Naval Ship Maintenance: An Analysis of the Dutch Shipbuilding Industry Using the Knowledge Value Added, Systems Dynamics, and Integrated Risk Management Methodologies

Abstract

Initiatives to reduce ship maintenance costs have not yet realized the normal cost-reduction learning curve improvements. One explanation is the lack of recommended technologies. Damen, a Dutch shipbuilding and service firm, has incorporated similar technologies and is developing others to improve its operations. This research collected data on Dutch ship maintenance operations and used it to build three types of computer simulation models of ship maintenance and technology adoption. Results were compared with previously developed modeling results of U.S. Navy ship maintenance and technology adoption. Adopting 3D PDF alone improves return on investment (ROI) significantly more than adopting a logistics package alone and adding both technologies improves ROI more than adding either technology alone. Adoption of the technologies would provide cost benefits far in excess of not using the technologies, and there were marginal benefits in sequentially implementing the technologies over immediately implementing them. Potential benefits of using the technologies are very high in both cases. Implications for acquisition practice include the need for careful analysis and selection from among a variety of available information technologies and the recommendation for a phased development and implementation approach to manage uncertainty.