Unmade in China by Jeremy R. Haft

Author:Jeremy R. Haft
Language: eng
Format: epub
Publisher: Wiley
Published: 2015-07-26T16:00:00+00:00

Shipbuilding

A vivid example happened recently, when Shell Oil was seeking to purchase an offshore drilling rig from China's newest, most advanced shipyard, Shanghai Waigaoqiao Shipyard (SWS), the jewel of the mammoth, state-owned China State Shipbuilding Company. Many drilling rigs these days are produced in South Korea or Japan. China has been vying to grab market share from these countries and has invested heavily in capacity building.

Before purchasing a rig from SWS, Shell performed an audit on the shipyard, as is customary before awarding a major contract to a new supplier. Even though SWS was considered the most modern shipbuilding facility in China, however, it flunked Shell's audit across every evaluation category. A company that makes offshore drilling rigs is basically a giant purchaser and assembler. It buys parts and puts them together (see Figure 4.1). So a good shipyard must have systems in place to monitor its suppliers, insuring the parts are compliant with quality standards of the end user, in this case, Shell. It must have good engineering to insure that the parts fit together safely. And it must have good workplace practices to prevent its assemblers from being injured on the job. SWS flunked in all of these areas.

4.1 Construction of a rig in dry dock

Source: iStock

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