Production Planning and Contro... free essay sample

Production Planning and Control for Marine and Offshore Shipbuilding Abstract In this report, I am identifying and analysing my companys (PaxOcean Shipyard) supply chain planning, control issues and providing recommendations for improvements. PaxOcean Engineering Pte Ltd (PaxOcean, n. d) is a subsidiary of a Singaporean multinational conglomerate, Kuok Singapore Limited (Kuok Singapore Limited, n.d.), established since year 2007. PaxOcean is a progressive and integrated marine and offshore service provider, offering oil rigs and vessels construction, ship repair and conversion. The shipbuilding supply chain is a very complex process (Sarder, Ali, Ferreira and Rahman, 2010), especially the length of duration it takes (normally 18 months to 24 months, depends on the vessels type, See Appendix 1 – copy PaxOcean Brouchure) to complete a newbuild vessel. It can prove very tough in successfully manage this type of supply chain without causing an undesirable impact on the rest of business functions and the overall profit of the company (Sarder, Ali, Ferreira and Rahman, 2010). In addition, shipbuilding also involve with hundreds of materials and equipment for fabrication works and assemble into a complete vessel (Appendix 2, Bill Of Materials). This report focuses on the PaxOceans supply chain and in particular on management of the material and its impact of PaxOceans bottom line. Improvements in material management will help PaxOcean in better position to receive future orders and eventually provide the Ship Owner with quality of ships needed to carry out its purpose. The overview flow of complete shipbuilding activity and competencies required as shown in. Vessels construction is a comprehensive design and long lead time process that demands careful planning and timely decision-making that meet Ship Owners requirements. Planning, optimizing and validate processes before vessel construction can be started. In fact, shipyard is an Engineer-to-order (Hicks, McGovern ; Earl, 2000) company that designs and fabricate vessel (Appendix 3) when orders are placed by Ship Owner. This process involves the cooperation of all parties, including the Ship Owner, shipbuilder and its suppliers. The process further necessitates a seamless interaction of the ship designer, equipment makers, material management, planning, scheduling and production. This is the method of interactions that can either cost the shipbuilder and Ship Owner due to rework and rescheduling or allow PaxOcean to construct the vessels at the cost and in the timeframe allotted by the contract. Due to costly of constructing vessels and current practices in shipbuilding industry, PaxOcean does not make a large profit and sometimes not at all. Discussion and Analysis Pre-Contract Signing Usually, Ship Owner provides specifications and schedules that allow PaxOcean to determine what materials and/or equipment will be needed. From this information, planning and scheduling of what materials are to be purchased, who will it be purchased from, and when to purchase it in order to meet requisition on site dates. At contract baseline, Ship Owner and PaxOcean determines what are the long lead time materials and equip ment. Normally, Ship Owner agrees to pay down-payment in order for PaxOcean to login order those long lead time and expensive major equipment such as main engine and propulsion system. In addition, the subsequent payment will be made by the Owner to PaxOcean upon production milestone is achieved. Below is an example of payment milestone associate with major deliverables. Shipbuilding Project/Production Planning In most of the shipyard including PaxOceans production planning and management in the initially centered on a Work Breakdown Structure. Systematically managing engineering data has become a subject of interest since the shipbuilding industry practising the concept of WBS, which treats each vessel as a project basis and defines the scope of works. The network gives a logical, showing the individual elements of work and their interrelation in the planned order of execution. In addition, it is used for overall planning of a project and also for detailed planning with production progress control. Since ETO process, there is the architecture of the whole production planning system and express the information flow. Therefore, shipbuilding processes in PaxOcean focusing on hierarchy and system development for production planning which flow from engineering basic design in accordance to ship owners vessel specification, to procurement, production till vessel delivery. Figure 6 shows that various tasks are need to be performed during construction, thereby making process management considerably significant. It is particularly important to plan and control production activities (Chaulya ; Prasad, 2016), because production constitutes the largest part of the overall process. For example, Project Manager has to plan when is the equipment shall be in placed, sequentially plan of ship blocks assembly, follow by equipment installation and blocks erection. As such, PM to facilitate procurement team with a list of ROS dates for dealing with suppliers on equipment estimate to arrive at shipyard.Most of the long lead-time equipment are make-to-order or engineer-to-order, therefore, it is crucial to deliver equipment on time in order to avoid any delay of vessel delivery to Ship Owner.Ship Design and Constrain Since it takes anywhere from one to two years for building a vessel; therefore, there are possibility changes to the original baseline, including design and material changes, specifically to keep up with technology changes. Ship design based on international marine rules and regulation (IMO, n.d.); different Classification Society (IACS, n.d.) includes a large communications suite that must be technologically advanced, so what was up to date at the beginning of the contract, rapidly becomes out of date as the years progress. The same goes for suppliers who can no longer provide PaxOcean with certain materials. For example, Classification Society enforce on new rules of Ocean Clean environment that all vessels must meet United States Coast Guard (USCG, n. d.) requirement; these are involved all materials/equipment streamline from a shipbuilding contract received to deliver the vessels. This is usually causes a schedule slip that renders into escalating costs and profits lost. Of course, without the material/equipment that is needed, production comes to a halt, worst scenario would be vessel is not able to deliver and sail due to not compliance.