When is $227 billion greater than $606 billion?


#1

https://www.bloomberg.com/view/articles/2018-05-25/china-outspends-the-u-s-on-the-military-here-s-the-math

“When is $227 billion greater than $606 billion? When comparing Chinese defense spending to that of the U.S.”

I have worked in US Shipyards and Korean ones. The quality of products delivered from both are nearly on par but… the primary difference is the efficiency of the systems in place.

Finance 101:
Time=MONEY

We build ships in America as if we have a limited amount of budget $ but an unlimited amount of manhours at our disposal. We value money over time not realizing that MONEY IS TIME and TIME IS MONEY.

One simple delay regardelss of cause (e.g. safety shutdowns, change requests, holidays) can cause thousands of workers to suspend actively leading to poor morale and delivery delays.

I’d suggest that China is outbuilding us at a fraction of our budget BECAUSE they keep the production line running at all costs. Nothing is allowed to stop or slow down the system because TIME IS MONEY.

Every second a welder’s torch gets cold, every moment an electrician doesn’t have his hands on a tool or cable, every stop work order is costly because the clock keeps ticking regardless of the production schedule and TIME IS MONEY.

Example: I would suggest that the thousands of small change requests the Navy sends shipyards during the build or repair processes are more costly than we realize because they account for a significant amount of the delays and DELAYS ARE EXPENSIVE


#2

Here’s a good reply from a FB Navy group I posted this to:

You’d also want to look at the level of detail in specifications provided to the manufacturer of any system… the more constraints or requirements placed on something, the more expensive it is to comply. If you ask a shipbuilder to “give me a ship that will carry 15000 TEU from Shanghai to Los Angeles at an average speed of 30 knots” you will get a very producible and affordable design. If you also tell the builder how much torque must be applied to every bolt and that he must conduct NDT on every weld then you will add significantly to the cost, schedule, and risk of the project.
Extend the above to a system where we empower individuals to specify details at microscopic levels without assessment of the impact on other areas and to demand quarterly reports on progress toward meeting each requirement they impose.

Further, complement the above by specifying in glorious detail not only what is wanted but how it is to be procured, managed and delivered. The solicitation for one current design effort with which I am familiar has roughly 9 pages in the statement of work to be performed, packaged in a 78-page document full of bureaucratic clauses from standard contract language. A couple of those pages are evaluation factors for the proposal, so actually kind of important to the bidders, but the rest just adds compliance costs to the job. Can we conclude from this data point that bureaucracy adds six times the actual content in useless labor?


#3

#4

:disappointed_relieved:


#5

Most shipbuilding in the Far East use standard contracts based on the SAJ Form, then the yard and the owner know exactly where they stand.

https://www.chambersandpartners.com/article/564/shipbuilding-contracts---different-forms-but-does-it-really-matter

https://www.linkedin.com/pulse/10-things-you-need-know-shipbuilding-contracts-aibek-ahmedov

Then you get this: