Project management of mega yachts as a dynamic model of fast tracking projects

April 2003

SESSION OUTCOME

  • Features of Super Yachts
  • Introduction to the Mega Yacht Industry
  • Environment, challenges and the dynamic nature of Project Management of super yachts
  • How to deal with undefined projects in the Mega Yacht Industry?
  • Discussion

The intention of this presentation is not give an answer but to prompt a discussion.

INTRODUCTION

Background

New project management techniques are required for very complex, high tech, quality driven, time sensitive and initially not well-defined projects. This lack of definition at the start of the project seems to be the biggest challenge for Project Managers. The construction of a Mega Yacht is a good example of such a project; however, such disciplines as computer development, the aviation industry or civil construction, also experience overlapping definition with execution. For starters let's concentrate on the Marine Industry, specifically on the Mega Yacht Industry. There are two reasons to look at these types of projects:

  • Some projects do not perform very well at all. Many projects are finished neither on time nor within the budget. Quality is usually achieved after a long period of “fine tuning”. Boats, after launching, often have the wrong immersion and/or wrong trim, can not reach expected performance, don't have enough stability, equipment does not perform to expectation, hatches leak, etc, etc.
  • Second reason is because I believe there is big room for some improvement. Please let me compare two vessels: Super Yacht versus Cargo Vessel. (Some may say there is no comparison). I would say: because there is such a huge disproportion in construction time versus weight, there must be something in it.
  30 m yacht Length 30 m Cargo Vessel Length        175 m
Weight of the vessel Weight 100 t Weight 7500 t
Construction period 18 month 9 month
Usage of material per month 5.5 t/month 835 t/month
Labour 110 000 man-hours 650 000 man-hours
Labour per one tonne of material 1100 man-hours/t 85 man-hours/t

To build a Super Yacht requires 12-13 times more hours per one tonne than for a Cargo Vessel (and this is not an extreme case). So, is there a room for improvement in Project Management Techniques? Can we shorten a construction period of a Mega Yacht and still expect very high quality? By investigating the features of a Mega Yacht, the Industry and its Project Environment, we may find reasons why mega yachts are difficult to build and we may also find some similarities with other industries and similar projects. Let's then examine the specifics of Super Yachts and the industry by which these yachts are produced and then think how we could improve Project Management Techniques.

Mega Yacht Industry, Mega Yachts, Project Environment

The Mega Yacht Industry is relatively new (statistics go back only to 1997). It started in the early eighties with construction of some 100 footers. Today vessels of 200 ft and more are not rare and production is 2 times greater than in 1980. The average growth of orders since 1997 is approximately 15%. Being such a young industry there is an obvious lack of corporate memory, especially since the company structure is usually very simple and basic. In general, companies are still run by the owner, with a small design office, a couple of project managers, if at all, and a small administration team. These companies are often born on the foundation of small boat building business operated by a small number of people. In these businesses the required expertise was low and there was neither project management, nor a design office. Modern yard need more sophisticated structure and definitely much more expertise.

Construction of Mega Yachts starts often, if not always, with only a vague description (definition) of the final product. Although a price is usually fixed, expectation for quality sometime exceeds the shipyard's imagination. The description of the project (in form of specification and drawings) is only conceptual.

A contract is usually signed based on 50-100 pages of specifications and 15-20 drawings including geometry of the hull and superstructure and some construction drawings. At this point in time scantling is rarely approved by the Classification Society. There is enormous pressure, however, from the client to start the project immediately after signing the contract despite the fact that numerous design features have not been sorted out.

It is quite unique to the Mega Yacht Industry that the client first employs a Naval Architect, and/or stylist and they start to develop the initial concept. At the same time or further down the track he also employs a “client's representative”. Now this team works together to prepare enough documents in order to go out for tender. At this point documentation is only sketchy and not specific. Only a few drawings are available. Such statements as: “Conceptual only, Yard to develop”, “Model to be advised”, “The Engine room shall be treated as a show piece and suitable care and attention shall be given to the final appearance”, “The vessel shell should be constructed in accordance with the highest yacht building standards”, “First class workmanship is required” are common either in specifications or on drawings.

Based on this documentation the yards tendering for the job try to guess the owners intentions. Upon selecting the final builder, a further design process takes place. This process takes the design to the next stage, but not the final stage. At this point the geometry is completed, tank testing is satisfactory, weight and buoyancy balances, scantling completed and General Arrangement approved by the client. At this stage the contract is signed. From this moment the chosen yard continues the design process. Joinery shop drawings, details of bulkhead penetrations and hull fittings are required. The vessel contains approximately 25 systems. All schematics have to be drawn and approved and reticulation plans need to be coordinated. Equipment has to be designed and mounted on board.

Such design elements as engine and shaft arrangement, air in and air out louvers, life-rafts storage and their deployment, crane arrangement or anchor system are an integral part of the structure, yet on construction drawings these are shown only in the conceptual stage. Additionally, there are not many proprietary items on the market, which can be bought off the shelf. There is need for very unique, one-off, custom-made equipment. There is demand for a high tech innovative approach to equipment such as captive winches, retrieved anchors, tilted ballast, furling systems etc. When the project starts, there is only a limited time for the Design, Review and Development of this equipment. Yet, in order to deserve the SUPER YACHT title, the functioning of these elements has to be perfect, safe and it should look beautiful – first time!

Further on, there are 25 or so systems on board a super yacht. Each system is made of equipment such as valves, pumps, filters, foundations, pipes, sensors etc. Each system spreads across several compartments going through bulkheads, partitions or decks. When putting pipes and/or cables through walls we have to make sure that penetrations are watertight and fire proof.

The level of surface finish and complexity of systems on board are very high. If we rate complexity and quality of finish of a Super Yacht it would receive a 10. A modestly finished yacht would receive approximately 3-4, and consequently a commercial vessel would receive 1 or less.

A Mega Yacht is defined by Specification and Drawings. This Specification is mainly called a Design Specification and only partially a Performance Specification.

Remind:

  • Design specification
  • Performance Specification
  • Process Specification

Design Specification is not good for Fast Tracking Projects!

Below is shown a Naval Architectural “Design Spiral”. It explains how the design of the boat (ship) is developed. It is a long, very time consuming and labour intense process in which may several parties may take part in: stylist, broker, naval architect, interior designer, client's representative, yard and various consultants.

Naval Design Spiral

Figure no. 1 - Naval Design Spiral

It is a rule of thumb that project shouldn't start until there is approximately 40% of information on hand. (Whatever the 40% mean)

So let's summarize the main features of Project Management in the Mega Yacht Industry:

  • “Vessels are built as prototypes and they remain prototypes forever.”
  • “Mega Yacht Projects are very complex, high tech, quality driven and time sensitive.”
  • “Each project has to be done right first time.”
  • Very high quality including art components
  • Strong Quality Assurance system required for prevention of faults (right first time)
  • Fun aspect
  • Involvement of many parties (international & multicultural team)
  • Extensive documentation
  • Egos
  • “3.4 defects per million opportunities” not acceptable. 100% reliability
  • Sometimes casually implemented changes
  • Unclear project (company) structure
  • Ambiguous roles
  • Multi project environment
  • Overlapping responsibilities
  • Non commercial aspect of project
  • Small construction space. Small space for a lot of people
  • Quality can be described as high expectation, perfect planning and excellent execution resulting in pleasant form and a safe & reliable product.
  • There is high expectation but poor definition at the start of the project.
  • Innovation and high complexity go hand-to-hand all the way through the project. To satisfy that, high tech and high expertise is required.

The following quotes capture all this well:

“If this was an airplane, 500 designers would spend 5 years and 50 million dollars making 50 prototypes before they build it. With the yacht we have to get it right first time. We have one shot”

Paolo Scanu

Naval Architect

“Georgia” by Lyn Anderson and Ralph Talmont

And

“The perfection of a yacht's beauty is that nothing should be there for only beauty's sake.” John McGregor

PROJECT MANAGEMENT IN THE MEGA YACHTS INDUSTRY

Now it is a challenge for the head of the Project Management Team to make sure that the definition of the project is always ahead of the construction process. It is not an easy task due to many reasons:

  • First, he has to negotiate and share the resources with other projects being under way in the shipyard at that time (usually in the Boating Industry nobody reports directly to the Project Manger).
  • Secondly, he has to make sure that all design features will satisfy the client, therefore all design choices have to be approved by the client or his/her representative.
  • Thirdly, the entire project has to be divided into such small tasks so that the design resources are used simultaneously on all projects, and there is a constant flow of information to the floor.

He faces the following Challenges:

  • Definition of the project has to be completed while construction is under way
  • Design Process for the boat/vessel is long and repetitive (see “Design Spiral”)
  • Many parties are involved and responsibilities are divided (or passed on I should say!)
  • Nearly every decision has to be Approved (design specification not performance specification)
  • “3.4 defects per million opportunities” not acceptable. Right first time.
  • Many critical paths change daily

He can expect the following Bottlenecks:

  • Slower than the rest (unexpected change of delivery date, waiting for approval)
  • Lack of information (lack of project definition, not enough design power)
  • Lack of inventory
  • Lack of resources (especially design resources)
  • Lack of expertise (cumulative mistakes)

Trades involved:

There are many trades involved at the same time in a relatively small space.

  • Construction (Composite, Aluminium, Steel…) (They work alone)
  • Engineering (systems, equipment, plumbing, metal product))
  • Electrical
  • Electronics
  • Woodwork
  • Soft furnishing
  • External fairing and painting
  • Internal painting and varnishing

The following figures show the difference between the Car Industry and the Mega Yacht Industry in respect to concept development versus implementation.

Concept Development vs. Implementation

Figure no. 2 – Concept Development vs. Implementation

As you can see, in Marine Industry, there is no room for full design development and prototype before the implementation. In fact Concept development goes right through the entire span of a project.

Let discuss when we should and when we shouldn't start a Mega Yacht project:

Probability of success

Figure no. 3 – Probability of success

Is 40% enough? When is 40%? (Discussion)
  • All Geometry defined (hull and superstructure)
  • General Arrangement completed (interior)
  • Construction (structural) drawings completed and approved
  • Weight study completed 95%
  • Hydrostatics & stability calculations satisfactory
  • Space allowances checked and confirmed
  • Main equipment selected

So, how we go about all that? Can we speed up a construction of Mega Yachts?

WHY FAST TRACKING AND WHY DYNAMIC?

(Here remind Fast and Super Fast Tracking definition)

Comparing the duration of construction of a Cargo Vessel and a Mega Yacht we can clearly see that the production process of a Mega yacht is very labour intensive and time consuming. In order to speed up the process, fast tracking and super fast tracking techniques need to be implemented. It may sound ironic that on such a long project and with a design specification, I suggest using fast tracking techniques. This message (approach to the project) should be communicated with all involved. It is a way of making involved parties aware, that although the project duration is long, the events follow each other with high speed and in a very dynamic manner.

The word DYNAMIC relates to motion and energy and this is why I use this word to emphasise the volatile, constantly changing, and energy requiring nature of Mega Yacht project management.

One small obstacle in using a fast tracking techniques is the fact that the mega yachts are defined by so called “design specification” which is not suitable for fast tracking, but there is solution to it:

THE WAY FORWARD

What techniques can we use in order to shorten the duration of construction of a Mega Yacht?

  • Find out what is the minimum information required (this varies from boat to boat and from yard to yard) in order to start a project “safely”. See the Design Spiral.
  • Define the project within your company's limits. This depends on how many designers you have on site and how quickly they will be available. It depends on how much expertise you have on site.
  • Sign a contract with the best possible specification (carefully balance the design and the performance specification).
  • Turn the design specification to the performance specification where possible. (low probability)
  • Try to define the remaining parts of the boat within the first three months of the project and immediately follow up with the additional design.
  • Adopt fast tracking techniques (dividing design packages into the smallest possible work packages and design packages).
  • These design packages can be fragmented into even smaller portions allowing the work on the floor to carry on while finalising the whole design. Get the approvals and freeze the design.

Please let me explain chunking technique (Fore reference please see figure no 4)

Traditionally schematics should be completed first and then all reticulation plans drawn. It is not possible and not practicable however to perform the design in an old fashioned manner unless you have a lot of time. The design on all systems must advance simultaneously giving the production just enough information for the up coming days. This means that schematics and reticulation plans do not have to be completed but only started. The important thing is to know that such and such pipes will go from there to there. When the production runs pipes they do not have to know exactly what type of pipe tube is going to be used, what type of safety valve, or kind of return valve shall be installed. The vital information for them at the beginning of the installation is to know the main routes for heavy pipes and heavy cables so they can allow enough space for the running of these pipes and cables. The next step in the design would be to determine exact sizes of pipes and cables so proper penetration can be installed in bulkheads, decks, etc.

CONCLUSION

The experience of the Mega Yacht Industry can be used in many other industries which start projects (for various reasons) without a “Blue Print” and are being defined while the project is underway. In order to carry out fluent construction, a yard (or company) must follow a rigorous and very dynamic design process. Hundreds of shop drawings have to be developed in such a way that information flows onto the floor without the drawings being fully completed! The approvals will always have a big impact on the critical path. Conclusion, Suggestions from audience, Questions and discussion.

REFERENCE

Anderson, L. & Talmont, R. Georgia.

Ship's Systems – Design and Construction Matrix

Figure no. 4 - Ship's Systems – Design and Construction Matrix

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

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