Riveting stuff: the e-market concept reaches shipbuilding

David Bicknell finds out how Tribon Systems has almost single-handedly driven the creation of an e-marketplace for the global...

David Bicknell finds out how Tribon Systems has almost single-handedly driven the creation of an e-marketplace for the global shipbuilding industry

Mention UK shipbuilding, and the image created is one that suggests an old industry in the throes of decline.

Any news story on shipbuilding is probably going to be one of yard closures, job losses, or a battle for a vital contract to save them.

Broadly-speaking, in sympathy with other manufacturing industries, the global market for shipbuilding has headed away from Europe towards the Far East, with South Korea, in particular, winning market share from Europe.

UK yards build 25-30 vessels a year and have begun to gain a reputation for repair and conversion work - an alternative to new building. Europe is the world leader with around 40% of the global market and the UK is now one of the top three converters in Europe.

Ignoring warship production, in which UK is a world leader, the industry in Europe covers the highest technological segment of world production: sophisticated passenger ships; advanced container vessels; ferries and ro-ros; multipurpose and shuttle tankers; offshore platforms and chemical and gas carriers; high standard fishing vessels; and the manufacture of small and specialised ships. Yet, despite the impression that shipbuilding is an industry in decline, even it has become the subject of an Internet-based marketplace. In fact, several.

But, unlike other sectors where it has been rival car manufacturers or retailers which have set up marketplaces, in shipbuilding one of the key players has been set up by a software firm. Tribon Systems, a Scandinavian company which evolved from the development of the first computerised design and information system created for shipbuilding, saw its market presence in the computer-aided design and manufacturing (CAD/CAM) marketplace for shipbuilding as an opportunity to drive the creation of a virtual marketplace for shipbuilders and their component suppliers. Tribon has over 40% of the marketplace for CAD/CAM systems in the shipbuilding market. Currently, the company's design and information systems are used in around 300 sites in 39 countries worldwide.

According to research group Fairplay (January, 2000) 48% of all container ships were launched by Tribon users, 49% of all bulk carriers, and 40% of all tankers. It has used this persuasiveness to build the marketplace since late last year when it did a feasibility study, culminating in the site going live on 3 October and unveiled to Tribon's annual user group meeting. It believes the total market comprises over 400 shipyards worldwide and over 6,000 suppliers.

Tribon suggests that its marketplace users can cut man-hours in design and production by up to 30%, with the elapsed time from contract to delivery by 50% compared to conventional shipbuilding. These savings come from build strategies that focus on earlier production starts, minimum building in dock time, extensive pre-outfitting, accurate work content estimates and specific production information for each stage of production.

One of the reasons Tribon believes a marketplace in the shipbuilding industry is necessary is because the period of time available from order to delivery is extremely short. This means that many tasks must be performed in parallel. Performing in parallel means having good methods and tools to synchronise them and to handle the complex flow of information.

The organisation says it is in a better position than its competitors because it is neutral, adding that the marketplace has been designed to complement existing channels and methods of communication. Equally, design agents, to whom work is sub-contracted by shipyards, will be invited to the marketplace. Tribon says it is aimed primarily at the new-build marketplace rather than the more lucrative after-sales sector, where items available on the marketplace are more easily defined. Most of these are buyer or seller-driven, focusing on purchasing power.

Among the services available on the marketplace will be CAD/CAM integration, downloading of technical information, iterative sales, auctions and reverse auctions and requests for quotation. Tribon insists that of other rivals, while there are competitors in the auctions and reverse auctions and RFQ area, there is little competition in the other areas.

One of its key tasks now - and it's a task facing many marketplace-builders - is to drive liquidity to its site and sign up key partners, who will be early adopters. That is no easy task with a string of rivals - perhaps up to 50 - addressing the same sector. So, key Tribon executives, such as marketing director Magnus Feldt, are now trying to sell the concept to as many suppliers as possible. The more that suppliers know of Tribon, the easier it is to get them on board and join the marketplace's global component database, a critical part of the operation.

Something else that is unusual about the Tribon marketplace is the technology behind it. For once this is a marketplace not powered by the usual suspects - Oracle, Commerce One or Ariba. Instead, Tribon uses a Java-based technology, Movex NextGen from Intentia.

Tribon's attempt to create an e-marketplace has followed classic lines - an organisation seeing an opportunity to take advantage of its dominant position to expand and take advantage of e-business. Like many other sectors, though, its only problem is ensuring that it succeeds ahead of its rivals.

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