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A Diet for Europe’s Shipyards


Amongst stiff international competition, European shipmakers are focusing increasingly on consistent cost awareness and improved working processes. External consultants such as Hamburg company Lean Maritime help you carry over and adapt lean solutions from other industry branches.

A low-cost carrier is soon going to commence service between Hamburg and Marseille, and for Jacques Hardelay and Theo Herzog that is welcome news. Hardelay, manager of the Chantier Naval de Marseille ship repair yard, and Herzog, Managing Director of Hamburg-based consultancy Lean Maritime, regularly commute between the two port cities. Together the two want to reshape structures at the Mediterranean shipyard into something slimmer. So it’s convenient that the bosses can now fly cheaply too.

Hardelay and Herzog have known each other a while, having first worked together in 2010. The Frenchman was then CEO of STX France in Saint-Nazaire, a large shipyard principally known for constructing new cruise ships. It dawned on the management at the time that competitors were beginning to improve in terms of price and quality. ‘To tell the truth we had considered ourselves number one up till then and were a little bit arrogant – after all, we had built Queen Mary 2’, Hardelay reflects.

Help came from outside
Reducing costs was already a topic at the Loire estuary, though nobody really knew what lean production in shipyards could look like. ‘The results of our own efforts fell far short of our expectations’, Hardelay recalls. Help had to be sourced from elsewhere, in this instance from Hamburg, in the form of Theo Herzog and the company Lean Maritime, who specialise in bringing over experience from the automotive and construction industries to the maritime sector.

‘The consultants promised us that cost savings of up to 30% were possible in some areas. We thought that was impossible’, the former shipyard manager recalls in a conversation in Hamburg. Lean Maritime meticulously screened all production steps. When Herzog and his team presented the first results to the top management after a few weeks, the managers were shocked. ‘It seemed inconceivable how much money we were clearly throwing out of the window’, Hardelay says today.

Implementing the steps suggested by Lean Maritime reaped quick rewards. After six months, costs in some areas had already sunk by 20 per cent. After only a year, the targets originally planned for 2015 had been reached. ‘Above all, the efficient use of machines and better work organisation were extremely effective measures’, Herzog explains. Just by reducing steel waste, the shipyard saved five million euros per year.

In addition to developing and implementing efficient production methods, guiding the change process is also part of Lean Maritime’s core business. The cultural change needed is often the greatest challenge for a business, according to Herzog. He says: ‘It’s not really that difficult to find solutions. However, motivating people for them is often more difficult.’ The top management plays a key role in this: ‘If they are not 100% behind the change process, then the change must start there first.’

Though it was also a matter of getting the workforce in Saint-Nazaire on board. The mistrust that external consultants from outside the industry encounter also came along with a widespread ‘that won’t work’ feeling and fears of job losses, a worry that shipyard manager Hardelay could completely understand, as ‘lean production usually also means less people’. Nevertheless, STX France during his time managed to get by without redundancies, since the improved productivity soon translated into additional orders.

Hardelay and his consultants in Hamburg agree that lean production in ship construction is still overall in its infancy. ‘We definitely can’t yet describe ship construction as lean and that is particularly the case when constructing large ships’, the Frenchman says. Herzog is convinced that ‘ship construction is still to undergo leaps in productivity that the automotive industry went through 30 years ago.’

Redefined business model
In Hardelay’s new domain in Marseille, his main occupation is currently also streamlining, though principally in the complete redefinition of business models. Chantier Naval de Marseille is a repair and refit business. Unlike with the construction of a new ship, the shipowner in such shipyards has so far completed up to 95 per cent of work themselves in extreme cases, for example sourcing material and putting together their own project management. ‘Usually the shipyard only makes the dock available’, the CNM president explains, making doubtlessly clear that this business model will soon become irrelevant. ‘There are dry docks the entire world over, and they are often cheaper elsewhere than they are here. In that case, the ship owner may as well go to China’, Hardelay says.

Just like before in Saint-Nazaire, on the Atlantic coast, Lean Maritime is also guiding the restructuring in Mediterranean Marseille. ‘Here we are working on the dry dock of the future. We want to establish a new kind of work and distribution of responsibilities in Marseille. The shipyard’s service offerings will gain much more importance than they have before’, Herzog explains.

There’s a lot to do in Marseille. Shipyard manager Hardelay concedes frankly that ‘currently we are really only competitive because we at least deliver on time’. In the future, ships will not only be returned on time, but also in the most flawless condition possible. ‘It’s a long road, but we have definitely made a start’, the Frenchman emphasises.

Provider of innovative solutions
Hardelay considers the future of his shipyard in being a provider of innovative technical solutions, for example in the promising area of exhaust gas control. For the latter, CNM has already begun cooperating with a special provider and a technical firm. ‘As a result we are now in a position to offer and install for ship-owners a complete exhaust gas washing system. They can’t do that themselves and also can’t get that done in China’, the shipyard manager believes.

This is how CNM believes it will gain a strong stake in the booming cruise industry, with the help of the Hamburg company. At some point the many newly constructed ships have to come back to dry dock for repair. Marseille has a major cruise ship harbour with outstanding infrastructure, which could be a noticeable locational advantage, and the new philosophy from CNM appears to be well-received by customers. ‘When we recently presented our concept and improvement programme to a few ship-owners in Miami, everyone was very keen’, Herzog recounts.

In the fight for the best slices of the cruise ship cake, the Frenchman is not only focusing on lean structures – size also matters. Thus the new Dry Dock 10 will be coming into operation in September. With a length of 465 metres and a width of 85 metres, it could also play host to the gigantic floating hotels that at the moment are being launched worldwide. ‘It is the largest, yet at the same time leanest, dry dock of its kind’, Hardelay says, not without pride.

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