Productivity Improvement Strategies Using Simulation in Offshore Plant Construction

Since the global financial crisis of 2008, the global shipbuilding industry has changed considerably and placed major Korean shipbuilding companies (mostly common carrier builders) in a precarious position. Current competitiveness in the global shipbuilding industry has been attracted by low labor costs in China. The Korean shipbuilding industry, with heavy industry as the central figure, is attempting to increase its share of offshore plant construction to develop deep-sea resources. This highlights the most outdated part of offshore plant in Korea, the development technology, which includes front-end engineering development and deep-water floaters, unlike in more advanced companies in the United States, where development technology has advanced rapidly. This has prompted the Korean government to invest most of its R&D funds in the areas of product and equipment development. However, mega shipbuilders such as Samsung, Hyundai, and Daewoo have incurred considerable losses at construction stages because of major delays in production. By contrast, international engineering companies have supported development engineering. The considerable financial losses incurred by mega shipbuilders are believed to be caused by a lack of quality management with respect to the massive production quantities and complexities involved in outfitting topside structures. This study investigates a strategy to advance production management specialized for the offshore plant business and describes a robust and sustainable technical roadmap based on current information technologies (IT) and simulation-based management methods.