Project Management: Case Study in Managing a Complex Shipyard Project in Singapore Background of Complex Shipyard Construction Project

Company background

Project Overview and Objective

Work Process of Building Construction

Issue Analysis in Shipyard Construction Project Management

Literature Review of Project Management

Issues in Scope Management

Methodology of Scope Management

Lessons Learned from Scope Management

Issues in Cost Management

Methodology of Cost Management

Lessons Learned from Cost Management

Issues in Human Resources

Methodology of HR Management

Lessons Learned from Human Resource Management

Case Study in Managing a Complex Shipyard Construction Project in Singapore

Introduction.

This paper introduces the special features of a completed shipyard project, together with its construction and human resource management processes as well. The organization of the paper provides an introduction to the topic, an overview and background of the In the first part, this project illustrates overview of the complex background of a complex ship-building project as envisioned by Koppel Shipyards of Singapore, the project objective and the background of the company involved. A critical review of the scholarly and relevant literature concerning project management and scope management is followed by an examination of case studies in ship-building that provide some guidance and insights into the underlying processes and problems that can be expected. Respective methodologies and lessons learned is followed by a summary of the research in the conclusion.

1. Background of Complex Ship-Building Project.

The shipbuilding and marine industry, just like any other, badly needs brave thinkers of the unthinkable, who are prepared to back their hunches by putting them into practice. Innovation remains both valid and necessary in shipbuilding and marine industry, and we depend on it to make ship building processes more efficient, better at the jobs they do and more productivity, quality, reduce industrial accident, cost reduction, minimize. raw material wastage and ultimately better profits for the entire stake holders. Fortunately, In the Keppel Group, there is a cadre of capable executives who are proactive and enthusiastic for business innovation. On the programme board, or computer, the sums all add up and the promises of the innovation look overwhelming. But reality has a habit of showing us unintended consequences of our apparently brilliant actions, and the shipbuilding process will very often find flaws in our finest and most innovative methodology when the project is on going through out the whole spectrum. So courage and innovation go hand in hand.

Industry today needs innovators because they can offer the hope of something better than the present. Without them we could anticipate no growth, no improvement, no dramatic increase in performance, and no cost savings. An absence of innovation would condemn us to a stagnant, uninspiring sameness and ultimately become mediocrity instead of differentiation advantage and gradually withering to its extinction.

Due to the innovators remaining active consistently in Keppel shipyard groups, over the past few years, there has been significant improvement across the board like relatively costs and materials usage efficiencies, shorter delivery schedule, better interaction in inter-dependency processes such as pre-fabricated material and panel flow, and certainly the increase of profitability. A system of shipbuilding and steel-handling has been devised that has been described as the most important innovation in ship construction since the inception of the innovative campaign. The greatest successes that we have had reckoned so far is the safety record of virtually zero accidental figure in the ship construction processes. From Keppel's perspective, there will always be far more sufficient room for further innovation to take place. Therefore, whenever there any achievement in business innovation regardless whether it is in a micro or macro level, it can be regarded as another milestone achievement rather than as a whole.

The Singapore Shipbuilding Industry particularly the Rig construction and Fuel Production and Storage and off Load (FPSO)is competing in a world-market -which is in crisis- and facing injurious pricing far below the cost price of the Korean, China and Middle East competition. Market prices dropped due to overcapacity, demand outstrips supply.

The changes in the Shipbuilding and FPSO conversion market are discussed with examples of specific markets. The distorted market, resulting from a price war, is illustrated with cost price comparisons. The result is that the market position of the Singapore Shipbuilding Industry is deteriorating. Our world leadership in the arena of Rig building and FPSO conversion may be lost if no immediate further investments in restructuring, improving of quality and productivity....

A significant portion of the future of hindered shipbuilding industry in Singapore will be in the conversion market.
The management of a ship conversion can be a volatile business, in which planning and supply chain flow can be by unforeseen, but often anticipated changes in the work scope as the project is carried out. This paper outlines some of the crucial innovations that Keppel Groups of shipyard in Singapore have implemented with significant achieved results in its Shipbuilding and Conversion business. Managing the complexity of the ship conversion process is highly demanding in manpower and usually requires the use of external sub-contract companies. Very detailed information is exchanged as a matter of routine, and it is not uncommon for paper documents to go astray or be held up and wrongly captured. An increasingly IT aware industry will allow for the development of an integrated software system that could not only vastly increase the flow of information within a company, but aid in its planning and management functions particularly in the HR management.

Seeing the present threats for the Singapore Shipbuilding Industry, caused by injurious shipbuilding policies and targets of the major shipbuilding countries are compared. The top management of Keppel Shipyard Groups of Company, the market leader in Singapore has determined to have a drastic change in the conversion process technology so as to boast its productivity as well as quality. The "Business Innovation Scheme" was launched by its groups chairman Mr. Coho Chiew Beng on the 18th Jan 2003 at Keppel Benoi Shipyard Singapore and the groups' Managing Director was assigned to champion this "Business Innovation Scheme" and was urged by the chairman to guarantee a quantum leap given with a six-month time.

Mr. Richard Tong the managing director of the Keppel Groups of Shipyard Singapore upon the delegation of this assignment of "Business Innovation Scheme" organized a meeting with his various production managers as well as some long-term partnership sub-contractors and the meeting was held on the 25th Jan 2003 at Keppel Benoi Shipyard so as to inviting creative suggestions, ideas and their active involvement in this "Business innovation Scheme." Among all the senior staff and sub-contractors who participated in this meeting, Mr. Peh the senior manager of Business Development and Sub-Contracting Department was appointed to head this challenging innovation task together with the writer (Managing Director of Candid Marine Engineering Pte Ltd.) of this assignment. Mr. Peh, a very well experienced man in the context of manpower resources, cost control and production processes and given with the writer vast experiences in human resource management and production in the context of shipbuilding and conversion processes together we have identified and determined to prioritize two sectors namely manpower control and welding technology, quality and productivities because our industry is so human resources intensive particularly welding sector which is not only the most manpower intensive sector but also highly quality intensive

There are significant risks associated with the conversion of the existing tonnage, quality defective, man-hour wastage and in common with other forms of offshore construction. The FPSO conversion sector has seen numerous examples of projects which have experienced substantial cost overruns and delays. The waste of man-hour and quality defective, in particularly the welding sector were reckoned as the main culprits. The risks of conversion itself are usually shared between the contractor and shipyard. It is therefore important to identify and assess carefully the risks of the project in the areas of man power management and quality defective, let alone the scope of work, management, design liabilities, title, insurance, etc.

As lower cost solutions for field development is to be sought as well as the improvement of welding quality in this "Business Innovation Scheme" The challenge for the shipyard and contractors is how to manage and share the risks of delivering suitable capacity in a manner that will not only enable them to generate an acceptable rate of return but to make the conversions business sustainable in the many years to come. The Business Innovation Scheme was officially launched on the1st of February, 2003.

1.1 Company Background.

Keppel Shipyard Benoi is an ISO certified organization located on the west coast of Jurong sea front; it is one of the group that underwent a few changes in its ownership as well as its name since its inception as Hitachi Zosen Robin Shipyard to Keppel Hitachi Zosen Singapore under the merger between the two marine engineering giants and, finally its present name of Keppel Shipyard Benoi, wholly owned by Keppel corporation. Over the past 3 decades, the core activities of Keppel Shipyard Benoi have been building and repairing of ships as well as FPSO (Floating Production Storage and Off Load) conversion since its inception and the present. According to its corporate profile, Keppel Offshore & Marine, integrating the experience and expertise…