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shipbuilding company

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 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

RFP for more insights on top segments, market opportunities, and growth strategies in the U.S. shipbuilding industry.

Business challenge

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

Facing similar challenges in your business? Get into dialogue with an expert from Infiniti Research to learn how we can help your business with tailor-made solutions.

Our Approach

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.

Results Achieved

shipbuilding industryInfiniti’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

Shipbuilding industry

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Reviving the US Manufacturing Sector

MANUFACTURING

The erosion of the US manufacturing sector over the past couple of years have been a big blow on the growth of the US economy. Small and midsize manufacturing companies are the most affected, while large companies in the US manufacturing sector have managed to thrive despite the growing headwinds. Although it is widely believed that little can be done to put an end to the ongoing decline of US manufacturing sector, continued losses are not a foregone conclusion. On the brighter side, the rising demand, productivity gains through technology, and finding growth in new parts of the value chain will likely create an opportunity for the US manufacturing sector to turntables. Given how vital manufacturing is to the broader economy, capitalizing on these opportunities must be given national priority.

We examine some of the key factors that will fuel growth in the future of manufacturing in the United States and how manufacturers can leverage this opportunity to revitalize their business.

Attaining success in the manufacturing industry involves the use of market research, demand forecasting, product development, and distribution. Facing predicaments in handling it all by yourself? Request a free proposal from Infiniti’s industry experts to learn how we can help you.

manufacturing sectorGrowing demand

Although the US market is not the same familiar ground it was in the past, it remains one of the most developed and lucrative markets in the world. Furthermore, the US consumers are more diverse and expect higher quality and varieties at lower prices. Beyond the domestic market, the demand is also soaring in developed and emerging economies around the globe. However, for tapping into demand growth in emerging economies, it is vital to know exactly where and how to compete. Markets including Africa, Brazil, China, and India represent enormous opportunities, but they have dizzying regional, ethnic, linguistic, and income diversity. This translates to the fact that manufacturing sector companies must navigate greater complexity than ever before and identify the most feasible strategies to produce a wider range of product models with differing features, price points, and marketing approaches.

Industry 4.0

In order to enhance productivity, the US manufacturing sector must capture demand opportunities coming their way. Innovative technologies will play an integral role in determining how effectively they can achieve this and compete better in the market. The rise of industry 4.0 in the US manufacturing sector is largely driven by the increase in volume of data available, new forms of human–machine interactions such as the use of AR, and the ability to transmit digital instructions to the physical world. These advanced technologies are designed to run smart, cost-efficient, and automated plants that produce large volumes or plants that produce highly customized products.

Rethink and reinvent your business strategies with advanced market intelligence solutions. Get in touch with us to learn how our manufacturing sector experts can help your organization achieve this.

Rethinking business models, footprint, and sourcing

US manufacturing sector companies are seeking new ways to capture value beyond traditional production processes. Moreover, with changing input costs, the gap between labor cost in the US and abroad have also narrowed and the cost of industrial robots are rapidly falling. As a result, several US manufacturing sector companies are moving their manufacturing base to the home country. Advancements such as the internet of things and robotics can effectively handle dangerous tasks and eliminate safety risks. Beyond the factory floor, new applications for coordinating distributed supplier networks improve the flow and tracking of raw materials and manufactured parts.

Want more insights on our solutions for the manufacturing sector?

Lean product development

How Lean Product Development Helps Improve Your Bottom Line

What is lean product development?

‘Lean’ refers to any process improvement that substantially and sustainably improves the output of your system. Lean product development involves increasing the focus on using lean to meet the need for innovative solutions in the manufacture of a product. Lean principles are used in lean product development to meet the rising challenges in product development. Some of the key issues that a lean product development process seeks to address include:

  • Long development cycle times
  • High costs of development
  • Need for innovative solutions
  • Rising production costs
  • Redevelopment cycles

80% of business failures can be attributed to how products are developed. Request a free proposal to learn we can help you strategize for an optimal product development process.

Steps in an effective lean product development process

lean product developmentLean product development process has been traditionally applied in manufacturing environments. However, lean methods can be applied to any industry, because all businesses benefit from cycle time improvements, increased productivity, and cost savings. Here are the key steps involved in an effective lean product development process:

Specify value for customers

The success and sustainability of a lean product development largely depend on the value that is being created for the customers. Before the actual product development process, manufacturers must look at the existing market and work backwards to ensure that the product being produced will attract the target customers and induce them to make a purchase. This step will allow businesses to invest in winning products even before its production begins.

Businesses that place cost reductions ahead of value creation while implementing lean principles often see their lean efforts fall flat. Get in touch with our experts for more insights on lean product development.

Identify value streams

Product development has a major impact on a company’s overall ecosystem. For products to be brought to the market successfully, it is essential to think end-to-end and ensure that all the employees are clear on the job roles assigned to them. Processes in organizations run smoothly when manufacturers, engineers, marketers, and the sales team know their role in the value stream. Often, during traditional product development cycle, the numerous communication errors due to hand-offs between departments leave little room for improvement. In the case of lean product development, the different stakeholders are united and in sync with one another’s processes from day one.

Ensure faster flow in the value streams

A lean company always aims at ensuring a faster flow of processes and value streams. This consequently ensures that customers are served faster, lead times are shorter, and improved product quality and flexibility. This would also eventually result in lower product cost.

Respond to customer pull

Gaining a clear understanding of customer pull is vital to make product development flow faster. Pull refers to customer demand. Eliminating wastes and responding to customer demand effectively would also create a positive customer experience by allowing time to work on things that create more value.

Learn more about how to adopt lean production principles at your organization

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