Thursday, December 10, 2009


Just about every boatyard uses the expression, “On time and on budget.” But in reality, how many major build or refit projects meet those criteria? Very, very few, if any.
There is a plethora of factors working to prevent a project from coming in on time and on budget. But in my experience, it is the inter-relation between three specific and key components of a major project that make or break it: 1) design/engineering, 2) materials/labor logistics, and 3) project planning and management.

A truly miniscule number of projects are held from starting until all relevant design and engineering have been completed. Instead pressures, primarily from buyers/owners, but occasionally from yard cash-flow needs, almost always result in major projects being started while design and/or engineering are still underway. And even if preliminary design and engineering for a project have been completed by the time the project gets underway, detailed systems engineering, completion of specifications, and production of shop drawings invariably continue to be done “on the fly” well after the project has begun.

Once engineering and related specifications have been finalized, there still remains the task of materials acquisition. Unfortunately, materials procurement involves an inherent time lag due to the need to locate, bid out, and finally purchase for a major project what is often a list of hundreds, if not thousands of items. Some of these may be available off the shelf, but just as many, if not more, have first to be assembled and/or manufactured to order before being shipped. This results in substantial, sometimes unanticipated lead times from order to delivery. And this does not yet take into account the fact that some specified items will often be found to be out of production and unavailable, or carrying too high a price tag, or involving too long a lead time for production to stay on schedule. In such cases, re-entry into the project’s design/engineering spiral is necessary, with all of its attendant additional delays.

The reality in a great number of major build and refit projects is that you have the tail wagging the dog. Too many major projects end up being driven (controlled) by “engineering” and/or the “BOM” (bill of materials). That situation is, I have to tell you, very far from being a happy one. Allowing engineering (i.e., when specifications and/or drawings happen to be available), or the BOM (i.e., which and when materials happen to be available) to control production inevitably leads to a project duration well beyond any initially envisioned. That often leads in turn, at best, to bad feelings and, at worst, to claims for liquidated damages due to late completion.

My experience is that the only acceptable driver for a properly planned and managed project is the production schedule. The production schedule should be dictating when engineering and attendant specifications and drawings are finalized, not the other way around. Similarly, the production schedule should be dictating materials target order and delivery dates, not the other way around.

Of course, achieving the ideal situation, in which the production plan/schedule drives engineering, materials acquisition, and production, requires having not only a highly detailed project plan in the first place, but also one which is grounded in reality. Further, it requires a plan that is practical in the circumstances as to allocation of labor and other resources, and as to the projected durations of component operations. The creation and implementation of such a project plan requires significant hands-on, industry-specific build and refit management experience. There is no way around it. In this, as in most things relating to boat building and refit… experience always matters.

1 comment:


    While I can't argue with the conclusion of this post -- indeed, experience does matter a lot -- I disagree with the main argument. In my 30+ year career as a designer I have rarely seen a project run to completion without changes in design -- and I think that it is design, and not the production schedule, that should drive a project. It doesn't matter if the vessel is delivered "on time and within budget" -- a bogey that I've never seen achieved by the way -- if the owner isn't happy with what he gets. If the craft is delivered 6 months late and 20% over budget but is exactly what the owner wants, 5 years after that, it will be held up as a masterpiece!

    In a recent home renovation, I found that a visit to Lowe's showed a "target of opportunity" (a sale on flooring) and a bathroom ended up with a real marble floor as a result. Naturally, that added to the cost and time required for the work. So what? In this case the BOM drove the project, but the owner (me) ended up happy. The design evolved as the owner's requirements changed. That happens -- everyone in the business of building anything has to get used to it.

    It's the owner's requirements that drive everything in a project -- but that drive energy is exerted through design (and its handmaidens, change orders) rather than through the production planning cited by Mr. Friedman. Production planning is important, sure -- but it must be kept in its place. Any low volume production process has to be flexible; if you think you're running a factory to produce 300,000 units a year, you'll soon be out of the marine business because there aren't even 100 customers a year for any seagoing craft.


    I don't expect designers and engineers to like what I have to say about who and what should drive a production schedule. But I too have 30-plus years in the industry; and I can tell you that the yard which allows engineering or the BOM to control the production schedule is a yard that consistently loses money.

    Of course, a customer can ask for or require changes during production. But the customer then accepts the consequences with regard to necessary changes in the contracted pricing and delivery date.

    What I'm talking about, however, is something else. I'm talking about situations in which the customer stands firm on contracted price and delivery date (and on liquidated damages for late completion), while the yard's internal or sub-contracted design and/or engineering departments work at a self-determined pace and in a self-determined order of priority, neither of which bear any resemblance to the needs of the contracted production schedule.

    And please don't tell me about creativity marching to its own drummer. If you are running a boatyard, that particular drummer will drum you right out of business.