasing [10]. repaired/ replaced before the check-in in the warehouse
The same category of or similar intermediate prod- because there is no backup inventory of raw materials
ucts are recognized, designated, organized according to or intermediate components [19]. According to Deming,
the shipbuilding processes. The shipbuilding production we should seek the best quality and work to achieve it
facilities and procedures are integrated into a flexible pro- with a single or a few key supplier(s) for and one item in
duction line by organizing these activities of the basic ele- a long-tern relationship [20].Therefore, a completed sup-
ment for intermediate products from design, fabrication, ply chain monitoring system should be established for
and management in the digital way as hull block build- SCM, which covers the selection of the supplier, contract
ing, outfitting and pipes for each block. According to the management, production report of the maker, factory
detailed map in Fig. 4 and paragraph of about the plan of acceptance test or check-in inspection, and performance
LSCM in shipbuilding, the block is a typical intermediate measurement of the suppliers.
product in shipbuilding.
Under these conditions, the SCM consists of a group 3.3 Plan of LSCM in shipbuilding
SCMs for the intermediate products which are simpler
and have a higher standardization ratio. For example, one The plan system defines the detailed schedule for design,
machinery purchaser only coordinates 30 engines, 30 engineering, procurement, construction, and commis-
shipsets of purifiers, and maybe some other key machines sioning of the shipbuilding projects. The project schedule
if the shipyard builds 30 ships in one year; the person(s) based on the mile stone plan is developed and refined
in charge of steel fittings is responsible for planning, con- with the work breakdown structure [21] and based on the
tracting (with, for example, seven factories), and ensuring required duration of each step by aligning the critical path
that the production of approximately 9000 pallets of steel of the building process [11]. In shipbuilding, the design
fittings for these ships meets the shipbuilding schedule. department of the shipyard firstly carries out the blocks
Each intermediate product is coded and named hier- and meg-blocks division as shown in Fig. 4; this step can
archically in hull number, category, installation stage, pal- be considered as work breakdown step in ship construc-
let number, and serial number. It can be traced and man- tion. Each block is an intermediate product of the ship-
aged for the whole life in the enterprise resource planning building process.
(ERP) system (from the design, purchase, inspection status, During the designed shipbuilding process, the
check-in and check-out in the warehouse, and onboard sequence of meg-blocks (which consist of several blocks)
installation). are erected and assembled to build a ship in the dry dock.
The machinery, outfitting, key components, and raw mate-
3.2 Quality control of LSCM in shipbuilding rials for hull structure, pipes, outfitting must arrive at the
shipyard warehouse and mounted onboard within the
The key aspect of quality control in LSCM is to ensure scheduled time frame. For the successful coordination
that no defective product enters the production line of the construction steps, the shipyard must clear com-
and the production flows without mistakes or defects municate the lead time of the machinery, outfitting, and

Vol.:(0123456789)
Research Article SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

Fig. 4  Block division plan

materials in advance. Thus, the delivery plans must be pre- cost, quality, and service. The most important facilities in
pared during the design stage. a shipyard are the dock and outfitting wharf; thus, the pro-
These plans are the most important factor in the LSCM duction process in line with the building schedule to main-
system. The correctness and preciseness have a significant tain the highest degree efficiency of the dock and wharf is
influence on the operation of LSCM and production. Poor the key and nuclear effectiveness of SCM in shipbuilding.
plan can result in poor performance measurement index; The efficiency performance in the LSCM process is
in particular, they can affect the efficiency group. assessed based on the inventory size. As already men-
tioned, there is almost no backup inventory in shipbuild-
3.4 Performance measurement of LSCM ing; nevertheless, more inventory or more waiting time is
in shipbuilding considered to compensate for poor product on quality and
delay caused by the suppliers. For example, the products
Such as in most measurement and evaluation solution for of categories B and C (see the Strategic Policy in Sect. 4.1)
the performance of SCM in other industries, the measures are inspected when they arrived at warehouse of the ship-
of the SCM in shipbuilding still fall into two broad catego- yard. The shipyard includes a few days or even a couple
ries: Effectiveness and Efficiency [3, 22]. The key point is of weeks of buffer time for the arrival of the material and
how to build a systematic approach to monitor and refine equipment to compensate for possible delays and defects.
the effectiveness and efficiency of LSCM in shipbuilding. Thus, the inventory size depends on many aspects such as
Each leading shipyard establishes its own standards to the quality control, plan execution, and risk management.
measure the basic performance of its supply chain; the Evidently, a smaller inventory reduces the total cost of SCM
approach assesses the schedule matching performance, in shipbuilding.

Vol:.(1234567890)
SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z Research Article

4 Systematic approach of LSCM In the strategic policy, the supply commodities are clas-
in shipbuilding sified into four categories according to the complexity and
value [24]: critical, bottleneck, leverage, or routine [3]. Sub-
With the study and optimization guided by CSSC Ship- sequently, the detailed management principles of the dif-
building Modeling 2.0, the improvement of shipbuild- ferent categories are implemented. Moreover, the critical
ing processes are driven by the increasing of efficiency commodities are subdivided into three detail categories
of production flow and reducing of total cost. Therefore, as A, B, and C; in addition, the suppliers of bottleneck
SCM is an important part to support the lean production commodities are classified into three levels to express the
in shipbuilding. different degrees of importance in the production chain.
In the beginning, the shipyard considers the supply Category A includes critical machinery with the highest
chain as the support and preparation of the lean produc- complexity and value, category B includes other inde-
tion; it is pushed by the shipbuilding processes. With the pendent product with lower importance, and category
study of SCM theory, the management principles can be C includes raw material and rest fittings. The suppliers of
integrated with the shipbuilding supply chain. category A are normally reliable partners of the shipyard.
Based on the experience of the authors who work in The designers of the shipyard usually discuss all technical
the SWS, the LSCM plan is established based on seven detail of all commodities of category A and non-stand-
sub-systems to integrate all detailed procedures (Fig. 5) in ardized items of category B beforehand. In addition, the
three levels; the first called as foundation level constitute manufacture of these products in the suppliers’ shop is
the foundation of the management principles, the execu- carefully monitored before the delivery. The shipyard also
tion level includes the operation guidelines, and the index put different frequency and concentration on the monitor-
level represents the performance measurement. ing of different level’s suppliers of bottleneck items; nor-
mally, they coordinate with the suppliers of the first level
4.1 Foundation level of LSCM in shipbuilding on the weekly basis.
Pallet management is a common practice in shipbuild-
In the coding system, all raw material, intermediate prod- ing [10]; one batch of fittings of the same kind is installed
ucts, and pallets are systematic named and coded accord- at a certain step; because this batch can be included in
ing to category, fabrication method, and installation stage; the one work order, it is called a pallet; it is normally put
the codes, which consist of numbers and letters, are used on a pallet during flowing in the production but sometime
for the entire product life cycle: from their design, pur- is not. The pallet is the smallest unit of the intermediate
chase, check-in and out at the warehouse, production products; all the raw materials and fittings can be organ-
planning, installation, and inspection. The coding system ized into pallets with specific codes to realize lean design
(i.e. basic language of LSCM in shipbuilding) [10] is com- and production.
bined with the ERP system of the company and other soft-
ware. Thus, digital tools can be used to control the way 4.2 Execution level of LSCM in shipbuilding
procurement teams work [23].
Lean plan management is the most important basis of
LSCM in shipbuilding; it allows all stakeholders to work

Fig.5  Frame of LSCM for ship-

building
Index
Performance Measurement of
Supply Chain
Lean Plan Purchasing
Supplier Management Execution
Management Management
Pallet Management
Coding Sys tem

Strategic Policy

Foundation

Vol.:(0123456789)
Research Article SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

together according to a coordination plan [25]. The plan established to monitor and measure the key performance
includes the drawing delivery plan, schedule of the raw of supply chain in the shipbuilding.
material, fittings, and machinery. In addition, it is well According to the value calculation and total cost results
aligned with the production plan for all intermediate in the SWS, the effectiveness shall be prior to efficiency
products from different working departments [10]. The in the two dimensions of performance measurement for
set of plans must be balanced according to work load and the LSCM in shipbuilding. The modeling for performance
facilities of the shipyard, and officially published when the measurement shall be calculated with the efficiency
shipbuilding project starts. The plan includes uncertainty index based on the health of effectiveness shown briefly
that can be caused owing to marketing problems and as below,
force majeure. In these situations, the plan must be re- The key goal of LSCM is that all demanded high-quality
evaluated and adjusted. Shipyards try to manage project materials, components, and intermediate products arrive
plans in the make-to-order mode and, simultaneously con- at the production line on time; the measurement results
trol their production process in a the pull way according are represented by the parameters V1 and V2 respectively.
to the lean manufacturing principles [26]. Service failure and defects that are found after the check-
Purchasing Management is the basic and main work in inspection will have a negative influence on the pro-
of the SCM team. To realize a successful SCM process, the duction; these negative impacts are represented by the
shipyard must establish a set of processes to monitor all parameters V3, V4, and V5.
the procedures, from the selection of the suppliers, to the Most shipyards worldwide have similar measurement
price decision, commodity confirmation, and payment. index defined in group V for the effectiveness of their sup-
This way, the shipyard managers can control the budget, ply chain. If there is only effectiveness index for the per-
cost, and risks. formance measurement; for satisfying the production, the
The supplier management includes a set of procedure managers will require the commodity to arrive earlier as
for the management of suppliers from the entering, per- a safety margin; therefore, the redundant inventory will
formance measurement, communication, and elimination. result in increasing cost, reducing efficiency, and potential
The suppliers can be classified into different groups and quality risk owing to the corrosion(some steel material is
taken different method on production report, communica- stowed at exposed warehouse); thus, the measurement of
tion frequency, and competition advantage according to inventory is required to restrict superfluous effectiveness
the products they provided and the result of performance and other efficiency index is implemented.
measurement. All kind of cooperation provides opportu- However, the calculation of the efficiency as defined in
nities to the suppliers to grow and improve continuously group C differs depending on the balance of between the
together with the shipyard [3]. resource and supply chain condition of the shipyard. The
values Table 1 are assessed and optimized based on the
4.3 Index level of LSCM in shipbuilding facility and supply chain in the SWS, which are advance
among shipyards in China. Some shipyards in Japan and
In the performance measurement stage, a detailed index Korea have a better performance derived from their strat-
system is established to evaluate the effectiveness and egy with supplier and building efficiency. For example,
efficiency of the SCM [3]. the C1, inventory cycle of steel plate can be achieved
All steps involved in the SCM belong to the production approximately 25 days in Kawasaki shipyard in Dalian,
preparation. The objective of production preparation is the which derives the precise supply from the steel supplier
continuous production, which is defined by the building in Japan. Alternatively, the C1 value can reach 70 days in
plan system. Continuous production means that the sup- some small shipyards in China.
ply chain is effective. In summary, the supply chain ensures The weight factor of efficiency measurement in Group
that high-quality materials and components (including C can be adjusted according to the degree of importance
steel plate, outfitting, cable, piping, and machinery) are and the supply chain condition of the shipyard. For exam-
transported to the right place of the yard at the right time. ple, shipyard can increase the weight of C3, plan match
The efficiency parameter represents the input of ratio of checkout for production if it wants to push the lean
resources with respect to the performance output and plan of the production. A high plan match ratio of check-
production demand [3]. For shipyards, a smaller inventory out in supply chain must derive from a precise produc-
benefits value flow in the production. tion plan. Supply chain managers will force the production
Some industries use balanced scorecard control managers to improve if the C3 index is poor.
method to measure their supply chain performance, for
example automobile supply chain performance [27]. Effec-
tiveness and efficiency index of in shipbuilding must be

Vol:.(1234567890)
SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z Research Article

4.4 Recirculation for perfection The same author, Niansheng Chu, preliminary studied the
character of SCM in shipbuilding and emphasized the coor-
The LSCM procedure can be executed step by step, as dination of design, purchasing, construction, and commis-
shown in Fig. 6. First, a set of management steps includ- sioning [11].The further study guided by lean thinking and
ing the already presented seven sub-systems is prepared systematic conclusion of operation is after that article pub-
to specify the management principles and detailed pro- lished and more achievement in the systematic approach of
cedure; subsequently, the colleagues are trained such LSCM is obtained.
that they understand and master the plan. The perfor- As a research of LSCM in the shipbuilding enterprise fin-
mance data are collected during the LSCM process when ished by Yu Hu, it represented much work focus on SCM,
the entire system operates. Based on the performance Lean, LSCM, systematic process, methodology, achieve-
data, the performance measurement model is built and ment, and management system respectively [29]; however,
analysed. the implementation of Lean principles in shipbuilding [5],
Recirculation in the presented system works in two in particular, systematic LSCM for the transformation of tra-
distinct ways: it improves the index on the incremental ditional shipbuilding supply chain into supply chain based
path, particularly the Group C parameters. Afterwards, on LSCM has not thoroughly been investigated. This study
when the root cause for the poor performance has been focus on LSCM implementation based on real operation
identified, it is eliminated on the radical path to improve of the SWS; the presented systematic approach includes
and refine the system [28]. detailed management principles and radical and incremen-
However, to implement effectively radical and incre- tal improvements.
mental improvements [1] of LSCM in shipbuilding, all the There are different methods for measuring the perfor-
activities should be part of value analysis on lean prin- mance characteristics of supply chain in shipbuilding [8, 29],
ciples of the building processes. Any local progress that nevertheless, the most successful method is determining the
harms the value stream of shipbuilding is not successful effectiveness and efficiency according to the research results
and recommended. and experience of the authors.
The digital revolution affects the supply chain in ship-
building. As stated by Morgan Swink and Nada Sanders, a
5 Discussion

Starting with the study of the LSCM in shipbuilding, experts

suggest to approach [8] and achieve [17]a sustainable supply Performance
Step 3 Measurement
chain under the theory of I4.0. Suresh Sharma and Pankaj J.
Gandhi raised a hypothesis to prove the efficiency improve-
ment of shipbuilding by implementing lean principles and Data
Step 2 Collection Recirculation
practices [5]. Other reports provided information on the
digital transformation [12] and IT support for the efficiency
improvement in shipbuilding supply chain. Moreover, Yu Hu Management
Step 1 Principles
and Lei Jiang studied LSCM in shipbuilding and reviewed
successful practices in the industry [29], and give proposals
for shipyards in a theoretic way. Fig. 6  Execution of LSCM for shipbuilding

Table 1  Index of LSCM for Category Index Mean rating Weight

Shipbuilding
Effectiveness Plan match ratio of arrival V1 > 98% Health index
Quality: passing rate of first inspection V2 > 95%
Claim of service V3 0 times
Liquidate damage V4 0 times
Safety conformity V5 Yes
Efficiency Inventory cycle of steel plate C1 55 days 0.30
Monthly turnover of fitting pallet C2 3 0.25
Plan match ratio of checkout for production C3 85% 0.25
Yearly Cost reduction C4 3% 0.20
Management improvement conformity C5 Yes Bonus point

Vol.:(0123456789)
Research Article SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z

digital supply chain integrates technologies that automate Declarations

and illuminate all processes including data capture, com-
munication, analyses, decision-making, transactions, and Conflicts of interest The authors declare no conflict of interest.
transformations [30]. The ERP system of a shipyard enables
supply chain to get technical data directly from the design Open Access This article is licensed under a Creative Commons Attri-
bution 4.0 International License, which permits use, sharing, adap-
model, and to execute the order management, inspection, tation, distribution and reproduction in any medium or format, as
payment, and measurement. long as you give appropriate credit to the original author(s) and the
source, provide a link to the Creative Commons licence, and indicate
if changes were made. The images or other third party material in this
article are included in the article’s Creative Commons licence, unless
6 Conclusion indicated otherwise in a credit line to the material. If material is not
included in the article’s Creative Commons licence and your intended
This article focuses on the key problems in shipbuilding use is not permitted by statutory regulation or exceeds the permitted
supply chain and defines the LSCM frame and radical use, you will need to obtain permission directly from the copyright
holder. To view a copy of this licence, visit http://​creat​iveco​mmons.​
and incremental improvement paths for optimization. org/​licen​ses/​by/4.​0/.
This paper is the first to determine the characteristics
of the supply chain in shipbuilding, present the differ-
ences between LSCM from traditional SCM, and provide
a systematical LSCM plan. Based on this information, References
shipyards can improve the efficiency of their shipbuild-
ing supply chain. 1. Womack JP, Jones DT (2003) Lean thinking. Simon & Schuster
Lean SCM (LSCM) plays an important role in lean 2. Womack JP, Jones DT, Roos D (2007) The machine that changed
shipbuilding management; LSCM and guidance regard- the world. SIMON & Schuster Inc
3. Handfield RB, Monczka RM, Giunipero LC, Patterson JL (2009)
ing the plan, budget, working procedure, and working Sourcing and supply chain management, 4th edn. Cengage
standard can be combined to establish a virtual produc- Learning Asia Ltd and Tsinghua University Press Limited (Chap-
tion line running on the completed and quantitative ters 6, 8, 16, and 19)
management system integrated with informational net- 4. Slater J (2020) The global lean supply chain. Productivity Press
5. Sharma S, Gandhi PJ (2017) Scope and impact of implement-
work [10]. In the virtual production line, all intermediate ing lean principles & practices in shipbuilding. Procedia Eng
products must contribute to a balanced and optimized 194:232–240
flow among processes. The goal is timely, continuous, 6. Kristoffersen S. Nextship-lean shipbuilding, Report 1214; 2012.
and reliable shipbuilding in the shipyard. ISSN: 0806-0789.
7. Sigmud A (2007) Lean shipbuilding, lean construction beyond
In the future, an index system for the performance lean/in EGLC-5. OSLO
measurement will be developed based on IT technology, 8. Ramirez-Peña M, Abad Fraga FJ, Sánchez Sotano AJ et al (2019)
specialized software, and the ERP system of the company Shipbuilding 4.0 Index approaching supply chain. Natl Library
(SWS). As mentioned in the book Three-Body Intelligence Med 12(24):4129
9. Xia LXX, Ma B, Lim R. Supplier performance measurement in a
Revolution, the system can be designed and applied supply chain. In: Proceedings of the 2008 6th IEEE international
after the operation procedure has been fixed and the conference on industrial informatics, Daejeon, Korea, 13–16 July
business model is mature [31]. 2008, pp. 877–881.
In the first phase, an LSCM system with self-growing 10. Zhou CY. Shipbuilding modeling 2.0 of China State Shipbuilding
Corporation, Beijing; 2006.
power will be established based on the information of 11. Chu NS. Coordination in the supply chain management of a
this study. In the second phase, a more effectiveness complicated EPCC projects. PMI Knowledge Shelf; 2019.
and efficiency LSCM for shipbuilding will be established 12. Diaz R, Smith K, Landaeta R, Padovano A (2020) Shipbuilding
based on industrial Internet of Things, 5G technology, supply chain framework and digital transformation: a project
portfolios risk evaluation. Procedia Manuf 42:173–180
serverless architectures or block-chain technology, and 13. Wisner JD, Tan KC, Leong GK, Wisner B, Leong SPL (2010) Prin-
artificial intelligence [23]. ciples of supply chain management: a balanced approach, 2nd
edn. Cengage Learning Asia Ltd and Tsinghua University Press
Limited (Chapter 1)
Author contributions Niansheng Chu is the leading author who 14. The Chartered Institute of Purchasing and Supply (CIPS). The
conceptualized and wrote the paper; Xiang Nie and Jiang Xu imple- global standard for procurement and supply version 3.1; 2018.
mented the lean production principles and established the perfor- 15. Hosie J. Turnkey contracting under the FIDIC silver book: what
mance measurement index; Kunlin Li managed the procedure and do owners want? What do they get? Mayer Brown; 2007.
collected and analyzed the relevant data. 16. Wu XF, Yue H, Shi Y, Wang J (2016) Current status and devel-
opment trend of smart manufacturing technology and stand-
ardization of China’s shipbuilding industry. Ship Sci Technol
38(09):1–6

Vol:.(1234567890)
SN Applied Sciences (2021) 3:572 | https://doi.org/10.1007/s42452-021-04562-z Research Article

17. Ramirez-Peña M, Sánchez Sotano AJ, Pérez-Fernandez V, Abad 25. Sui YF, Wang SQ (2020) On materials and plan based on lean
FJ, Batista M (2020) Achieving a sustainable shipbuilding supply production. Ship Boat 31(01):28–32
chain under I40 perspective. J Clean Prod 244:118789 26. Zong MD, Sun HF (2013) An integrated production system model
18. Reeves M, Levin S, Fink T, Levina A (2020) Taming complexity. and project plan restricted pull-way production control method
Harv Bus Rev January-February:113–119 for lean shipbuilding. Appl Mech Mater 2601:1852–1859
19. Chu NS, Wang XZ (2019) Application of FMEA in design project 27. Wu LP (2020) Research on fuzzy comprehensive evaluation of
risk management. J Nav Archit Ocean Eng 35(04):69–72 automobile supply chain performance. J Zhejiang Wanli Univ
20. Walton M, Deming WE (1988) The deming management 33(06):6–11
method. The Berkley Publish Group (USA) 28. Chu NS. The Execution of FMEA in Risk Management of a Project.
21. Project Management Institute (PMI), Inc. A guide to the project PMI Knowledge Shelf; 2018
management body of knowledge (PMBOK guide), 6th ed. 2018 29. Hu Y, Jiang L (2017) 船舶工业企业精益供应链管理体系研究.
22. Van Wheele AJ (1984) Purchasing performance measurement Harbin Engineering University Press
and evaluation. Int J Purch Mater Manag Fall:18–19 30. Swink M, Sanders N (2020) Want to build a digital supply chain?
23. Radell C, Schannon D (2019) Digital procurement: the ben- Focus on capacities. Supply Chain Manag Rev November:12–21
efit go far beyond efficiency. Supply Chain Manag Rev March/ 31. Hu H, Zhao M, Ning Z et al (2016) Three-body intelligence revo-
April:14–21 lution. China Machine Press
24. Chopra S, Meindl P (2013) Supply chain management: strategy,
planning, and operation. Pearson Education ASLA Ltd and Tsin- Publisher’s Note Springer Nature remains neutral with regard to
ghua University Press Limited (Chapter 15) jurisdictional claims in published maps and institutional affiliations.

Vol.:(0123456789)