Project Management Institute

Subpar results

submarine manufacturing projects are on the rise -- and are marred by delays

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Workers attend a ceremony to launch the Russian diesel-electric submarine Stary Oskol in 2014.

For the first time in a quarter century, the world's fleet of submarines is growing. Yet turbulent political waters and shifting requirements mean many sub manufacturing projects are struggling to stay on schedule, within budget and in scope.

The greater demand for submarines in the US$51 billion industry is being driven by existing fleets aging out of commission, countries’ changing strategic threats, surging global trade (supported by secure shipping routes) and the desire for new technologies, according to IBISWorld, an Australian research company.

At least 17 countries have confirmed they are creating or expanding their fleets.

Source: The Wall Street Journal

At least 17 countries have confirmed they are creating or expanding their fleets, according to The Wall Street Journal. (Countries closely guard military plans, which makes tracking the exact number of projects impossible.) Iran has announced project plans to develop its own conventional subs as a supplement to those it bought from Russia in the mid-1990s. China's expansion of its nautical fleet, including nuclear-powered subs, has sparked a wave of submarine projects across Southeast Asia. Indonesia, Singapore and Australia have all launched initiatives to expand their fleets, while Vietnam is sponsoring a project to build a submarine armed with attack missiles capable of reaching China's coastal cities.

It's an ever-shifting cycle: As one country's portfolio of defense projects evolves, those in other countries react. And that impacts defense contractors and military project practitioners tasked with managing and meeting project requirements.

When a submarine project hits a setback, the schedule delays and cost overruns tend to be mammoth. Those troubles can draw international attention.

A 19-year, £10 billion program to create seven submarines in the United Kingdom has been plagued with technical problems, delays and cost overruns. In 2014 alone, the program ran £87.5 million over budget. With just two subs commissioned into the Navy, the U.K.'s Major Projects Authority listed the initiative's status as “amber/red,” noting ongoing technical and scheduling challenges.

INTO THE DEPTHS

A brief history of the evolving requirements faced by submarine manufacturers.

1776: The first submarine to be used in naval combat, the U.S.'s Turtle, is human-powered and can carry only one person.

1895: Inventor John Holland develops the steam-powered Plunger, a project sponsored by the U.S. Navy.

1904: Less-volatile diesel replaces petroleum as the surface propulsion fuel of choice in project plans for the French sub Aigette.

1954: The U.S. builds the world's first nuclear-powered sub, the USS Nautilus.

1960: The U.S. Navy's Trieste becomes the first submersible to reach Challenger Deep, the ocean's deepest point.

2000: Photonic masts replace periscopes with the U.S. military's latest-generation Virginia-class nuclear-powered submarines. Photonic masts rely on high-resolution cameras and optical fiber data lines.

PHOTO BY OLGA MALTSEVA/AFP/GETTY IMAGES

One of Australia's largest-ever defense programs, to build 12 submarines for at least US$26 billion, has dragged on since 2009. Years of delay were driven in part by political arguments over the program's scope and a slowed economy. There has been “at least five years of mostly inactivity,” says Andrew Davies, PhD, senior analyst and director of research, Australian Strategic Policy Institute, Canberra, Australia. He points to “a combination of lack of government focus on the issue for years and the political stigma of the underperforming Collins-class submarines [the model now in use], which made it hard for any government to talk much about spending tens of billions of dollars on new submarines.”

An Australian program to build 12 submarines has experienced “at least five years of mostly inactivity.”

—Andrew Davies, PhD, Australian Strategic Policy Institute, Canberra, Australia

When researchers at the Parliament of Australia analyzed the Collins program's shortcomings, they pointed to shifting IT requirements that created “orphan systems” incompatible with systems produced by other manufacturers, making the procurement process difficult and costly.

“A little-understood characteristic of project management is that a focus on the production and delivery phases of equipment programs misses the crucial aspects governing success,” the researchers wrote in a government report. “Experience indicates that 90 percent of the discretionary decisions that affect the outcome of a project are made in the first 7 to 12 percent of its life. … [B]efore the contract to develop and build the [Collins] submarines was awarded … the future of the program was largely decided.”

That's a lesson learned that other nations would be wise to take to heart. India's government, for instance, is inching toward approving plans to manufacture six nuclear and six diesel-electric subs. Once the program is fully approved, it won't be completed for at least seven years. —Kate Rockwood

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.

PM NETWORK JANUARY 2016 WWW.PMI.ORG
JANUARY 2016 PM NETWORK

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