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Journa~ o f S h i p P roduc ti on , V o l . 2 , No. 2 , Ma y 1986, pp . 7 4- 79

Shipyard Organization and M anag em ent Dev elopm ent

R . D . C h i r i l l o t I . I n u k i 2 a n d I . K o b a y a s h i 2

T h e p h i l o s o p h y a n d m e r i ts o f t h e t w o m a j o r fo r m s o f c o m p a n y m a n a g e m e n t a n d o r g a n i z a t io n a l s tr u c tu r e a r e e x a m i n e d ,

w i th p a r t i c u la r a p p l i c a t io n t o t h e s h i p b u i l d i n g i n d u st ry . T h e h i g h l y s u c c e s s f u l o p e r a t i o n o f o n e o f J a p a n s m a j o r s h i p -

b u i l d e r s , a p r o d u c t f o r m o f o r g a n i z a t i o n , i s d i s c u s s e d a l o n g w i t h a m a n a g e m e n t s t r a t e g y t h a t e m p h a s i z e s h a n d s - o n

s h o p e x p e r i e n c e f o r a l l c o l le g e - e d u c a t e d m i d d l e m a n a g e r s . A p p e n d i c e s h s t e x a m p l e s o f t y p i c a l r e sp o n s ib d lt ~ e s f o r s t a f f

p e r s o n n e l a t t h e y a r d .

O n l y A m e r i c a c a n s u r p a s s J a p a n i n s h i p b u i l d -

i n g. B u t , w e d o n o t w o r r y b e c a us e A m e r i c a h a s a

h u m a n p r o b l em : n o t e n o u g h c o l l e g e -e d u c a t e d

p e o p l e i n m i d d l e m a n a g e m e n t .

H I S A S H I S H I N T O :}

I n t r o d u c t i o n

INTERVIEWED by the

W a s h i n g t o n P o s t

in April 1983, Dr.

H. Shinto, perhaps the foremost shipbuilding authority in

Japan, noted that when he first visited America in the early

fifties he observed that college-educated engineers pervaded

the workshops. rhe enginee rs knew the production pro-

gram, and they knew how to use machine tools. Because they

knew the production process in detail, they were able to get

greater productivity and high quality. He added tha t dur-

ing his visit to the United States in 1980, he . . . didn't

find the same kind of intelligence in the workshop.

This paper began as a report on the management devel-

opment program of Ishikawajima-Harima Heavy Industries

(IHI) of Japan. Dr. Shinto's emphasis on the role of middle

management in the shipyard was the impetus. However, re-

search soon disclosed that another, related but much wider

topic needed to be addressed: shipyard organizational struc-

ture and design.

Between 1950 and 1970, an extraordinary change oc-

curred among the U.S. F o r t u n e 500 companies. In 1950 just

20.3 percent of them were product organizations while as

many as 62.2 percent were in functional organizations. As

shown in Fig. 1, within two decades, 75.9 percent of the

F o r -

tu n e 500 had adopted product organizations while the num-

ber retaining functional organizations plunged to 11.2 per-

cent { 1 ] . 4

In the middle of the same time frame, that is, the early

sixties, shipbuilders in Japan abandoned functional and

adopted product organizations based on a Product Work

Breakdown Structure (PWBS). In contrast, no such revolu-

tion occurred in the U.S. shipbuilding industry [2].

F u n c t i o n a l a n d p r o d u c t o r g a n i z a t i o n s

The two basic forms of organization are functional and

product. All other forms, such as matrix, are hybrids.

~L. D. Chirillo Associates, Bellevue, Washington.

2Ishikawajima-Harima Heavy Industries (IHI/, Tokyo Shipyard, To-

kyo, Japan.

3Formerly president of IHI, Dr. Shinto is now president of Japan Tel-

egraph and Telephone Corporation.

4Numbers in brackets designate References at end of paper.

Manuscript received by the JSP Committee January 17, 1985.

Fig. 1

8 0

,

Functionol

Product

3

2 0

1

O ~

195 196 197

T r a n s f o r m a t i o n o f or tune 5 0 0 c o m p a n i e s f r o m f u n c t i o n a l t o p r o d u c t o r -

g a n i z a t i o n s b e t w e e n 1 9 4 9 a n d 1 9 6 9 ( f r o m r e f e r e n c e [ 1] , p . 6 6 )

A functional structure groups resources into common ac-

tivities. Engineers are organized per function and produc-

tion people are organized per function. A product structure

is based on PWBS and Group Technology, which permits

diversification, that is, a multiproduct line. Design and pro-

duction are organized in the same way, both aimed at the

same products; in the case of shipbuilding, in terim products.

Functional organization, as an organization type, is best

when a firm makes only one or a few products and where

technology does not change. Traditionalists in shipbuilding

look simplistically at the entire ship as the end product of

a shipyard. Modern shipyard managers, however, . . . break

down an envisioned end product into interim products, i.e.,

parts and tiers of subassemblies, which are contrived to fa-

cilitate creation of larger assemblies and which are assigned

for manufacture to the most specialized and cost effective

producers, in-house or elsewhere. Such advanced shipbuild-

ing is said to be product (interim product) oriented and is

primarily an assembly process [3].

7 4 8 7 5 6 - 1 41 7 / 8 6/ 0 2 0 2 -0 0 7 4 5 0 0 .3 7 / 0 J O U R N A L O F S H I P P R O D U C T I O N

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T h e s h i p a s a n e n d p r o d u c t b e c o m e s i n c i d e n t a l a s t h e e n d

p r o d u c t c o u l d b e o t h e r t h a n a s h i p , t h a t i s , a b r i d g e , c h e m -

i ca l p la n t , p o w e r p l a n t , e t c . W h a t e v e r t h e e n d p r o d u c t , m o d -

e r n s h i p y ar d m a n a g e r s a r e d e s ig n e r s a n d p r o d u c e r s o f m a n y

i n t e r i m p r o d u c t s . T h i s f o c u s o n i n t e r i m p r o d u c t m a k e s i t

p o s s i b l e f o r l a r g e f i r m s , l i k e IH I , t o b e t t e r c o p e wi t h t e c h -

n o l o g i c a l c h a n g e a n d m u l t i p l e m a r k e t s .

T w o l ev e l s o f g en era l ma n a g emen t

~ ' rh e p r o d u c t s t r u c t u r e i m p l i e s t h e e x i s t e n c e o f a t l e a s t

t w o le v e l s o f g e n e r a l m a n a g e m e n t a n d a n i n c r e a s e i n th e

n u m b e r o f g e n e r a l m a n a g e m e n t r o l e s o v e r t h a t o f a f un c -

t iona l s t ruc t ure ( [1 ] , p . 33).

I n a s t u d y o f t h e d e v e l o p m e n t o f 7 0 l a r g e A m e r i c a n c o r -

p o r a ti o n s , t h e i m p a c t o f t h e c h a n g e f r o m f u n c t i o n a l t o p r o d -

u c t o r g a n i z a t io n w a s d e s c r ib e d a s c r e a t i n g t w o l e v e l s o f g e n -

e r al m a n a g e m e n t w h i ch , . . . r e m o v e d t h e e x e c u t iv e s

r e s p o n s ib l e f o r t h e d e s t i n y o f t h e e n t i r e e n t e r p r i s e f r o m t h e

m o r e r o u t i n e o p e r a t i o n a l a c t i v i t i e s a n d s o g a v e t h e m t i m e ,

i n f o r m a t i o n a n d e v e n p s y c h o l o g i c a l c o m m i t m e n t f o r l o n g - t e r m

p l a n n i n g a n d a p p r a i s a l . C o n v e r s e l y , i t p l a c e d t h e r e s p o n s i -

b i l it y a n d n e c e s s a r y a u t h o r i t y f o r th e o p e r a t i o n a l a d m i n i s -

t r a t i o n i n th e h a n d s o f t h e g e n e r a l m a n a g e r s o f t h e m u l t i -

f u n c t i o n d i v i s i o n s [ 4 ] .

H a v i n g m o r e t h a n o n e e n t e r p r is e , t h e t w o - t i e r m a n a g e -

m e n t c o n c e p t i s ex p l o i te d t o t h e u t m o s t b y I H I . I n e a c h s h i p -

y a r d , a l t h o u g h t h e t i tl e g e n e r a l m a n a g e r i s u s e d , t h e in -

c u m b e n t h a s l e s s r e s p o n s i b i l i t i e s t h a n a t y p i c a l A m e r i c a n

g e n e r a l m a n a g e r a n d m o r e re s p o n s i b i l i t ie s t h a n a r e g e n e r -

a l l y a s s o c i a te d w i t h t h e t i t le o p e r a t i o n s m a n a g e r . F o r t h e

p u r p o s e o f m a i n t a i n i n g a d i s ti n c t io n , t h e t i t l e p r i n c i p a l op -

e r a t i n g m a n a g e r ( P O M ) i s u s e d h e r e i n a f t e r .

P O M r e s p o n s i b i l it i e s i n c l u d e t h e f o l lo wi n g f u n c t i o n s o f t h e

m a n a g e m e n t c y c l e t h a t a p p l y f o r a l l i n d u s t r i a l p r o c e s s e s :

p l a n n i n g ( d e s i g n a n d m a t e r i a l d e f i n i t i o n a r e a s p e c t s o f

p l a n n i n g ) ,

s c h e d u l i n g , a n d

e x e c u t i n g ( i n c l u d e s m a t e r i a l p r o c u r e m e n t a n d m a r s h a l l -

i n g a s we l l a s p r o d u c t i o n ) .

R e g a r d i n g d e s i g n , t h e P O M i s r e s p o n s i b l e f o r a l l a s p e c t s e x -

c e p t b a s i c d e s i g n wh e n a c e n t r a l b a s i c d e s i g n o f f i c e e x i s t s .

F u r t h e r , a P O M i s n o t d i s t r a c t e d b y b u s i n e s s a f f a i r s s u c h

a s a c c o u n t s p a y a b l e o r r e c e i v a b l e . A b o v e a l l, a P O M i s c on -

c e r n e d o n l y w i t h m a t t e r s t h a t a r e i n t e r n a l t o t h e s h i p y a r d

wh i c h d i r e c t l y a f f e c t p r o d u c t i o n a n d i s n o t i n v o l v e d i n e x -

t e r n a l m a t t e r s ; f o r e x a m p l e , s a l e s , b u s i n e s s a c q u i s i t i o n s , a n d

l o b b y in g . A n o t h e r w a y t o c h a r a c t e r i z e t h e r o l e o f P O M v i s -

a - v i s t o p m a n a g e m e n t i s t h a t P O M i s c o n c er n e d w i t h c u r -

r e n t r e t u r n o n i n v e s t m e n t w h i l e g r o w t h t h r o u g h i n v e s t m e n t

i n n e w p r o d u c t s a n d b u s i n e s s e s i s t h e r o l e o f t o p m a n a g e -

m e n t .

D es i g n p ro d u c t i o n i n teg ra t i o n

I n t e g r a t i o n i s t h e q u a l i t y o f c o l la b o r a t i o n b e t w e e n d e -

p a r t m e n t s [ 5 ] .

A n a l m o s t c o n s t a n t c o m p l a i n t b y t r a d i t i o n a l i s t s i s t h a t d e -

s i g n a n d p r o d u c t i o n f a i l to c o l l a b o r a t e. E v e r y o n e r e a l i z e s t h a t

t h i s l a c k o f i n t e g r a t i o n i s e x t r e m e l y c o s t l y a n d a d v e r s e l y

i m p a c t s o n m o r a l e . W h i l e a d m i t t i n g t h e p r o b l e m , t r a d i t i o n -

a l i st s h a v e l o n g f a il e d a t a s o l u ti o n . T h i s i s b e c a u s e t h e f a u l t

d o e s n o t l ie , a s t ra d i t i o n a l i s t s i m a g i n e , w i t h i n d i v i d u a l s i n

e i t h e r d e s i g n o r p r o d u c t i o n .

W h e n p e o p l e a c t a t c r o s s p u r p o s e s o r u n d e r p r e s s u r e t o

a c h i e v e d e p a r t m e n t a l g o a l s a t t h e e x p e n s e o f o r g a n i z a t i o n a l

g o a l s t h e ( o r g a n i z a t io n a l ) s t r u c t u r e i s o f t e n a t f a u lt . T h i s

i s t h e c a s e i f . . . b r e a k d o w n s o c c u r w h e n p e o p l e a t t h e

o p e r a t i o n a l l e v e l wh o s e e c h a n g i n g c o n t i n g e n c i e s c a n n o t f e e d

i n f o r m a t i o n i n t o t h e p l a n n i n g a n d o b j e c t i v e s e t t i n g a t h i g h e r

l e v e ls . A g o o d e x a m p l e i s t h e n e e d t o g e t p r o d u c t i o n p e o p l e

i n v o l v e d i n c o n t r a c t d e s i g n [ 6 , 7 ] .

L a c k o f c o m m u n i c a t i o n b e t w e e n d e p a r t m e n t s i s a f u n d a-

m e n t a l w e a k n e s s o f f u n c t i o n a l o r g a n i z a t i o n s t r u c t u r e . ' ~ rh e

s i m i l a ri t y w i t h i n e a c h d e p a r t m e n t c a u s e s e m p l o y e e s t o a d o p t

s i m i l a r v a l u e s , g o a l s a n d o r i e n t a t i o n s . S i m i l a r i t y e n c o u r -

a g e s c o l l a b o r a t i o n , e f f i c i e n c y , a n d q u a l i t y wi t h i n t h e f u n c -

t i o n b u t m a k e s c o o r d i n a t i o n a n d c o o p e r a t i o n w i t h o t h e r d e -

p a r t m e n t s m o r e d i f f i c u l t . Th e f u n c t i o n a l s t r u c t u r e p l a c e s t h e

e m p h a s i s o n e x p e r t i s e w i t h i n f u n c t i o n s r a t h e r t h a n o n h o r -

i z o n t al co o r d i n a t io n . F o r a s m a l l c o m p a n y t h a t d o e s n o t d e a l

i n a n y t h i n g c o m p l e x , f u n c t i o n a l o r g a n i z a t i o n w i l l s e r v e . B y

v i r t u e o f it s s iz e , a s m a l l c o m p a n y i s a b l e t o m a i n t a i n n e e d e d

l e v e l s o f c o m m u n i c a t i o n d e s p i t e a f u n c t i o n a l o r g a n i z a t i o n ( [6 ] ,

p. 226) .

B u t i n a l a r g e o r g a n i z a t i o n d e a l i n g w i t h c o m p l e x t e c h -

n o l o g y , p r o d u c t o r g a n i z a t i o n a l s t r u c t u r e g r o u p s b o t h d e s i g n

a n d p r o d u c t i o n b y p r o d u c t; i n t h e c a s e o f s h i p b u i l d i n g b y

i n t e r i m p r o d u c t . P e o p le , i n f o r m a t i o n a n d w o r k a r e o r g a n i z e d

i n t h e s a m e w a y . T h u s , c o m m u n i c a t i o n a n d i d e n t i f i c a t i o n o f

d e s i g n a n d p r o d u c t i o n e m p l o y e e s c e n t e r s a r o u n d e v e r y t h i n g

i t t a k e s t o p r o d u c e t h e i r a s s i g n e d i n t e r i m p r o d u c t . C o l l a b -

o r a t i o n a c r o s s f u n c t i o n s i s e x c e l l e n t ( [6 ] , p . 2 3 1 ).

P ro d u c t o rg a n i za t i o n a n d ma n a g emen t

d e v e l o p m e n t

W i t h t h e b r e a k t h r o u g h i n t o p r o d u c t o r g a n i z a t i o n c a m e

m a n y b e n e f i t s i n a d d i t i o n t o d e s i g n p r o d u c t i o n i n t e g r a t i o n .

A m o n g th e s e , J a p a n e s e s h i p b u i l d e r s f o u n d t h a t c o s t c o n tr o l

w a s e n h a n c e d . T h e p r o d u c t i o n o f e a c h c l a s s o f i n t e r i m p r o d -

u c t s w a s h a n d l e d l i k e a s e p a r a t e b u s i n e s s . P r o d u c t i o n c o n -

t r o l w a s e n h a n c e d a s t h e m o r e l o g i c a l d i v i s io n o f w o r k a l -

l o w e d s t a t i s t i c a l c o n t r o l m e t h o d s t o b e a p p l i e d t o w o r k

p r o c e s se s wi t h g r e a t e r e f f e c ti v e n e s s . To g e t h e r w i t h t h e a b o v e ,

J a p a n e s e s h i p b u i l d e r s w e r e a b l e t o e x p l o i t t h e i r p r o d u c t o r -

g a n i z a t i o n s t o p r o m o t e i n a s y s t e m a t i c a n d c o n s c i o u s w a y

m a n a g e m e n t d e v e l o p m e n t [6 ].

I n I H I , p r o d u c t o r g a n i z a t i o n i s t h e b a s i s f o r a s u c c e s s f u l

m a n a g e m e n t d e v e l o p m e n t p r o g r a m . B e c a u s e o f t h e d i f fe r -

e n c e s i n h o w f u n c t i o n a l a n d p r o d u c t o r g a n i z a t i o n s a r e c o n -

s t r u c t e d , m a n a g e m e n t d e v e l o p m e n t a n d p e r s o n a l a d v a n c e -

m e n t a r e h i g h l y a ff e c te d . P r o d u c t o r g a n i z a t i o n s a c t a s a . . .

b u i l t i n 's c h o o l o f m a n a g e m e n t , ' t r a i n i n g m i d d l e l e v e l g e n -

e r a l m a n a g e r s i n t h e p r o b l e m s a n d o p p o r t u n i t i e s a s s o c i a t e d

wi t h e c o n o m i c r e s p o n s i b i l i t y [ 8] .

I n t r a d i t i o n a l o r g a n i z a t i o n s p e o p l e c o m e u p f r o m f u n c -

t i o n a l s h o p s o r d e p a r t m e n t s . P r o m o t i o n u p t h e h i e r a r c h y i s

n o r m a l l y o n th e b a s i s o f e x p e r i e n c e a n d e x p e r t i s e w i t h i n t h e

f u n ct io n . S u c h m a n a g e r s u n d e r s t a n d i n e x h a u s t i n g d e t a i l

t h e v a g a r i e s o f t h e s h o p o r d e p a r t m e n t f r o m w h i c h t h e y c a m e ,

b u t t h e y d o n o t u n d e r s t a n d e i t h e r o t h e r s h o p s o r t h e r e l a -

t i o n s b e t w e e n s h o p s . T h e i r s i s a p a r o c h i a l, n o t s y s t e m i c v i e w

o f m a n u f a c t u r i n g ( [6 ] , p. 2 2 7 ).

I n I H I , a s i n t h e U . S . m i l i t a r y , y o u n g , c o l l e g e - e d u c a t e d

p e o p l e a r e m o v e d f r o m p o s t t o p o s t ( j o b r o t a t i o n ) . I n l a r g e

c o r p o r a t i o n s t h i s a p p r o a c h i s m a d e p r a c t i c a l b y a p r o d u c t

o r g a n i z a t i o n . A p r o d u c t o r g a n i z a t i o n i n s u r e s t h a t p r o m o t i o n

i n to h i g h e r m a n a g e m e n t is . . . o n t h e b a s i s o f m a n a g e -

m e n t a n d i n t e g r a t i o n s k i l ls r a t h e r t h a n o n t h e b a s i s o f f u n c -

t i o n a l e x p e r t i s e . M a n a g e r s m u s t b e a b l e t o a c h i e v e c o o r d i -

n a t i o n a c r o s s f u n c t i o n s r a t h e r t h a n t o b e a n e x p e r t i n a n y

s ingle func t ion ( [6 ] , p . 231) .

M A Y 1 9 8 6 7 5

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A n i n s t i tu t i o n t h a t c a n n o t f . r o d u c e i ts o w n m a n -

a g e r s w i l l d i e . . . . T h e a b i l it y o f a n i n s t i t u ti o n

t o p r o d u c e m a n a g e r s i s m o r e i m p o r t a n t t h a n i ts

a b i l it y t o p r o d u c e e f f i c ie n t l y a n d c h e a p l y .

PETER F.

D R U C K E R

A s p e c t s o f a m a n a g e m e n t d e v e l o p m e n t s y s t e m

There is nothing inherently Japanese in the IHI man-

agement development process. Many of the same techniques

are used by other firms; for example, IBM, Exxon and Ci-

tibank. With its product organization and management de-

velopment program, IHI's corporate culture much more re-

sembles IBM or Exxon than any U.S. shipbuilding firm.

Some common threads that run through successful man-

agement development programs including those at IHI, IBM,

Exxon and Citibank are:

They are built deep into the system, involving all levels

of management and affecting the way the organization

works. 'We don't hire management trainees' says Ed-

ward F. Krieg, IBM Director of Management Develop-

ment. 'We go after (technically) competent people and

provide a crucible where they can evolve into managers.'

Management development is part of every manage rs job.

Each executive is responsible for grooming his subordi-

nates. His salary and promotions are based partly on their

success.

Top manageme nt support and a long-term commitment

to the program are unwavering. Otherwise, movement

of executives in and out of learning jobs (job rotation)

comes to an end 19].

W e u s e d a g r o u p o f j u n i o r e n g i n e e r s . . , s h i ft in g

t h e m f r e q u e n tl y f r o m o n e d e p a r t m e n t t o a n o t h e r - -

m o s t b e c a m e t o p - n o tc h s u p e r v i s i o n . . . .

ELMER L. H A N N

I H I m a n a g e m e n t d e v e l o p m e n t

IHI's mission is to supply products and services of high

quality for reasonable reward in compliance with the de-

mands of society. At the same time, the company is depen-

dent upon human creativity. Thus, development of the in-

dividual is a fundamental function of management on the

same level with production. Development of the individual

and development of the manufacturing system go hand in

hand. Most importantly, individual development is not sub-

jected to the short-term vagaries of management. Career

planning is done on a one-year and three-year basis for each

new graduate. Each year these plans are updated. The man-

agement development plan is part of IHI's overall manage-

ment plan, having much to do with the future of the enter-

prise. Long-term con tinuit y is ess ential. 5

The purpose of the management development program is

to forge, by instruction and discipline, a person who embod-

ies the goals of IHI. All during the development period, IHI

will entrust the person with greater responsibility. Even-

tually, IHI may entru st the person with company leadership

overall.

Each year, all IHI departme nt managers project their per-

sonnel needs for the next ten years. Then, they instruct the

Personnel Department on the number of college graduates

they require for the coming year. The Personnel Department

~ IH I 's m a n a g e m e n t d e v e l o p m e n t p r a c ti c e s w e r e s u b m i t t e d b y I H I M a -

r i n e T e c h n o lo g y , I n c. i n r e s p o n s e t o t h e N S R P p r o j e c t R o l e a n d D e v e l -

o p m e n t o f M i d d l e M a n a g e r s .

hires all new college graduates for all departments simul-

taneously. As a result, all graduates joining the company in

a given year form a class. In the early years of their service

with the company, seniority, based on their class year, serves

as the basis for advancement. Later, ability will separate ou

the few who will continue to climb the corporate pyramid.

The necessary attrition is effected by moving surplus expe-

rienced people to other organizations in which IHI has in-

terests, such as domestic subsidiaries, overseas project of-

rices and consultancies. Because these people are managerial

generalists as well as technical experts they can be of ser-

vice in man y different industries. In Exxon as in IHI, The

lifeblood of our management development system is the rate

at which we can move talent through the management ranks,

a l w a y s p r o v i d i n g a g r e a t e r c h a l l e n g e

says Frank Gaines, Jr.

Executive Development Coordinator at Exxon [9].

In 1983, IHI's shipbuilding division hired 27 graduates,

five of whom held post-graduate degrees. A slightly higher

number was hired in 1984. These new employees were as-

signed to IHI's head office and four shipyards. All together,

college graduates typically account for 3 percent of total

shipyard personnel, not counting those assigned to basic de-

sign. This percentage includes a small number of high-schoo

graduates who demonstrated analytica l ability and who rose

through company educational opportunitiesP

Two important aspects of IHI's manageme nt developmen

program are that it is organized and given a high priority

by top management. Development is carried out through:

departmental on-the-job training,

courses for technical specialists,

courses on financial affairs, computers, management

documentation, etc., and

courses on written and spoken communication.

The most critical of the above is on-the-job training. Here

newcomers are assigned to shops or departments where

managers are drilled in management development tech-

niques. In implementing their development roles, m anagers

must:

always be conscious of their development responsibili-

ties (to help subordinates progress is the most crucia

jobs of line managers),

train people to master fundamentals from the start (this

includes drill in the logic and principles c oncerning their

work as a stable foundation for future advancementt,

not put every person in the same mold (a proper devel-

opment plan is according to a person's ability, character

and strong points),

demand from their people responsibility and competence

(this is the greatest catalyst for individual growth),

must assign jobs which challenge current knowledge and

experience, and

note results after assignments are completed.

Job rotation is carried on for a full 12 years after a grad-

uate joins IHI. For the first two years, every graduate is as-

signed to some aspect of design. At the end of two years, the

graduates are transferred to production. Thus, the company

assures itself that its prospective management personnel ex

perience the dynamics between design and production and

the need for constant communications between the two. This

is over and above the fact that IHI's product organization

affords much better design production integration than the

functional organizations used elsewhere by shipbuilders.

Each person's career plan is updated annually through in

6 A s a m a t t e r o f i n t e r e s t to s t u d e n t s o f l e a d e r s h i p a n d o r g a n i z a t i o n s

p e r t h e U . S . A r m y ' s F o r t L e w i s P u b l i c I n f o r m a t i o n O f f ic e , a c o m b a t i n

f a n t r y b r i g a d e o f 3 00 0 s o l d i e r s c o n t a i n s a c o m p l e m e n t o f 90 o f f i c e rs , t h a

i s , 3 p e r c e n t . I n I H I ' s s h i p y a r d s , t h e c o l l e g e - ed u c a t e d l e a d e r s h i p i s a l s

3 pe r c e n t .

76 JOURNAL OF SHIP PRODUCTION

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G E N E R A L

M A N A G E R

A S S I S T A N T

G E N E R A L

M A N A G E R

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r ~ O T H E R

D E P A R T M E N T S

I

M A T E R I A LC O N T R O L E C T IO N I

P R O D U C T I O N O N T R O L I

D E P A R TM E N T J J J P U R C H A S I N GE C T I O N

4

S C H E D U L E M A N - H O U R U D G E T I

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H U L L S T R U C T U R A L E S I G N G R O U P I - I DEPARTMENTOUTFITTING

D E C K O U T F I T T IN G E S I G NG R O U P

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M A C H I N E R YO U T F I T T I N G J

S H O P I

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P I P E F A B R I C A T IO N

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F i g . 2

The organi za t i on show n i s that for t he I H I Ku re Shipyard c i rca 1982 . W hen t he w ork l oad was s i gn if i cant ly great er a sep ara t e depar t men t was i n

charge o f pai nti ng and there were s epara t e shops f or su bass embl y and as semb l y . C ol l ege- edu cat ed produ ct ion engi neer - ma nagers we re ass i gned t o t he

production control hul l construct ion and outf i tt ing departm ents and throughout shops. Since 1 982 the lat ter two depa rtmen ts w ere com bine d into a single

production department . S eeming ly this const i tutes a return to a funct ional organ izat ion. How ever at the supervisory level work f lows st i l l ref lect product

organization. Man -hour and mater ial budget ing and scheduling are st i ll perform ed by col lege -educate d produc t ion-en ginee r-man age rs as sign ed to the pro-

duct ion control and product ion departments and throughout shops

t e r v i e w s w i t h s e c t i o n a n d d e p a r t m e n t m a n a g e r s . I n d i s c u s s-

i n g a v a i l a b l e c a r e e r o p t i o n s , t h e d e s i r e s a n d t a l e n t s o f t h e

i n d i v i d u a l a r e t a k e n i n t o a c c o u n t . A t y p i c a l m a n a g e r i a l c a -

r e e r m i g h t f e a t u re t h e f o l l o w i n g a s s i g n m e n t s :

e n g i n e e r - - a n y o u t f i t d e s i g n g r o u p ,

f i e l d e n g i n e e r - - m o l d l o f t ,

f ie l d e n g i n e e r - - e r e c t i o n s h o p ,

f i e l d e n g i n e e r - - m a c h i n e r y o u t f i t t i n g s h o p ,

fi e ld e n g i n e e r - - p a i n t i n g s h o p ,

s h o p m a n a g e r o r s e n i o r p r o d u c t i o n e n g i n e e r i n h u l l c o n -

s t r u c t i o n o r o u t f i t t i n g d e p a r t m e n t s ,

m a n a g e r o f t h e h u l l c o n s t r u c t i o n o r o u t f i t t i n g d e p a r t -

m e n t ,

m a n a g e r o f t h e p r o d u c t i o n c o n t r o l d e p a r t m e n t ,

a s s i s t a n t g e n e r a l m a n a g e r , a n d

g e n e r a l m a n a g e r .

T y p i c a l r e s p o n s i b i l i t i e s i m p l e m e n t e d b y c o l l e g e - e d u c a t e d

p e o p l e a s s i g n e d e a r l y i n t h e i r m a n a g e r i a l c a r e e r s t o s h o p s

a r e li s t e d i n A p p e n d i c e s 1 a n d 2 . B a s i c a l l y , i n b e h a l f o f s h o p

m a n a g e r s , t h e y a r e r e s p o n s i b l e f o r b u d g e t i n g m a n - h o u r s a n d

m a t e r i a l s t o , a n d s c h e d u l i n g t h e o p e r a t i o n o f , w o r k f l o w s

w i t h i n s h o p s .

F u l l y d e v e l o p e d e n g i n e e r - m a n a g e r s a r e e x p e r i en c e d i n t h e

ent ire industr ia l process . They are wel l -educated, wel l - trained

p e o p l e w h o a r e a w a r e o f th e i r a b i l i t y a n d o b l i g a t i o n t o c o n -

s t a n t l y i m p r o v e t h e m a n u f a c t u r i n g s y s t e m . T h e y a r e w e l l

p r ep a re d t o s t ep i n t o h i g h e r m a n a g e m e n t p o s i t i o n s . T h e y h a v e

a s t ro n g t e c h n ic a l b a s e , y e t t h e y a r e m a n a g e r i a l g e n e r a l i s t s

a s w e l l . T h e y a r e , i n d e e d , a n e l i t e g r o u p .

S u m m a r y

I HI s s h i p y a r d o r g a n i z a t i o n , F i g . 2 , i s a f o r m o f p r o d u c t

organizat ion appl ied to shipbui lding. People , informat ion and

w o r k a r e a ll o r g a n i z e d so a s t o e x a c t ly m a t c h t h e P W B S e m -

p l o y e d . A s s h o w n i n F i g . 3 , t h e s t r e n g t h i s i n t h e e x a c t

m a t c h i n g o f th e o r g a n i z a t i o n o f s h o p w o r k t o h o w c o s t s a r e

c o l l e c t e d . P WB S , t h e r e f o r e , i s t h e f r a m e w o r k u p o n w h i c h

s h i p b u i l d e r s c a n e r e c t a p r o d u c t o r g a n i z a t i o n .

A l s o , t h e i m p o r t a n c e o f h i g h l y e d u c a t e d , h i g h l y t r a i n e d

a n a l y t i c a l t h i n k e r s t o a m o d e r n , a d v a n c e d m a n u f a c t u r i n g

M A Y 1 9 8 6 7 7

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5/6

i . o F I F - - c . . O N S . O . I . . o o . E o

A R D W O R K

O R A S S E M B L Y

T E A M T R A D E S

1 1

m

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- I T O E I I

J

F I

1

F ig . 3 F rom the l ef t , look ing to the r igh t , i s t he IHI sh ipya rd o rgan i za t i on , c i r ca 1975 , when sh ipbu i l d i ng

p e a k e d i n J a p a n . F r o m t h e r i g h t l o o k in g l e f t is t h e p r o d u c t w o r k b r e a k d o w n s t r u c t u r e ( P W B S ) e m p l o y e d .

I n th e d e c a d e f o l l o w i ng , c o m m e n s u r a t e w i t h t h e s h i p b u i l d in g r e c e s s i o n a n d a 4 5 p e r c e n t w o r k f o r c e r e -

d u c ho n , p a i n t in g w a s c h a n g e d f r o m a t w o - s h o p d e p a r t m e n t t o a s i n g l e s h o p ; s u b b l o c k a s s e m b l y a n d b l o c k

a s s e m b l y w e r e a s s i g n e d to o n e s h o p m a n a g e r a n d t h e s e p a r a t e d e p a r t m e n t s w e r e r e p l a c e d b y a s i n g l e

p r o d u c t i o n d e p a r t m e n t . S u c h c h a n g e s i m p a c t e d o n d e p a r t m e n t a n d s h o p l e v e l s o n l y . F o r b u d g e t i n g a n d

(~os ti ng pu rposes , wo rk f l ows by i n te r im -p roduc t ca teg o r i es a t supe rv i so ry l eve l s w i th in sh ops rem a ined

s e p a r a t e d s o a s t o c o n t i n u e t o m a t c h t h e P W B S

system cannot be denied. Scientific shipb uildi ng techniq ues

demand college-educated engineer-managers. Functional or-

ganizations, traditi onal in the U.S. shipbui lding industry, fail

to produce managerial generalists with a strong technical

base. Product organization is the foundation upon which a

corps of engineer -mana gers can be constructed. Curr ent

challenges, particu larly for buil ding warships, requ ire man -

agers of shipyards to become more organized, purposeful and

sophisticated in their use of college-educated middle man-

agement.

R e f e r e n c e s

1 Rumelt, R. P., Strategy, Structure and Economic Performance,

Division of Research, Harvard Business School, Boston, Mass., 1974, p.

65.

2 Okayama, Y. and Chirillo, L. D., Product Work Breakdown Struc

ture -Revised, National Shipbuilding Research Program, Decembe

1982.

3 Product Oriented Material Management, National Shipbuilding

Research Program, June 1985.

4 Chandler, A. D., Jr., Strategy and Structure Doubleday, Garden

City, N.Y., 1962, p. 382.

5 Lorsch, J. W., Introduction to the Structural Design of Organi

zations in Organization Structure and Design Irwin and Dorsey, Home

wood, Ill., 1970, p. 5.

6 Daft, R. L., Organizatmn Theory and Design West Publishing Co

St. Paul, Minn., 1983, p. 250.

7 Pre-Contract Negotiation of Technical Matters, National Ship

building Research Program, Dec. 1984.

8 Scot t, B. R., Stages of Corporate Development, unpublished pa

per, Harvard Business School, Boston, Mass., 1970, p. 14.

9 HowCompanies Raise a New Crop of Managers, Business Week

10 March 1975, p. 44.

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A p p e n d i x 1

T y p i c a l r e s p o n s i b i l it i e s f o r c o l l e g e . e d u c a t e d s t a f f

p e o p l e a s s i g n e d t o a n o u t f i t t i n g f a b r i c a t i o n s h o p ( f o r

e x a m p l e , f o r m a n u f a c t u r i n g p i p e p i e c e s )

Special activities

a . F o r e a c h b u i l d i n g c o n t r a c t , b u d g e t m a n - h o u r s a n d m a t e r i a l s a l lo -

c a t e d to t h e s h o p t o t h e v a r i o u s f l o w l a n e s b a s e d o n r e c o r d s o f e f -

f i c ie n c y a c h i e v e d a n d a l s o b a s e d o n p l a n n e d i m p r o v e m e n t s i n w o r k

m e t h o d s , s u c h a s a u t o m a t i c w e l d i n g , a n d b e t t e r ji g s a n d t o o ls .

M a i n t a i n a l o n g - t e r m ( o n e y e a r ) s h o p l o a d i n g p l a n a n d r e v i s e i t in

response

t o e v e r y c h a n g e i n t h e s h i p y a r d ' s m a s t e r s c h e d u l e .

M a n a g e t h e u s e o f s u b c o n t r a c t o r s a n d t h e u s e o f o v e r t i m e t o o f f s e t

w o r k l o a d f l u c t u a t i o n s .

N e g o t i a t e w i t h s u b c o n t r a c t o r s a n d s e t t l e o n v o l u m e s o f w o r k a n d

u n i t p r i c e s t h a t a r e t o a p p l y f o r a o n e - y e a r p e r i o d .

E s t i m a t e w o r k a s s o c i a t e d w i t h d r a w i n g s , m a t e r i a l l i s t s a n d o t h e r

i n f o r m a t i o n p r o v i d e d b y d e s i g n e r s .

D e v e l o p i n t e r m e d i a t e - t e r m ( t h r e e m o n t h s ) s c h e d u l e s t o m e e t p a l l e t

r e q u i r e d d a t e s u s i n g f e e d b a c k ; t h a t i s , m a n - h o u r s p e r u n i t w e i g h t ,

pe r p i pe p i e c e , pe r e l e c t r i c - c a b l e l e ng t hs , e t c .

M a i n t a i n m a n - h o u r c o n t r o l g ra p h s p e r s h i p b y t h e p a r a m e t e r s u s e d

f o r f e e dba c k .

M a i n t a i n t h e d a t a b a n k f o r c o m p u t e r p r o c e s s in g o f i n f o r m a ti o n , s u c h

a s l o t n u m b e r a n d s e r i a l n u m b e r f o r c o n t r o l d u r i n g f a b r i c a t i o n v e r -

s u s s h i p n u m b e r , p a r t n u m b e r a n d p a l l e t n u m b e r n e e d e d f o r c o n t r o l

d u r i n g a s s e m b l y o n - u n i t , o n - b l o c k a n d o n - b o a r d .

i . P l a n f ac i l i ti e s i m p r o v e m e n t s .

j . Im p l e m e n t s pe c i a l p r o j e c ts , s uc h a s how to m a ke t h e s hop m or e v iv i d .

b.

c.

d .

e

f.

g.

h .

Routine activities

a . P r e s i d e o v e r w e e k l y m e e t i n g s a t t e n d e d b y t h e s h o p m a n a g e r , f l o w

l a n e f o r e m e n a n d t h e i r a s s i s t a n t s a n d o t h e r s t a f f a s s i s t a n t s t o :

a s c e r t a i n t h e n u m b e r o f c o m p o n e n t s c o m p l e t e d p e r w e e k r e l a t i v e

t o p l a n n e d o u t p u t p e r f l o w l a n e ,

e s t a b l i s h t h e a m o u n t s o f w o r k t o b e a c c o m p l i s h e d n e x t w e e k , i n -

c l u d i n g o v e r t i m e w o r k a n d w o r k t o b e s u b c o n t r a c t e d , a n d

e s t a b l i s h a m a n n i n g p l a n p e r f l o w l a n e fo r n e x t w e e k ' s w o rk .

O n c e e a c h m o n t h , p r e p a r e t h e s h o p m a n a g e r ' s r e p o r t t o t h e d e p a r t -

m e n t m a n a g e r p r e s e n t i n g t h e a c t u a l t r e n d o f p r o d u c t i o n ( d i f fe r e n c e

b e t w e e n w h a t w a s p l a n n e d a n d s c h e d u l e d a n d f i n a l r e s u l ts ) a n d p r e -

s e n t i n g r e c o m m e n d a t i o n s f o r i m p r o v e m e n t .

M a i n t a i n t h e a c c u r a c y c o n t r o l s y s t e m .

A t t e n d s a f e t y co n t r o l m e e t i n g s w h i c h a r e h e l d t w i c e p e r m o n t h .

b .

C.

d .

A p p e n d i x 2

T y p i c a l r e s p o n s i b i l i t ie s f o r c o l l e g e - e d u c a t e d s t a f f

p e o p l e a s s i g n e d t o a n o u t f i t t i n g a s s e m b l y s h o p ( f o r

e x a m p l e , d e c k , a c c o m m o d a t i o n , m a c h i n e r y a n d

e l e c t r i c a l )

Special activities

a . P a r t i c i p a t e i n t h e s tu d y o f e a c h p r e l i m i n a r y d e s i g n , b e f o r e c o n t r a c t

d e s i g n s t a r t s , a n d c o n t r i b u t e t o a b a s i c b u i l d s t r a t e g y .

b . P a r t i c i p a t e i n m e e t i n g s f o r h u l l b l o c k d e f i n i t i o n .

c . P r e p a r e t h e s t r a t e g y f o r z o n e o u t f i t t i n g b y d e s i g n a t i n g z o n e s a n d

s t a g e s f o r o u t f i t t i n g o n u n i t , o n b l o c k , o n g r a n d b l o c k a n d o n b o a r d

a n d w h e n n e c e s s a r y a d v i si n g d e s i g n e r s o f c h a n g e s i n a r r a n g e m e n t s

t h a t w o u l d i m p r o v e p r o d u c t i v i t y w i t h o u t i n h i b i t i n g o w n e r r e q u i r e -

m e n t s .

d . D e s i g n a t e s p e c ia l m a t e r i a l r e q u i r e d d a t e s s u c h a s f o r a m a i n e n g i n e

a n d c h e c k f o r s u c h m a t e r i a l a v a i l a b i l i t y .

e . P r e p a r e th r e e - m o n t h s a n d o n e - m o n t h s ch e d u l e s u s i n g t h e d e s i g n

o u t p u t s p e r p a l l e t a n d m a n - h o u r r a t e s a s s o c i a t e d w i t h f i t t i n g s p e -

c i f i c m a t e r i a l s .

f . C o n t i n u e t o c o n t r i b u t e to f u r t h e r d e f i n i t i o n o f a b u i l d s t r a t e g y a s

s u b s e q u e n t d e s i g n p h a s e s e v o l v e a n d e v e n t u a l l y i n p u t t i n g i n f o r -

m a t i on ne e de d t o f a c i l i t a t e w or k , s uc h a s c he c k po i n t s , r e f e r e nc e l ine s ,

m e a n s f o r a i r t e s t i n g w e l d s , s o t h a t t h e o u t p u t o f d e t a il d e s i g n i s ,

l i t e ra l l y , w o r k i n s t r u c t i o n s .

g . D o c u m e n t t h e o u t f i t t i n g s t r a t e g y a n d e s t a b l i s h t a r g e t s t a k i n g i n t o

a c c o u n t n e w i d e a s f o r r e d u c i n g c o s t s .

h . P r e p a r e t h e z o n e - o u t f i t ti n g s c h e d u l e i n s u r i n g t h a t i t is c o m p a t i b l e

w i t h t h e d e s i g n s c h e d u l e f o r p r e p a r a t i o n o f w o r k i n s t r u c t i o n s c o r -

r e s p o n d i n g t o p a l l e t s ( M L F ).

i . P r e p a r e a s t a g i n g p la n .

j . S p e c if y a c c e s s a n d r o u t e s f r o m a s a f e t y p o i n t o f v i e w .

k . F o r e a c h b u i l d i n g c o n t r a c t , b u d g e t m a n - h o u r s a n d m a t e r i a l s a ll o -

c a t e d t o t h e s h o p t o t h e v a r i o u s f l o w l a n e s b a s e d o n r e c o r d s o f ef -

f i c ie n c y a c h i e v e d a n d a l s o b a s e d o n p l a n n e d i m p r o v e m e n t s i n w o r k

m e t h o d s , s u c h a s a u t o m a t i c w e l d i n g , a n d b e t t e r ji g s a n d t o o l s.

I . P l a n r e l o c a t i o n s o f o n - b o a r d c r a n e s t o a n t i c i p a t e e r e c t i o n p r o g r e s s .

m . P r e p a r e p l a n s s u c h a s fo r m a i n e n g i n e i n s t a l l a t i o n , p r o p u l s i o n s y s -

t e m a l i g n m e n t , a n d f l u s h i n g c o m p l e t e d p i p e s y s t e m s .

n . P l a n f a c i li t i es i m p r o v e m e n t s .

o . I m p l e m e n t s p e c ia l p r o j e c t s a s s i g n e d b y t h e s h o p m a n a g e r .

p . M a i n t a i n a n a c c o u n t o f s h o p e x p e n s e s .

q . M a i n t a i n c o n t r o l c h a r t s a n d a n a l y z e r e s u l t s b y s t a g e f o r f i t t i n g o n

b l o ck , o n g r a n d b l o c k a n d o n b o a r d .

r . D o c u m e n t w o r k p r a c t ic e s .

Routine activities

a . A t t e n d t h e b r i e f m e e t i n g o f e l e c t ri c s h o p f o r e m e n e a c h m o r n i n g .

b . P r e s i de ove r t he w e e k l y ( T ue s da y) m e e t i ng f o r f i na l i z i ng ne x t w e e k ' s

w or k l oa d s pe c i f i c a l l y by :

c h e c k i n g m o n t h l y s c h e d u l e s p r o p o s e d b y f o r e m e n a n d w e e k l y

s c h e d u l e s p r o p o s e d b y a s s i s t a n t f o r e m e n ,

c o n v e y i n g p o l i cy c o n c e i v e d b y t h e s h o p s t a f f f o r h o w w o r k i s t o

p r oc e e d , a nd

d i s c u s s i n g a n d a d j u s t i n g t h e d i s t r i b u t i o n o f w o r k e r s w i t h t h e f o r e -

m e n .

c . P a t r o l t h e c o n s t r u c ti o n s i t e s t w i c e p e r d a y .

d . B e i n a t t e n d a n c e d u r i n g s t a r t - u p o f m a j o r e q u i p m e n t s .

e . R e s o l v e o w n e r ' s a n d s u r v e y o r ' s r e p o r t s o f u n s a t i s f a c t o r y i t e m s a n d

pr oc e s s f e e dba c k r e por t s .

f . A t t e n d t h e s h i p m a n a g e r ' s ( s u p e r i n t e n d e n t ' s ) w e e k l y s h i p c o n s t r u c -

t i o n m e e t i n g a n d p a r t i c i p a t e i n c o o r d i n a t i n g d e c i s i o n s w i t h o t h e r

s h o p s ' s t a f f p e o pl e , p a r t i c u l a r l y f o r p a i n t i n g .

g . O n c e ea c h m o n t h , p r e p a r e t h e s h o p m a n a g e r ' s r e p o r t to t h e d e p a r t -

m e n t m a n a g e r p r e s e n t i n g t h e a c t u a l t r e n d o f p r o d u c t i o n ( d i f f er e n c e

b e t w e e n w h a t w a s p l a n n e d a n d s c h e d u l e d a n d f i n a l r e s u l t s ) a n d p r e -

s e n t i n g r e c o m m e n d a t i o n s f o r i m p r o v e m e n t .

h . A t t e n d t h e s a f e t y c o n t r o l m e e t i n g s w h i c h a r e h e l d t w i c e p e r m o n t h .

M A Y 1 9 8 6 7 9