OPTIMIZING THE INTEGRATION OF SHIP DESIGN WITH CONSTRUCTION: A LINEAR PROGRAMMING APPROACH
Howard Moyst
Submitted in partial f i l f h e n t of the requirements for the degree of
MASTER OF APPLIED SCIENCE
Major Subject: Indushial Engineering
DALHOUSIE UNIVERSITY
Halifax, Nova Scotia -
Q Copyright by Howard Moyst
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DEDICATION
1 would like to dedicate this thesis to the memory of my parents, Howard and Marina,
who taught me the importance of education and learning. I would like to honor Titus
Noble, my Grandfather, who sparked my interest in ships.
DISCLAIMER
The author has used a case study to formulate estimates. As such, the numbers within the
thesis do not necessarily reflect the actual results of the case study. This approach has
been taken in order to maintain as confidential the participating company overhead and
labor hour costs. Because of the nature of the case study, the statistical results have been
based on a small sample size. Therefore, caution should be taken in extrapolating these
results to other shipbuilding programs. The author and the University both disclairn any
responsibility for discrepancies that may occur between the data reported in this thesis
and data found in company or governrnent records.
TABLE OF CONTENTS
........................................................................ LIST OF TABLES
LIST OF FIGURES .......................................................................
LIST OF ABBREVIATIONS AND SYMBOLS ....................................
ACKNO WLEDGEMENTS ..............................................................
............................................................................... ABSTRACT
CHAPTER 1 . INTRODUCTION ...................................................... 1.1 Statement of the Problem ...............................................
..................................................... 1.2 Research Objectives ...................................................................... 1.3 Scope
1.4 Methodology .............................................................
CHAPTER 2 . LITERATURE REVIEW .............................................. 2.1 Ship Design and Construction Process ............................... 2.2 FactorsAffectingDesign .............................................. 2.3 Integration Issues ........................................................ 2.4 Linear Programming and Optimization .............................. 2.5 SummaryofFindings ...................................................
CHAPTER 3 . A SHIPBUILDNG CASE STUDY ................................. 3.1 Ovemiew .................................................................. 3.2 Change in Design Scope ................................................
.................................... 3.3 Impact of Design on Construction 3.4 Discussion of Findings ................................................. 3.5 Summary of Case Study Findings ....................................
CHAPTER 4 . LINEAR PROGRAMMING MODEL FORMULATION AND ANALY SIS ............................................................
4.1 Overview and Objectives ............................................... ............................................... 4.2 Formulation of LP Mode1
4.3 Linear Program Solution & Analysis ................................. 4.4 The Impact of Resolving Design Changes on Construction .......
Page
viii
X
xii
xiv
TABLE OF CONTENTS Page
CHAPTER 5 . SUMMARY. CONCLUSIONS AND FUTURE RESEARCH .. 5.1 S u ~ i i m a r y .................................................................
.............................................................. 5.2 Conclusions ................................................. 5.3 Research Implications
......................................................... 5.4 Future Research
REFERENCES ............................................................................
APPENDIX A . CASE STUDY ANALYSIS SAMPLE PRJNTOUTS ...........
APPENDIX B . WINQSB LP PRINTOUTS .........................................
.......................................... APPENDIX C . CASE STUDY EXHIBITS
LIST OF TABLES
Page
Table 3.0 Table 3.1
Table 3.2
Table 3.3
Table 3.4 Table 3.5
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8
Table 4.9
Table Al Table A2 Table A3 Table A4 Table AS Table A6
Table A7
Estimated Number of Drawings Produced by Design.. . . . . . . . . . . . . . 37 Planned Duration Statistics of StnichiraVOutfit Drawing.. . . . . . . . .. 37 Activities Actual Duration Statistics of SmicturaVOutfit Drawing.. . . . . . . . . . . 38 Activities Estimated Construction Duration for the First Four Ships.. . . . . . . . 42 Based on Schedule Revisions Block 3 Schedule Achievement Statistics.. . . . . . . . . . . . . . . . . . . . . . . . . . .. 46 Summary of Linear Regression Relationships Devised.. . . . . . . . . . . . 54 To Explore Ship Construction Schedule Start Decisions Case Study Production Budget and Contract Schedule.. . . . . . . . . . . .. 67 Comibnents Scenario A: Comparison of LP Mode1 Results with Case Study.. . 75 Design and Construction Budget Direct Hours Scenario B: Cornparison of LP Model Result Minimizing Actual.. $79 Labor Hours versus the Case Study Result Scenario C: Comparison of LP Model to Minimize Total Hours.. . 82 witb Ship 1 EFT S 43 to Actual Case Study Results Scenario C: Cornparison of LP Model Minimize to Total Hours.. . 83 Relaxing S hip 1 EFT Constraint S 50 Months to Actual Case Study Results Scenario D: Comparison of LP Model Result with Case Study . . . . . 86 Budget Results (Ship 1 EFT S C 4 3 ) Scenario D: Cornparison of LP Model to Minimize Total . . . . . . . . . . 89 Duration (Ship 1 EFT S 43) to the Case Study Results Scenario D: Comparison of LP Model to Minimize Total .. . . . . . . . . 90 Dwation (Ship 1 EFT I 50) to the Case Study Impact of the Slope Coefficient of the Design Rework Function.. . 93 On Total Hours and Duration Sample of Ship 1 and 4 Construction Data. .... . ...... ... ... ... ... ... 109 Ship 1 Frequency Table for the Difference in Start Times.. . . . . . . . 11 1 S hip 4 Frequency Table for the Di fference in Finish Times. . . . . . . 1 1 3 Ship 1 Frequency Table for the Difference in Start Times.. . . . . . . . 1 15 Ship 4 Frequency Table for the Difference Hi Finish Times.. . . . . . 1 17 Ship 1 : Table of Means and Means Plot of the Difference . . . . . . .. 1 19 in Direct Labor Hours by Stage of Construction. Ship 4: Table of Means and Means Plot of the.. . . . . . . . . . . . . . . . . . . . . 121 Difference in Direct Labor Hours by Stage of Construction
LIST OF TABLES (Cont.)
Page
Table A8
Table A9 Table A 10
Table A 1 l Table A 12
Table B 1
Table B2
Table B3
Table B4
Table B5
Table B6
Table B7
Table B8
Table B9
Table B 10
Table B 1 1
Table B12
Table B 1 3
Data Table used to Formulate Construction Mathematical. . . . . . . . . . Functions Linear Regression Results to Formulate the LP Model. .. .. . ... ...... Sample of "Statgraphics Plus" Linear Regression Analysis.. . . . . . . . Printout Actual Direct Labor Hours and Lag Design Data Table.. . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . ... Sample of "Stagraphics Plus" Linear Regression Analysis.. . . . . . . . Printout -Design ACWP and Lag Scenario A: In-feasibility Analysis for Model for Original Plan.. . and Budget Scenario A: Combined Report for Model for Original Plan and.. . Budget to Minimize Total Hours & Ship 1 EFT S 43 Scenario B: Combined Report for LP Model with Rework.. . . . . . .. Included to Minimize Total Hours Br Ship 1 EFT S 43 Scenario C: Combined Report for LP Model with Overhead.. . . . . . Ship 1 EFT 6 43 to Minimize Total Hours Scenario C: Combined Report for LP Model with Overhead.. . . . . . Ship 1 EFT I 50 to Minirnize Total Hours Scenario D: Combined Report for Model for Original Plan.. . . . . . .. and Budget to Minimize Total Duration Br Ship 1 EFT S 43 (Scenario A) Scenario D: Minimize Duration: Combined Report for LP Model . . with Overhead (Scenario C) Ship 1 EFT S 43 Alternative 1 & 2 Scenario D: Minimize Duration: Combined Report for Model.. . . . . with Overhead Model Ship 1 EFT S 50 Alternative 1 & 2 (Scenario C) Scenario E: Cornbined Report for Sensitivity to Change in.. . . . . . . . Slope (+ 10Y0) to Minimize Total Hours Scenario E: Combined Report for Sensitivity to Change in.. . . . . . . . Slope (- 1 0%) to Minimize Total Hours Scenario E: Minimize Duration: Combined Report for Slope.. . . . . Sensitivity (m=+ 10%)-Alternative 1 & 2 Scenario E : Minirnize Duration: Combined Report for S lope. . . . . . Sensitivity (m'-IO%) Alternative 1 & 2 Scenario C: Minimize Duration: Base Model to Assess.. . . . . . . . . . . Sensitivity to Change in Rework Slope Alternative 1 & 2
LIST OF FIGURES
Page
Figure 2.0 Figure 2.1 Figure 3 . 0
Figure 3.1 Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 3.6 Figure 3.7
Figure 3.8
Figure 3.9
Figure 4.1 Figure 4.2 Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 4.7
Figure 4.8
Figure 4.9
Design Drawing and Deliverable Review Process .................. Design Phase Review Process .......................................... Improvement Curve Comparing Ship Constmction Direct ......... Labor Hours Estimated Recorded Extra Work by Year ............................. Frequency Distribution of Drawing Revision ........................ Level for a Sample of DSIL Drawings Cumulative Number of Drawing Revisions for Pipe & ............. Electrical Draw ings Structural Steel Budget Deviations in Budgeted Direct Labor ..... Hour by Stage of Construction Deviations in Direct Labor Hours by Outfit Stages of ............. Construction Nurnber of Drawing Revisions Remaining versus Lag ............. Scatter Plot of Construction Actual Direct Labor Hours versus ... Nurnber of Drawing Revisions Remaining Scatter Plot of Construction Duration vs . Number of Drawing .... Revisions Scatter Plot of Rework versus Drawing Revisions .................. Remain ing Design Construction Overlap Defrnition .............................. Defmition of Construction Overhead Time Period .................. Scenario A: Cornparison of Original Plan to LP Mode1 ............ to Minirnize Total Budget Hours Scenario B: Cornparison of LP Model Results to Case Study ...... Actual Results with Ship 1 S 43 Months Scenario C: Cornparison LP Mode1 vs . Actual Case Study ......... ResuitsWith Ship 1 EFT S 43 Months Scenario C: LP Mode1 (Ship 1 EFT S 50) Compared to ............ Actual Case Study Results Scenario Dl : Cornparison of LP Mode1 Results to Minimize ...... Total Duration vs . Case Study Original Schedule & Budget
.... Scenario D2: Comparison of LP Model (Ahernative 1 Shown) to Minirnize Total Duration to Case Study Results with Ship 1 EFT <=43 Cornparison of Minimizing Total Duration with Case Study ....... Results (Alternative 2:Ship 1 EFT <=50)
LIST OF FIGURES Koat.)
............ Figure 4.10 LP Model to Minimize Hours to Assess the Change in Design Rework Function Slope
Figure 4.1 1 LP Mode1 to MinimW Total Duration to Assess the Change ..... in Design Rework Function Slope
Figure C 1 List of the Stages of Construction Used by the Shipbuilding ..... Case Study
Figure CS Product Work Breakdown Structure ................................. Figure C3 MCDV Contract Sumrnary Master Schedule ....................... Figure C4 Sarnple of the Drawing Schedule Issue List (DSIL) ............... Figure CS A Simplified Ship Design and Construction Flowchart ........... Figure C6 Terminology ............................................................
Page
LIST OF ABRREVLATIONS & SYMBOLS
ACWP ActdirectHrs Adur Afmish Astart Br B C W Budhrs Cd C AD/C AM c c ,
Cd0 Cl CI1 CSCS DiffDuration
Diff Start
Diff Finish
Di fference Direct Labor Hours DSIL ECO EFT FI) EST (Si) HVAC LP MRI
Pdur Pfmish Pstart PMI PWBS Rr Ri
S 1
S d Stage Td
Actual cost of work performed. Actual construction direct labor hour cost (AC WP). The actual duration of the stage of construction. The actual fmish time. The actual start tirne. Construction budgeted direct hour function Budgeted cost of work perfomed Budgeted direct labor hours The total achüil incurred design direct hours. Cornputer aided desigdComputer-aided manufacturing Construction overhead translated into equivalent hours. Design overhead translated into equivalent hours. The total actual i n c m d direct hours for Ship 1, for 1 = 1 to 4. The Construction Industry Institute (United States) Cost schedule control system The difference between the planned duration and the actual duration. The difference in days between the planned start and the actual m. The difference in days between the planned fmish time and the actual fmish time.
The difference between the BC WP and the AC WP. Drawing schedule issue list. Engineering change order. Early fmish time. Early start t h e . Heating ventilation and air conditioning. Linear programming. The material rework for each ship for 1 = 1 to 4, in equivalent hours. The planned duration of the stage of construction. The planned fmish time. The planned start tirne. Project Management Institute Product work breakdown structure The number of remaining revisions. Rework (Construction rework due to design) for Ship 1 =1 to 4. The earliest construction start tirne for each Ship 1, for 1 =1 to 4 The start time for design, which is tirne zero. The stage of construction. Design duration (months).
TI Construction duration for each Ship 1, for 1 = 1 to 4 (months). Tduration or T, Ship design/construction cycle duration. W Q S B Windows based software package entitled "Quantitative Systems
for Business". WSIL Workstation drawing schedule issue k t .
xiii
ACKNOWLEDGMENTS
1 would like to thank the guiding cornmittee, Dr. Biman Das, Dr. Eldon GUM and Dr.
Charles Hsiung, for their valuable input and time in reviewing this work. Special thanks
are in order for Dr. Biman Das who kept me focussed over the course of my part tirne
studies. He was a major influence in my decision to pursue postgraduate studies in
Industial Engineering. 1 would like to thank Dr. Pemberton Cyrus for providing his time
and interest in discussing the research and providing suggestions. To al1 of the Industrial
Engineering department staff, ththank you for your encouragement during my studies.
1 would like to take this opportunity to thank Dr. Charles Hsiung for introducing me to
the field of Shipbuilding. Dr. Hsiung in conjunction with Dr. Dereck Muggeridge
motivated me to continue my professional studies.
1 sincerely appreciate Halifax Shipyard Limited for participating in the University - Industry Research Program and their cooperation and openness in providing the
background on the Case Study. Specifically, 1 would like to acknowledge the staff who
provided their tirne and fi111 cooperation in assisting me to coltect the data. 1 would like to
thank Mr. Robert Shepherd and his father, Mr. John Shepherd for their cornmitment and
support regarding my postgraduate studies and this research.
I would like to thank my wife, Rosalind, for her encouragement and patience throughout
my studies.
xiv
ABSTRACT
The objectives of this study were to: 1) investigate the impact of ship design on construction through a case study involving four ships, and 2) explore the optimum overlap of design with construction with respect to I ah r hours and duration using Iinear programming techniques. A linear programming model was formulated based on a case study where statistical relationships were developed between lag and design and construction labor hours, rework, and construction duration. The purposes of the Iinear programming model were to: 1) assess the feasibility of the original case study budget and schedule, 2.) explore the impact of design rework and design and construction overhead on labor hours, construction start times and the design construction cycle duration, and 3) assess the impact of the rate of resolution of design changes on labor hours and duration.
The case study correlated drawing changes with ship construction labor hours and duration and it demonstrated that a change in design scope had a negative effect on ship construction. The case study investigation found that there is considerable f~nancial benefit to be gained by ship design and construction companies to reduce rework due to design. The design rework increased design and construction labor cos& by 3296, which is between $7M to $12M based on four ships. The LP model verified that the original case was infeasible with respect to budget and committed fmish tirne. The mode1 projected o v e m s in design and construction labor budgets. Extending the analysis to consider design rework and ushg the objective to minimize design and construction labor hours, it fond that ships two, three and four could have had their start times delayed by approxirnately two, six and seven months respectively. This reduction in the overlap of design with consûuction could have reduced construction labor hours by 8.4%.
The LP model scenario of minimizing duration and including design and construction overhead closely approximated the actual case study results. When minimizing duration, the model projects a minimum design/construction cycle duration of 54.35 months, which is 3.65 months less than the original contract schedule. When minimizing total hours, the model projects little difference in total hours with the case study result, but projects significant improvements in individual ship construction labor hours. The model found that by accelerating the resolution of design changes one could reduce construction rework and duration. By delaying the start of construction of the ships, more tirne would be available to resolve design problems that cause rework. It is believed that design work can be facilitated through improved communication among design, construction, suppliers, the regulatory authority and the customer. Future research is needed to investigate causes of design rework, the drawing/design process, and planning and SC heduling systems. This would facilitate the integration of design and construction phases.
CHAPTER 1 - INTRODUCTION
A ship construction program can cost anywhere fiom ten million to over four billion
dollars. In 1996, it was reported that the value of American shipbuilding contracts, those
under construction and those pending were U.S. $20,237 million and U.S. $7,225 million,
respectively (Marine Log 1996). In 1999 it was foreseeable that active ship construction
programs in Eastern Canada were coming to an end with the possibility of shipyards
closing. In order to attract new work shipyards would have to improve their
competitiveness. In fact, Bennett and Lamb (1996) identified the need to reduce
shipbuilding costs and the design and build cycle by 30% to 50%.
Shipbuilding in Canada, specifically governent programs, has had problems in the
transition fiom design to construction. Based on first hand experience gained on the last
two Canadian naval ship new construction programs, the author witnessed the many
problems encountered by design and construction due to design changes. Labor hour
ovemns and schedule slippages due to design changes were one. This has k e n
fhstrating for managing shipyard operations even with the application of project
management practices and techniques within ship construction. This has raised the
question: what can be done to improve this situation? With friture orders king of limited
quantity, the ability to start-up a build program and go through the transition fiom design
to construction efficiently is paramount. The decision of when to start construction
relative to design progress is a fundamental management scheduling decision.
Complicating this issue is that shipyards tend to start subsequent ships before the fmt
ship is completed. Therefore, the requirement is to execute the learning process very
quickiy to beneft subsequent ships.
Contributhg to this problem is the impact of design evolution on construction cost and
duration, which has resulted in shipyard management's questioning the logic of going
through the whole design process. To build to order, one must purchase or develop a
design. Purchashg a design means buying a drawing package to fabricate and consmict a
ship, supposedly already proven and accepted by a regulatory authority. The level of
design detail purchased will determine the extent of design activities a shipyard will
undertake. The level of detail denoted within the design package c m Vary fkom a basic
preliminary design or a package comprishg detail design and procurement specifications
orientated to specific suppliers. There are advantages and disadvantages in buying or
developing the design oneself. Even with purchasing a design, a shipyard is still
committed to al1 or some part of the detail design process, which consumes the majority
of the design hours.
Design, in fàct, has corne under considerable f i e as a reason why ship construction
productivity suffers (Frankel 1996). There is also debate on how much t h e should be
spent in detail design and planning before construction commences. Design offices have
argued that insufficient time is often allocated to design for the level of detail and service
expected fiom constniction. Shipyard management has argued that design will take as
much time as you give them. 1 have personally witnessed the frustration management has
experienced dealing with the uncertainty design changes have created in the pursuit of
budget and schedule goals seemingly attainable under normal circurnstances.
Lack of timely supply of vendor information to perform drawing activities has been
clairned as a major cause of engineering design coa overruns and delays. The clairn is
that it causes drawing omissions and errors creating design rework because of releasing
preliminary information. Another claim is that preliminary information is p r because
designers know they will have to rework the drawings, therefore little effort is expended
on the first iteration. Construction personnel claim that poor design data and the tardiness
of drawings cause the majority of their rework and schedule slippage.
Within steel, outfit, and assembly shops and at the slipway and wharf sites, it is necessary
to coordinate and balance the flow of work to maximize facilities and resources to
complete the work at the most opportune tirne. Changes and delays cause disruptions in
the flow and can move work fiom more opportune construction stages to later stages
thereby increasing duration and cost. Traditionally there is a desire to accelerate
construction as quickly as possible to commence steel and outfit fabrication, with the
intent to reduce the overall duration of the shipbuilding program. The transition phase
when design is rolling out drawings for construction is a critical time for ship
construction because of rework caused by design and the challenges it imposes on
subsequent ships to achieve the ofien tough schedule cornrnitments and budgeted labor
direct hours.
As a project management process consisting of design, procurement and construction,
shipbuilding has k e n cornmonl y approached as a project-scheduling problem because of
the non-repetitiveness of the work, the tirne hune, and the magnitude off the costs. Gantt
charts have been the most cornmon applied technique to coordinate shipbuilding
construction activities. Shipyards have for many years applied scheduling techniques to
construction activities. Based on this schedule methodology, material lists were
developed to note when equipmcnt and drawings were required to support construction.
Product work breakdown structure and group technologies are widely applied in today's
manufacturing practices (Chirillo 1983). Sorne Eastern Canadian shipyards have
upgraded facilities to capitalize on these technologies and to perform outfitting under
controlled environmental conditions within a subassembly and assernbly shop. However,
design changes still force slippage of work ont0 later stages of construction, such as
during onboard the ship and overboard at the wharf (overboard outfïtting stages). These
changes prevent the shipyard nom capitalking on facilities that allow the construction of
the ship under controlled environmental conditions and that have easy access to
construction services.
Design information is used by procurement, manufacturing, operation and maintenance,
and marketing. To support these business functions, design has to produce timely and
accurate information. For example with the procurement function, equipment and
material purchase requisitions are produced for purchashg to solicit quotations. These
requisitions eventually evolve Uito purchase contracts. Manufacturing needs are
comprised of preliminary data to start the construction and process planning huictions
and eventually accurate and clear construction drawings and sketches to fabricate.
assemble, and test the interim and final products. Critical to the design process is the
coordination of design data fiom supplies, feedback nom the customer and other design
disciplines, the communication of construction details and build strategy, and receiving
feedback fiom regulatory reviews. The material flow within design is data and
information.
A typical design schedule is known in the shipbuilding industry as a drawing schedule
and issue list. The drawing schedule issue list dates are based on customer requuements
and the construction schedule. It is the foundation for the cost schedule control system,
where each deliverable has budget hours with start and completion dates. The budgeted
cost of work scheduled, the budgeted cost of work performed, and the actual costs of
work performed are monitored and perforxnance evaluated. Also, progress curves on the
number of deliverables schedule to be issued versus the actual number issued are
analyzed. Although these measures have been implemented, the cost and duration of
design has still exceeded budget and tirne commitments. This begs the question: does an
adequate planning and scheduling system exist for design, which will integrate and
coordinate design functions with the regulatory agency, the customer, procurement, and
construction?
The maturity of design and releasing incomplete design data impacts the design
deliverable accuracy and overall project costs and duration. To what extent has not been
quantified or analyzed within the shipbuilding industry. The challenge is further
complicated by a fm's inability to integrate supplier information and production
requirements into the design process and to initiate the procurement process early enough
to support design and construction. The ship design process is a complex operation due to
the number of deliverables, information requirements, the wide range of required
knowledge, the number of suppliers and people, changing technology and the shear
number of equipment and part interfaces. This complexity causes many design iterations
and prolongs the design duration and cost. Management has often raised the question of
when should design be considered complete? Many industries consider it complete when
the as-built drawing package has been completed representing the configured product.
Thereafier, multiple products can be produced with the same configuration and expected
performance expectations. Design duration is important for cost considerations and the
ability to bid on future work. It depends upon the vesse1 design maturity, whether or not it
is a new design, a redesign, or a modified design (Evbuomwan et al. 1996).
Frequently, shipbuilding drawings are released before they are completed. This is known
as a partial release of drawings to supply preliminary or partial information to the next
design phase or project stage to support original schedule cornmitment dates. Cost and
schedule risks are associated with this approach. It has been considered as compensation
to the real problems within the design process and it has raised the question as to what
degree should design overlap construction. The Construction Industry Institute views this
method as non-traditional drawing release and considers it as a method to procure and
expedite materials, to prevent the tendency for over design and detailing, and to scope the
project into relatively small packages to expedite the project phases (CI1 Publication 6-7
1988).
An important issue at contract award relative to the preliminary design and detail design
stages is the issue of procurement and what equipment and supplier list machinery
arrangements, system diagrams, specifications, and weight estirnates have been
developed around. Any major changes in equipment or system selection can have wide
influence on the design work scope in ternis of what aspects of the design spiral has to be
revisited. Therefore late procurement decisions can cause a disniption in progress. For
example, if a design has been predicated on a list of vendors during preliminaq and
contract design and each piece of equipment is subjected to a process of re-evaluation,
then there is a likelihood that changes will impact the detail design process. Contract
specifications may require updating and ofien an approval process with the owner will
occur, al1 adding to the duration of the design process.
This leads to questions as to how much tirne should be allocated for design and
construction. The minimization of duration or the cost of time can apply to design or to
construction or to the combination of both design and construction. Minimizing design
duration and cost can result in increased costs and duration for construction, likewise
minimizing construction duration and cost can increase design duration and cost. Even
though design typically is a small portion of the total coa (5 % to 9 %), it is desirable to
spend only what is necessary. Because the sequence and timing of design activities
directly affects construction activities, it is best to frnd out how to minimize the overall
duration and cost of both design and construction.
Due to the iack of consistent work within Canada, companies are unable to maintain a
consistent complement of technical staff. Engineers and drafting technicians flip flop
fiom project to project to secure work. The longer the project, the longer their contract of
employment, which may raise a conflict of interest question if contract employees initiate
additional design iterations and changes to prolong their work. Short sightedness by
companies and the employees could result Ui lost productivity oppominities and a
reduction in competitiveness. Many of these issues can affect the fust few ships of a
multi ship prognun, resulting in overruns in budgeted hours and schedule delays
depending on the number of ships constructed.
1.1 STATEMENT OF THE PROBLEM
Ship design and construction activities can occur in series or they can overlap and it has
become a common practice to overlap design with construction. To what degree they
should overlap does not appear to have been studied. The degree of overlap is dependent
on ship types, design maturity, build philosophy, customer requirements and mostly
practical experience. It was not obvious fiom the literature review that quantitative
techniques have been used to assess the impact of the overlap of design and construction
on the design build cycle duration or construction labor cost. Also, impacting this
decision is the nature and number of design changes generated over the course of design
and during construction stages.
The purpose of this research is to determine the optimum overlap of design with
construction and to explore the benefits of applying a linear programming technique to
provide insight into the problem. A linear programming model provides the ability to
explore the benefits of minimizing total labor hours or the design construction cycle
duration. In broad terms, the research will determine the early start times and duration for
the fust few ships most affected by design changes. The result of the investigation is the
formulation of an optirnization model based on linear prognunming techniques to assess
the overlap of design with construction. The research deals with scheduling decisions and
the scheduling process used to integrate design with construction. It is concemed with
how muc h concurrent y is appropnate during the period design overlaps construction,
which is characteristic of many design changes. With the thought that design changes are
inevitable, it is necessary to devise a methodology to detennine how much overlap there
should be between design and construction.
A diffculty with using linear programming techniques is estimating the scope and
generation rate of design changes over the course of a shipbuilding program. Past project
data can be used to estimate this relationship with ship construction direct labor hours and
duration, relative to design's early start tirne. Construction activities are usually very
well defmed because of the detailed product work breakdown structure and various stages
of construction implemented to coordinate work and materials. Design, on the other hand,
follows a phased approach, which involves each design phase completing with a forma1
design review corresponding to a specific milestone. Design documents are prepared and
distributed to the customer in advance for comment before each forma1 design review.
Design's work breakdown structure activities cease at the level of producing the design
drawing or study (drawing or report). Therefore there is no data on any sub-activities
required to produce the design drawing or engineering study. Schedule and labor hours
are compiled to the larger activity that may occur over many months and consist of
hundreds of hours. This has led to using linear prograrnming rather than network theory
to mode1 the overlap of design with construction. Also, because the period design
overiaps with construction has been observed as the period when construction labor costs
are exceeded and schedule slippage occun, it was decided to focus the LP formulation on
the design/construction cycle. Recentiy, local shipyards have undertaken small batch
shipbuilding programs, involving the design and construction of only two to four ships,
which further supports the need to research the design/constmction cycle period.
1.2 RESEARCH OBJECTIVES
The objective was to initiate research into design and construction processes used within
the Canadian shipbuilding industry. It was specifically orientated to the integration of
design with construction and the methods that cm be used to explore them. Part of this
study was the investigation of other industry experience and the impact of design changes
on construction. Enumerated are the objectives of this study :
1. Provide an ovewiew of the research conducted by other industries regarding design
and manufacturing integration and its relevancy to shipbuilding .
2. Provide the results of the research conducted on a shipbuilding case siudy with
regards to the impact of design changes on construction.
3. Formulate an optimization model based on linear programming methodology to
explore the overlap of design with construction and the impacts on the design
construction cycle duration and labor cost, in terms of hours.
1.3 SCOPE
To simpliQ the problem we have limited the research into investigating the period that
design overlaps constmction. Specifically, data fiom a recent case study was used to
develop a Iinear program optimization model. The case shidy provides a known design
and construction process as well as actual t h e and duration data. Investigation into the
overlap of specific design stages with constmction stages was not possible because of the
lack of detail in the design process and its planning and scheduling structure. The case
shidy treated design and each ship construction as individual but integrated projects of
the shipbuilding program. The study investigates the overlap of design with the
construction of four ships planned to occur concurrently, under an environment of
uncertainty, caused by design changes. We assume the creative phase of design was
completed and the concept design was available to develop M e r into basic and detail
design. Modem shipbuilding techniques were assurned practiced by the shipyard in terms
of steel construction and pre-outfit of ship blocks to capitalize on product by stage of
construction and accessibility of the work to maximize productivity .
The underlying daim of this study is that with better integration of design with
construction, shipbuilding cost and duration will reduce and shipbuilding will move
closer towards its full productive potential.
1.4 METHODOLOGY
The approach included reviewing current literature on the ship design and construction
process, design and construction integration issues, and methods used to integrate design
with construction. In general there was no published literature on design and construction
overlap. During a literature review update, it was noticed that more activity in analyzing
the overlap of design fhctions had k e n published. Therefore, the research proceeded
into cornpiling data fiom a recent shipbuilding case study to cornplement other industry
research for relevancy and similarity of issues between the industries.
Research into other industries provided insight on the design and manufacturing issues
experienced by other industries, which reaffms the importance of fust understanding the
issues (Wheelwright and Clark 1992). Due to the many issues and lack of specifc data to
model the design process, the research direction was orientated towards the availability of
the data. Therefore, the approach taken was fmt to use a case study to provide an outline
of the ship design and construction process used within Canada. Secondly, a literature
review was conducted to detemine the issues within design and its integration with other
professes, with the objective of exploring how ship design and construction cost and
duration can be reduced. Thirdly, to complement the literature review, a case study
analysis was used to quanti9 some of the issues and to assess the impact of design on
construction. Finally , linear programming was used to model the overlap of design with
construction. Various scenarios were modeled. Variations of the model were used to
explore the feasibility of the original case study budget and schedule and to investigate
the impact of compensating for rework into the case study budget and schedule.
Overhead was then included into the model by developing a function based on the
transformation of a fuiancial value per period to equivalent hours and a solution sought to
minimize total hours was compared to the actual case study results. The sarne model was
then solved to minimize total duration and compared to the case study. Finally the slope
of the rework fùnction, representing the rate of design change resolution, was varied +/-
10% and the LP model solved to minimize total labor h o u ~ and then the
designlfonstruction cycle duration to assess its impact on total hours and duration.
CHAPTER 2 - LITERATURE REVIEW
Published research on shipbuilding productivity in the United States identified various
reasons why American shipyards were not competitive. Some of these symptoms were
the lack of product design/prduction and process technology integration, lack of
effective design for producibility, inadequate design and product developrnent capacity.
inadequate design production integration and inadequate production planning (Frankel
1996). Research into Dutch Shipbuilding found that a cost effective production system,
production-friendly ship design, shorter lead-the and fuiancial engineering maintains the
competitive position of a shipyard and lowers hancing costs for the owner (Hengst and
Koppies 1996). Bennett and Lamb (1996) have observed that cost reductions and design
build cycle reductions in the order of 30 to 50% are necessary to be competitive in global
commercial shipbuilding market. This literature review involved current work within the
shipbuilding industry, the commercial new product industry. and land based construction
indusûy. This chapter provides an overview of the ship design and construction process,
a discussion on characteristics and factors impact ing design and integration issues of
rework, engineering changes and design and construction overlap.
2.1 THE SHIP DESIGN AND CONSTRUCTION PROCESS
The ship design process has k e n described, as an iterative process comprised of four
basic phases: mission analysis and concept design, preliminary design, contract design,
and detail design. Each phase îùrther defmes ship particulan and systems as described by
the design spirals for Naval Architecture (Taggart 1980) and Marine Engineering
(Harrington 197 1 ).
Basic design is comprised of concept and preliminary design, which is sometimes
referred to as design defmition. Completion of basic design is when the ship features
have been detennined with su ffïcient dependability to allow the orderly development of
contract plans and specifications (Taggart 1980). Between the two phases, the ship
performance and system requirements have been defrned and a shipyard can estimate
detail design and construction materials and person-hours. Conmct design is the phase
after preliminary design, which involves the preparation of detail specifications and plans
for the shipyard contract. Many important technical details are defmed through this
iteration around the design spiral. If there were any details left outstanding regarding hull
fom, structural details, weight and centers, powering, sea-keeping or maneuvering
characteristics or equipment selection, they would have ripple effects on the production
of detail drawings and design and construction cost and duration. Each design phase
produces specific information that fbrther defmes the ship characteristics. The earlier
phases are usually done in series. Preliminary and contract design usually overlaps and
contract design is cornplete at the tirne the contract is awarded to the shipyard. The
shipyard conducts detail design and commences construction. If the contract or
preliminary design requires an update then one will see an overlap of preliminary and
detail design with M e r overlap of detail design with construction. The eariy definition
of various deliverables and systems is necessary to avoid significant design rework.
Detail design is the phase where the development of the detail construction plans and
fabrication, assembly, and installation instructions are completed. Within the industry
there has been discussion on the nature and type of design deliverables to be prepared for
construction, which depends upon the Company producing the detail design drawings and
customer specifications for the drawings (Chirillo 1983). Preliminary and detail design
phases initiate the procurement cycle because they produce the purchase specifications
and recornrnend technically cornpliant suppliers. It produces the detail construction
drawings, customer drawings and reports, and the test and trial procedures used to build
and test and try the fmished product. The design documentation must also serve
regdatory requirements and it is used to operate and maintain the vesse1 over its life.
Design deliverables are usually produced by a design organization comprised of Hull,
Marine, and Electrical sections consisting of drafting technicians and engineers. These
deliverables would include design study reports, drawings and plans, sketches, purchase
requisitions and contract technical specifications, detail fabrication data (lofi packages)
for Numerical Control machines and detail construction draw ings.
Design is a process where design reports and drawings are produced for each design
phase of concept, preliminary, contract and detail design, which in tum are the design
inputs for the next phase. For example, concept design documents serve as the input to
prelirninary design and preliminary design data are inputs to contract and detail design.
The completion of each phase is a milestone. Preceding the completion of each phase, a
design review occurs and completes with a formal review as shown in Figure 2.0. The
formal review involves a forma1 presentation of each system design to the customer
representatives (Figure 2.1). Integral to this phase review process is a drawing review
process, which precedes the phase review (Figure 2.0,2.1).
Depending on the dollar amount, the awarding of specific purchase orders may require
review and approval by the customer. This process is very important in f m i n g up
preliminary information or in starting specific design tasks because of design's
dependency on vendor furnished information. The procurernent cycle depends on the
nature of the materials procured and can be broken d o m into a number of categories,
such as long lead items, intermediate lead items, buk purchases, and miscellaneous
purchases. Traditionally procurement has an additional responsibility to obtain and
supply information regarding design fiom the various vendors. They have an important
scheduling role in expediting information and materials fiom vendors. Design, dependant
on this information, develops the detail design drawings for part fabrication, minor
assembly, assembly, outfitting of ship systems by geographical area, and integration of
ship systems.
I in Wnrîrino navc I
Issue For Construction
Figure 2.0
Design Drawing and Deliverable Review Process
Construction predominantly consists of two materials flows. The first is structural steel
fabrication, assembly, inspection, and testing and the second is outfit material receipt and
staging, fabrication, assembly, installation, integration and testing (Appendix C - Figure
CS). The outfit flow is integrated with the structural steel flow to allow for good access
and to minimize work in the overhead position. This is augmented by the build strategy,
which defines the product work breakdown structure and the definition of stages of
construction for planners to allocate material and labor by stage of construction and to
capitalize on when ship units are assembled inverted. Structurally a ship is constructed by
breaking the ships into blocks, which are broken down into erection units comprised of
assembly units. Likewise, the assembly units are subdivided into subassembfies made up
of fabricated parts. The assembly units can be assembled in an upright or inverted
position to maximize the ease of assembly and the installation of equipment and other
system assemblies, such as pipe or equipment. The installation of pipe, equipment,
electrical cable, etc. into the structural units is commonly referred to as outtitting.
Pre-outfïtting and outfitting work in general could consumes a considerable amount of
the work scope, depending on the ship type, and as such is given specific attention
(Chirillo 1983). Coordination of outfit material, such as pipe, equipment and electrical
cable and fïttings is fed into the ship consîruction process at various stages. It is critical to
install components at the most cost effective construction stage to maximize pre-
outfitting.
Rcsolution of
deliverabla
Figure 2.1 - Design Phase Review Process
Three main outfit processes are on-unit outfitting, on-block outfitting, and on-board
outfitting (Chirillo 1983). On unit outfitting can occur when the ship unit is either
inverted or upright depending on the best orientation of the work to maximize
productivity and accessibility . Shipbuilding publications recommend organizing the
design information by ship zone (geographical location), problem area, and construction
stage. Integrated Hull Construction, Oubitting and Painting (IHOP), as it is known,
requires a transition process within design to go fiom system to ship zone. Chirïllo and
Okayama (1 983) advocate ceasing the costly process of producing system arrangement
drawings. They describe the design effort as consisting of four phases: basic design,
functional design, transition design and work instruction design. Basic design descnbes
the ship as a total system, which faes the ship's general configuration and performance,
and the deliverable end items are specifications and contract plans. The format and
content details of the deliverables depend on the owner. Functional design produces key
plans and a material list by system for each diagrammatic system drawing. The purpose
of these documents is to obtah regulatory and owner approval. Transition design
regroups information by systems and by zones for shipyard development of specific work
instructions. Work instruction design groups the design infornation by producf zonelarea
and construction stage. The end deliverables are called stage plans and include material
lists for each outf~tting work instruction.
This advance in ship design and construction has put added work on detail design and
planning and the decision making process. For example, shipyards use computer-aided
manufachiring in the cutting of the steel plate structure, such as decks, bulkheads, and the
like. It is desirable to cut al1 the penetrations and openings in decks, build up beams and
bulkhead structures on a CNC plasma arc burning machine. This will minimize manual
lofting and cutting at later stages of construction. The achievement of this objective on
the fmt ship of a series depends on when information details are available fiom other
design disciplines for incorporation into the steel-lofting package. The design maturity of
system diagrams or arrangements, such as pipe and electrical systems, has to progress
faster and be accurate in order to utilize this technology. If not, rework may result fiom
inserting wrong penetration locations and cutting new ones. This is a typical dilemma
facing detail design and management of the schedule release of drawings. A fimdarnental
question is how can design maturity be accelerated to support systems outfitting? How do
we integrate design, production engineering and planning, construction and customer
requirements to achieve their individual project objectives and deliverables? There is a
need to answer these questions to improve productivity.
A ship is constructed in stages to coordinate the workfiow and resources. The
construction stages allow the planning of the work to be completed at the most
opportunistic time to reduce cost and overall schedule. Combined with the ship's product
work breakdown structure, the work is defmed assigned and completed at specific
stages. Hypothetically, at the completion of a specific construction stage, the progress has
been scoped and quantified with a cost and duration. A typical set of construction stages
consists of fabrication, sub-assembly, assembly, pre-outfi, outfït, system integration, and
test and trials. Current shipbuilding practices organize the work by stage of construction,
which rneans capitalizing on pre-ouditting steel units in an upright or inverted position to
maximue the orientation of the work for productivity, balancing the work load,
maximizing under cover work, and coordinating the trades. The product work breakdown
structure (PWBS) is paramount to developing the construction schedule, which in tum is
the blueprint for other Company departments to follow.
2.2 FACTORS AFFECTING DESIGN
To supplement this literature review of a local shipyard design and construction process,
factors affecting design were snidied. Two main industries were studied and they were
the commercial new product industry and the land based construction hdustry. The
commercial new product industry provides an appreciation of design integration issues in
a very cornpetitive environment. The leading research in this industry cornes from the
automotive sector (Meyer and Utterback 1995, Nobeoka and Cusumano 1995,
Wheelright and Clark 1992). Research fiom the land based construction industry would
probably be more representative of the complexity encountered within the shipbuilding
industry because of the many systems comprising the product and the coordination of
vast amounts of information, matenal and resources (CI1 Publication 108 1995). These
industries provide insight on factors effecting design and issues dealing with design
integration with manufacturing or construction.
Commercial new product development appears to be the leading industry with literature
related to product development, design and its integration with manufacturing (Clark and
Fujimoto 1991, Loch and Terwiesch 1999, Wheelwright and Clark 1992). Likewise, the
Construction Industq lnstitute (CII) has researched land based development projects in
various areas such as quality, construction performance, schedule reduction and
compression, and impacts of design on construction (CI1 Bulletins 4 1-1 1995,6-10 1990,
6-7 1988, 8-2 1987, 8-1 1986). Concurrent Engineering is a popular subject and the
principles and process has claimed to provide considerable savings within the
commercial new product industry (Miller 1993, Poolton and Barclay 1996, Syan and
Menon 1994). The new product development process has been given wide publication
and attention to improve Company effectiveness, t h e to market and survival (Floyd et al.
1993, Rosneau 1990, Slade 1993, Smith and Reinerstsen 199 1).
A common issue found in various industries was that many design processes have k e n
found to be generic, with the many details undefmed (Wheelwright and Clark 1992).
Within the shipbuilding hdustry, there has been limited research on the design process
and its inteption with other processes (Bevins et al. 1992, Chappe11 1991, Chirillo 1983,
Bennett and Lamb 1985). Many organizations in North America use the phased design
process (Smith and Reinertsen 1991). Phase project planning uses phase reviews where
the next phase does not start until the previous phase review is completed successfully.
Phase reviews have k e n labeled as the "over the wall" engineering approach (Smith and
Reinertsen 1 99 1 )-
It is understandable that research has been conducted into the characteristics of design
and development because it cuts across many fùnctional departments, may last for
months, and may involve many resources (Clark and Fujimoto 199 1). Clark and Fujimoto
(1 99 1) have researched the new product development process in the automotive industry
and found that design has many characteristics. It works differently in different
companies because of the complexity of the product and difference between products. It
is compnsed of hundreds or thousands of decisions, many different people, competing
interests, and multiple objectives. It is a subjective process that must have an agreed to
process of evaluation. The owner, the designer, and contractor have different interests in
and uses fur cost-effective design and have varying roles of importance in each step of
the project execution. It is a subjective process, lirnited by the niles of mechanics and
physics, but oriented toward optimiziog certain features as detemined by a client or the
market. Its measurement of productivity and effectiveness is dificult and the reality is
that the real mesures of its efiectiveness are found in the manufacturing, construction,
start-up, and operational phases of a product and inevitably there will be design changes.
One of the conclusions of their work was that an organization has a whole set of choices
regarding the overall design and development process. Some of these choices were
activities and tasks sequencing, management of effort, what milestones to be established,
management interaction and how the probiems should be m e d and solved (Clark and
Fuj imoto 1 99 1 ).
Hobbs and Bouchard (1990) studied the detail-engineering phase and consider it to
consist of four sub phases centered on the production of four s e l of drawings. These sub
phases are the detailed scope statement, the drawings and specifications for the cal1 for
submissions, the construction drawings, and the drawings describing the facility as it was
built. They consider detail engineering as a phase that produces drawings and al1 the
previous produced drawings are used for the next sub-phase (Hobbs and Bouchard 1990).
Hubka and Eder (1987) found that design work methods, the structure of the process, the
technical means and knowledge empioyed, methds of representation, available technical
information and the quality of management affected the quality of design. They found
this was tnie in controlling the design process, the working conditions and the
environment for the designers. The quality of the product specification has a big
influence on the success of the system design effort. A cornmon fault with specifications
is the tendency to speciQ the technology rather than the fünctionality, which causes
design to slowiy acquire more features a process known as "creeping elegance" (Iiubka
and Eder 1987). Specification development and system design decisions are key points in
the process. Design decisions establish product cost and performance and the duration of
design and development. Smith and Reinertsen (1 991) offered various practices to reduce
duration, such as:
Effective use of modularity in design tends to shorten development cycles.
The degree of modularity is a key system design decision and increased rnodularity
enables sub dividing the design task, pennitting simultaneous work on different
subsystems and a shorter development process.
Rapid development processes are favored by having generous design margins in al1
subsystems.
Keep fhctionality in roughly the same module fiom one design to the next, and
minimize movement of fhctionality between modules.
Design interfaces so that they are simple, stable, robust, and standard.
Rapid product design and development is achieved by rnanaging the degree and
location of technical risk within a system.
The Construction Industry Institute (CU) in the United States has supported and
conducted joint research with industry in various topics such as concepts and methods of
schedule reduction, 3-D modeling as a tool and the evaluation of design effectiveness.
One such work involved identifjing input variables impacting design effectiveness (CI1
Publication 8-1 1986). Of the forty variables identifie4 ten were considered as having the
greatest impact. The top ten were scope defmition, owner profile and participation,
project objectives and priorities, pre-project planning, basic design data, designer
qualification and selection, project manager qualifications, construction input, type of
contract and equipment sources. The study presented a mode1 of the level of influence of
the design decisions relative to the phase of the project. The influence rapidly decreases
afler the basic engineering phase. It also concluded that how well the input variables were
managed and executed will detennine the overall effectiveness of design. Some of their
other findings were (CI1 Publication 8- 1 1986):
1. Each step in the design process must have clearly defmed objectives, adequate
resources to achieve the objectives and sufficient management to coordinate the
efforts of other resources to preclude repetition, duplication and rework.
Close coordination between the engineering disciplines is required to facilitate the
continuous interchange of information, minimize rework and ensure compliance with
the owner requirements.
Production engineering should not commence until the basic engineering/detail
planning phase documents have been carefully reviewed and approved for design.
The efficiency and accuracy of the engineering effort directly affects the procurement
func t ion.
To proceed with the detailed design the various engineering groups urgently need
complete and accurate vendor drawings and certifed data to be provided in a timely
manner.
Design expenditures must be carefully controlled and major project schedule and cost
engineering tools should be used throughout the project.
Change procedures should be designed to minimize the disruptive effects of changes
on company operations and maintain an accurate record of scope changes.
Designs input variables influence al1 projects whether designed by in-house or full-
service companies.
The owner, by fat, is the major contributor of design input variables.
10. Early design input variables affect many of the other input variables that corne later in
the project. This means that properly addressing certain input variables in the earliest
possible phases will have the widest possible influence on the outcome of design.
11. Each company can identify those input variables unique to their type of project,
organizational structure and management approach.
12. The most effective way to modi@ the effects of design input variables are to be aware
of them prior to heavy project involvement.
It does not appear that suficient up front product planning occurs and it has been
recommended that al1 cornpanies should implement a systematic planning process.
Tailoring the design process to the goals and capabilities of the individuals and the
enterprise is necessary. The design and development process must be systematically
dissected, disciplines integrated, and opportunities identified for Unprovernent relative to
the objectives of cost, t h e , and performance. Cost and tirne reduction opportunities exist
in the fkont end of the design and development process. Core techniques for saving
development time are providing more importance to the fiont end of a project, creating a
set of lhited product objectives, and shortening the decision-making loops through
staffmg and project structure (Smith and Reinertsen 1 99 1 ).
2.3 INTEGRATION ISSUES
Concurrent engineering design has been given wide acclaim as a management
rnethodology to integrate design with constniction, to shorten lead tirne, reduce cost and
provide higher quality (Bennett and Lamb 1996, Hodson 1992, Miller 1993). The
traditional "over the wall" engineering process is still the approach taken within product
design even with the reported benefits of concurrent engineering design. The claimed
benefits are a 30070% reduction in development tirne, 65-90% reduction in engineering
changes, 20-90% reduction in tirne to market, 200-600% irnprovement in quality, 20-
110Y0 hprovement in productivity, 540% improvement in sales and 20420%
improvement in return in assets (Bennett and Lamb 1996).
Concurrent engineering makes use of cross-functional teams and teamwork. Bennett and
Lamb (1996) found in Japanese shipbuilding companies that close cooperation between
departments did not require cross-fûnctional teams. Japanese duration and degree of
overlap between phases were presented in terms of months afker contract award. Of the
examples presented, construction overlapped the production drawings phase anywhere
fiom O to 4 months for various commercial ships with total design construction duration
ranging fiom 16 to 21 months (Bennett and Lamb 1996). The 1 s t Canadian naval
shipbuilding program had planned design overlapping construction for the full
construction period for the fmt two ships. In actual fact, design ended up overlapping the
construction of ship one only. The case study plan had ship one construction start 16
months after design start.
Overlapping two phases does not necessarily mean a Company is applying concurrent
engineering principles (Bennett and Lamb 1996, Miller 1993). Miller (1 993) has defmed
concurrent engineering design as a set of technical, business, manufacturing planning,
and design processes that are concurrently performed by elements of the manufacturing
organization prior to the cornmitment to actually produce something. It involves the
execution of four processes: (1) process management, (2) design, (3) manufacturability
and (4) automated infiastructure support. For more detailed research on the iterative
nature of development see Krishnan et al. (1997). Design iteration models have been
developed to build process models for planning and managing complex projects and
concurrent engineering (Krishnan et al. 1997, Smith and Eppinger 1997, and Loch and
Terwiesch 1998).
Research into the leaming c w e for ship construction (Argote, et al. 1990, Erichsen
1994,) found that interruptions in construction by accepting a different contract had a
detrimental effect and adding a ship to a small series had greater gain than adding a ship
to a large series (Erichsen 1994). Vesse1 design configuration changes, changes in
suppliers and building sirnilar vessels for different owners disturbed the effect of learning
(Erichsen 1994). Erichsen found that shipyards that built ships tiom scratch and started
building a new and previously unknown type reported that doubling the number of units
reduced the average cost to be between 81 - 83% of the fvst ship.
An analysis of the Liberty shipbuilding program during the Second World War, found
that shipyards that started later than others were more productive (Argotte et. al. 1990).
There was evidence that knowledge acquired through production depreciated rapidly, that
shipyards benefited fiom other yards, that leamhg is acquired through experience in
production, that labor turnover did not contribute significantly to explainhg changes to
productivity, and that leaming was embedded in various organizations. Whereas, research
with a specialty chemical producer found that cost reduction was a result of srnall
technical changes in production that were based on R&D and related activities, which
were achieved through process innovations (Sinclair et al. 2000). What lwked like
leaming from production was really shaped by process innovation and the incentives
underlying it.
Neibel (1992) and Hodson (1992) have theorized on what makes up productive and
unproductive work within the learning curve. Design enors and changes have been one of
them (CI1 Publication 6-1 0 1990). Rework has been attributed as the main reason why
ship schedule commitments and budgets are not achieved on the fmt ships of a series.
Cooper (1993) has studied the project rework cycle and figures project management
techniques such as the critical path method lack consideration of the need for reworking
incomplete tasks. He figures that undetected errors and rework cycles are unavoidable in
complex development projects and estimates that the design of large construction projects
has a range of one-half to two and one-half rework cycles. Cooper (1993) has modeled
the rework cycle with simulation and has developed a c w e of the typical quality
achieved in development projects versus the nurnber of rework cycles. These quality
levels are then used to provide better estirnates of the percent complete on projects. There
is a tendency to overestimate progress because of the lack of consideration for rework
and undiscovered rework.
The automotive industry has had similar problerns with engineering change orders
(ECOs). Research into the engineering change order process identified five key
contributors to long engineering change order lead times and these were: a complex
approval process, the snowballing of changes, scarce capacity and congestion, setups and
batching, and organizational issues (Tenviesch and Loch 1999). ECOs have been
estimated to consume one-third to one-half of engineering capacity (Soderberg 1989). It
has been estimated to account for over US$ 100 million in large development projects
(Tewiesch and Loch 1999). The research highlighted that:
1. Many ECOs are not necessary changes and can be avoided if the engineer spends
more time on the fmt release of the component.
Some ECOs look beneficial at fvst sight but in the end provide only minor cost
savings that do not justi@ the negative non-financial impacts on the process.
The negative impact of changes should be minimized, which is a function of the
change (Krishnan 1996). its timing (Loch and Terwiesch 1999), the number of
components (Smith and Eppinger 1997) and tools that are affected (Thornke 1996).
ECOs become more expensive and harder to include the later that they are
implemented. This rnakes it imperative to detect al1 the need for changes as early as
possible (Loch and Terwiesch 1999).
It is necessary to speed up the ECO process. The time it takes between the detection
of a need for a change and the time the ECO is fmally in place is disproportionate to
the amount of work it takes to perform the intermediate steps (Terwiesch and Loch
1999). Most of the non-value added tirne is waiting tirne.
Coordination arnong engineers is more dificult as multiple parties fiequently work
with the same data simultaneously (Terwiesch and Loch 1999).
Research has found that the ECO process can take anywhere fiom 2 months to one year
and the approval process anywhere from one to ten weeks. Loch and Terwiesch (1999)
M e r simulated the capacity and congestion effects on the ECO process and were able
to propose improvement strategies to reduce ECO lead times without adding extra
capacity. They found that by providing flexible capacity, merging tasks, and balancing
the workload, throughputs c m be reduced. Managing the batching of ECOs and reducing
setup times can impact throughput times. Pooling of resorirces, by engineers assuming
broader technical responsi bility , was found to have complicated tradeoffs. AIso,
providing incentives to engineers and making them accountable for their lead-the
estimates was necessary. Often engineers provide conservative estimates (Goldratt 1997).
Padding the estimates lengthens the throughput and creates procrastination until the latest
possible time for a task to be done. This has been claimed to be due to multi-tasking of
the resource.
The land based constmction industry quantified the impacts of change on construction
and found that construction productivity decreases with increases in construction change
(Salemo 1 995). Likewise, engineering productivity decreases with increases in
engineering change (Salemo 1995). Changes could hvolve the addition of work, deletion
of work, demolition and rework, specification change, or some combination, and it can
affect cost or schedule. Changes originate fiom many sources. such as: the owner,
owner's agent, design engineer, or contractor. Design personnel are the agents for
irnplementing most ownersriginated changes and are the originators of changes caused
by inadequate howledge of existing conditions at project sites, design errors, unforeseen
conditions, new regulatory requirements, or revised design parameters. Field originated
changes and supplier changes end up in design for evaluation and implementation.
Regardless of the source of the change, design is responsible for its assessrnent and
implementation. The three major causes of change orders (CI1 Publication 1 O8 1995) in
construction projects have been identified as design errors/omissions (65%), design
change (30%), and unforeseen conditions (5%). The timing of when changes occur and
are implemented is an important factor influencing cost and schedule. A simple change
early in design could be basically an administration bc t ion , while the sarne change
discovered during construction becomes a major disruption, delay, and cost to the
builder. It is obviously important that changes are managed on a design and construction
project and an expeditious process to minimize the negative effects and throughput is a
necessity .
2.4 LINEAR PROGRAlMMING AND OPTIMIZATION
Ship design and construction process follows a project management approach to achieve
the goals of minimizing cost and duration, while achieving the technical and quality
requirements. Some of the applications of industrial engineering in shipbuilding have
been in the determination of a ship's product work breakdown structure, the application
of group technology in construction, development of construction schedules and material
management systems. Cornmon tools such as Gantt charts, critical path method (CPM)
and program evaluation and review technique (PERT) have been used for analyzing,
planning and scheduling large-scale projects (Hax and Candea 1984). From the
perspective of network representation, there are no essential differences between critical
path method and program evaluation review technique (PERT). However, PERT regards
total project duration as a random variable and perforrn probabilistic calculations to
characterize it. CPM, on the other hand, is deterministic. Baker and Boyd (1982) and
Torone (1990) highiighted scheduling and resource issues impacting the integration of
project activities.
A main concem of the originators of the CPM was to reduce the total time of a project
and as such the idea was developed of allocating additional resources to shortened
activity duration, which has become known as the tirne-cost tradeoff problem (Hax and
Candea 1984). Typically, to perform resource analysis, two categones of cost are
involved activity direct costs and indirect costs. Direct costs usually comprised of
material, equipment and direct labor, while indirect costs nomally include overhead
costs, late completion penalties, early completion bonuses and so on. Obviously as a
project's duration increases so does the indirect cost. On the other hand, when one desires
shoxter project duration the direct costs will increase. Therefore, there is a tradeoff of
duration and indirect and direct costs. The t h e cost tradeoff objective is to fmd the
project schedule which minimizes the total costs, that is to shorten project duration up to
the point where the increase induced in direct costs is just balanced by the reduction in
indirect costs. The time cost tradeoff problem c m be modeled using linear prograrnrning.
In the past linear prograrnrning has not been used to optimize ship design and
construction phases.
Linear programming (LP) is a quantitative technique using mathematical modeling to
translate observed or desired phenomena into mathematical expressions. The benefits of
building a LP mode1 provides a greater understanding of the problem being modeled and
often reveals relationships, which were not readily apparent by people. It provides the
possibility to analyze a problem mathematically to help suggest courses which otherwise
be apparent and it allows one to experiment witb a model when it is often not possible or
desirable to experiment with the object/situation king rnodeled (Williams 1997). Linear
programming models seek to minimize or rnaximize some goal, such as maximizing
profit or minimizing cost or tirne. This objective maybe constrained by resourçes or other
factors. These constraints maybe a variable consfraint or a functional consiraint. The
process of building good mathematical models involves art and the steadily increasing
knowledge of the project under shidy. It consists of four main steps of problem soiving,
researching the problem, mathematical modeling, model solution and analysis and the
communication of the results. Linear program models are based on four assumptions that
the decision variables are continuous, the parameters are known with certainty, the
objective function and constraints exhibit constant returns to scale and there are no
interactions between the decision variables (Foulds 1981). Eficient solution techniques
are available to solve the problems and modem software packages provide useful output
that provides information on the sensitivity of the solution to changes in the objective
function coefficients or the right hand side of the hct ional constraint. The simplex
method is the most widely applied method for linear programming. It is an iterative
method of solving problems by moving between adjacent feasible solutions.
2.5 SUMMARY OF FINDINGS
Only recent publications in the commercial new product industry have questioned the
technical aspects of concurrency of design tasks by developing analytical models and
analyzing the degree of overlap of these tasks with design changes. This litetature
revealed the following:
1. The design process has not been subdivided into stages, as is the construction process.
The phase review process is a serial process widi a formai transmittal of design data
within design, to the shipyard and extemal to the customer and the regulatory
authority. Construction follows a concurrent process for the two main material flows,
structural steel and outfit. Associated with these material flows is an information
flow, which must suppon construction, originating f?om design and planning.
2. The integration of supplier information with design evolution is a very important
process determinhg system performance and drawing quality. Design initiates the
procurement process with the specieing of material and equipment. This results in a
flow of information to design and the shipyard and a flow of material to the shipyard.
The three processes determine the success of a project.
3. Inespective of the industry, time to market, design manufacturing cycle tirne, cost
and quality are concems of organizations. Improved methods to reduce lead-the by
pedorming processes concurrently and to improve coordination between product
design and other business processes have k e n identified. Concurrent engineering
design, although not a new idea, is considered to be a strategy that has been
recommended by various industries. Overlapping activities has become the nom, but
at what point in time do the costs outweigh the benefits in an environment where
design changes have been considered unavoidable?
4. Basic issues of understanding the design and development process and providing a
coherent architecture for its control have been identified as necessary (Wheelwright
and Clark 1992). Planning and scheduling decisions on how activities should be
sequenced, what milestones should be established, and how the process effort should
be led and interaction of fhctions coordinated have been raised.
5. Research Uito concurrent engineering design within the shipbuilding industry, has
identified the challenge to accelerate design maturity/evolution to tap into the
underutilized benefits of CADKAM and pre-outfit methodology (Bevins et. al.
1992)-
6. A cornmitment to cntical path methodology and network techniques has been
advocated to develop a process framework for concurrent engineering (Bevins et. al.
1992, Miller 1993).
7. It c m be concluded that design is a complex process needing M e r understanding to
fùlly integrate with other Company processes, such as construction or manufacturing.
This literature review concludes that there would be benefits in conducting research
on methods to:
1 ) Quanti f i and control the impact of design changes on ship construction.
2) Plan and schedule the integration of design with manufacturing.
3) Improve communication and organization structures to improve coordination
between design disciplines and construction.
4) Standardize preliminary and detail design drawings.
5) Evaluate the overlap of design stages within design and with construction.
8. Linear programming has been used in project management to mode1 the time cost
tradeoff problem. This approach can be used advantageously in plannbg and
scheduling ship design and constnict ion activitiesiphases.
CHAPTER 3 - A SHIPBUILDING CASE STUDY
3.1 OVERVIEW
The purpose of investigating this case study was to quanti@ the npple effect design had
on construction. The ripple effect pertains to quantiQing the impact of drawing changes
on construction direct labor hours and construction duration and the resulting effect of
unplanned work being passed on to later stages of construction. Also, this investigation
determines if there were any changes in design scope, by looking at the increase or
decrease in the nurnber and type of drawings, any reported increase in design work, and
the fiequency of drawing revisions. The ripple effect design had on construction has been
quantified by comparing two ships' machinery spaces labor hour deviations from budget.
The machinery spaces were blockhone three denoted in the product work breakdown
structure shown in Appendix C. Also, the impact of drawing revisions on construction
direct labor hours was quantified by plotting drawing revisions with ship construction
labor hours and rework hours. The scope of changes was fonnulated in tenns of drawing
revisions and was found by accumulating the number of revisions for structural,
mechanical and electrical drawings over tirne. This formed a cumulative summation
graph. This plot of revisions can be shown in terms of the number of revisions generated
over tirne or the number of revisions remaining 01) Detail design was considered
complete when ship one was completed and it was anticipated that the only drawing
changes would occur thereafter to denote any major configuration difierences between
successive ships. Therefore, the relevant period over which revisions were accumulated
was from the start of design to three months after ship one was completed.
The learning curve for the ship construction program was plotted and the budgeted and
actual labor hours to constmct the fmt four ships were used to develop linear
relationships with drawing revisions, construction duration and lag. Lag is the time after
design starts that ship construction starts. For the linear regression analysis, F-Ratio and
the coefficient of determination (?) were the indicators used to assess the significance
and strength of the relationship, respectively. The case study documents that served as the
main data sources for this analysis were:
A drawing revision history status report, which provided the status of drawing
revisions to al1 shipyard management and supervision.
Drawing schedule issue list (DSIL) that provided fields such as; the drawing nurnber,
drawing description, the budgeted cost of work scheduled, the budgeted cost of work
performed, the acnüil cost of work performed, the percent complete, schedule start
and completion tirnes and acnial start and completion times.
Drawing schedules with required "in yard" dates for construction.
Maritime Coastai Defense Vesse1 (MCDV) Master Contract Sumrnary Schedule.
Shipyard Gann charts, a Iist of work packages by ship and stage of construction and
various intemal memorandums.
The case study was a ship design and construction program whose objective was to
design and construct twelve coastal defense vessels, to build shore base facilities, and to
provide integrated logistic support services and training for the crew. The Shipyard was
responsible for the design and construction of twelve vessels. The fiont end of the
pro- required ninety months from the tirne of initiation until project approval and
until completion of the fmt ship. An additional thirty-six months was required to
complete the procurement and construction of the eleven remaining ships. It took over
seventy percent of the tirne to go fiom project approval to the design and construction of
the fmt ship of the tweive-ship program.
Case study particulars in Appendix C show that the ship was built into three main blocks
consisting of a number of assembly units. The ship construction schedule provides the
assembly, joining, and erection sequence of the erection and assembly units. A three-digit
number system was used to identiQ what block the unit was associated with and its
geographical orientation. There were nine construction stages used to organize the work
and allocate it to the most opportune stage of construction. The stages of construction
were fabrication, minor assembly, panel assembly, sub unit and unit assembly, pre-outfit
1, block assembly, zone pre-outfit 2, block erection and finishing. Equipment modules
were built independently to provide easier assembly and were loaded out into the
respective ship assembly unit. These module assemblies had their own specific stages to
organize the work such as module preparation, assernbly and fmishing, and testing.
An important aspect of the sub-assembly, assembly, and pre-outfit stages is the early
requirements of detail design data, such as seat fabrication and installation details, back-
up structure requirements and locations, system penetrations and system hanger location
details, system routing etc. This work would require a cutting or welding operation,
which is known as hot work. A delay in completing this work or changes thereto impacts
the intemal and extemal paint preparation and painting necessary to be completed for the
installation of equipment and the start of pulling cable. The coordination and sequence of
outfit work is instrumental in controlling the costs and quality of a ship construction
program. This in turn dictates the sequence of material delivery, procurement, and the
provision of construction drawings. Design changes, for whatever reason, cause rework
and the possible slippage of work into less opportune construction stages, where re-setups
for hot work and paint rework would be required. These npple efTects can delay the
completion of succeeding constmction stages of pre-outfït, zone and system outfit,
compartment completion, system testing and the commencement of trials. To regain
schedule siippage requires exceptional effort, coordination, and additional costs.
3.2 CHANGES IN DESIGN SCOPE
The literature review identified that a change in project scope was one of the top ten
factors that affected design effectiveness. To assess if changes in design scope had
occurred on the case study the following was compiled:
1. The improvement curve for the ship construction program, based on data provided by
the shipyard (Figure 3 .O).
2. An estimate of the nurnber of drawings produced and discontinued (Table 3.0), as
well as, the number work extras recorded by year (Figure 3.1).
3. A frequency distribution of the number of drawing revisions for a drawing category
(Figure 3.3).
4. The number of revisions for structural, pipe and electrical drawings were accumulated
by period and plotted over time (Figure 3.2).
The fust analysis plots the improvement curve for the shipbuilding case snidy. This plot
compares, using a base one hundred statistical index, the budget and actual construction
labor hours planned and spent to constnict the twelve ships. Figure 3.0 demonstrates the
largest labor cost overruns in direct hours occurred with the fmt four ships. Labor cost
o v e m s in excess of 40% had occurred on the fmt ship. These costs decreased until ship
four actual labor costs achieved ship one's original budgeted hours (Figure 3.0). Ship
four labor hours were over their projected budget target by approximately 14%. This plot
was formed by taking the planned budgeted labor hours for each vesse1 and dividing each
one by ship one's budgeted hours, which sewed as the baseline. Similarly, each ship
actual labor hours were divided by ship one's budgeted hours. This plot shows the real
labor cost improvements that can be attained on the fvst four ships, which in this case
overlapped the design phase.
Approximately fifty-four drawings made up the original contract drawing package. Table
3.0 presents an estimate of the number of drawings produced over the duration of the
project, which includes the aurnber of drawings canceled and discontinued.
Approximately eighteen percent of the drawings produced were eventually canceled.
Another thirteen percent were converted fiom shipyard drawings to customer drawings.
eliminating the need to maintain two sets of drawings. Another indicator of the change in
design scope is presented in Figure 3.1 where the nwnber of formal requests for extra
design work is plotted by year. A sample page from the e n g i n e e ~ g Company Drawing
Schedule Issue List is presented in Appendix C. Over seventy percent of them were
recorded in 1994, almost two years after the design had started.
U-T T V I 7 1 f 1 I w I I 1
1 2 3 4 6 6 7 8 9 10 1t 12
Ship Number Figure 3.0 lrnprovement Curve Comparing Ship Construction
Direct Labor Hours
Two main classes of construction drawings were produced. The fust set of drawings was
by system and major ship block. The only exception was ship wide system drawings. The
drawing classififations consisted of structural arrangements, general outfit, machinery,
pipe, and electrical arrangements. The drawing schedule issue list (DSIL) was the
document listing these drawings and their associated planned start and completion dates,
actual start and completion dates, budgeted cost work scheduled, budgeted cost work
performed, a c ~ a l cost work performed, and other data fields for progress claims. A
sample of this is contained in Appendix C. The second set of drawings was known as
workstation drawings, which were drawings produced specifically for ship zones for each
stage of construction. Over 35% of these drawings were eventually discontinued and the
apparent reasons were the cost of maintainhg thern and the duplication and confusion
they created with the DSIL drawings. The workstation drawings were planned and
monitored using a Workstation Drawing Schedule and Issue List (WSIL), which was
similar to the Drawing Schedule and Issue List.
1992 1993 1994 1995
Year
Figure 3.1 Estimated Recordeci Extra Work by Year
Table 3.0 Estimated Number of Drawinns Produced Bv Daim
Drawing Category
DSIL Drawings before Ship 1 Cornplete
1 Total Before Ship 1 Complete 1 695 1 94 1 127
Number of Drawin~s
Work Station Drawings Loft Packages, Spool and
Sketch Packages
Statistics on planned and actual duration of design activities provides an appreciation of
286
the impact the change in design scope had on schedule. Sample statistics were compiled
-- -
Number Replaced
200
209
on structural and outfit drawings. Statistics on design activities in Tables 3.1 and 3.2
Number Canccled
94
show the average planned duration ranged fiom 106 to 170 days and grew on an average
56
O
O
fiom 60 to 378 days. This indicates that design work orders were lefi open to incorporate
71
O
drawing revisions. It would seem likely that this would cause a cost and schedule control
problem. A more detailed work breakdown structure woutd have provided better control
of this situation. The statistics in Tables 3.1 and 3.2 were detennined by taking five issues
of the drawing schedule issue list at different points in time and computing the summary
statistics on duration. A sample page is in Appendix C.
Table 3.1 Planned Dumtion @ays) Statistics of StructuraVOutfit Drawing Activities
Y er r
1992
1993
1 994
1W5 I
Average
1 06
171
1 72
1 70
Standard Dcviatioa
92.45
88.44
88.22
89.52
Maximum Durrition
454
495
495
495
Minimum Duntion
27
25
25
25
Number
74
83
83
83
1 Table 3 3 1
The ship design and construction process described in Chapter 2, presented a customer
drawing review process, which planned a duration of twenty-fve days for a complete
cycle (Figure 2.0). This cycle would be repeated on the issue of drawings for prelimhary
and detail design reviews and on the incorporation of drawing comments obtained fiom
both the customer and regulatory authority. It is worth noting that the customer was at
arm length to the shipyard design agent, in that they were located in different cities, and
were separated contractually by the prime contractor. This prevented fiequent close
penonal communication and the development of a good working relationship. Special
meetings and forma1 design reviews were the mechanisms used to obtain feedback and to
resolve design issues. This caused misunderstandings and prolonged the design review
process.
Actual Duration @ays) Statistics of StructumVOutfit Drawing: Activities
Drawing revisions are considered a part of the design process and have been refemed to
in the literature review as unavoidable. A drawing list and revision status report was
obtained fkom the shipyard and the revision level for each drawing was compiled by
month into a spreadsheet by drawing discipline. This provided the capability to
accumulate the number of revisions by drawing discipline by month and to provide the
total number of drawing revisions over speci fic tirne -es. Draw h g revisions provide
an appreciation of the amount of design changes and the dynamic nature of drawing
activities. This is demonsîrated by the fkequency distribution for the revision level of a
Siamdard Deviaîion
- Year
1992
Num ber
1
Average
60
Minimum Duration
Maximum Duration
60
sarnple of drawings, as presented in Figure 3.2. The fiequency distribution shows that the
majority of drawings fiom this sample had at least three or more revisions and the
number of revisions ranged fiom zero to seventeen.
Revision Level
Figum 3.2 Frequency Distribution of Dmwing Revision Levet for a
Sarnple of DSlL Dmwings
The majority of the drawing revisions did not occur after design reviews were completed
but occur over the life of the design process, as shown in Figure 3.3, where the
cumulative number of revisions for ~o drawing disciplines were plotted. Many design
offices collate a nurnber of drawing changes to make one drawing revision and between
updates use a drawing change notification process containing a sketch depicthg details of
the change. This activity forms part of the change control process, which is required by
quality system standards today. Construction personnel often argue that oumerous and
fiequent drawing revisions encompassing design changes could be considered a change
in scope. Many shipyards do not include budget hours beyond management reserve for
these drawing revisions or change notifications. However, one would expect that design
and construction allocate a certain percentage of the budget to account for a certain
number of design changes, as would a manufacturer when planning the production of
fmished goods for scrap or rework. This creates an interesting debate regarding costing
procedures. Figure 3.3 shows that the majonty of the revisions had occurred afier
construction fabrication started. Therefore, much of the design and construction rework
discovery occurred during the fabrication and assembly of
observation better methods to discover drawing changes in the
implemented.
the ship. Based on this
design process need to be
MONT H
Figure 3.3 Cumulative Number of Drawing Revisions for Pipe 8 Electrical
Droiwings
This evidence indicates that the case study had an increase in design work scope
stemming from requests for extra design work, drawing revisions, and a change in
direction in the number and type of drawings required for the customer and ship
construction. A number of observations c m be made fiom this experience and they are:
1. Design activities are not sufficiently subdivided into discrete planned work packages
to adequately assess changes in work scope on time and duration.
2. Many of the design changes occurred after fabrication and assembly started and
increased as work progressed in the assembly of the ship.
3. Design effort was wasted producing and maintaining drawings that were eventually
discontinued because of a change in direction in drawings required for construction.
4. Better defrnition of design scope and type of drawings is necessaxy for future
contracts.
3.3 IMPACT OF DESIGN ON CONSTRUCTION
The design work scope significantly increased due to drawing changes. We now explore
the effect these changes had on construction. This is accomplished by comparing the
machinery spaces direct labor hour deviations for ship one and four by stage of
construction (Appendix A) and by comparing planned start and completion times to
actual times. As ship construction progresses fiom fabrication to assembly to system
integration and finishing, the stages of construction numerically increase (Appendix C).
For example, within the structural stages, fabrication would be stage one and steel
assembly would be stage six. One would expect that design would have more of an
impact on earlier ships than on later ships and would have the strongest effect on
assembly and integration construction stages. Assembly stages are where interference
between ship systems would be discovered.
The main machinery spaces provide a good representation of a11 the facets of mechanical,
electrical, and structural work and it is an area where design discipiines and construction
trades compete for construction space. Ship four was chosen for cornparison purposes
because its actual direct labor hours achieved ship one budget. This analysis assumes
detail design came to an end when ship one was completed which was the end of 1995,
and drawing maintenance fùnctions were the extent of design work thereafter.
The first ship baseline schedule went through various revisions over the course of the
startup (Table 3.3). Schedule changes were due to major design changes that were known
to impact design and construction and were planned accordingly. There were ais0
unpianned drawing changes consisting of errors and omissions that impacted cost and
schedules. A note of historical significance was that the shipyard was purchased in the
spring of 1994 and one of the irnmediate actions of management was the stopping of
construction. It was re-started three months later (Figure 3.3). This action allowed detail
design to progress to support construction, to resolve some of the outstanding design
issues fiom the two design reviews, and to allow the completion of the necessary facility
upgrades to support the project. One of these was the construction of a large assembly
shop, known as the Module Hall, where the main ship construction blocks were to be
assembled.
Table 3.3
Estimated Construction Duration for the First Four Ships Based on Schcdule Revisions
Plannecl Basclinc Scbeàuk A m a l Bweà on List of Work Packages
Ship - R w
Master Schedule
O 1 -Initial
To demonstrate the trends in construction budget overruns, the average ovemn by stage
01 - Rev 5
of construction was plotted in Figures 3.4 and 3.5 for structural and outft construction
ES
Oct -1 993
20-Jun-94
stages, respectively. The average overruns were calculated fkom the list of work packages
ES
20-Jun-94
for ships one and four and a sample analysis is presented in Appendix A, as Table A6 and
EF
June 1995
13-0ct-95
A7. Calculations for the difference in start times, difference in fmish times, planned and
EF Durrition Days
7-Nov-95
Duration YS
480
505
17-Dec-93 1
18-Deç-95 73 1
a c ~ l duration, differences in duration and differences in labor hours were compiled.
This provided the ability to analyze labor hours and to schedule performance by ship and
stage of construction. Of specific interest was the average deviation of l a b r hours by
stage of construction. Based on Figure 3.4 and 3.5, ship one deviations were found to be
significantly larger than ship four, with the assembly stages experiencing the largest
budget deviations. Figures 3.4 and 3.5 are based on Tables A6 and A7 in Appendix A.
1 +Ship 1 +Ship4 -Po&. (Ship 1) 1
Figure 3.4 Structural Steel Deviations in Budget Dimct Labor Hourr by Stage of
Conshction
Also, outfit stages experienced larger deviations (Figure 3.5) than steel fabrication and
assembly stages (Figure 3.4). This would be expected because the mechanical, hull and
electrical systems would require difTerent knowledge bases to design and integrate these
systems by geographical area within a constrained workspace.
To summarize the data from Appendix A, which presents the average deviations and
standard errors, the averages were plotted for the stnictwal stages and a best-fit line was
fitted to the data. A similar plot was done for ouffit stages shown as Figure 3.5. The
figure clarifies kppendix A by showing the trend in the average deviations. There was no
trend for ship four. These graphs illustrate that a negative trend occurred for ship one
when compared to ship four. The npple effect is represented by the negative trend by
stage of construction or as the ship progresses through the build process. The probable
causes are design changes, late materials, coordination problems, and poor planning or
underestirnation of preparation tirne. It has been hypothesized that design changes were a
l+~hip t +Ship 4 -Log. (Ship 1) 1
l 1
1 5 7 8 9
Stage of Construction
Figure 3.5 Deviations in Direct Labor Houm by Outfit Stages of
Construction
major cause.
Construction stage seven had the biggest deviation for ship one and four. This stage was
pre-outfit two. The logic supporting drawing changes as a major cause is based on the
fact that changes would cause stoppages of work in a given construction stage until the
problem was resolved. This in mm would delay planned work and in fact may have
caused rework witb completed work. The rework and delays would cause planned and
unplanned work to be passed on to the next construction stage. If the change involves hot
work, which is cutting and welding, the ripple effect would probably be more significant
because of the setup and takedown t h e necessary to execute the work. If work between
successive stages was dependent on its sequence then design changes would more than
likely cause some part of the planned work of the subsequent stage to be delayed or the
work planned for the curent stage to be delayed to the subsequent stage. There is a point
in tirne when the work can not be transferred on to a next stage and this usually occurs at
the most costiy point in tirne when the ship is in the fmishing stage. Interference within
and between system designs is a fiequent problem. This is often not f o n d until assembly
and system integration takes place. Stages six and seven are assembly stages where cable
pulling, electrical connections and assembly of various systems occur and system
integration commences. The Construction lndustry Institute found that when a change
impacts an activity, it would have a ripple affect on following activities that have
dependency relationships. Also the more change a project experiences the more of a
negative impact it has on labor productivity (CI1 Publication 1 O8 1995, CI1 Publication 6-
t O 1990). Figures 3.4 and 3.5 support this claim. It was observed that as the budgeted
cost of work performed for a stage of construction increased the actual deviation in cost
was more pronounced, that is, as one planned more work for a specific stage the impact
of changes were more severe (Appendix A). This was observed for both ships, with ship
one having the largest deviations.
Ship four machinery space actual construction iabor hours reduced approxirnately 20%
compared to those of Ship 1 (Appendix A). Adherence to construction schedule start and
fmish times did not irnprove fiom ship one to ship four. There was no significant trend in
the duration deviations for either ship machinery space when one considered al1 the
stages of construction either individually or as a whole (Appendix A). Table 3.4
surnmarizes the data fiom Appendix A, Table A2 to AS. The percent of time the start
time was achieved or bettered was determined by developing a fkequency table and the
associated histogram for the variable "dflerence in start times" for ships one and four. It
was sirnilarly done for the "difference in fmish times" for each ship, where the average
and standard deviation were calculated and the percent schedule achievement was taken
fiom the fiequency table cumulative relative frequency colurnn. The "difference in start
times" and the "difference in finish times" were calculated by subtracting the planned
times fiom the actual times.
Table 3.4 Block 3 Schedule Achievement Statistics
Scbedule Indicators Percent of Time Achieved or Ahead of the Start Time
Average Days Ahead or Behind Start T h e
Sbip 1 21 .25 %
Standard Deviation in Start Times
Ship 4 13.79%
--
-4.9
Percent of T h e Achieved Finished Times
1 Standard Deviation in Finish Times 1 58.0 1 65.6 1
-13.8
30.2
Average Days Ahead or Behind Finish Times
3.3.1 Impact of Drawing Cbanges on Construction
27.0
7.5 %
To investigate the possibility that design was one of the causes of construction labor
overruns and increase in duration deviations, design changes were rnodeled by
cumulating drawing revisions over time and plotting them relative to ship duration and
construction direct labor hours. The number of drawing revisions was accumuiated to
determine the cumulative number of revisions by drawing discipline. As previously
noted, the revision history was cumulated up to three months beyond the tirne ship one
was complete. A linear relationship between the total number of revisions and lag
(months after design start) was used to formulate the total arnount of drawing change.
This total number of revisions was then used to generate a graph of the number of
remaining (Rr) revisions and a linear function was fitted to the data. Also, the number of
revisions remaining was summed up to the start of construction for the fvst four ships.
The number of remaining revisions is presented in Figure 3.6, relative to the rnonths afier
10.5 %
-38.6 -39.4
design start. The plot shows how the number of revisions generated increased right up to
the tirne design was completed and that it can be represented by a linear function. The
previous plot, Figure 3.3, showed that the number of drawing revisions generated leveled
off as the ship neared completion.
1 Rsmaining Rwhioru (RI) -Umar (Remaining Revisions (Rr)) I
O u 1 u u
O 10 20 30 JO 50
Lag - Months After Design Start
Figure 3.6 - Number of Dmwing Revisions Remrining versus Lag
By plotting ship construction actual direct labor hours agahst the number of revisions
generated at the time ship construction started, a linear relationship was found to fit the
scatter plot of Figure 3.7. Similarly, another scatter plot of the nwnber of revisions to
construction duration was constructed as shown as Figure 3.8 and a linear function was
f o n d to fit that data. Construction rework was calculated as the difference between the
actual and planned direct labor hours for each ship and it was plotted against the total
number of revisions remaining in Figure 3.9 and a linear relationship was found to fit the
data. The data table (Table AS) and a sample statistical analysis are presented in
Appendix "A" and Figures 3.7 to 3.9 sumarizes this analysis.
Number of Dnwing Revisions Remaining Figure 3.7 - Scatter Plot of Construction Actual Direct Labor
Hours versus Number of Dmwing Revisions Remaining
The plots presented in Figure 3.7 to 3.9 demonstrate that construction direct labor hours
and duration are correlated to the amount of design changes, as represented by drawing
revisions. The figures support the observation that M e r research in the cause of design
changes and methods for its prevention would be justified. For example, using the linear
function fkom Figure 3.8, a design generating six hundred venus two hundred revisions
will increase ship construction labor by 162,580 hours. This is an estimated increase in
cost of more than $7.3 million.
Taking the difference between the budgeted and actual labor construction hours an
estimate of construction rework was ascertained. In the fkst instance, this was plotted
relative to the number of revisions remaining, which is presented as Figure 3.9. The
difference between Figures 3.9 and 3.7 is that Figure 3.7 is the actual construction direct
labor hours incurred for each ship plotted against the number of remaining revisions at
the t h e construction started for each ship. Both plots demonstrate strong relationships.
O ! 1 1 1 1 1 u I
O 100 200 300 400 a0 6m 700
Number of ûrawing Revisions Remaining
Figuru 3.8 Scatter Plot of Ccmtniction Dumtion vernus Number of
ürawing Revisions Remaining
3.4 DISCUSSION OF FINDLNGS
The case study analysis supports the literature research fuding that the change in project
scope significantly affects dependent processes. This emphasizes the importance of
clearly defming the design scope if a ship design and construction project is to be
successful. It would be prudent for the design scope to be defmed in ternis of the quantity
and content of design information to be supplied, both for whom and when. To minirnize
rework cycles, the production process and quality criteria to produce the data rnust be
well understood. A better understanding of the drawing production process and the
supporting information flow and the development of a more detailed work breakdown
structure within design would assist in better defming design scope. Also, it would allow
for the development of appropriate planning and scheduling systems for design, which
would improve coordination between other stakeholders, such as suppliers and the
shipy ard. Also, it would provide managzment w ith visibility of design progress and the
impact of late information on the production of construction drawings. This would allow
management to make better decisions on what action to take when probiems arise.
! - - - - - -- - I
1
1 I I 1 I 1 d
O i O 0 200 300 400 500 600 700
Number of Omwing Revisions Remaining
Figum 3.9 Scatter Plot of Rework vernus Drawing Revisions Remaining
Design changes have been shown to be a major factor in increasing construction direct
labor hours and construction duration. Reducing the magnitude of changes over time and
their generation rate can reduce construction duration and costs in ternis of labor. This is
reflected in the number of drawing revisions produced over time and the correlation
fond between drawing revisions remaining and construction actual labor hours and
duration. Research into the detailed causes of why drawing changes occur would be
beneficial for devising methods to prevent them or to deal with them expeditiously when
they arise.
As previously discussed, one must consider the impact of design on construction when
making planning and scheduling decisions and the planning and scheduling process must
take into account rework discovery as design progresses. One scheduling decision of
interest to shipyard management is the scheduling of the construction start of the various
ships. Appendix A presents a sample analysis that was typical in the development of
various relationships between construction variables and lag. The purpose being to
developing mathematical models that c m be used to explore the overlap of design with
construction. These linear regression models can serve as inputs into a linear program
mode1 to explore the scheduling decision of when to stan each ship's construction phase
relative to design's start t h e and the impact on labor hours and the design construction
cycle duration. Appendix A presents a summary of this analysis, which included scatter
plots and linear regression analysis. The relationships that were developed from this
analysis included correlating lag with construction duect labor hours, rework hours,
construction duration, total duration, design budgeted labor hours, construction budgeted
labor hours and matenal rework in equivalent hours. Data fiom the fmt four ships were
used to develop these relationships. The data is fiom various shipyard interna1
memorandums and reports and is surnrnarized in Table A9 in Appendix A containhg
ship number, lag, construction duration, remaining revisions (Rr), construction direct
labor hours, total duration fiom design start to ship construction complete, budgeted labor
hours, and rework hours. Table 3.5 summarizes the statistical fiinctions, their statistical
significance and strength of the relationships. For example the fùnction of construction
direct labor hours versus lag was the actual labor spent building each ship, which
illustrates that an increase in lag tirne reduces construction labor hours.
Similar functions were developed for lag with constniction duration and lag and total
duration. As lag increases construction duration decreases and total duration increases.
Total duration being the total design constniction cycle fkom the start of design to the
completion of the respective ship. It is interesting to note that ship four's achial
construction duration was 8.6 months less than ship one's and it started nineteen months
later than ship one. Overlapping design with construction has an impact on construction
cost and duration in that the earlier ships experience the full impact of the drawing
revisions. It is evident fiom Table 3.5 bct ions , that as construction duration increases so
does the direct labor hours. Ship four's duration was approximately 65% of Ship one's
and it coincided with an approximate 40% reduction in labor hours. Rework decreases
with an increase in lag, which irnplies that an increase in overlap of design with
construction increases rework (Table 3 S).
With respect to fomulating design functions relative to lag, design actual labor hours
were compiled over five specific points in the . This data was then plotted relative to lag
and a Iinear fùnction was fitted to the data, as shown in Appendix A as Table Al l and
A12. The material rework equivalent hours were formed by surnming the estimated
dollars of material needed to finish each ship, divided by an estimated labor rate. The
material estimates were obtained fiom a material shortage report. A problem with this
estimate is that it is in its tniest fonn an estimate and it was not the actual recorded dollar
value of the material.
3.5 SUMMARY OF CASE STUDY FINDINGS
The case study findings can be summarized as follows:
Changes in design work scope caused design cost and schedule problems, which were
shown to be attributed to 1) drawing changes, 2) recorded extra work, and 3) changes
in the number and type of drawings eventually used for the shipbuilding program.
Based on pipe and electrical drawing revisions (Figure 3.3) many of the drawing
revisions occ urred after construction started, demonstrating a need to develop
methods to identifjr and resolve changes within design.
The four ships that overlapped the design phase exceeded the construction cumulative
labor budget by approximately 319,563 hours, an increase in labor costs of 28.8%,
which could range beîween $8M to $14M depending on the labor rate used.
The learning/improvement curve (Figure 3.0) shows that the greatest deviation in
labor hours occurs on the fmt three ships, which significantly overlap the design
phase and starts to follow a more conventional learning curve at ship four.
A rework function was found by subtracting budget hours f?om actual hours and it
was correlated to drawing revisions indicating that design was a factor causing
construction rework.
Design changes impacted construction original schedules and caused an increasing
trend in the o v e m of budget hours as ship one progressed through the construction
stages. Assembly stages experienced the most pronounced effect.
The duration of design's planned activities averaged seventy-one days and the actual
average duration grew to three hundred and seventy-eight days demonstrating a need
to develop a better planning and scheduling system for design and its inteption with
other Company operat ions.
A correlation was found between drawing revisions and ship constniction direct labor
hours and duration. A case study function developed fiom the statistical analysis
(Figure 3.7) estimates on an average that tipling the nurnber of drawing changes
could cause more han a $7.3M increase in construction labor costs.
The research formulated empirical mathematical relationships of various variables
with lag (Table 3.5). These functions will be used in a linear program mode1 to
optirnize the integration of ship design with construction: (1) ship construction actual
duect labor hour function, (2) ship construction budget direct labor hour function, (3)
design rework fbction, (4) ship construction duration function, (5) design
construction cycle total duration bction, (6) material rework equivalent hour
fùnction, (7) design budget direct labor hour fiuiction, and, (8) desim actual direct
labor hour function. A sample analysis and data used to develop these relationships
are presented in Appendix A.
r Table 3.5
Summary of Lincar Regrtssion Relationships Deviscd to Explore Ship Construction
Line Function Description c Construction Budgeted Direct Labor Hours (BI)
1 .
(Construction rework due to design - RI)
Lag and Ship Construction Actual Direct Labor Hours (CI)
Lag and Construction Duration (TI)
(Design and Construction - Tt )
labor hours ( Bd).
6.
labor hours (Cd).
Lag and Material Rework Equivalent Hour Function (MRI)
&hedule ~ t a A Decisions
R'
94.5
74.5
97.5
99.2
99.4
70.8
F-Ratio
34.5
5.8
79.4
254.7
368.2
4.87
Lïnear Regression Function
585988 - 7741.4*Lag
or it can be represented by Pr +RI)
347832 - 2376.44 *Lag
238157 - 5364.9S2Lag
32.89 - 0.454*Lag
32.89 + 0.546*Lag
17875.8 - 363.4*Lag
Degrees o f Freedom
3
3
3
3
3
3
CHAPTER 4 - LINEAR PROGAM MODEL FORMULATION AND ANALYSIS
4.1 OVERVIEW AND OBJECTIVES
The linear program determines the optimum point in time when construction should have
started for the fmt four ships relative to design's start tirne, which in turn determines the
extent of concurrency of design with consmiction. This startup period is the focus of the
analysis and is defined as the p e n d design overlaps constmction. The case study will be
the source for the linear program constraints and objective functions. Specific functions
were developed fiom the case study analysis, which were presented in Table 3.5, and will
form the constraints in conjunction with some of the case study schedule logic. The
model investigates the cost of tirne, in t ems of labor hours, and total startup duration, in
months. It estimates construction start and finish times, duration, and total hours to fmd
the optimum level of concurrency. The chapter objectives are:
1. To formulate a linear program model based on case study logic and schedule
constraints.
2. To determine the optimum construction start times for the fmt four ships relative to
design to minimize cost in tems of time (hours) and total startup duration.
3. To determine the impact of design change resolution on construction tirne and
duration by varying the magnitude of the slope in the design rework function.
4.2 FORMULATION OF LP MODEL
The fvst step in formulating a linear program model is to translate the problem into a
description or question and to defme the decision variables. The model objective was to
answer the question: "When do you start construction relative to design to minimize labor
hours or duration?" Does one wait until design is complete? How much overlap of the
two stages provides the best compromise between duration and total hours? This chapter
refers to this as the design/construction overlap problem.
A problem when determining when to start construction is obtaining complete and
accurate information on design completion and king able to forecast the extent of design
rework. Pushing design to an unseasonable timetable without the necessary inputs can
cause premature release of drawings or insuficient attention to accuracy and drawing
quality. It can cause the problem of claiming progress prematurely when the work is
unknowingly incomplete or requires rework.
The determination of when to start constniction was fonnulated around the design start
tirne and the number of months thereafker. Considering that the objective is to detemine
when one should start construction, the problem has been based on how long afier
design's start time does each ship construction start to minimize total hours or total
startup duration. The time between design start and each ship construction start has been
termed "lag". There is also a lag between individual ship construction starts.
There are a number of tirne related costs which must be considered in making a decision
of when to start construction on each ship. Some of these are 1) construction direct labor
hours, 2) shipyard overhead, 3) design's direct labor hours and 4) design overhead. The
ship material cost has k e n assumed to be constant fkom ship to ship, except for material
rework. It will be s h o w that material rework contribution to the analysis is not of major
significance relative to labm cost. Each ship actual construction direct hours were broken
into two functions by subtracting the budget fiom the actual hours to develop a design
rework function. The correlation of drawing revisions to direct hours (Figure 3.7) and to
rework (Figure 3.9) in Chapter 3 supports this assumption.
The case study contract master schedule used the critical design review as the tollgate for
the earliest start tirne for the construction of ship one. It depicted that a Ship Critical
Design Review would be held sixteen months after contract award. Design early fmish
t h e was assumed to be when Ship 1 was complete. This reflects the logic that a
configured set of drawings is necessary for the ship owner to use for maintenance and
operation purposes and for the shipbuilder to use to constnict subsequent ships. A counter
argument would be that design should fmish approximately when system integration and
test and trial functions commence. The original plm had design fmishing when ship two
was complete, which was impractical, and design was actually considered complete when
ship one was complete.
Two different ship direct labor costs were used in the LP model: the construction budget
labor hours and the actual direct labor hours. Solving the model with the design and
construction budget functions would detennine the feasibility of achieving the original
cornmitted delivery times and budget. Traditionally, shipyard overhead is expressed in
terms of dollars. To maintain shipyard confidentiality of the shipyard labor rates, dollar
costs were converted to direct labor hours and have been refemed to as equivalent hours
or equivalent direct hours. Management fiequently uses this conversion to estirnate the
number of labor hours that need to be sold to cover overhead costs.
One can estimate overhead in two ways. The fvst method is by converting direct labor
hours into dollars and applying a factor to compensate for overhead cost. Another method
is to convert overhead to labor hours by taking the total overhead and dividhg it by an
hourly rate per hour. For example, for the first case if the labor cost is huenty dollars,
then to include overhead the charge might be forty dollars, with an overhead factor of
two. The other rnethod takes the total annual overhead dollars fiom the business plan and
converts it to a monthly disbusement. It is then divided by an hourly labor rate to convert
it to hours. This method has k e n used to convert overhead and material rework into
equivalent hours. The material rework dollar cost was obtained firom a matenal overage
and shortage report and represents an estimate of the material rework cost incumd. These
figures were obtained fiom shipyard records and business plans. They are estimates and
not exact values, to mainain confidentiality.
Design direct hour cost is related to the duration of design and the amount of rework
incurred. There was insuffkient breakdown in work xope to model design phases and to
separate rework fiom normal direct hours to perform the work. Design overhead, similar
to construction overhead, was formulated in texms of equivalent hours per pend. The
calculation methods are as follows for both design and construction:
Construction Method - This method has been based on shiward business ~ l a n s and data.
1. Calculation of overhead per period: Annual Overhead / 12 = Overheadhlonth
2. Catculation of percent overhead assigned to new construction: Overhead/Month * 63% = Adjusted OverheadMonth. The 63 % factor was based on business plan
projections of labor for new construction and ship repair.
3. (New Construction Overhead / Month) / (Labor Rate / Hour) = Equivalent Hours 1
Month
4. Assumed cumulative hours formula: 27255 Lag (in months).
Design Overhead Method - This method has been based on desim accountina practices
and data.
1 . The total indirect hours were summed for al1 personnel for a year.
2. Total indirect hours were then divided by twelve and multiplied by 1.1.
3. Assumed cumulative formula: 4400 * Lag (in months).
The LP model logic was based on Figure 4.1, where design start is the baseline start point
and coiistniction lag is the p e n d fkom the start of design to start of construction for each
ship. Based on the case study analysis, linear functions for direct labor hours, project
duration, and design rework were fomulated relative to lag. Schedule consttaints on
early frnish dates for each ship constmction project complete the model constraints. The
model assumes that each project would be started and completed in sequence. Therefore,
the succeeding ship can not start before the preceding ship and a constant start to start lag
was assumed for each succeeding ship representative of the original contract schedule
(Appendix C). If no start lag fiom ship to ship were assumed then one would be assuming
unlimited resources in tenns of facilities and labor.
1 Total Duration
Design Duration (Td)
k l Ship 1 Duration ( TI ) -
Ship 2 Duration (T2 )
le( Ship 'TV Duration 1
Legend : Si - Lag in construction start times for ships 1 = 1 to N Td - Design duration TI - Construction duration for ships 1 = 1 to N
Figure 4.1 - Design Construction Overlap Definition
LP Model Objective Function, Variables and Constraints
We can have two main objectives when solving the linear program model, the first to
minimize total tirne spent in labor hours or the second to minimize total startup duration.
Total startup duration is the time fiom the start of design to the completion of t!!e
construction of ship four. In the first case various scenarios will be investigated which
will entail rninimizing different versions of the base objective h c t i o n with the addition
or deletion of specific constraints. For example, the objective function scenarios to
minirnize hours will include minimizing budgeted hours, actual labor hours that include
rework, and total hours that include overhead and rework. Total hours are the addition of
budget and rework labor hours and overhead equivalent hours for design and
construction. In the second case, the minirnization of total stanup duration is investigated
for each of the aforementioned scenarios to compare schedule and actual hour results to
the previous objective to minimize labor hours. The decision variable is at what point in
time after design start should each ship construction start to minimize cost or total startup
duration. Solving the construction start time for each ship determines the construction
duration, which in tum sets the fmish t h e . Construction duration is a fiuiction of lag
(Table 3.5), which combined with the start tirne establishes the earliest finish time. A
defmition of variables, notation, the objective functions and constraints follow.
Variables:
The variable nomenclature has been developed under the notion that design and each ship
are individual projects. Design was denoted with the subscript "d" and the fmt ship with
subscript "1" to retain ship numerical notation with the subscript notation. The notation is
as follows:
Cd - The total actual incurred design direct labor hours.
Cdo - Design overhead translated into equivalent hours.
C, - Construction overhead tmnslated into equivalent hours.
Cr - The actual incurred direct labor hours for ship 1, for I = 1 to 4, which can also
be represented by the addition of the budget and rework functions for each ship
(&+RI). Bd - The design budget direct labor hours.
BI - The budgeted direct hours for ship 1, for 1 = 1 to 4.
RI - Represents the design rework function for each ship for ship 1, for 1 = 1 to 4
Sd - The start time for design, which is zero.
SI - The earliest start tirne (EST) for each ship 1, for 1 =l to 4
FI - The earliest finish tirne (EFT) for each ship 1, for 1 =1 to 4
Td - Design duration in months
Tt - Total startup duration
Tl - Construction duration for each ship 1, for 1 = 1 to 4 in months.
MRI - The material rework equivalent hours for each ship for 1 = 1 to 4.
Objective Function:
A comrnon linear program mode1 has been used to investigate various scenarios. It
reviews minimlling budgeted hours to determine the feasibility of the original schedule
and budget hours. The second scenario compares the shipbuilding case study actual
results to the model that minirnizes total labor hours and that has the impact of rework
within it. The third scenario adds the effect of design and construction overhead and
minimizes total hours. The fourth scenario detennines the minimum total startup duration
for the design/construction cycle and compares a duration minimitation approach to one
of minirnizing labor hours. Finally the rate of design change resolution is investigsted by
varying the magnitude of the dope coefficient in the rework hinction (Equation 6) and
solving the LP model to minirnize t h e then duration. The objective fùnctions are as
follows:
Where one can use either ( F ~ 1-1 to 2 (CI)) or o or I = I to S (BI) + For 1-1 to 2 (RI)) for the
construction labor hour function.
Where one can use either F, 1=1 (Cl) or ( F ~ ~ i= i (BI) + FM I=I (Ri)) for the
construction labor hour function. The latter is used when analyzing the influence of the
rate of resolution of design changes, which is rnodeled by varying the rework h c t i o n
dope coefficient.
Objective fùnctions lc) and 1 d) are used in the case of assessing the rate of design change resolution.
Case study statistical models (Table 3.5) and schedule cornmitments (Appendix C -
Contract Surnmary Master Schedule) were used to develop linear constraints, such as
developing iag starts between ships and planned early frnished times. To have al1 the
sarne uni& in the model, tirne has been denoted in h o m and duration, in months. The
contract master schedule, presented in Appendix C, was assumed to be the initial plan
when comparing against the plan and the actual case study results were used when
comparing the LP model results.
Design Overbead Equivalent Hour Function
The linear cumulative function for design equivalent overhead hours is based upon a
minimum overhead and has been estimated with the following function:
Cdo=440OS(S1 + T i )
Where (Si +T1)=Td
The constant was determined by summing reported indirect hours and dividing it by the
number of months to get the number of indirect hours per month. The design period was
assumed to extend fkom design staR to ship one construction completion (Figure 4.1).
Construction Overhead Equivalent Hour Function
The fhction to mode1 total construction overhead in equivalent hours is as follows and
the period it covers is defmed in Figure 4.2. It assumes the period fiom start of ship one
constniction to completion of ship four.
Ship 4 Construction
s4
4 Construction Overfiead Pend Tb
Legend: Si - Lag for ship one, which is the lag in construction start after designs' start time. Ss - Lag for ship four. Tg - Construction duration for ship four.
Figure 4.2
Definition of Construction Overbead Time Period
Sbip Coastruction Actual Direct Labor Hour Function
Linear tegression models were developed based on the case study data to formulate the
ship construction labor hour function (Equation. 4). A sample of this is presented in
Appendix A. Each ship start time was translated into months afier design start and each
ship construction labor hours was plotted, producing a "x-y" scatter plot, whereby a
linear relationship was fitted to the data. The hours used were the actual hours consurned
to build each ship. This function was then used to estimate construction direct hours
depending on when each ship started construction relative to design. The slope of the
function would in reality be technically limited and as more ships were constnicted the
function would approach more of a learning curve function, as was presented in Chapter
3 as Figure 3.0. The startup p e n d of the learning curve, of when design overlaps
construction, can be approximated by a linear function. The construction actual direct
labor hour function was found to be (Table 3.5 - Line 1):
Ci=585988-7741.3gt SI F o r 1 4 to4
Where "1" represents Ship 1 to 4.
This fûnction can be broken down into two functions, the fmt being a mathematical
relationship representing the budget and the second a rework funftion reflecting the
impact of design changes on construction. The rework function was found by subtracting
the budgeted hours fonn the actual hours for each ship and plotting them relative to lag,
and a linear relationship was fitted to the data (Table 3.5). The budget fiuiction is
represented by equation five and the design rework function by equation six. Therefore,
these equations c m be substituted for equation four. The rework function allows one to
assess the rate of resolution of design changes on construction, by modieing the slope
coefficient (5364.95) by +/- 10%. The total construction labor hours can then be
calculated either by equation four or the addition of equation five and six (BI + RI).
Construction Budget Direct Labor Wour Function (Table 3.5 - Line Item 2):
BI = 347832 - 2376.44 * Si For 1 = 1 to 4 ( 5 )
Design Rework Function (Table 3.5 - Line Item 3):
RI = 238157 - 5364.95 * Si For 1 = 1 to 4 (6)
Construction Duration Function
Construction duration was related to lag by plotting lag to actual ship duration fiom the
case study. Again a linear function was fitted to the data and is presented in Table 3.5 as
line item 4) and is as follows:
Construction Duration (Table 3.5 - Line Item 4)
TI = 32.8946 - 0.454 * Si For 1 = 1 to 4
Design Direct Labor Hour Function & Duration
By compiling design direct labor hours at five different points in tirne to form a scatter
plot with lag, a linear function was fitted to the points to develop the direct labor hour
constraint (Appendix A -Table Al 1). The hows represent the actual hours consumed in
design or commonly know as the actual cost of work performed (ACWP). The plot is best
represented by an "S" cume function, but a linear function was found to fit with minimal
reduction in the strength of the relationship (Table 3.5). Because design has been
assumed to be complete when ship one is complete, design direct labor hours (Cd) is a
b c t i o n of when ship one starts and ends. The budgeted labor hour function was forrned
similarly to the actual labor hows, but the budgeted cost of work performed was used.
The budget fùnction is denoted as equation (8a). The design duration (Td) is an algebraic
function of the early start and fmish times of ship one and is shown as equation nine.
Design Direct Labor Hours (ACWP) (Table 3.5 -Lhe Item 8)
Cd = 2220.68 + 5271.34 (Si+Ti) (8)
Design Budget Labor Hours (BCWP) (Table 3 -5 -Line Item 7)
Bd = 15143.6 + 3037.4 * (Si+Ti) (8a)
Design Duration in months
The original contract plan had detail design scheduled to be complete when ship two was
complete. Ship one was scheduled to start construction sixteen months after design start
(Appendix C). There was a planned sixteenmonth construction lag between ship one and
two (Appendix C). A small field engineering team existed for the fùll construction
program after design was complete and they were merged with shipyard planning. The
Design Company ceased to exist in 1 995.
Early Finish Times
For each ship construction project, in addition to the cost objectives, has specific contract
completion times to achieve. Including early fmish times allows one determine the
feasibility of achievuig schedule commitments. Relaxing the bound on early fuiish times
provides the opportunity of detennining the optimum total hours and duration under no
predetermined constraints. Therefore, the bounds are as follows:
FI = Sr + Ti For 1 = 1 to 4 (10)
Design early fmish tirne can be expressed relative to start and fmish times for each Ship
by substituting early frnish times for each project (Table 4.1). The following represents
the original contract schedule.
Design Early Finish T h e (Fd) Si +Ti S 16
Ship 1 Early Finish T h e ( F i ) SI +Tl 5 37
Ship 2 Early Finish Time (Fz) SZ +Tz S 50
Ship 3 Early Finish Time (F3) S3 +T3 S 54
Ship 4 Early Finish Tirne (Fd) Sq +T4 S 58
Original committed ship completion construction times were obtained nom the contract
surnmary master schedule (Appendix C). This will be discussed M e r when the various
what-if scenarios are modeled. The case study committed completion times calculated in
terms of months after design start is shown in Table 4.1 for ships one to four.
Start Lag of Construction between Projects
The delay between early start times between succeeding ships was obtained fiom the
contract master summary schedule (Appendix C), which was set to be at least four
months (Equations 12 to 14). The constraint of when ship one started construction was
set to occur at the tirne the detail design review occurred, which was approximately
sixteen months after the design start (Equation 15). A b , an arbitrary maximum limit of
twenty-seven months was set (Equation 16).
Table 4. 1 Case Study Production Budget and Contract Scbedule Commitments
Project
Design
Budget Direct H O U ~
L
Ship 1
Actual ESTEIT
Actual Direct Hours
124,265
Ship 2
Contnct EST IEFï
Ship 3
Ship 4
1 Ship one construction was stopped after the shipyard was bought to allow design to progress to a higher level of completion. Thus it has two start times, the actual start and then when it was re-started.
67
204,675
299,247
292,47 1
Total
1 6/3 7 438,532
265,270
253,9 19
Moaths 0/50
J
19-25'143.3
3 70,88 1
1,235,172
Mont bs 0143.3
327,428
293,679
1,635,195
32/50 29/48.5 1
36/54
41/58
32/5 1.3
3W53.8
The case snidy duration for ship one was broken into two parts to represent the initial
start and then the restart after the shipyard was bought.
Material Rework Equivaknt Hour Function
Material rework costs were estimated by taking a shipyard report and compiling the
rework dollars spent for missing, reworked and shortage matenal by ship. The material
cost for each ship has been assumed to be constant and was not included in the model.
The dollar value of this rework material was then converted into equivalent hours by
dividing it by a labor rate. See Table 3.5 Line Item 6) for the summary of the statistical
analysis.
The fùnction was based on material estimates and not actual recorded values and as such
could not be verified. Therefore, it was dropped fiom analysis of objective functions (lc)
and (Id). Dropping this function had minimal effect on the overall analysis, less than 1%,
when overhead is included in the analysis.
Nonnegative Coastraints
Obviously there is the nonnegative constraint on the variables included in the model. This
requires that al1 the variables must be greater than or equal to zero.
4.2.2 LINEAR PROGRAM MODEL
The linear program model was developed to explore the following four questions:
1. Was the original schedule and budget feasible and what would have been the plan if
design rework had k e n considered?
2. What would have been the schedule and total hours when design and construction
overhead is considered and how does the result compare to the actual case study?
3. What would have been the labor hour cost and schedule if duration was minhized
rather than total labor hours and how does this compare to the case study?
4. What effect does the rate of design change resolution have on tord hours and
durat ion?
To explore these questions, variations of the linear program were solved. For instance, to
explore the budget question, the linear program model with the objective function to
minimize the budgeted hours was used with the elhination of a number of constraints,
such as overhead and rework. The 1inea.r program model objective fùnctions are as
follows:
Objective Functioa Scenarios
A. Minimize Budget H o m (Assessrnent of the original schedule and budget)
Minimize: F~~ I=I to .&BI) + Bd
Scenario A assesses the case study's original plan feasibility usuig the budget
direct labor hour functions for design and construction. There are no constraints
used for overhead or rework and as such they were deleted fkom the model.
B. Minimize Total Labor Hours (Determination of budget and schedule with
consideration of design rework)
where ( F O ~ I=I t~ 2 (Cr)) is substituted for ( F ~ ~ i=l to a (BI) + For 1-1 t~ 2 (RI)) tO
combine two fùnctions into one construction actual labor hou function. Scenario
B determines a schedule when minùnizing design and construction labor hours,
where both include rework within it. The actual direct labor hour fhction is used
to estimate the combination of budget and rework functions because the rework
function was denved fiorn it, by subtracting the budget from the actual. The
overhead constraints are deleted and the design actual direct labor hour fùnction is
used in replace of the budget labor hour bc t i on . The results are compared to the
original plan.
C. Minimize Total Hours (Design and Construction Direct Labor Hours and
Overhead Equivalent Hours)
Minimize: For 1=1 to 2 (CI) +Cd + Cco + Cdo
Where or I=I to (CI)) is substituted for ( F O ~ i=i J (Bi) + For 1-1 to 2 (Rd) to
combine two fiuictions into one construction actual labor hour fùnction. Scenario
C incorporates design and construction overhead into the analysis and ignores the
effect of material rework. It has a fùnction each for design and construction
overhead. This assesses the influence of overhead in minimizing total hours and in
determining a schedule for each of the overlapping ships. This is compared to the
actual case study result.
D. Minimize Total Duration @esign/Constniction Cycle Duration)
Minimize: (S4 + Tq ) for;
Dl) Uses model constraints presented in Scenario A), and
D2) Uses model constraints presented in Scenario C).
Scenario D uses the linear programming model to detemine the minimum startup
duration. It does this for the original plan using the original design and
construction budget fùnction. Similarly it minimizes total startup duration using
the actual design and constmction labor hour functions and equivalent overhead.
The total hours result obtained fiom minimizing duration is compared with the
results obtained fiom Scenarios A and C. For example in Scenario A, the model
determines the budget and schedule to achieve the case study minimum budget.
Scenario D minirnizes total startup duration using only the budget labor hour
functions for design and construction. The solution is then compared to Scenario
A. Each of the preceding Scenarios, A and C, is compared to Scenario D using the
appropriate labor andor equivalent labor hour fiinctions within the model.
E. Minimize total hours and then duration to açsess the variation of the design
rework function slope (+/- 10%) on total hours and schedule.
Where ( F ~ ~ I=I to 2 (Bi) + For 1.1 to 2 (Ri)) is substituted for (F,, I=I I, 2 (Ci)) to break
the construction actual labor hour b c t i o n into two functions. In order to vary the
slope coefficient of the rework fûnction. The last analysis assesses the influence
of resolving design changes at different rates by varying the magnitude of the
slope coefficient in the design rework function. The slope of the rework function
is increased by ten percent and substituted into the design rework function and the
linear program model is solved and compared to Scenario C model solution. This
analysis is completed for the two objective fûnctions of minimizing total hours
(lc) and total startup duration (Id). A similar analysis is completed for reducing
the rework fimction's slope by ten percent.
Desian Overhead Equivalent Hour Function
Construction Overhead Equivalent Hour
Funct ion
For 1 = 1 to 4 Construction Actual Direct
Labor Hours (Ci) or BI + Ri, constraints.
which are:
For 1 = 1 to 4, Construction Budget Direct
Labor Hour Function
For I = 1 to 4, Design Rework Function
For 1 = 1 to 4, S h i ~ Construction Duration
Function
Design - Actual Direct Labor Hour Function
or
Design Budaet Direct Labor Hour Function
For 1 = 1 to 4 Matenal Rework Equivalent
Hours
Start Lag Relationship Ship 1 to 2
Start Lag Relationship Ship 2 to 3
Start Lag Relationship Ship 3 ;O 4
Minimum EST for Ship 1
Maximum EST fof Ship 1
Design EFT (Fd)
Ship 1 EFT (Fi= 37.43, & 50')
Ship 2 EFT (F2)
Ship 3 EFT (F3)
Ship 4 EFT (F4)
Design Duration Calculation (Ta)
Each of the scenarios illustrate the use of linear prograrnrning to assess a shipbuilding
program from a p s t audit point of view to formulate an approach for future prograrns.
' Three EFTs were used, the original plan, the case study actual and unwnstrained finish tirne.
Specifically, it demonstrates a methodology that can be used to assess the original plan
and schedule to determine its feasibility and the implications of rework. Although, a
rework function would have to be estimated for each new shipbuilding program and in
this case historical records have k e n used to estimate the rework fiinction.
4.3 LINEAR PROGRAM SOLUTION & ANALYSIS
The analysis uses " W Q S B " software, an integrated management science software
package, to solve the linear program model and various what-if scenarios. The software
uses the simplex method. The simplex algorithm solves problems by beginning at one
extreme point and evaluates the value of the objective function at adjacent extreme points
in its quest to fmd an optimal solution. The software has the ability to conduct sensitivity
analysis, which provides insight into how the LP's optimal solution is affected by
changes in the LP's data, such as the decision variables, objective function coefficients,
the decision variable constraint coefficients and the structural constraints' right hand
sides. There are two cornmon types of sensitivity analysis perfomed, the fust considers
the range of optimality, which is the range of values within which the current optimal
solution remains unchanged, although the value of the objective function may change.
The second considers the sensitivity of the optimal solution to any of the binding
constraints. Therefore any changes in the right hand side of a binding constraint will
affect the optimal solution. A change to a coefficient of a binding constraint requires
resolving the problem with "WINQSB".
4.3.1 SCENARIO A: ASSESSMENT OF ORIGINAL BUDGET & SCHEDULE
To assess the feasibility of the original plan and schedule, the design budget hc t i on (Bd
= 5 143.6 + 3037.4 (!&+TI)) and the ship construction budget function (Bi = 347832 - 2376.44 * Si) for each ship were used as the labor hour function constraints in the model.
The objective function F~ I=I to &BI) + Bd was minimized. Using the original contract
cornrnitted ship completion time of 37 months in constraint 13), the model found that
ship one schedule compIetion cornmitment was infeasible (Appendix B). The case study
delivered ship one approximately forty-three months after the start of design (Table 4.1 ).
Therefore, after relaxing ship one's finish time constraint fkom thirty-seven to forty-three
months (Table 4.1 ), it was f o n d feasible. With reference to Figure 4.3 and Tabk 4.2, the
LP model proposed plan is compared to the case study original plan and the results are as
follows:
The case study plan was not feasible with ship one early finish time of thirty-seven
months. This is because the earliest feasible fmish time for ship one is approximately
41.6 months, which was calculated by using the earliest start time and construction
duration function. The calculation using equation seven is, 16 + 32.8946 - .454*(16)
= 41-63.
The plan based on the model to minimize budgeted hours delays the start of the
vessels relative to the contract plan with ship four king the most significant. The
recommended delay in start times for ship one to four ranged fkom one to over five
months (Figure 4.3).
The minimization of budgeted hours achieves the scheduled finish times and indicates
the planned design and construction budget was not attainable, by 61,744 hours,
which was the best possible solution while achieving schedule comrniûnents. An
interesting aspect of this number is that design is the main contributor to the projected
o v e m . It projects a design budget o v e m by 76,523 hours while the total
construction budget of the ships is reduced by 14,779 hours. This illustrates a
problem with the original design budget logic considering that the original plan
assurnption had design not complete until ship two was complete.
It is interesting to note that even though ship one's earliest compktion t h e was
cafculated to be 4 1.6 months; the model extended construction up to the relaxed target
completion tirne of forty-three months, which was the actual case study fmish t h e .
5 . The LP mode1 schedule reconunends delaying the start of construction for ship four
beyond the design completion time assumption, which is over five months beyond the
original scheduled start t h e (Figure 4.3).
6. The mode1 recommends a reduction in the amount of overlap for al1 vessels.
Table 4.2 Sccnario A: Cornparison of LP Mode1 Resuk witb Case Study Design and
Constniction Budget Direct Labor Hours Ship 1 LP Model for Ship 1 EFï = 43 months 1 Difference
Design
Ship 1
Ship 2
Hours (%)
+76,523 (6 1.6%)
Direct Labor Hour
Minimization 200,788
300,080
Ship 3
Original Plonned Production Direct
Hours 124,265
277,979
Ship 4
299,247
265,388
Total Ship Construction Labor
+833 (0.3%)
292,487 1
252,68 1
Hours Total
1 1 I
Note: The LP mode1 found that it was infeasible to achieve the original planned completion tirne of 37 months for ship one (excludes design rework and overhead equivalent hours).
- 14,492 (4.9%) 265,270
Duration Months
+II8 (0.04%)
253,919
- 14,779 (1.3%) L
1,296,9 16
- l,23 8 (0.49%) 1,096,128 1,110,907
1,235,172
O I
+61,744 (5.0 %)
58 58
Figure 4.3 - Scenario A: Cornparison of the Original Plan to the LP Model Results to Minimize Total Budget Hours
4.3.2 SCENARIO B: DETERMINATION OF BUDGET AND SCHEDULE WITH
THE CONSIDERATION OF DESIGN REWORK
The purpose of this analysis is to illustrate the significance of design rework when
recommending a plan for the case study. The model result is compared to the original
budget and to the actual case study results. This analysis minimizes objective fünction
For I=I to 4 2 (CI ) + C d + F~~ I = I 42 (MRi) to detennine a budget and schedule cognizant of
design rework and schedule commitments. This would be representative of a typical
production strategy to minimize design and construction labor hours while achieving
contract schedule commitments. In the case study the ship manager would have been
trying to achieve the ship construction budgets and schedule in an environment
characteristic of many design changes. The analysis uses the design and construction
actual direct labor hour fùnction to estimate design labor hours and ship construction
labor hours. The construction actual direct labor hour constraint (Ci = 585988 - 774 1.39 * SI) is used instead of construction budget labor hour and rework constraints. Therefore,
one can solve the linear program model with either combination of constraints. One
fhction is used to simpliQ the model output. Also, design and construction overhead
functions are deleted fiom the model (Constraints 1 & 2). The design actual labor hour
fùnction (Cd = 2220.68 + 5271.34 * (Si+Ti)) replaces the budget function (Bd = 5 143.6 +
3037.4 * (Si+Ti) ) in the design labor hour constraint. For completeness, matenal rework
is included in the LP model and is represented by constraint 6. In the previous budget
analysis, we found the minimum finish tirne for ship one to be 41 -6 months; therefore for
ship one we have assumed the case study actual completion time of 43 months. This
results in relaxing the contract completion tirne from thirty-seven months to a target of
forty-three months.
A solution was found (Appendix B) that satisfied ship one's scheduled completion t h e
(Table 4.3). There were no significant differences in scheduled start and fmish tirnes for
the model result when compared to Scenario A, although there was signiticant difference
in l ab r hours. Comparing the results of this mode1 to the actual case study results, Figure
4.4 and Tabie 4.3, supports the following observations:
The model result projects spending an extra 24,2 13 houn within design to reduce the
overall startup hours by 95,455. This reduction in design and constniction hours is
attributed to the later construction starts and shorter ship construction durations.
The results indicate that ship one should have started earlier and longer construction
lags were necessary for the follow ships (Figure 4.4).
Accounting for design's impact on construction one could have reduced the
construction startup costs by 8.4%, which is approximately $2SM to WlM,
depending on the hourly rate. The range of the saving is based on a straight t h e labor
rate and a rate including overhead.
The analysis indicates that the material rework equivalent hours contribution is
approximately 1.5% of the total direct hours and with the addition of overhead will
reduce to less than 0.9%. In addition to this, the material rework dollar values were
based on estimates and not on actual incurred costs, therefore, any future analysis will
exclude material rework, which has k e n denoted as such in the objective fùnctions.
5. The model result projects that a significant improvernent was possible with a net
reduction in total direct labor hours through better ship construction schedule
decisions and the monitoring of the incorporation of design changes into construction
draw ings.
6. The actual case study early finish times were better than the LP model result but there
was an increase in construction labor hours. This was probably due to management
taking a schedule acceleration approach. Management was also pushing production to
reduce construction labor hours at the same time and this appears to be a conflicting
approach. This analysis indicates that production was faced with an impossible task
of achievïng both objectives because of the impact of design rework. This will be
explored fiuther with objective fiinction D.
A risk that must be considered when starting construction early is that changes effect
assembly and fabrication drawings. Therefore, if a change impacts a fabrication drawing,
then there is the possibility that pieces and assemblies would have to be reworked. This
would have a varying degree of risk depending on whether or not the rework involved
structural, pipe, mechanical, and/or electrical work. This was probably the cause of the
difference in the case study construction direct hours.
Figure 4.4 Scenario B - Cornparison of LP Model Results to Case Study Actual Results
With Ship 1 EF ï S 43 Months
Material Rework versas the Case Study Result Ship One EFT = 43 1 Col. 2 - LP 1 Col. 3 - Case 1 Difference between LP Months
Design 1 1 m
Model Result (Labor Hours) ,
228,888
Ship 2
+5,295 (+i .2 %) Ship 1
Ship 3
Study Actual &abor HOUA)
204,675
443,827 1 438,532
345,276
1
Ship 4 1 23 2,699 I
Model and Case Study Hours (% Col. 3) +24,2 1 3 (+ 1 1.8%)
289,000
Design and Construction Total
370,881
293,629
-25,605 (-6.9 %)
327,428
-60,930 (-20.8 %)
1,539,690
-38,428 (- 1 1.7 %)
1,635,145 -95,455 (-5.8%)
4.3.3 SCENARIO C: IMPACT OF DESIGN AND CONSTRUCTION
OVERHEAD
The objective of this analysis is to answer the question: what would be the impact of
overhead on design and construction labor hours and ship construction start and finish
times. Normally construction schedules are based on a specific logic and not necessarily
how to optimize construction labor hours or with the consideration of construction
overhead. Thus we estimate overhead by converting it fiom a dollar cost per period to
equivalent direct hours per period and include it in the model. The LP model has been
modified by adding the overhead equivalent hour function for design and construction
and the material rework constraint was deleted because it of its minimal contribution to
the results. In this scenario, we relax ship one contract completion time fiom 37 months
to 43 months as we did in the previous analysis, but we m e r relax it to a target of 50
months, which is ship two's contract completion tirne. In the model we represent budget
and rework fiinctions as one construction direct labor hour constraint, as we did in the
previous scenario. Likewise design's actual direct labor hour function was used raiher
than the budget labor hour fùnction to model design actual labor hours.
Ship 1 EFT S 43
Relaxhg the early fmish t h e for ship one to 43 months and solving the LP model to
minimize total hours, the model total hours were found to exceed the case study result,
which can be seen in Table 4.4. This is partly due to the calculation of overhead, which is
based on the duration of design and construction. The LP solution, found in Appendix B,
projected a significant difference to the schedule for ship four. The scheduled start tirne
for ship four changes fiom 45.6 months after design start to 42.4 months. The
construction duration increases fiom 12.4 months to 13.8 months and the early finish
time reduces fiom the planned 58 months to 56.2 months, providing a slack of L .8 months
(Figure 4.5).
The case study actual total startup duration was less than the LP model result. by
approximately 2.4 months (Figure 4.5), but the case study was 99,628 hours more for
ships two to four compared to the model estimate. Because the case study duration is less
than the LP model result, it reduces the total overhead equivalent hour contribution by
77,305 hours. The calculation for the case study overhead equivalent hours is as follows:
Cdo = 4400 * ( Si + TI ) Design Overhead Equivalent Hour Function
Cdo = 4400 * (19+24)
Cdo = 1 89,200
Cc, = 27255*(S4 -Si+ T4) Construction Overhead Equivalent Hour Function
C, = 27255 * (38 - 19 + 16)
Cc, = 953,925
The difference in construction direct hours for each ship is due to the difference in start
times for each ship, as shown in Figure 4.5. The tradeoff is starting later and relying on
shorter construction duration associated with less of an impact due to design rework,
while achieving committed completion tirnes. Taking only ship construction direct hours,
a saving of 94,333 hours (6.6%) was found compared to the actual case study result
(Table 4.4). Afier including design direct Iabor hours, a net reduction of 70,120 hours
was possible compared to the case study. Comparing ship construction direct hour results,
presented in Table 4.4, tiom this solution to the previous direct hour model solution, in
Table 4.3, an increase of 25,335 hours for ship fou. constxuction was observed. The
model results for ship four were still significantly less than the actual case study
construction ïabor hours by 12.1 %. Based on Table 4.4, the benefits of delaying the
construction starts or reducing the overlap of design with construction is realized on later
ships. To achieve the projected hours the solution deiays the start of the ships, especially
ship three and four.
Table 4.4 Scenario C - Cornparison of LP Model to Minimize Total Hours
1 1 Overhead Mode1 1 Results 1 Houn(%) I
With Ship 1 EFT S43 to Acturtl Case Study Rcsults Hours LP Direct1 1 Case Smdy Actual 1 Di fference
Design Overhead
Construction Overhead
(A) 189,200
Design
1 Ship 2 1 345,276 1 370,881 1 -25,605 (-6.9%) (
1
1 ,O3 1,230 1 953,9253 I
Ship 1
(B) 189,200
77.305 (+8.1%)
228,888
W B ) O
443,827
Ship 3
1
Ship 1 EFT S5û
204,675
438.532
289,000
Ship 4
Subtotal Construction Direct Labor Hours Subtotal Design and Constniction Labor Hours Total (Direct Labor Hours + ûverhead Hours)
Relaxing ship one completion commitment to a maximum of fifty months and resolving
24,2 13 (+ 1 1.8%)
5,295 (+1.2%)
293,629 258,034
the LP model to minirnize total hours one can determine if the ship one early fmish tirne
327,428
-35,595 (- 12.1 %)
1,336,137
1,565,025
2,785,455
of forty-three months was appropriate. The LP model solution achieves the cornrnitted
-38,428 (-1 1.7%)
schedule times while reducing the total nurnber of hours by 249,113 hours as shown in
1,430,470
1635,145
2,778,270
Table 4.5. The results show a change in schedule times with an overall reduction in
-94,333 (-6.6%)
-70,120 (4,3%)
7,185 (+0.26%)
duration to 56.2 months compared to the original plan of 58 (Figure 4.6). This is still
longer than the case study result of 53.8 months. The LP model result was 2,529,157
hours compared to the case study value of 2,778,270 hours (Table 4.9, a saving of
249,113 houn over the case study. Removing the effect of overhead, the total direct
Calcdation uses rounded figures.
hours reduced to 1 1 1,934 hours, which is approximately a $3M swing. Recalling that
management had stopped construction for three months afier the purchase of the
shipyard, this analysis indicates a longer delay to follow ships, rather than to ship one,
would have been a more cost effective approach, which would have still allowed the
shipyard to achieve schedule commitments. The obvious benefit of reducing duration is
the reduction in the overhead equivalent hours. The mode1 to rninimize total hours
recornmends a schedule that delays the start of ship constniction thus lessening the
impact of design rework on construction labor hours and dmtion, as shown in Figure
4.6.
Table 4.5 - Seenario C: Cornparison of LP Model Rcsult to Minimut Total Homs
Relaüng Sbip 1 EFT Constrrriot S Sû Months to Actual Case Study Results
Design Overhead
Di fference (A-B)
Construction Overhead
Case Study Actuaf Results
Hours
(A) 210,100
L
Design
LP Direct & Overhead Mode1
795,846
Ship 1
1 Ship 4 1 258,034 1 293,629 1 -35.595 l
189,200
953,925 I - 158,079 20,900
49,252 253,927
I
204,675
-6 1,562 1
370,881 Ship 2
Subtotal Design and Construction Direct Labor Hom Total
7
376,970
-25,60 1 345,280
438,532
1 ,523,211
2,529,157
1,635,145
2,778,270
-1 11,934
-249,113
Figure 4.5 Scenario C - Comparison of LP Model (Ship 1 EFT S 43) vs. Actual Case Study
Results
Figure 4.6 Scenario C: LP Model (Sbip 1 EFï S50) Compared to Actual Case Study Results
4.3.4 SCENARIO D: lMINIMIZE TOTAL STARTUP DURATION
The objective of this analysis is to determine the minimum total startup duration, which is
to minimize the LP model objective function (Sq + T4 ). It addresses question three of
section 4.2.2, which asks what would have k e n the labor hour cost and schedule if
duration was minimized rather than total hours and how does this compare to the case
study result? Ship four detemines the total duration of the design construction cycle,
considering it is the last ship that overlaps design. Therefore, the total duration can be
determined by ship four's lag and its construction duration. The fmt part of this analysis
uses the LP model constraint configuration from Scenario A in conjunction with the
duration minimiung objective function to determine the budget that would have been
required to achieve a duration minimization strategy. The second part of the analysis uses
the LP rnodel constraint configuration of Scenario C to fmd the actual design and
construction labor hours to achieve the minimum duration. Scenario C consbraint
configuration includes overhead and the actual design and construction labor hour
functions. As modeled in Scenario C, two ship one completion times, forty-three and fi@
months wiIl be used.
Scenario Dl: S h i ~ Design - and Construction Budget Labor Hours and Ship 1 EFT S 43
Scenario A used design and construction budget labor hour functions and efiminated
overhead, rework, and actual design and construction labor constraints. The difference
between this scenario and Scenario A is that the objective function minimizes total
duration. The rnodel result (Appendix B) presented in Figure 4.7, starts ship two to four
earlier than the case study original plan and provides two alternative schedule start times
for ship one. Alternative one has the minimum total hours of the two and it exceeds the
original production budget by 79,261 hours (6.4%). which would represent over three
million dollars. Therefore to reduce the total startup duration by 3.65 months, one should
expect an increase in the original budget between 5.2% and 6.4%to achieve it.
Table 4.6 I Conparison of LP M d e l Resolts with Case Study Budget Deriga and Coastruction Direct Labor Hours
Ship
Policy
Ship 2
Ship 4
1 1 I I Duration Months 1 58 54.35 1 54.35 1 58
Note: The LP mohel found that it was infeasible to achieve the original planned completion time of 37 months for ship one. (Excludes design impact on construction and overhead equivalent hours.)
277,979
Total
- Design
Budget Direct Labor
Hours
LP Mde l for Ship I EFI' = 43 months
252,68 1
Figure 4.7 Scenario D 1 - Cornparison of LP Model Rwulîs (Budget) to Minimize Total
Duration vs. Case Study Original Schedule
124,265
299,247
Direct Hr Minimization
278,136
1,296.9 16
Design
Ship I
264,206
200,788
300,080
Durdon Minimization
200,788
300,080
277,978
1 -3 14,433
ALT 1 1 99,s 1 5
304,180
292,47 1
252,68 1
ALT 2
253,9 19
1,299,442 1,235,172
Scenario D2: S h i ~ 1 EFT S 43 & S h i ~ Des i~ons tn i c t i on Actuai Labor Hours and
Overhead
This analysis takes the LP model with the modified constraints of Scenario C with the
objective fùnction to minimize duration. Two cases of constraining ship one early finish
time to forty-three and fifty months were solved and compared to the case study result.
The solution fmds no difference in the minimum total startup duration between any of the
duration minimization scenarios because total duration is an algebraic fùnction of ship
four start tirne and construction duration. Also, ship four early f ~ s h time is a fûnction of
lag between ships and with design. Therefore it becomes the case of determining the
labor and overhead hours to achieve the minimum total duration.
The model result provided two alternative solutions with the fvst estimating that ship one
would start and fmish approximately the same time as the case study, but following ships
would start and fmish later, while achieving the optimum total duration of 54.35 months
(Appendix B). The model found a slight increase in total hours (2,360 hours) versus
minimizing total hours, when comparing Tables 4.4 and 4.7. According to Figure 4.8, it
appears that shipyard management had implemented an approach to accelerate the
schedule. The construction start tirnes for subsequent ships were advanced. It is not
known if management's intent was to reduce total duration and overhead. The normal
direction to production is to reduce cost and to better the schedule. The d e l schedule,
shown in Figure 4.8, differs fiom the case study schedule with respect to the construction
start and fmish times for ships two to four.
The difference between the two mode1 proposed alternatives (Appendix B) was ship one
start time changes fiom 18.4 months to 16 months and its finish t h e changes fkom 43
months to 41.7. Alternative one provides the lower total number of hours, which would
be the preferred choice, while obtaining the same total duration of 54.35 months. Here a
slight delay in the start of construction provides a lower cost schedule alternative.
Alternative one solution provides the better approximation of the case study result, as
shown in Figure 4.8.
Figure 4.8 Scenario D2: Cornparison of LP Mode1 (Alternative 1 Showa) to Minimize Total Duration
to Case Study Results with Sbip 1 EFï S43
Considering only design and construction direct labor hours, alternative one provides a
total of 1,6 1 7,807 hours providuig a saving of 1 7,3 88 hours as cornpared to the case study
result shown in Table 4.7. This difference is attributed to the acceleration of ship
construction start times in the case study resulting in an increase in labor hours for an
approximate reduction of a half a month in duration (Figure 4.8).
-- - -
Table 4.7 Scenario D - Cornparison of LP Mode1 to Minimize Total Duration
Minimue Total Duration
(Ship 1 EFT 3 43) to the Case Study Results
Actual Results I
Item Description LP Mode1 1 Case Study 1 Difference in Hours
Alt 1 Alt 1 Alt 2 Alt 2
Design Overhead
Construction Overhead
189.200
Design
980,808
1
Ship 1
1 83.480
228,888
Ship 2
1,045,229
' 443,827
Ship 3
1 Subtotal Construction f 1,388,9 19 1 1,407,216 1 f 1 1 1 1
1,430,470 1 -41,55 1 1 -23,254
189,200
222,035
345,980
Ship 4
462.125
3 15,039
1 Total 1 2,787,815 1 2,857,960 ( 2,778,270 1 9,545 1 79,690
O
9 1,304 1
204,675
345,979
284,073
Labor Hours Subtotal of Design and Construction Labor Hours
Scenario D3: Ship 1 EFT S 50 & Ship DesianlConstruction Actual Labor Hours and
Overhead
-5.720
953,925
438,532
3 15,039
Relaxing the constraint of ship one early fmish time fiom 43 to JO months provide insight
into the potential that lies in providing methods other than construction to resolve design
changes. The solution provided two alternatives, with alternative one starting ship one
later than the case study result. A later construction start provided a total of 2,53 1,5 17
hours, as show in Table 4.8. Considering design and construction direct labor hours
only, alternative one proposes a solution that has a potential saving of 59,152 hours,
26,883
24,2 13
370,88 1
284,073
1,6 1 7,807
17,360 1
327,428
5,295
-24,90 1
293,629
1,629,25 1
23,593
-24,902
- 12,389 - 12,389
-9,556
1,635,145
-9,556
(-2.9%) -17,338 ( -1 .0 )
(-1.6%) -5,594
(-0.34%)
which is approxhately between $1.5 to $1.6 million. This indicates there are fuiancial
benefits in applying different technology in the design process that can identiq and
resolve design changes within design. Table 4.8 presents each alternative result and the
difference in hours compared to the case study. Figure 4.9 presents the least total hour
solution when minimizing duration compared to the case study
Table 4.8 Cornparison of LP Direct and Overbcad Model to Minimize Total Duration (Sbip 1 EFï
S 50) to Case Study Results
Alt 1
Difference ffours
Alt 2 L
LP Mode1 Minimize Total
Duration
1 83,480 Design Overhead C I
1
Design 1 253,927
Case Study Actual Results
210,100
1,045,229 Construction Overhead
Ship 1
189,200
745,424
222,035
Ship 2
953,925
376,970
Ship 3
20,900
204,675
345,984
Ship 4
-5,800 1
462,12 5
3 1 5,039
Subtotal for Construction Labor Hours Subtotal for Design and Construction Labor Hours
-208,SO 1
49,252
345,979
284,073
Total
9 1,304
17,360
438,532
3 15,039
1,322,066
1,575,993
370,881
2,53 1,5 17
-61,562
327,428 1
1,407,2 16
1,629,25 1
23,593
-24.897
-9,556 284,073
2,857,960
-24,902
-1 2,389
-9,556 293,629
1,430,470
1,635,145
-1 2,389
2,778,270
- 108,404 (-7.6%)
-59,152
-23,254
-5,894
-246,753 (-8.9%)
79,690
Shp 1
1 1 1 1 1 1 1 1 1
Shi92
ship3
Ship 4
-- --
Figure 4.9 Cornparison of Minimizing Total Duration with Actual Case Study Results
(Alternative 1 Ship 1 EFT <= 50)
A reduction of 7.6% in construction labor hours over four ships is a significant reduction
in design rework, if design rework is around 30%.
4.4 THE IMPACT OF RESOLVING DESIGN CHANGES ON CONSTRUCTION
To investigate the rate of resolution of design changes on design and construction labor
hours, the LP Model uses the objective function denoted as Scenario E. Previously it was
demonstrated that the ship construction total labor hours is the summation of the budget
and design rework. Therefore, we use the construction budget direct labor hour function:
Bi = 347832 - 2376.44 * SI, for 1 = 1 to 4; and the design rework fùnction: Ri = 238157 -
5364.95 * Si, for 1 = 1 to 4; to replace the actual direct labor hour function; CI = 585988 -
7741.39 * S i , for 1 = 1 to 4.
The other changes in the model constraints include the deletion of material rework (6)
and the replacement of design's budget labor hour fùnction with design's actual direct
labor hour fùnction, which was shown as constraint (5). The base model version is the
sarne as Scenario C, with the only difference king the breakdown of the construction
actual direct labor hour function into two, as previously described.
This analysis assumes that changes in the rework slope coefficient can model the rate of
resolution of design changes. A steeper slope means a quicker resolution of changes,
while a more gradua1 slope would relate to a slower resolution of changes. This
assumption has ken based on Figures 3.6, 3.7 and 3.9 and Table 3.5, where design
impact was modeled in tems of number of revisions remaining and construction labor
hours and rework was correlated to the number of revisions remaining. If the design
changes were resolved quickly, then one would expect the number of drawing revisions
remaining to decrease at a quicker rate. The slope could possibly be influenced by
improving the change control system and methods to identiQ design problems and their
resolution.
This approach involved comparing the resuhs of this analysis to Scenario C result with
the objective fùnction to minimize total hours ushg a ship one's early fmish time of 43
months. A second analysis was completed minimizing total duration using the same
Scenario C constraint configuration as a base but with an objective fùnction minimizing
duration. The design rework slope coefficient was then varied +/- 10% and the net effect
on hours and total duration relative to Scenario C results was determined.
Increasing the slope magnitude by 100/0, a 2.4% reduction in total hours and a decrease in
duration by 1.1 months were determined compared to Scenario C, which is presented in
Table 4.9. Decreasing the slope by 10% caused an increase of total hours by 2.4% and a
reduction in total duration of 1.8 months. An interesting aspect of minimizing total hours
is that no matter if the resolution of design changes was accelerated or deceleratedo the
total duration reduces compared to the base model shown in Figure 4.10. This is due to
the least cost solution accelerates the start of ships three and four and even though the
construction dunition increases slightly it reduces the ship three and four fmish times.
Varying the rate of design change resolution significantly alters the extent of construction
rework. A quicker resolution of design changes reduces rework labor hours by 18.2 %,
while a slower process of resolving (-10%) changes increases its by 39.9%, when
compared to the base original rework hours of 254,708.
--
Table 4.9 Impact of the Slope Coeff~cient of tbe Design Rework Function
to Base Mode1 (Ship Change in in Total Compared to 1 EFT = 43) Magnitude Toîal Hom 1 ToW 1 1 l I in
Duration Base Model Construction Rework
on Total Hours and Duration Differences Relative 1 Change in 1 ?'O '%O 1 % Change 1 % Change
Minimize Hours (Hours: 2,785,455)
(Duration: 56.2)
Performing a similar analysis and comparing it to Scenario C when minimizing duration,
the sarne minimum duration of 54.35 months was found for each case of varying the
design rework fûnction slope by +/-10%. The base mode1 had two alternatives when
minimizing total duration. Therefore the least total hour solution was taken as the
preferred solution and compared to the least total hour solution found when varying the
slope of the design rework function.
+100/o
Minimize Duration (Hou~s: 2,787,8 16) (Duration 54.35)
This analysis provided two alternatives that provided two different solutions for rework,
construction and overhead hours. Increasing the design rework fiinction siope provided
the options of reducing total hours by 2.4% or increasing it by 0.2%. Reducing the slope
by 10% increased total hours by 2.4% or 4.8%. Increasing the design rework function
slope by 10% reduces the construction rework fiom 2.7 to 3.5% compared to Scenario C
(Table 4.8). Sirnilarly, reducing the slope by 10% increases the rework from 3.3 to 3.7%.
The ability to identi@ and resolve changes and their impact on construction could either
-10%
-2.4%
I
+IO%
-1W?
+2.4%
Labor Hours -2.3%
Alt 1 : -2.4% Alt 2: +0.2%
Alt 1 : +2.4% Alt 2: +4.8%
+7.5%
-1.9
Alt 1 :-4.1% Alt 2:-3.3%
Ait 1 :+4,1% Alt 2: +4.7%
Hours - 18.2%
-3.2 +39.9%
O
O
Alt 1 : -22.7% Alt 2: -1 7.8%
Alt 1 :+22,7% Alt 2:+26.7%
reduce or increase the consmiction cost by $1.78 million over four ships. When
atternpting to minimize total labor houn. a slower resolution of design changes creates a
difficult situation and will increase rework. This analysis demonstrates there is economic
justification for design and shipyard management to be prudent in monitoring the
evolution of design changes, the rate of resolution, and the change control process. It also
justifies M e r research into the processes of design and drawing production and the
factors that can reduce design changes to improve overall productivity.
Figure 4.10 LP Model to Minimize Hours to Assess the Change in Dtsign Rework Function Slope
Figure 4.1 1 LP Mode1 to Miaimize Total Duration to Assess Cbaoge in Desiiga Rework Fuactioa Slope
CHAPTER 5 - CONCLUSIONS AND FUTURE RESEARCH
5.1 SUMMARY
The purpose of this investigation was to determine the impact of design on construction
using a shipbuilding case study and to determine the optimum ship construction start
times for those ships that overlap design to minimize the impact of design rework on ship
construction labor hours and duration.
A shipbuilding case study that dealt with the design and construction of twelve ships was
used to explore the impact of design on constniction. Specifically, four ships that
overlapped design was used to develop a linear program model to determine the optimum
overlap of design with construction. The case study investigation involved reviewing
design and construction data to correlate drawing revisions with ship construction labor
hours and duration. Also a cornparison of ship one and four machinery space's labor
hours by stage of construction was used to demonstrate the ripple effect that design had
on construction. The case study analysis correlated lag to design budgeted hours, design
actual labor hours, construction duration, design rework, construction budgeted labor
hours and construction actual labor hours. These relationships were used in conjunction
with the case study schedule logic to formulate a linear program model.
Various versions of the LP model were used to investigate the: 1) feasibility of the
original case snidy budget and schedule, 2) influence of design rework, 3) addition of
overhead translated in terms of equivalent hours, and 4) rate of resolution of design
changes on labor hours and duration. The LP model results were compared to the case
study original plan and actual results, dernonstrating the benefits of the methodology to
analyzing the overlap of design with construction. This helped in developing a master
summary schedule to integrate design and construction functions.
5.2 CONCLUSIONS
The conclusions reached fiom this researc h are as follows:
The case study revealed that design changes and a change in design scope were the
main causes of design exceeding budget by 64.7% and ship construction by 28.8%. In
total it caused design and construction to overrun the labor budget by 32.4%.
Design changes, in terms of drawing revisions, were comelated to construction direct
labor hours, dwation and construction lag. It was found that design rework caused an
estimated increase in construction labor hour cost for the fvst three ships in the range
of $7SM to $12.6M.
Four ships fioxn the shipbuilding case study were used to establish relationships
among project variables. Correlation's were found between lag and design budgeted
labor hours, design actual labor hours, ship construction budgeted labor hours, ship
construction achial labor hours, construction duration, and design rework. These were
used in the formulation of the linear progmnming model.
The linear programming model revealed that original construction budget and
schedule was infeasible for the four ships overlapping design. To achieve schedule
cornmitments and to minimize the increase in design and construction budget hours to
5.0% required deiaying ships one, three and four by 2.4, 2.4, and 4.6 months,
respectively .
The construction costs, excluding overhead, based on four ships couid have been
minimized by 8.4% ($2.5M to $4.1) by delaying the start of ship two, three and four
by 2.1, 6.4, 7.6 months, respectively. To achieve this design labor costs would have
increased by 11.8% providing a net saving of 5.896, after considenng design and
construction labor hours together.
By considering design and construction overhead the total duration was reduced by
1.8 months and the rninirnized construction labor hours changed fiom 8.4% to 6.6%
and when including design fkom to 5.8% to 4.3%. This was achieved by delaying the
start of construction of ships two, three, and four to 2.1, 6.4 and 4.4 months,
respectively .
A policy to minimize total labor hours tends to schedule ship construction start times
later, reducing the overlap of design with construction and lessening the effect of
design rework on construction labor hours. Reducing the overlap of design with
construction reduces constructicn direct labor hours and duration, but increases the
total design/construction cycle duration.
tncreasing the rate of resolution of design changes by 10Y0 cm reduce total design
and construction labor hours due to rework between 2.3% and 4.1%. Likewise a
slower rate of resolution of design changes can increase design and construction labor
hours between 4.1 % and 7.5%.
Relaxing ship one's scheduled completion time illustrates the benefits of devising
methods to identiQ and resolve design changes within design rather than during
construction. The model, including overhead, projected a saving in construction costs
in excess of $3M in direct labor hours by delaying the construction start time for
ships one, two, three and four by 8,2.1,6.7 and 4.4 rnonths, respectively.
10. A policy to minimize total hours provides the best analytical result in terrns of total
labor hours while achieving or bettering ship construction scheduted completion
times. The incremental increase in total hours to implement a total duration
minimization policy must be offset by the fuiancial benefits oE 1) fieeing up capacity
to pursue other work, 2) improving case flow, 3) reducing fmancing costs. 4) contract
bonuses or penalties, and 5) reducing the overall shipbuilding prograrn overhead.
11. It is believed that by delaying the start of construction of ships one to four, more
oppomuiities will be available to resolve design problems. lmproved communication
among design, construction, suppliers, the reguiatory authority and the customer will
allow design problems to be resolved before the start of construction. This will
improve the integration of design with construction leading to lower labor costs and a
shorter design/consûuction cycle time.
5.3 RESEARCH IMPLICATIONS
Enumerated are some of implications that must be considered relative to the study
fmdings and conclusions.
1. One can not make definite statements regarding the case study actual results because
estirnates were used within the LP mode1 and contract details regarding bonuses and
penalties were not researched. However it does demonstrate the insight LP modeling
can provide on a ship design and constmction prograrn.
2. The model's proposed plan when minimizing design and construction labor hours,
recommended starting construction of ail ships later than the original plan while
achieving the contract committed completion times for ships two to four and with a
revised target completion time for ship one. For minirnizing duration the
recornmendation is made to start the ships eatlier than the plan, resulting in a
reduction in the planned fmish times and duration. This raises the question of
including the influence of design rework within construction budgets and schedules.
3. The linear programming model indicates that the management approach used in the
shipbuilding case study was to accelerate the schedule as was demonstrated with the
early construction starts. It has been assumed that the intent of this policy was to
minimize duration. Based on the LP model result that included overhead, there is
evidence that a duration minimization policy was the best representation of the
shipbuilding case study.
4. Solving the LP model to minimize duration with the overhead constraints included
and ship one completion tirne constrained to fi@ months raises the practical
consideration of starting ship one so late and not being able to use it to resolve design
issues. In such a case, holding a tighter schedule for ship one may be more practical
than to follow the results fkom relaxing ship one completion to 50 months. Methods
to identiQ and resolve design problems within design would be required in order to
capitalize on delaying the construction start of ship one. These methods would also
reduce design cost and duration.
5. This research demonstrates that linear programming is a viable technique in assessing
design construction overlap problems. The analysis shows that there are practical
issues that must be considered in devising a design and construction strategy, such as
the impact of design rework. The investigation demonstrated that there is a potential
fmancial benefit in conducting research into reducing design rework by improving the
design process and its integration with construction. Processes to reduce design erron
and changes and to speed up the change control process and its implementation would
be beneficial to a shipbuilding program, especially during the startup period when
design overlaps construction.
5.4 FUTURE RESEARCH
Further research is needed as follows:
1. Fornulate a design planning and scheduling model to integrate design disciplines,
design with construction and extemal agencies invotved, such as suppliers and
regulatory bodies.
2. Consider bonuses and penalties in fbture mode1 development. Also to develop a
model to compare the difference in solutions of a multiple ship program that extends
construction beyond the period that design overlaps construction to a mode1 that
optimizes only the construction start of those ships overlapping design.
3. Investigate the causes of design changes and their impact on ship construction cost
and duration.
4. Determine the optimum method of resolving design changes to minimize rework in
construction.
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APPENDIX A
CASE STUDY ANALYSIS SAMPLE PRINTOUTS
INDEX FOR APPENDIX "A"
This Appendix is divided into two parts. Appendix A l presents the frequency distribution
tables for the difference in start and finish times for Block 3 for ship one and four, which
was used to assess the design impact on construction schedule start and finish times. Also
it presents the average difference in labor direct hours by stage of construction for ship
one and four, which was used to present evidence of design's impact on construction.
Appendix A2 presents the scatter plot sarnples to show the impact of design on
construction and the hct ions developed for the Linear Program Model.
Appendix A1 - Frequency Distribution Tables and Average Difference in Construction Labor Hours by Stage of Construction
Exhibi t Description
Table A 1 Sarnple of Block 3 Construction Data Table used for analysis in Chapter 3, which contains the following:
Ship Nurnber, Stage, the stage of construction, Unit, Block 3 is the notation for the structural steel assembly units, Pstart, the planned start time, Pfinish, the planned finish time, BCWP, the budgeted cost of work performed, ACWP, the actual cost of work performed, Astart, the actual start time, Afinish, the actual finish time, Diff Start, the difference in days between the planned start and the actual star'& Diff Finish, the difference in âays between the planned finish time and the actual finish time, Pdur, the planned duration of the stage of construction,
Adur, the actual duration of the stage of construction, Dimuration, the difference between the planned duration and the acîual duration, and, Difference Direct Labor Hours, the difference between the BCWP and the ACWP.
Table A2 Ship 1 Frequency Table for the Difference in Start Times Table A3 Ship 1 Frequency Table for the Difference in Finish Times Table A4 Ship 4 Frequency Table for the Difference in Start Times Table A5 Ship 4 Frequency Table for the Difference in Finish Times Table A6 Ship 1 : Table of Means and Means Plot of the Difference in Direct Labor
Hours by Stage of Construction. Table A7 Ship 4: Table of Means and Means Plot of the Difference in Direct Labor
Hours by Stage of Construction
Appendix A2 - Statistical Results of the Assessrnent of the Impact of Design on Construction and the Linear Program Model ~unctions
Table A8
Table A9 Table A1 0 Table A 1 1
Table A 1 2
Data table used to formulate construction mathematical functions. It contains the fields of:
Lag in months (Lag), Construction duration in months (Duration), The number of remaining revisions (Rr), The actual direct labor hours used to construct each ship (ActdirectHrs), The total duation measured fiom the time design started to the completion of each ship in months (Tduration), The budgeted labor hours to constnict each ship (Budhrs), and, The difference between the actual direct hours and the budgeted direct hours referred as Design Rework (Desibm Rework). Table of Linear Regression Results Sample Regression Analysis: ActdirectHrs and Lag Data Table used to formulate design direct labor hour îunction. It contains the following fields:
Lag in months (Lag), Design dates time was accumulated, Budgeted cost of work scheduled (BCWS), Actual cost of work perforrned (ACWP), Budgeted cost of work performed @CWP), Revisions at that specific point in time (Revisions), Remaining revisions at that specific point in time (Rr), and, Percent of revisions rernaining (PercentRr). Sarnple of Linear Regression Analysis: Design ACWP and Lag
Table A l - Sample of Ship 1 and 4 Coostructioo Da& - Continued Appendix A 1/4/2001 L i : 00 An
F i l e : C : \HMoyst \WPHESIS' ,Block 3 Construction Data. ûf 3 - Page 4
Di ff Start Di f f F i n i s h ---------- * ------- -- ----------- 1 - 7 -4 7 2 2 4 -2 8 3 -146 - 1 4 -122 L 5 3 - 5 5 6 -L -195 7 -2 9 5 i3 1 -11 9 11 -33 LO -6 -2 7 11 3 - 7 12 -10 -150 13 - 1 -167 14 - 3 -73 15 5 - 1 16 14 1 6 i 7 O -2 L 18 O - 4 4 19 3 1 - 34 20 -18 - 5 2 21 -16 -109 2 2 - 1 U - 74 23 O -10 2 4 3 -0 2 5 O - 8 26 - 3 -10 27 5 - 8 2 8 - '3 -2 2 4 3 -6 3 0 - 4 -2 1 3 1 - 8 -86 32 - 4 - 8 3 3 3 1 -27 3 4 -28 -125 3 5 - 3 -75 36 1 -369 3 7 5 - 6 38 - 5 - 2 5 39 - 1 - 4 8 4 0 -22 -138 4 1 - 2 - 3 9 4 2 - 17 -15 4 3 - 17 - 7 4 4 - LY -84 4 5 -8 -26 46 O -10 4 7 O - 10 4 8 -2 3 -6 4 9 - 2 -15 5 0 - 6 - 3 5 1 52 7 -38 5 3 - 2 - 4 2 5 4 O 1 5 5 - 1 -64 56 -3 1 O
Pdur Adur ------------ 3 2 72 139 201 160 13 - 7 -130 59 1 17 182 376 293 196 109 281 141 185 141 162 147 157 66 206 79 245 7 4 144 8 14 6 1 4 1 8 29 133 177 9 : 3 4 5 0 8 4 4 4 137 4 5 105 1 1 4 389 395 7 15 7 14 7 20 1 4 8 1 10 7 2 4 8 8 6 1 5 3 6 54 51 14 8 8 7 159 2 37 1 3 & 13 a 2 4 36 83 37 L53 7 7 114 2 4 22 3 4 2 4 107 172 22 40 4 14 4 14 3 3 3 316 2 4 37 3 4 29 4 O 217 262 325 365 655 6 5 4 4 3 106 190 177
Table A2 - Sbip 1 Frequency Table for the Difference in Start Times
Appendix fi alock 3 Construction.sgp (Block 3 construction Data.sf3) 1/4/2001 11:14 AM
Orequency Tabulatlon for DL£ f F l n x s h
----+---------------------------------------------------------------------------
Lover Upper Relative Cufnulati~e Cum. Rel. C l a s s L i m i t List Hldpoint Prequcncy Prequency Frequcncy Frequency
or below -400.3 -380. O -360.0 -7 4 0 . 0 -320. O -300. O -2 8 0 . 0 -260. O -240. O -220. O -200. Ci -180.0 -160. O -140.0 -120. O -100.0 -80.0 -60. O - 4 0 . 0 -20. O 0.0 20.0 40. O 60.0 0O.û 100.0 120.0 140. O 160.6 1 8 0 . O ZOO. O
--------------------------------------.------------------------------------------ Hean = -38.6375 Standard deviatian = 58.0247
The StatAdvlsor --------------- T h i s optron petforms a frequency t a b u l a t ~ o n by
dividing t h e range of D r f f F i n i s h into equal w l d t h intervals and countlng the number of data values rn each i n t e r v a l . The frequencles çhou the number of data values i n each xnterval, w h i l e the relatrve trequencles show the proport ions rn each interval. You can change t h e definitron of rhe mtervals by pressing the alternate mouse button and selecting Pane Options. You can set t h e r t s u l t s of the tabulatlon graphically by selecting Frequency Hlstogram £rom the L i s t o f Graphical Opt~ons.
Table A2 - Ship 1 Frequency Table for the Differeoce in Start Times
Appendix A Block 3 Construction.sgp (Block 3 Construction Data.sf31 1/4/2001 12:18 PM
proportions in each interval. Yoü can change the definition of the intervals by pressing t h e alternate mouse b u t t o n and selecting Pane Options. You can see the results o f t h e t a b u l a t ion graphically by selecting Frequency Histogram £rom the List of Graphical Options.
Ship 1 Histogtam for Diff Start Times
30
Diff Start
Table A3 - Ship 4 Frequency Table for the Differeoce in Start Times
Fqpendix A B l a c k 3 Construction.sgp (Block 3 Construction Data.sf31 1/4/2001 1 1: 1 4 AM
Frequency Tabulation for D i f f Start
-------------------------------------------------------------------------------- Louer Upper Relatrve CumuLative C m . Rel.
Class L i m i t L i n u t Midpornt Frequency Fraquency Frequency Frequency ------------------------------*--------------------------------------------------
a t or belaw -240.0 O O O. 0000 0 - O000 1 A -240.0 - 2 2 5 . 6 -232.5 O O. O000 ü O . 0000 2 -225.0 -210.0 -217.5 1 0-0115 1 G-0115 2 -210.0 -195.0 -232.5 O O. O000 1 0.01 15 4 -145.0 -100.0 -187.5 O 0,0000 1 0.0115 5 -180.0 -165.0 -172-5 O O, QOOO 1 0.0115 6 -165.0 -150.0 -157.5 O O - 0000 1 O. 0115 7 -150.0 -L35.0 -142.5 O O . 0000 1 O. 311.5 8 -135.0 -120-0 -127.5 il O . O000 1 0.0115 3 -120.0 -105.0 -112.5 O 0. 0000 1 O. 0115
1 û -1135.0 -90. O -97 , 5 O O . 0000 1 O . 0115 11 -96.0 - 7 5 . O - 8 2 . 5 O 0 . 0 0 0 0 1 0.OLL5 12 - 7 5 . O -60. O -67 - 5 i 0,0115 2 O. (3230 13 -60. O - 4 5 . O -52.5 5 0 , 0 5 7 5 7 O. OSOS 14 - 4 5 . O - 3 0 . 0 - 3 7 . 5 3 O. 0 3 4 5 ?O O . 1 1 4 3 2 5 -30. O -15. O -22.5 18 0.2069 SB O. 3218 16 -15. O O. O - 7 . 5 4 7 7 5 0.8621 O. 5402 17 O. O 15, O 7 . 5 12 0.1379 87 1.0000 18 15.0 30. O 22.5 O O . 0000 8 7 1.0000 13 30. O 45 .0 3 7 . 5 0 O . 0000 9 7 1.oûoo 2 O 45.0 60. O 52.5 O O. 0000 8 7 1.0000
above 6 0 . 0 O O . 0000 8 7 1 . 0 0 0 0 -------------------------------------------------------------------------------- Mean = - 1 3 . 7 8 1 6 Standard deviatlon = 27.0247
The SIatAdvisor ---------------- This option performs a frequency tabulaCion by
d i v i d i n g the range of D i f f Start into equal width intervals and counting the number of data values L n each in terva l . T h e frequcncies show t h e number of data values in each i n t e r v a l , w h i l e the relative frequencies show the proporlions in each interval. Yau can change the definition of the intervals by pressing tne a l t e r n a t e mouse button anci selecting Pane Options. You can see the resu l t s of the tabulat~on graphzcally by select ing Frequency HLstogram from the l i s t of Graphical options.
Table A3 - Ship 4 Frequency Table for the Difference in Start Times
Appendix A B l o c k 3 constructron-sgp !Block 3 Construction Data.sf3) 1/4/2001 Li: 14 An
Ship 4: Nstogram for Diff Start Times
Diff Start Times
Table A4 - Sbip 1 Frequeacy Table & Histogram for the Differeoce in Finish Times
Appendix A Block 3 Construction. sgp (Block 3 Construction Data. sf 3) 1/4/2001 11~14 AM
Freqtiency Tabulation for Diff Fxnish
-------------------------------------------------------------------------------- Lower Upper Relat ive Cumulative Cum. Rel.
Class L i m i t L i m t Midpotnt Prequency Frequency Frequency Frequency -------------------------------------------------------------------------------- at or belov -400.0 O o. 0000 a 0.0000 i -400. O -390.0 -390-0 O O. Cl000 O o. OO(30 2 -380.0 -360.0 -370.0 1 O. 0125 1 O. 0125 3 -360.0 -340. O -350-0 O 1 O. 0125 O. 0000 4 -310.0 -320.0 -330.0 O C . O000 1 0.0125 5 -320.0 -300.0 -310.G O o. 0000 1 O. 0125 6 -300.0 -280.0 -250.0 O O. C O 0 0 i 0.0125 7 -280.0 -260.0 -270.0 O I 0.0125 O. 0003 8 -260. O -240. O -250 -0 O O . 0000 1 3.0125 9 -240.0 -220.0 -230.0 3 0.0000 1 O. O125 10 -220.0 -200.0 -210.0 O O . O000 1 d.0125 l!. -230.0 -180.0 -190.0 1 O. OL25 2 0.0250 12 -180.0 -160.0 -170.0 1 O. 0125 3 O. 0375 L 3 -160.0 -140. O -150. O 1 O , O125 4 O . 050- L 4 -140.0 -120.0 -130.0 4 O. 0500 8 O. 1000 i5 -120.0 -100.0 -110.0 1 O. 0125 9 3.1125 16 -100.0 -80.0 -90.0 2 O. O250 11 0.1375 17 -80. O -60. O -70. O 4 O - 0500 15 O. 1875 18 -60. O - 4 0 . 0 - 5 0 . 0 9 O. 1125 24 O. 3000 19 -40.0 -20.0 -30.0 2 O O. 2500 4 4 o. 5500 20 -20.0 0.0 -10.0 30 O. 3750 74 O . 9250 21 9. O 20.0 L0.0 5 0.0625 7 9 O. 9875 2 2 20.0 40.0 3 9 . 0 O 0.0000 7 9 0.9875 2 3 4 U . a 60.0 50 .O O O . 0000 7 5 O. 9875 2 4 60.0 80.0 70.0 O 0.0000 79 0 . 9875 2 5 80.0 100. O 90.0 1 O . 0125 8 O 1. ooi30 26 109.0 120. O 110.0 O O. 0000 8 O L.0000 27 f20.0 140.0 130.0 O O. 0000 80 1 .O000 2 9 140.0 160.0 150.0 O O. 0000 8 0 1.0000 2 9 160.0 180.0 170. O O O . 0000 8 0 1.0000 3 O 180.0 200. O 190. 0 O O. O000 R O 1.0000
above 200.0 O O . 0000 8 O 1.0000 --- -------------------------.-------------------- Mean = -38.6375 Standard deviation = 50.0247
The stitAdviuor --------------- This option perfoms a frecpency t a b u l a t ~ o n by
dividrng t h e range of D l f f F i n i s h i n t o equal wrdth rntervals and counting the number of data values in each in t erva l . The frequencies show the numbec of data values l n each interval . w h i l e t h e relative frequencles show the proport ions i n tach Interval . You can change t h e definrtion of the intervals by press ing the a l t e r n a t e mouse button and s e l e c t i n g Pane Options. You can set the r e s u l t s of the rabulation graphically by selecting Frequency Histogram from the list of Graphical Options.
Table A4 - Ship 1 Frequency Table & Histogram for the Difference in Finish Times (Cont.)
Appcndix A Block 3 Construction.sgp ( B l o c k 3 C o n s t z u c t u m Data.sf31 1/4/2001 11:14 AM
Ship 1 : Histogram for Diff Finish Times
Table A5 - Ship 4 Frequency Table & Eétogram for tbe Difference in Finisb Times Appcndix A BLock 3 Construction.sqp {Block 3 Construct~on Data.sf3) 1/4/2001 1L:14 An
Frequency T a b u l a t ~ o n f o r Dl f f F i n i s h
-------------------------------------------------------------------------------- Louer Uppcr Relative Cumulative Cum. Rel.
Claus L i r m t LUIIL t Midpoint f requcncy FrequtnCy Frequency Frequency -------------------------------------------------------------------------------- a r or below -210.0 O O. O000 O O. O000 1 -220.0 -200.0 - 2 0 5 . O O O. 0000 O O - 0000 2 -200.0 -190.0 -195.0 O O. O000 O O. 0000 3 -190.0 -180.0 -185.0 1 O, 0116 1 O. 0116 4 -180.0 -170.0 -175.0 2 O. 0233 3 O . 0349 5 -170.0 -160.0 -165.0 0 O. O000 3 O. 0349 6 -160.0 -150.0 -155.0 2 O. 0233 5 O. 0581 7 -150.0 -140.0 -145.0 2 O . 0233 7 O. 0814 8 -140.ù -130.0 -135.0 1 O . 0116 8 0.0930 9 -130.d -120.0 -125.0 L O. 0116 3 O. 1047 10 -120.0 -110.0 -115.0 L O. 0116 1 O O, 1163 1 1 -110.0 -100.0 -105.0 3 O. G349 13 O . 1512 12 -100.0 -40. O - 5 5 . O 6 O. 0698 19 O. 22O5 13 -90.0 - 0 0 . 0 -85. O O O. O000 L 9 O. 2204 14 -80. 0 -70.0 -75. O 2 O. 0233 21 O. 2442 15 -70.0 -60. O -65.0 O O. O000 2 1 0.2442 16 -60.0 -50.0 -55.0 3 O. 0349 2 4 0.2791 17 -50. O -40.0 -45 . O 7 O. 0814 3 1 O. 3605 18 -40.0 -30-0 - 3 5 . O 13 O. 1512 1 4 O. 5116 L9 -30.0 -20.0 - 2 5 . O 11 O . 1279 5 5 O . 6 3 9 5 2 0 -20.0 -10-0 -15.0 19 '2.2209 7 4 O . 8605 21 -10.0 0.0 -5. O 3 0.0349 77 O. 8953 2 2 0.0 10.0 5.0 2 O. 0233 79 O. 9186 23 10.0 20. O 15.0 1 O. 0110 80 O - 9 3 0 2 2 4 20 .0 30. O 25.0 1 0.0116 81 O . 9419 2s 30.0 4 0 . 0 3 5 . 0 O o. ogao 81 o. 9419 26 40.0 50.0 45.0 O O. 0000 81 O. 9419 2 7 50.0 60. O 55.0 1 O.OL16 8 2 O. 9535 2 8 60.0 70. O 65.0 O E 2 O. 9535 O. O000 2 9 70.3 80. U 75.0 2 O. 0233 8 4 O. 9767 3 0 80.0 90.0 85. O O O . 0000 8 4 O. 9767 3 1 90.0 100, O 45. O O O. O000 8 4 O. 9767 22 100.0 110.0 10S.O O O. O000 84 0.9767 3 3 110.0 120. Q 115. O O O - 0000 8 4 0.9767 3 4 120.0 130. O 125.0 O O. 0000 8 4 0. 5767 35 130. O 140.0 135. O O O. O000 8 4 O. 9767 3 6 140.0 150.0 145-0 O O. O000 84 O . 5767 37 150. O 160. O 155.0 O O. 0000 8 4 O . 9767 38 160.0 170.0 165.0 O O. 0000 8 4 O . 9767 39 170.0 180.0 175.0 O O. 0000 8 4 O. 9767 4 0 183.0 190. O 185.0 O O. 0000 8 5 O . 9767 41 190.0 200. O 195.0 O O. O000 8 4 O. 9767 4 2 200. O 210.0 2 0 5 . O O 0.0000 8 4 O . 9767 4 3 210.0 220.0 215.0 O 0.0000 84 0.9767 4 4 220. O 230.0 225.0 2 O. 0233 86 1.0000 4 5 230.0 2 4 0 . 0 2 3 5 . O O 0. 0000 9 6 1.0000 46 240.0 250. O 245.0 O 86 1.0000 O. 0000 4 7 250. O 260.0 255.0 (3 O. 0000 8 6 1.0000 4 8 260.0 270.0 265.0 O O. O000 86 1 * 0000 4 9 270. O 280.0 275. O O O. 0000 86 1.0000 5 O 280.0 290. O 285. O O O. O000 €?G 1.0000
above 290.0 O O. O000 86 1.0000 ---*---------------------------------------------------------------.-------------
Table A5 - Ship 4 Frequency Table & Histogrrm for the Difference in Finish Times Appcndix A B l o c k 3 Constructmn-sgp ( B l o c k 3 Construction Data.sE3) L/4/2001 L1:14 An
Uean = -39.3605 Standard deviation - 65.6051 T h i s option perfozms a frequency tabulat ion by
div id ing the range of D i f f F ~ n i s h r n t o equal width intervals and countrng the number of data values i n each interval . The frequencies show the number of data values in each rnterval, while the relative frcquencles show t h e proportrons i n cach interval . You can change the d e f i n i t ~ o n of the i n t e r v a l s by pressing t h e alternate mause b u t t o n and s e l e c t r n q Pane Options. You can sec the results of the tabulation graphically by s e l e c t i n g Frcquency Histogram f r o m the L i s t of Graphical optrons.
Ship 4: Histogram for Diff Finish Times
-2 10 -1 10 - 10 90 LW 290
Diff Finish Times
Table A6 - Ship 1 Table of Means and Means Plot of the Difference in Direct Labor Hours by Stage of Construction
Append~x A Block 3 Construction.sgp (Block 3 Construction Data.sf3) 1/4/2001 Li:14 AH
T a b l e of Means for D r f f D i r e c t H o u r s by Stage with 9 5 . 0 percent confidence intervals
Stnd. error Stage Count Mean ( p o o l 4 s) Louer l i m i t Upper lmit
1 11 -98.3636 210.072 -518.032 321.304 2 10 -41.8 220.325 - 4 8 1 . 9 5 1 398.351 3 9 5 - 22222 232.243 - 4 5 8 -730 469.183 4 fi -1343.25 246.331 -1540.35 -556.146 5 9 - 3 6 5 . 5 7 5 246.331 -857.979 126.229 6 7 -531.714 263.339 -1457 - 8 - 4 0 5 . 0 3 3 ? 4 -4862. O 348.365 -5557 .94 -4166.06 a C)
L -1695.5 492.663 -2679.71 -711.292 9 1 -2898 - O 696.73 -4284.86 -1506.12 L 1 2 -327.5 492.663 -1311.71 656.70B 12 ?
L -91. O 492.663 -1075.21 893.208 2; 3 -349 . O 402 -257 -1151.6 455.603 2 2 a -80 .3333 402.257 -883.936 723.27
2 3 2 -24. O 492.663 -1008.21 960.208 3 1 1 - 4 . 0 696.73 -1395.~1~ 1387. a 8 3 2 7 7.14286 263.339 - 5 1 8 , 9 3 9 533.224 33 1 -17. O 690.73 - 1 4 0 8 . 8 8 1374.88
Tota l 8 1 - 5 8 2 , 296
The StatAdvisor
Thts table shows the mean D r f f D i r e c t H o u r s for each level of Stage. It a l s o s h o w s the standard erroE o f each man, w t u c h is a masure of its sampiing variability. The standard errat is formed by div id ing the pooled standard deviation by t h e square root of the number of observations at each level. The table also d i s p i a y s an interval around each man. The intervals currently disp layrd are 95.0ê confidence i n t e r v a l s for each mean sepdrate iy . 95.03 of such i n t e r v a l s w i l l contain the truc means. You can di sp lay the intervals gtaphically by selecting Means Plot from the list of Graphical Options. In the Multiple Range Tests, these i n t e r v a l s are used to d c t e n n ~ n e which means are signif icantly dif f c r c n t f rom which o t h e r s .
Table A6 - Sbip 1 Table of Means and Means Plot of the Difference in Direct Labor Hours by Stage of Construction
Appendix A B l o c k 3 C O ~ S ~ K U C ~ ~ O C . sgp !BLock 3 Cons truc t ion Data. sf 3) 1/4/2001 11:14 AM
Ship I : Means and 95 .O Percent Confidence Intervals ( pooled s)
Stage
Table A7 - Sbip 4 Table of Means and Means Plot of the Difference in Direct Labor Hours by Stage of Construction
Appendix A Elock 3 Construction. sgp ! B l o c k 3 Construction Data. sf3) 1/4/2001 11: L4 An
Table of Means for DiffDirectHours by Stage v i t h 95.0 p e r c e n t conf~dence ~nterva l s --------------------------------------------------------------------------------
S t n d . error Stage Coun t ~ e a n (pooled s) Lover limit Upper lrmir
9 11 -187.727 91.6273 -330.519 - 4.93545 2 8 26.75 107 -443 - 107.592 241.092 3 9 27.8889 101-298 - 174.195 229.973 4 9 -98. 0 101-298 -300 .084 104.0e4 5 9 -209 - 0 101.238 -411.084 -5.91604 6 8 -109.5 107.443 -323.842 104.842 ? 4 -1598.5 151.947 -1901-63 - 1295.37 8 1 -84.0 303.893 -690.252 522 - 2 5 2 9 1 -79. O 303.893 - 6 8 5 . 2 5 2 527.252 11 1 -67. U 303.893 -673.252 5 3 5 . 2 5 2 12 1 -21.0 303,893 - 627 .252 5 8 5 . 2 5 2 2 1 3 -29.6667 1 7 5 . 4 5 3 -379.686 320.353 22 3 6.66667 175.453 -343.353 356.686 2 3 2 4.0 214.885 -424.685 432.685 3 1 2 45.5 214.885 -383.185 4 7 4 . 1 8 5 3 2 5 40.0 135.905 -231.124 311.124 3 3 1 20.0 303.893 - 5 0 6 . 2 5 2 626.252 4 2 9 -151.0 101.298 - 3 5 3 . 0 8 4 51 .084 -------------------------------------------------------------------------------- Total 8 7 -149.345
The StatAdvisor --------------- This t&le shows the mean DiffDirectHours for each
level of Stage. It also shows the standard error of each mean, which is a m a s u r e of its sjmpling v a r i a b l l i t y . The standard error is formed b y dtviding t h e pool& standard deviatlon by t h e square root of the numbcr of observations at each lsvel- The table also displays an i n t e r v a l around each mean. The in terva l s currently displayed are 95 . O % confidence intervals for each mcan separately. 9 5 . O?? of such i n c e r v a l s vil1 contain t h e t r u c means. You can dispiay t h e intervala graphica l ly by selectrng neans Plot from the list of G r a p h ~ c a l Options. In the Multlple Range Tests, these intervals are ueed to determine whrch means are s l g n i f i c a n t l y di f ferent fram uhich others .
Table A7 - Ship 4 Table of Means and Means Plot of the Difference in Direct Labor Hours by Stage of Construction
B l o c k 3 Construct~on.sgp ( B l o c k 3 C o n s t r u c t i o n Data.sf3) : i 4 / 2 0 3 1 :::14 AM
Stage
Appendix A2 Statistical Results of the Assessrneat of the Impact of Design on Construction and
the Linear Program Model Functions
Table A8 Data Table used to Formulate Construction Mathematical Functions
Appendix A 1/4/2001 2 : 3 0 PM
F i l e : C: \HMoyst?MTHESIS\Final Overlap.sf3 - Page 1
Description
Table A9 Linear Regression Results to Formulate LP Model
Mode1 1 df 1 F-Ratio 1 P-Value 1 R-
Ship Construction Actual Direct Labor
Hour Function Construction Budget Direct Hour Function
Rework Function
Construction Duration Function
Design Budget Labor Hour Function
Design Direct Labor Hour Function
Material Rework Equivalent Hour
fiinction Total Duration and Lag
Relationship of Construction Duration
and Number of Drawing Revisions
Relationship of Actuai Direct Labor Hours and the Number of Drawing
Revisions Relationship of Rework
and the Number of Drawing Revisions
585988 - 774 1.4* Lag
347832 - 2376.4 * Lag
238 157 - 5364.9
32.9 + 0.55 * Lag 3 368.2 0.002 99.5
3
* Lag 32.8 - 0.0454 *
Lag 15143.6+3037.4
* Lag 2220.68 +
5271.34* Lag 17876 - 363.37 *
Lag
3
3
34.5
3
4
4
3
5.84
79.4
0.027
254.7
15.0
51.6
4.87
squared 94.5
O. 136
0.0 12
74.5
97.5
0.0039
0.030
0.0055
O. 15
99.2
83.4
94.5
70.9
Table A10 Sample of "Statgraphics Plusn Linear Regression Analysis Printout
Actual Direct Labor Hours (Actdirectbrs) and Lag
Appendix A Overlap - Appendix A.sgp ( F i n a l Overlap.sf3) 1/4/2001 2 : 4 6 PM
Reqression Analysis - Sinear model: Y - a + b * X ----------------------------------------------------------------------------- Dependent variable: ActdirectHrs Independent variable: Lag
---- - - - - - - - - - -
Standard T Parameter E s t i m a t e Error Statistic P-Va lue
ïntercept 585988.0 39881.9 14.6931 0.0046 Slope -7741.39 1317.37 -5.87 638 O. 0278
Corre la t ion Coefficient a -0 .972241 R-sq~ared = 94.5253 percent Standard E r r o r of Est. - 17918.2 The S t a t A d v i sor ---------------
The o u t p u t shows the results of fitting a linear mcdel t o describe the relationship between ActdirectHrs and Laq. The equation of t h e titted rnodel 1s
ActdirectHrs = 585908.0 - 7741.39'Lag Since t h e P-value in the ANOVA table is Less r h a n 0.05, there is a statistically significant relationship between ActdirectHrs and Lag at the 95% confidence l e v e i .
The R-Squared statistic ind ica tes that the model as fitted expla ins 94.5253% of t h e variability in ActdirectHrs. The correlation roef f i c i e n t equals -0.972241, indicating a relatively strong relationship betueen t h e variables. The standard error of the estimate shows the standard deviation of the residuals to be 17918.2. This value can be used to construct p t e d i c t i o n limits for new observations by selecting t h e F o r e c a s t s cption from the t e x t menu.
Table A10 (Coat.) Sample of "Statgraphics Plus* Lioear Regressioo Analysis Priotout
Actdirectbrs and Lag
Appendix A Over Lap - Appenaix A . s % [ F i ~ a : Cveriap-sf 3 ) 1/4/2001 2 : 4 6 FH
Plot of Fitted M d e i
Table A l 1 - Design Data Table
Appendix A 1/13/2001 11:16 AM
File: C:\HMoyst\Mthesis Orrginal submission\Design F i n a l Version.sf3 - Page 1
Lag Design BCWS ACUP BCWP Revlsion Rr Pe rcen tR r
L 2 7/1/92 8640 681 O O 7 8 3 100.00 2 7 12/1/92 121630 30046 35076 29 754 96.30 3 19 12/1/93 124265 125510 105172 207 574 73.31 4 31 12/1/94 124265 187868 121152 404 376 48.02 5 43 12/1./95 124265 204675 124133 697 87 11.11
Table A l 2 - Sample of "Statgrapbirs Plus" Linear Regression Analysis Priotout: Design A W and Lag
Appcndrx A Design Final Version.sgp (Design Final Version.sf3) 1/13/2001 LI: 17 AW
A n a l y s i s of Variance -----------------------------------------------------------------------------
Correlation Cocfficlent = 0.972178 R-squared = 94.513 percent standard frror of Est. = 24793.9
The StatAdvisor
T h e output shows t h e r e s u l t s of f i t t i n g a Linear mode1 ta describe the relationship between ACWP and Laq. The equatxon o f t h e firted mode1 rs
Sinct the P-value in the N O V A t a b l e is less than 0 . 0 1 , t h e r e is a statistzcaliy significanr relationship between ACVP and Lag at the 995 confidence level.
The R-Squared statistic ind ica te s that the mode1 as fitted explarns 9 4 . SI3 6 of the variability in ACtfP. The correlation coefficient equals 0.972iï8, indicating a r c l a t i v e l y stronq re lat ionship b e t u e e n t h e variables. The standard error of t h e estimate shows the standard dcviation of the residuals to be 24793.9. mis value can be used to construct predictron limits for nen observations by selecting t h e F o r e c a s t s option from the text menu.
Table A12 (Cont.) - Sample of "Statgraphics Plus" Linear Regression Analysis: Design ACWP and Lag
Appcnd~x A Des lgn F i n a l Version.sgp (Design Final Vcrslon.3f3) 1/13/2001 11:24 AH
Plot of Fitted Mode1
APPENDIX "B" WNQSB LP PRINTOUTS
INDEX FOR APPENIDX "B"
Appendix B presents the linear program solutions supporting Chapter 4. Enumerated are the WINQSB solution p ~ t o u t s :
Table Description
Scenario A: In-feasibility Analysis for Model for Original Plan and Budget Scenario A: Combined Report for Model for Original Plan and Budget to Minimize Total Hours & Ship 1 EFT 1 43 Scenario B: Combined Report for LP Model with Rework Included to Minimize Total Hours & Ship 1 EFT B 43 Scenario C: Combined Report for LP Model with Overhead Ship 1 EFT 4 43 to Minimize Total Hours Scenario C: Combined Report for LP Model with Overhead Ship 1 EFT S 50 to Minimize Total H o m Scenario D: Combined Report for Model for Original Plan and Budget to Minimize Total Duration & Ship 1 EFT S 43 (Scenario A) Scenario D: Minimize Duration: Combined Report for LP Model with Overhead (Scenario C) Ship I EFT S 43 Alternative 1 & 2 Scenario D: Minirnize Duration: Combined Report for Model with Overhead Model Ship 1 EFT S 50 Alternative 1 & 2 (Scenario C) Scenario E: Combined Report for Sensitivity to Change in Slope (+100/0) to Minimize Total Hours Scenario E: Combined Report for Sensitivity to Change in Slope (- 10%) to Minimize Total H o m Scenario E: Minirnize Duration: Combined Report for Slop Sensitivity (m=+ 1 O%)_Alternative 1 & 2 Scenario E: Minimize Duration: Combined Report for Slope Sensitivity (m=- 10%) Alternative 1 & 2 Scenario C: Minimue Duration: Base Model to Assess Sensitivity to Change in Rework Slope Alternative 1 & 2
Amendix B - Table B1
Scenario A : In-feasibilihr Aoahda for Model for Original Plan and Budget
lnfcnsible solution!!! Makc any of the following RflS changes and sotvc the problcm agiin,
10-15-2000 Rigbt Hand Sbadow Add More Tban Add Up To 09:31:12 Constmint Direction Sidc Prict This To RHS This To RHS 1 Design Direct Hours = 15,144.ûûûû 1 .O000 -1 74,440.5000 M 2 Ship 1 Direct Hom = 33 1,934.0000 1 .ûûûû -304,180.4000 M 3 Ship2 Direct Hours = 33 1,934.0000 1 .ûûûO -277,982.7000 M 4 Ship 3 Direct Hours = 33 1,934.0000 1.0000 -265,388.4000 M 5 Ship4 Direct Hours = 33 1,934.ûûûû 1 .ûûûû -252,68 1.9000
- M 6 Design duration - O O -13.0000
- l3.OOûû
7 Ship 1 Duration - 32.9000 O -M -4.700 8 Ship 2 Duraiion - - 32.9000 3,153.8180 -1.8000
- 0.0500 9 Ship 3 Duration - 32.9000 3,153.8180 -1.8000
- 1 .%O00 10 Ship 4 Duration - 32.9000 3,157.4540 -1.3000 1.8000 1 I EFT Ship l <= 37.0000 5,270,3400 4.7000 13.0000 12 EFT Ship2 <= 50.0000 -3,153.8180 -0.0500 1.8000 13 EFT Ship 3 <= 54.0000 -3,153.8180 -1.8000 1.8000 14 EFT Ship 4 <= 58.0000 -3-1 57.4540 -1.8000 2.4000 15 Start LagShip2 >= 4.0000 O - 1 1 .O909 M 16 SiasiLagShip3 >= 4.0000 O -M 3.2727 17 Starî Lag Ship 4 >= 4.0000 O -M 3.2727 18 Max Lag Ship 1 <= 27.0000 O -1 1,0000 M 19 Min LaaShi~ 1 >= 16.0000 O O M
Left Hind Right Hand Slack Sbadow Allowa blc Allowabk Constnint Side Direction Side or Sumlus Prict Min. RHS Max. RHS
1 Design Direct Hours 2 Ship 1 Direct Hours 3 Ship 2 Direct Hours 4 Ship 3 Direct Hours 5 Ship 4 Direct Hom 6 Design duration 7 Ship 1 Duration 8 Ship 2 Duration 9 Ship 3 Duration 10 Ship 4 Duration 11 EFT Ship 1 12 EFTShip2 13 EFTShip3 14 EFTShip4 15 Start Lag Ship 2 16 Stari LagShip3 17 StartLagShip4 18 Max Lag Ship 1 19 Min L.g Ship 1
A ~ ~ e n d i x B - Table B3 Cont.
Left Hand Rigbt Hand Slrck Shadow Allowoblc Allowrble Con~tmint Side Direction Side or Sumlus Pricc Min. RHS Mis. RHS
I Design Direct Hours 2 Ship 1 Direct Hom 3 Ship 2 Direct Hom 4 Ship 3 Direct Hours 5 Ship 4 Direct H o m 6 Design duration 7 Ship I Duration 8 Ship 2 Duration 9 Ship 3 Dwation 10 Ship 4 Duration I I EFT Ship l 12 EFT Ship 2 13 EFT Ship 3 14 EFT Ship4 15 Start Lag Ship 2 16 Start Lag Ship 3 17 Stm hg Ship 4 18 Max Lag Ship l 19 Min Lag Ship 1 20 ~ e w o k ~ a t e r i a l Ship 1 17,876.Oûûû 21 Rework Material Ship 2 17,876.0000 22 Rework Material Ship 3 17,876.ûûûO 23 Rework Material ~ h i i 4 17.876.OON.l 17.876.0000 O 1 .O000 16.582.8800 M
Scenrrio C: Combincd Rewrt for LP Modtl witb Ovcrbead Shh 1 EFl' d 43 to Minimize Total H o u n
09:35:03 Sunday Octobcr 15 2000
Decision Solution Unit Cost or Total Rtduccd Basis Allowablc Allow able Variabk Value Profit c i i l Contribution Cost Statua Min. c(i) Mas. a
basic basic at bound basic basic basic basic basic basic basic basic basic basic basic basic basic basic
Objective Function(Min.) = 2,785,458.0000
Left Hand Right Hand Slrck Shadow Allowrblc Allowrblt Comtrrint Sidt Direction S i c or Sumlus Prict Min. RHS Max. RHS
Design Overhead Construction Overhead Direct Hours Design Direct Hours Ship 1 Direct Hom Ship 2 Direct Hours Ship 3 Direct Hom Ship 4 Design Duration Ship 1 Duration Ship 2 Duration Ship 3 Duration Ship 4 Duration EFT Ship 1 EFT Ship 2 EFT Ship 3 EFT Ship 4
17 StartLagShip2 4.0909 18 Start Lag Ship 3 7.2727 19 Starî L.ag shiP 4 4.0000 20 Max Lag Ship 1 27.0000 21 Min Lag Shi0 l 27.0000 16.0000 11.0000 0 -M 27.0000
Amendix B - Table B6
Sccnario D: Combincd Rewrt for Model for OMnal Plan and Budget to Miaimizc Total Duntion & S b i ~ IEFT 543
Decision Solution Unit Cost or Total Ruiuctd Bonis Allowab~e Allowable Variiblt Valut P M t c l i l Contribution Coat Status Min, di1 Mar.cQ
1 Sd O O O O at bound -M M 2 SI 18.3636 O O O basic -M O 3 S2 31.0000 O O 0.5500 at bound -0.5500 M 4 S3 35.0000 O O O basic -0.5500 M 5 54 39.0000 1.0000 39.0000 O basic 0.4500 M 6 Bd 200,788.4000 O O O basic -M O 7 BI 3ûû,080.4ûûû O O O basic O M 8 82 278,136,8000 O O O basic -M O 9 B3 271,223.0000 O O O basic -M 0.0003 10 84 264,206.6000 O O O basic -M 0.0003 11 Td 43.0000 O O O basic -M O 12 Tl 24.6364 O O O basic O M 13 n 18.9500 O O O basic -M 1.2222 15 T4 15.350 1.0000 15.3500 O basic -M 2.2222
Objective Function (Min.) = 54.3500 (Note: Alternate Solution Exists!!)
Left Hand Right Hand Slack Shidow Allowable Allowa blc Constnint Side Direction Sidc or Sumlus Price Min. RHS Mix.RHS
I Design Direct Hours 2 Ship 1 Direct Hours 3 Ship 2 Direct Hours 4 Ship 3 Direct Hours 5 Ship 4 Direct Hours 6 Design duration 7 Ship 1 Duration 8 Ship 2 Duration 9 Ship 3 Duration 10 Ship 4 Duration 1 1 EFTShip l 12 EFTShip2 13 EFT Ship 3 14 EFTShip4 15 Start h g Ship 2 16 Slart Lag Ship 3 17 StariLagShip4 18 Max Lag Ship 1 18.3636 19 Min Laa Shib I 18.3636 >= 16.0000 2.3636 O -M 18.3636
A~mndix B Table 86
Srcnrrio D: Combincà Rewrt for Model for Oriniarl Plan rad Budnet to Minimizc Total Dumtion & S b i ~ IEFT -43
h is ion Solution Unit Cost or Total Rduccd Basis Allow able Allowable Variable Value Profit c l i l Contribution Coit Status Min. clil Mit. CQ
at bound at bound basic basic basic basic basic basic basic basic basic basic basic basic
15 T4 12.3636 1.0000 12.3636 O basic O M
Objective Function(Min.) = 54.0636 (Note: Altemate Solution Exisîs!!)
A~mndix B -Table 87
Scearrio D: Minimize Duration: Combiatd Rewrt for LP Modcl witb Overbead lSccnario C ) S h i ~ 1 EFT 5 43 Alternative 1 & 2
09:38:55 Sunday Octobcr 15 2000
Decision Solution Unit Cost or Total Reàuceà Ba& Allowable Allowrble Variable Value Profit cli) Contribution Coat Status Min. clil Mas. di)
I Cdo 2 Cc0 3 Sd 4 S1 5 S2 6 S3 7 S4 8 Cd 9 CI 10 C2 11 C3 12 C4 13 Td 14 Tl 15 T2 16 T3
basic basic at bound basic at bound basic basic basic basic basic basic basic basic basic basic basic
17 T4 15.3500 1 ,0000 15.3500 O basic -M 2.2222
Objective Function(Min.) = 54.3500 (Note: Allernate Solution Exists!!)
Amendix B - Table B7 Continucd Setnario D: Minimizc Duntion: Combined Rcaort for LP Modcl witb Ovcrbead (Scenario Cl S b i ~ 1 EFT S 43 Altemitivc 1 & 2
Left Hrnd Rigbt Hand Slrck Shadow Allowrble Allowrble Coast nint Side Direction Side or Surplus Pricc Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Direct H o m Design 4 Direct Hours Ship 1
E 5 Direct Hours Ship 2 6 Direct Hom Ship 3 7 Direct Hours Ship 4 8 Design Duration 9 Ship 1 Duration 10 Ship 2 Dwation 1 1 Ship 3 Duration 12 Ship 4 Duration 13 EFTShip l 14 EFTShip2 15 EFT Ship 3 16 EFT Ship 4 17 Start Lag Ship 2 1 8 Starî Lag Ship 3 19 Start Lag Ship 4 20 Max Lag Ship 1 21 Min Laa S h i ~ 1
Apwndix B -Table 87
Scenario D: Mioimize Duration: Combintd R e m i t for LP Model witb Ovcrhtad (Scenario Cl Shi0 1 EFï S 43 Alternative 1 & 2
09:33:33 Thuraday Novembcr 02 2000
Dtcision Solution Unit Cost or Total Rtduced Bas W AHowible Allowable Varia blc Value Profit di) Contribution Cost Strtus Min. di) Max. cijl
1 Cdo 183,480.0000 O O O basic O M 2 Cc0 1,045,229.0000 O O O basic 0.OQOO O
at bound at bound at bound basic basic basic basic basic basic basic basic basic basic basic
17 T4 15.3500 1 .O000 15.3500 O basic -M 2.2222
Objective Function (Min.) = 54.3500 (Note: Altemate Solution Exists!!)
Ao~endix B -Table B7
Scenario D: Minimize Duntion: Combincd Rcwrt for LP Model witb Overheid iScenrrio Ch Sbib 1 EFI' S 43 Alternative 1 & 2
Left Hand Rigbt Hand Siack Shadow Allowablc Allowa blt Constraint Sidc Dirtction Side or Surplus Price Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Direct Hom Design 4 Direct Hours Ship 1 5 Direct Hours Ship 2 6 Direct Hours Ship 3 7 Direct Hours Ship 4 8 Design Duration 9 Ship 1 Dwation 10 Ship 2 Duration 1 I Ship 3 Duraiion 12 Ship 4 Duration 13 EFTShip l 14 EFTShip2 15 EFTShip3 16 EFT Ship 4 17 StartLagShip2 18 Siart Lag Ship 3 19 Starî Lag Ship 4 20 Max Lag Ship 1 2 t Min Laa Ship 1 16.0000 >= 16.0000 O O -M 16.0000
Sccnario D: Minimizc Duration Combined Rcwrt for Mdtl witb Overhead S b i ~ 1 EFT S 50 Alternative 1 & 2
09:39:38 Sunday OctoberlS 2000
Deciaion Solution Unit Cost or Total Rtduced Basis Allowrble Allowable Variable Value Profit di1 Contribution Cod Stmtus Min. di) Max. c m
1 Cdo 210,100.0000 O O O basic -0.0002 O 2 Cc0 745,424.3000 O O O basic O 0.Q000
- 3 Sd O O O O at b u n d -M M 5 4 S I 27.0000 O O O basic -0.5500 O
5 S2 31.0000 O O 0.5500 at bound -0.5500 M 6 S3 35.0000 O O O basic -0.5500 M 7 S4 39.0000 1.0000 39.0000 O basic 0.4500 M 8 Cd 253,927.2000 O O O basic -0.0002 O 9 Cl 376,970.4000 O O O basic O 0.0001 10 C2 345,984.2000 O O O basic -M O 11 C3 315,039.4000 O O O basic -M 0.0001 12 C4 284,073.8000 O O O basic -M 0.0001 13 Td 47.7500 O O O basic - 1 .O000 O 14 Tl 20.7500 O O O basic O 1.2222 15 T2 18.9500 O O O basic -M 1.2222 16 T3 17.1500 O O O basic -M 1.2222 17 T4 15.3500 1.0000 15.3500 O basic -M 2.2222
Objective Function(Min.) = 54.3500 (Note: Alternate Solution Exisis!!)
Appcndix B -Table BB Sccnario D: M i n i m h Duntion Combined R e ~ o r t for Mode1 witb Overhead Sbia 1 EFT I 50 Alternative 1 & 2
Left Hand Right Hand Slrck Sbrdow Allowrblt Allowa ble Confitnint Sidc Direction Sidc or Sumlus Prim Min. RHS Max. IHS
1 Design Overhead 2 Construction Overhead 3 Direct Hours Design 4 Direct Hours Ship 1 5 Direct Hom Ship 2 6 Direct Hom Ship 3 7 Direct Hours Ship 4 8 Design Duration 9 Ship 1 Duration IO Ship 2 Duration 1 1 Ship 3 Duraiion 12 Ship 4 Duration 13 EFTShip l 14 EFTShip2 15 EFT Ship 3 16 EFT Ship4 17 Start Lag Ship 2 18 Start Lag Ship 3 19 Starî Lag Ship 4 20 Max Lag Ship 1
Scenrrio D: Minimize Duration Combined Report for Modcl witb Overhead Shia 1 EFT S 50 Alternrtivt 1 & 2
Dccisioa Solution Unit Coat or Total Reduccd Basis Allowiblc Allowa blc Virir blc Valut Profit d i ) Contribution Cast Stntus Min. di) Mas. di)
1 Cd0 183,480.0000 O O O basic O M 2 C w 1,045,229.0000 O O O basic 0.0000 O 3 Sd O O O O at bond -M M 4 S1 16.0000 O O O at bound O M 5 S2 31.0000 O O 0.5500 at bound -0.5500 M 6 S3 35.0000 O O O basic -0.5500 M 7 S4 39.0000 1.0000 39.0000 O basic 0.4500 M 8 Cd 222,033.6000 O O O basic O M 9 Cl 462,125.8000 O O O basic -M O 10 C2 345,979.2000 O O O basic O 0,000 1 1 1 C3 315,039.4000 O O O basic -M 0.0001 12 C4 284,073.8000 O O O basic -M 0.0001 13 Td 41.7000 O O O basic O M 14 Tl 25.7000 O O O basic -M O 15 T2 18.9500 O O O basic -M 1,2222 16 T3 17.1500 O O O basic -M 1,2222 17 T4 15.3500 1 .O000 15.3500 O basic -M 2.2222
Objective Function (Min.) = 54.3500 (Note: Altemate Solution Exists!!)
Sccnario I): Minimizc Duration Combined Remrt for Model with Overbcad S b i ~ 1 EFT S 50 Alternative 1 & 2
Lcft Hand Rigbt Hand SIack Sbadow Allowable Allowable Constrain t Side Direction Side or Sumlus Price Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hours
L 5 Ship 2 Direct Hours
O 6 Ship 3 Direct Hours 7 Ship 4 Direct Hours 8 DesignDuration 9 Ship I Duration 10 Ship 2 Duration 1 1 Ship 3 Duration 12 Ship 4 Duraiion 1 3 EFT Ship 1 14 EFT Ship 2 15 EFT Ship 3 16 EFT Ship4 17 Start LagShip2 18 Siart Lag Ship 3 19 Stiuî LagShip4 20 Max Lag Ship I 2 1 Min h a Ship 1
Scenario E: Combined R C D O ~ ~ for !hnsitivitv to Cbinet in Slow (+IO%) to Minimize Totit Haum
Left Haad Rigbt Hand SIack Sbadow AHowa ble Allowable Constniat Sidc Direction Sidc or Sudus Prict Min. RHS Max. RHS
I Design Overhed 2 Construction Overhead 3 DesignDirectHours 4 Ship 1 Direct Hours 5 Ship 2 Direct Hours 6 Ship 3 Direct Hours 7 Ship 4 Direct Hours 8 Design Impact Ship I 9 Design Impact Ship 2 10 Design Impact Ship 3 I 1 Design Impact Ship 4 12 Design Duration 13 Ship 1 Duration 14 Ship 2 Durcttion 15 Ship 3 Duration 16 S hip 4 Durat ion 17 EFT Ship l 18 EFTShip2 19 EFT Ship 3 20 EFTShip4 21 Ship2 Lag 22 Ship 3 h g 23 Ship4 Lag 24 Ship l Max Lag 25 hi-^ 1 Min ~ a 6 18.363 16.0oOO 2.3636 O -M 18.3636
Sccnario E: Combiaeâ R c w r t for Scnsitivitv to Cbanec in S l o ~ e (-10?4 to Minimh Total H o u n
09:48:45 Sunday OctoborlS 2ûûû
Dtcision Solution UnIi Cost or Total Reâuced Basis Allowablt Allowsblc Variiblc Value Profit cl i l Contribution Cost Statua Min. di) Max. t-0
1 RI 2 R2 3 R3 4 R4
m Ul
5 Cd0 w 6 Coc
7 Sd 8 SI 9 S2 10 S3 I I S4 12 Cd 13 BI 14 R2 15 B3 16 B4 17 Td 18 Tl 19 T2 20 T3 21 T4
basic basic basic basic basic basic at bound basic basic basic basic basic basic basic basic basic basic basic basic basic basic
Objective Function(Min.) = 2,853,405.0000
Amendix B -Table BI0 Sccaario E: Combined Rem14 for S4nsitivitv to Cbingc in Slow (-10%) to Minimizt Total Houn
k f t Hand Rigbt Hand Slack Sbidow Allowrblc Allowable Constnint Sidc Direction Sidc or Sumlus Pricc Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hom 5 Ship 2 Direct Hours 6 Ship 3 Direct Hours 7 Ship 4 Direct Hom 8 Design Impact Ship 1 9 Design Impact Ship 2 10 ûesign Impact Ship 3 1 I Design Impact Ship 4 12 Design Duration 13 Ship 1 Duraiion 14 Ship 2 Dwation 15 Ship 3 Duration 16 Ship 4 Dwation 17 EFT Ship 1 18 EFT Ship 2 19 EFT Ship 3 20 EFTShip4 21 Ship 2 Lag 22 Ship 3 Lag 23 Ship4 Lag 24 Ship 1 Max Lag 25 ~ h i p I Min hi 18.3636 16.0000 2.3636 O -M 18.3636
A ~ ~ c n d i r B -Table BI1 Sccnario E: Miairnize Duration: Combincd Rewrt for S l o ~ e Snsitivitv lm=+10%) Alternative 1 & 2
Left Hmd Right Hand SLck Shadow Allowablc Allowablc Constnint Side Direction Sidt or Surplus Pricc Min. RHS Mas. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hours 5 Ship 2 Direct Hours 6 Ship 3 Direct H o m 7 Ship 4 Direct H o m 8 Design lmpact Ship 1 9 Design Impact Ship 2 10 Design lmpact Ship 3 I l Design lmpact Ship 4 12 Design Duration 13 Ship l Duration 14 Ship 2 Duration 15 Ship 3 Duration 16 Ship 4 Dwation 17 EFT Ship 1 18 EFT Ship 2 19 EFT Ship 3 20 EFTShip4 21 Ship2 Lag 22 Ship3 Lag 23 Ship4 Lag 24 Ship 1 Max Lag 25 ~ h i i I Min 18.3636 16.0000 2.3636 O -M 18.3636
A~wadix B -Table BI 1 Sccnario E: Minimize Duration: Combined R e m i for Slow Sensitivih (m=+lO%b Alternative 1 & 2
Left Hand Rigbt Hand Slack Shadow Allawr blc Allownblc Coastnint Sidc Direction Sidc or Sumlus Pilce Min. RHS Mir. RHS
1 Design Overhead 2 Construçtion Overhead 3 Design Direct Hours 4 Ship I Direct H o m 5 Ship 2 Direct Hours 6 Ship 3 Direct Hours 7 Ship 4 Direct Hours 8 Design Impact Ship 1 9 Design lmpact Ship 2 10 Design lmpact Ship 3 1 1 Design lmpact Ship 4 12 Design Duration 13 Ship 1 Duration 14 Ship 2 Duration 15 Ship 3 Duration 16 Ship4 Duration 17 EFTShip l 18 EFT Ship 2 19 EFT Ship 3 20 EET Ship4 21 Ship 2 Lag 22 Ship 3 Lag 23 Ship4 Lag 24 Ship 1 Max Lag 25 ~ h i u I Min 16.0000 16.0000 O O -M 16.0000
o o o o o o o o o o o o o o o o o o o a a
Apwndix B -Table 912 Sccnario E: Minimize Durition: Combined Rcwrt for Slow Scnsitivih lm=-100/.) Alternative 1 & 2
Left Hand Right Hand Slick Shadow Allowi blc Allowrble Confitnint Side Direction Side or Sumlus Pricc Min. RHS Max. RHS
I Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hours 5 Ship 2 Direct Hom 6 Ship 3 Direct Hours 7 Ship 4 Direct Hom 8 Design Impact Ship 1 9 Design Impact Ship 2 10 Design lmpact Ship 3 1 1 Design lmpact Ship 4 12 Design Duration 13 Ship 1 Dumtion 14 Ship 2 Duration 15 Ship3 Dwation 16 Ship 4 Duration 17 EFT Ship l 18 EFTShip2 19 EFT Ship 3 20 EFTShip4 21 Ship 2 Lag 22 Ship3 Lag 23 Ship4 Lag 24 Ship 1 Max Lag 25 Shib 1 Min Lan 18.3636 16.0000 2.3636 O -M 18.3636
O O C
Amendis B -Table BI2 Sctaario E: Minimize Duration: Combinai Remrt for Slow Sensitivitv lm=-10%) Alternative 1 & 2
Loft Hand Right Hand Slack Shadow Allowoble Allowable Consinint Sidc Direction Side or Sumlus Pricc Min. RHS Mas. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hours 5 Ship 2 Direct Hours 6 Ship 3 Direct Hom 7 Ship 4 Direct Hours 8 Design Impact Ship 1 9 Design Impact Ship 2 10 Design Impact Ship 3 I 1 Design Impact Ship 4 12 Design Duration 13 Ship l Dwation t 4 Ship 2 Duration 15 Ship 3 Duration 1 6 S hip 4 Durat ion 17 EFT Ship l 18 EFT Ship 2 19 EFT Ship 3 20 EFTShip 4 21 Ship2 Lag 22 Ship3 Lag 23 Ship4 Lag 24 Ship l Max Lag 16.0000 <= - 25 ~ h & l Min Laa 16.0000 >= 16.0000 O O -M 1 6.00(H)
Apmndix & Table 813 Sccnario E: Minimizc Duntion Base Modtl to Asseas Sensitivitv to Channe in R m o r k Slom Alternative t & 2
Left Hand Right Hand Slsck Sbadow Allowa ble Allowablc Conatnint Side Direction Sidt or Surplus Pricc Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Hom 5 Ship 2 Direct Hours 6 Ship 3 Direct Hours 7 Ship 4 Direct Hours 8 Design lmpact Ship 1 9 Design lmpact Ship 2 10 Design lmpact Ship 3 I 1 Design lmpact Ship 4 12 Design Dwation 13 Ship 1 Duration 14 Ship 2 Duration 1 5 S hip 3 Durat ion 16 Ship 4 Duration 17 EFT Ship 1 18 EFT Ship 2 19 EFT Ship 3 20 EFT Ship4 2 1 Ship 2 Lag 22 Ship 3 Lag 23 Ship4Lag 24 Ship 1 Max Lag 25 ~hk 1 Min L& 18.3636 16.0000 2.3636 O -M 18.3636
a a a
0 0 0 0 0 0 -0 .- *- -- -0 .- . . . . ., ., ., ., ., ., .; 3 3 3 8 3 8 ~ ~ s o s o o s s a s o n o
Scenirio E: Minimizc Duration Base Mode1 to Assess Srnsitivitv to Cbannc in Rework Slopc Alkrnative 1 & 2
Left Hand Rigbt Hand Slack Shadow Allowable Allowablt Constniat Side Direction Sidc or Surplus Price Min. RHS Max. RHS
1 Design Overhead 2 Construction Overhead 3 Design Direct Hours 4 Ship 1 Direct Ilours S Ship 2 Direct Hours 6 Ship 3 Direct Hours 7 Ship 4 Direct Hours 8 Design lmpact Ship 1 9 Design lmpact Ship 2 10 Design lmpact Ship 3 I I Design lmpact Ship 4 12 Design Duration 13 Ship 1 Duralion 14 Ship 2 Duration 15 Ship 3 Dwation 16 Ship 4 Duration 17 EFï Ship 1 18 EFT Ship2 19 EFT Ship 3 20 EFT Ship4 21 Ship2Lag 22 Ship3 Lag 23 Ship4Lag 24 Ship 1 Max Lag
APPENDIX C - CASE STUDY EXHIBITS
Index for Ap~endir C
Figure Cl List of the Stages of Construction Used by the Shipbuilding Case Study Figure C2 Product Work Breakdown Structure Figure C3 MCDV Contract Sumnaary Master Schedule Figure C4 Sample of the Drawing Schedule Issue List (DSIL) Figure C5 Terminology
Figure C 1 List of the Stages of ~onstmction Used by the Shipbuilding Case Study
NEW BUILD STRATEGY STAGES
STAGE 2: MINOR ASSEMBLY
STAGE 3: PANEL ASSEMBLY
STAGE 5: PREOUTFIT 1
STAGE 6: BLOCK ASSEMBLY
STAGE 7: ZONE PREOUTFXT 2
-
STAGE 8: BLOCK ERECïION
Figure C2 Product Work Sreakdown Structure
Figure C3 - MCDV Master Schedule
- -
PPC ,
1993 313001-MD #H&V DlAG MACHY SP a 110 00 .MS 1Oû OO 92-07-09 1994 313001-MO '#H&v DIAG MACHY SP ' 1lOW MS 10000 92-07-09 1995 31 3001 -MD 1HBV DlAG MACHY SP , 11000 MS,10000'9247-09 1992 31 3002-MD #HVAC DtAG ACCOM , 120 00 MS 50 00 92-08-04 1993 313W2-MD 'YHVAC DlAG ACCOM . 120 00 MS ,100 00 '92-08-04 1994 313002-MD 'IHVAC DlAG ACCOM 12000 MS 10000,92-08-04 1895'313002-MO :#HVAC O1 AG ACCOM 120 00 MS, 100 00 92-08-04 1992 313100-MD HVAC OWGS 29000 MS , 000 93-06-10 1993 313100-MD 'HVAC ARGT DRVIMTR RM ' 280 00 MS 90 00 '93-04-01 1994'313100-MD'HVAC ARGT DRVMTR RM , 290 00 MS 1Oû O0 93-04-01 1995 313100-MO HVAC ARGT DRVlMTR RM ' 280 00 MS 100 00 '93-0441
'93-io-22 -NIA 94-10-31 '94-10-31 'NIA I I
/93-10-22 'NIA 94-10-31
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1992 313101-MD ,HVAC DWGS 1093 313101-MD HVAC ARGT AMSIFMS 1994 313101 -MD 'HVAC ARGT AMSE MS 1995'3l3lOl -MD 'HVAC ARGT AMSIFMS 1992 ~I~IO~-MD:HVAC DWGS 1993 313102-MD IHVAC ARGT AUX RMS IW'~I~IO~-MD :HVAC ARGT AUX RMS 1995'313102-MD ,HVAC ARGT AUX RMS 1992'313900-ME HVAC 1993'313900-ME HVAC l ~ ' 3 l 3900-ME 'HVAC 1985'31 3 9 0 0 4 ~ , HVAC 1992'313901-ME 'HVAC SYS MACH SP 1 9 9 3 ' 3 1 3 ~ 1 . ~ ~ 'HVAC svs MACH SP 1994'313801-ME 'HVAC SYS MACH SP 1995 3139614~ :HVAC SYS MACH SP 1992'31 3902-ME .*ACCOM HVAC l M 3 ' 3 ? 3 s o 2 - ~ ~ ACCOM HVAC 1994 31 3902-ME 'ACCOM HVAC ls~!i:31 3902-ME ' ACCOM HVAC 1992 316100-HD 'ACCOM VENTILATION 1993 3161WHD :ACCOM VENTILATION 1994a3181M)-HD , ACCOM VENTILATION lW5 316100-HD ACCOM VENTILATION
I I I I NIA
94-1 1-03 94-11-03 NIA
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: I I 'NIA ; Il i95-01-31 'NIA
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:n3002 : 313007
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Fieure C6 - Terminolm
Algorithm - is a structured senes of steps that m u a be performed to solve a model.
Assemble - To fit together small parts or subassemblies, in making a large section or Part*
Concurrent Engineering - It is a systematic approach to the integrated, concurrent design of produca and t h e i related processes, hcluding manufacture and support. The approach is intended to cause the developers, tiom the outset, to consider al1 elements of the product life cycle fiom concept through disposal, including quality, cost, schedule, and user requirements.
Crashing an actMty - means perfonning an activity in the shortest technically possible tirne by allocating to it al1 the necessary resources.
Direct (Labar) Hours - 1s the labor of those people who work either with machines or hand tools specifically on the materials converted into fmished products. Referred fiequently within the thesis in the short form of direct hours.
Equivalent Hours - 1s the conversion of overhead costs in terms of direct labor hours. A method that was used within this thesis to convert overhead costs into direct labor hours to formulate an overhead fiuiction for the linear programming model.
Erect - To hoist into place and bolt up on the ways fabricated parts of a ship's hull, preparatory to welding.
Fabrimate - To process hull material in the shops prior to assembly or erection.
Girder - A continuous member running fore-and -afi under a deck for the purpose of supporting the deck beams and decks.
Croup Technology - A manufacturing philosophy in which similar parts are identified and grouped together to take advantage of their similarities in design and production.
Heuristic - A "rule of thumb" or common sense procedure that maybe employed to yield what the analyst feels may be a good, though not necessarily optimal solution. A heuristic is used to generate a good starting solution for a model that is then improved upon by using an optimization algorithm.
LearningAmprovement Cuwe - A plot of productive output or unit work times of individual or group as a iùnction of t h e or output per unit tirne; used to predict the
learning rate in starting a new job or project. It is usually exponential and flattens out with t h e .
Linear Programming Mode1 - is a mode1 that seeks to maximize or minimize a linear objective function subject to a set of linear constraints.
Loftiog - The process of developing the size and shape of components of the ship from the designed lines; traditionally, making templates using full scale lines laid down on the floor of the mold loft; today perfonned at small scale using photographie or computer methods.
Mock-up - A three dimensional full size replica of the shape of a portion of a vesse1 used where the geometry makes fabrication of steel membea fiom conventional templates dificuit or to avoid interferences by Iaying out components in three dimensions.
Overbead - Includes al1 manufacturing costs other than duect materials and direct labor costs and may include, electricity, taxes, insurance, indirect labor, factory supplies etc..
Plasma-arc cuttiig - A process employing an extemally high temperahw, high velocity constricted arc between an electrode within a torch and the metal to be cut. The intense heat melts the metal, which is continuously removed by a jet-like Stream of gas issuing fkorn the torch.
Product Work Breakdown Structure - A scheme to subdivide work in accordance with an interim-product view.
Stage of construction - A division of the production process by sequences, e.g. fabrication, subassembly and assembly, and outftting on unit.
Zone - An objective of production, which is any geographical division of a product, e.g. a machinery space.
