Competitive benchmarking for a U.S. Shipbuilding Company Helps Improve Productivity By 31%
The U.S. shipbuilding industry is known to be one of the finest producers of both military and commercial fleet. However, the rising costs continue to erode the budgets and overall profitability of shipbuilding companies in the US. According to experts at Infiniti Research, some of the key causes of the rising costs include material and [...]
The U.S. shipbuilding industry is known to be one of the finest producers of both military and commercial fleet. However, the rising costs continue to erode the budgets and overall profitability of shipbuilding companies in the US. According to experts at Infiniti Research, some of the key causes of the rising costs include material and schedule delays, starting production with immature designs, inexperienced labor force, and reduced productivity due to the introduction of a new series of a given combatant. Other roadblocks to growth faced by players in the U.S. shipbuilding industry involve factors such as unstable and declining build rate, lack of appropriate competitive benchmarking, and suboptimal acquisition strategies. While companies are taking measures to address these U.S. shipbuilding industry challenges, the inefficiencies in tackling costs continue to plague the industry’s overall growth.
Top markets (by global market share): South Korea, China, and Japan
A U.S. shipbuilding company, engaged in building and repairing vessels of assorted sizes and utility, approached experts at Infiniti Research to undertake a competitive benchmarking study in an effort to understand how key players in the shipbuilding industry performed and tackled business challenges. Apart from this they also sought strategies to address other business challenges including:
- The shipbuilding company noted a decline in productivity when compared to other international shipyards, with outputs tailing by at least 40% in comparison
- Tackling cost growth by identifying the key cost drivers and taking corrective measures
- Assess the U.S. private shipyards using a standardized benchmarking system
- Improving operating margins which was found to be much higher compared to international commercial shipyard companies
- Enhancing obsolete designs that do not adhere to the quality standards
- Identifying DoD, Navy, and industry actions, policies, and contract incentives that can be implemented
Experts at Infiniti Research undertook a comprehensive competitive benchmarking study with exhaustive secondary research from proprietary and open source information sources to develop insights and hypotheses specific to the U.S. shipbuilding industry. Rigorous desk research through 750+ sources was executed to understand the U.S. shipbuilding market landscape, competitor strategies, and market trends.
As a part of the engagement, in-depth market research was undertaken where our experts assessed ten leading international shipyards and the seven major U.S. shipyards to understand their key product lines and compare the shipbuilding practices in the international markets with that of the client. The market data collected was also validated with market experts and independent consultants in the shipbuilding sector. An Industry best practice assessment also identified key strategies and best practices followed by international shipbuilding companies to reduce costs and enhance productivity. This enabled us to help the shipbuilding company benchmark their exiting processes with that of key players in the market and identify the critical gaps. With Infiniti’s market opportunity analysis, the U.S. shipbuilding company was able to analyze various growth opportunities.
Infiniti’s engagement helped the shipbuilding company implement strategies to enhance their overall productivity. Within a span of 7 months, the client recorded a 31% increase in their productivity. The benchmarking analysis also helped the client understand how they compared to top performing shipbuilding companies and replicated their cost-cutting strategies into the business. The shipbuilding company also identified the right suppliers to procure good quality materials at reasonable prices, bringing down the overall cost of production. Additionally, the shipbuilding company was also able to:
- Improve their operating margins by 10% in each quarter
- Revamp design implementation strategies by understanding the changing market requirements and discarding the obsolete segments
- Identify unmet market needs and key growth segments before their competitors, giving them a first-mover advantage in the market