Shipyard
Organizational
Structures
Lec 2
Why Organizational Structure
Matters
A shipyard is a complex industrial system — it
includes design offices, workshops, dry docks,
procurement, quality control, and safety management.
A clear organizational structure is essential to:
• Coordinate thousands of workers.
• Manage project schedules and budgets.
• Ensure safety, quality, and compliance.
• Streamline communication and decision-making
Main Organizational Structures in
Shipyards
Organizational
Structures in
Shipyards
Functional Matrix
Project-
Organizati Organizati
Based
on on
Main Organizational Structures in
Shipyards
1-Functional Organization
• Definition:
Employees are grouped according to their specialized function or department.
• Structure
• Design Department
• Production Department
• QC
• Safety
• Procurement
• Characteristics:
• Each department has a manager or head.
• Communication flows vertically (top-down).
• Workers report to one supervisor within their function.
Main Organizational Structures in
Shipyards
1-Functional Organization
• Advantages
High specialization and efficiency.
Clear authority and career path.
Suitable for repetitive ship series (e.g., bulk carriers).
• Disadvantages:
Slow communication between departments.
Coordination challenges between design and production.
Less flexibility for unique ship projects.
Main Organizational Structures in
Shipyards
1-Functional Organization
• Example:
• A shipyard with separate design, welding, painting, and
inspection departments.
• The production manager reports directly to the general
manager.
Main Organizational Structures in
Shipyards
2-Project-Based
(Product-Oriented) Organization
• Definition:
The shipyard is organized around specific shipbuilding projects (e.g.,
Project A – LNG carrier, Project B – Offshore vessel).
• Structure:
Each project has its own:
• Project Manager
• Design engineers
• Production team
• QC and procurement staff
Main Organizational Structures in
Shipyards
2-Project-Based
• Advantages:
Strong project focus and accountability.
Faster decision-making.
Excellent coordination within the project team.
• Disadvantages:
Duplication of resources (multiple design teams, multiple
QC units).
Less sharing of knowledge between projects.
Harder to maintain standardized procedures.
Main Organizational Structures in
Shipyards
2-Project-Based
Example:
• A shipyard building several ships of different types
simultaneously assigns a full team to each vessel
project.
Main Organizational Structures in
Shipyards
3-Matrix Organization
• Definition:
A hybrid system combining functional and project-based
structures.
Employees report to two managers:
• Functional manager (department head).
• Project manager (specific ship project).
• Structure Example:
Design Engineer reports to:
• Head of Design Department
• Project Manager of Vessel X
Main Organizational Structures in
Shipyards
3-Matrix Organization
• Advantages:
Efficient resource sharing between projects.
Flexible staffing.
Enhances cross-functional collaboration.
• Disadvantages:
Possible conflicts between project and functional
managers.
Requires strong communication skills and clear reporting
systems.
Main Organizational Structures in
Shipyards
3-Matrix Organization
Example:
• A large shipyard (e.g., Hyundai or Fincantieri) uses a
matrix to balance resources between multiple ship
projects.
Summary
Structure Key Feature Advantages Disadvantages
Slow inter-
Organized by Specialization,
Functional department
department clear authority
communication
Project- Organized by Focused, fast
Resource duplication
Based vessel/project decisions
Flexible,
Matrix Mix of both Possible role conflicts
efficient
Communication & Reporting
Lines
• 1-Vertical Communication
• Vertical communication is the flow of information up and
down the management levels inside the shipyard.
• It moves vertically — like an elevator — between higher and
lower positions in the organization.
• Between management levels (e.g., General Manager →
Department Head → Supervisor → Worker).
• Ensures control and reporting discipline.
Communication & Reporting
Lines
• 1-Vertical Communication
Upward communication (from bottom to top):
• Workers report progress, problems, or safety issues to
supervisors.
• Supervisors report updates to department heads.
• Department heads give reports to the General Manager.
Communication & Reporting
Lines
• 1-Vertical Communication
Downward communication (from top to bottom):
• The General Manager gives instructions, production targets, or
policies.
• Department heads pass these to supervisors.
• Supervisors explain the work details to workers.
Communication & Reporting
Lines
• 1-Vertical Communication
Why It’s Important:
o Keeps control and discipline.
o Ensures everyone knows their tasks and responsibilities.
o Helps management monitor progress and make decisions.
Communication & Reporting
Lines
• 2-Horizontal Communication
• Between departments at the same level (e.g., design ↔
production ↔ QC).
• Important for solving on-site issues quickly.
• Horizontal communication happens between departments or
people at the same level of authority.
• It’s communication across, not up or down.
Communication & Reporting
Lines
• 2-Horizontal Communication
Example in a Shipyard:
• The Design Department sends updated drawings to Production.
• The Production Department contacts Quality Control (QC) for
inspection.
• The Safety Team coordinates with Procurement to ensure safe
materials.
Communication & Reporting
Lines
• 2-Horizontal Communication
Why It’s Important:
• Helps departments cooperate smoothly.
• Solves problems quickly on-site.
• Prevents delays caused by miscommunication between teams.
Summary
Type Direction Example Purpose
Vertical General Manager
Up and Down Control, supervision,
Communicatio → Supervisor →
(between levels) reporting
n Worker
Horizontal Coordination,
Design ↔
Communicatio Across (same level) teamwork, quick
Production ↔ QC
n problem-solving
Shipyard Departments and Their Roles
Department Main Responsibilities
Design / Ship design, drawings, 3D modeling, structure & systems
Engineering integration.
Production /
Steel cutting, welding, assembly, block erection, outfitting.
Fabrication
Procurement /
Material sourcing, vendor management, cost control.
Supply Chain
Quality Control
Inspection, testing, compliance with class and standards.
(QC)
Safety &
Safety supervision, training, environmental protection.
Environment (HSE)
Planning & Work breakdown structure (WBS), time management, resource
End of Lecture
Modern Shipyard Management
Approaches
• 1. Concurrent Engineering
• Concurrent Engineering integrates the design and production stages by
involving multidisciplinary teams early in the project’s development
phase.
• This approach minimizes delays by ensuring that design requirements
are aligned with manufacturing capabilities from the start.
• Concurrent Engineering means doing design and production planning
at the same time, instead of one after the other.
• In traditional methods, engineers first finish the design, then hand it to
the production team — which often causes problems or delays if
something in the design is hard or expensive to build.
• In Concurrent Engineering, both teams (designers and production
engineers) work together from the beginning of the project.
Concurrent Engineering
How It Works:
• The design team creates the initial ship or component design.
• At the same time, the production team reviews it to check if it’s practical to
build, affordable, and meets material or equipment limits.
• Feedback is shared instantly between departments — like design,
manufacturing, quality, and safety — so any issue is solved early.
Concurrent Engineering
In a Shipyard Example:
• Imagine designing a new fuel-efficient ship hull.
• The design team plans a new shape.
• The production engineers check whether the shipyard’s machines can cut
and weld that shape easily.
• The safety and quality teams ensure it meets regulations.
• If there’s a problem, they fix it right away — before production starts.
Concurrent Engineering
Benefits:
• Saves time (fewer design changes later).
• Reduces costs (less rework or wasted material).
• Improves quality (design fits production capability).
• Increases team collaboration and innovation.
• Shortens project lead time.
• Improves product quality through early detection of potential issues.
• Strengthens collaboration and coordination among departments.
• In Short:
• Concurrent Engineering = Designing and planning together from the start to
build better ships faster and smarter.
Modern Shipyard Management
Approaches
• 2. Lean Manufacturing
• Lean Manufacturing emphasizes reducing waste, optimizing
workflows, and promoting continuous improvement.
• The main objective is to achieve greater efficiency with fewer
resources—by streamlining operations, minimizing excess inventory,
and enhancing overall production performance.
• Lean Manufacturing is a management approach that focuses on
doing more with less —less time, less waste, less cost — while
keeping high quality and smooth production flow.
• The goal is to make work efficient by removing everything that
doesn’t add value to the final product.
2. Lean Manufacturing
• Core Idea: Every step in production should either:
• Add value for the customer,
• Or it’s considered waste (and should be reduced or removed).
Types of Waste in Lean (The 7 Wastes):
• Overproduction – making more than needed.
• Waiting – workers or machines standing idle.
• Transport – unnecessary movement of materials.
• Extra Processing – doing more work than necessary.
• Inventory – storing too many materials or products.
• Motion – wasted movement by workers or equipment.
• Defects – mistakes that require rework or cause scrap.
2. Lean Manufacturing
• In shipbuilding, Lean Manufacturing means:
• Planning material delivery just in time to avoid clutter.
• Designing production lines for smooth workflow between sections (hull,
outfitting, painting).
• Using visual management (charts, boards, color codes) to track progress.
• Encouraging workers to suggest improvements — continuous improvement is
key!
Benefits:
• Reduces waste and production costs.
• Improves efficiency and product quality.
• Speeds up delivery time.
• Builds a culture of teamwork and continuous improvement.
• Reduces waste and eliminates non–value-added activities.
• Enhances overall efficiency and product quality.
In Short:
• Lean Manufacturing = “Work smarter, not harder.”
It’s about making shipbuilding faster, cheaper, and
better — by removing waste and focusing only on what
adds value.
