Shipbuilding 4.0: Low labor cost alone can’t give us leverage anymore
With the world witnessing a fourth industrial revolution, the traditional shipbuilding sector has witnessed a myriad of changes as well
Bangladesh, as a maritime nation with a sea area of 1,66,000 square kilometers and more than 200 rivers all over the country, has a rich history of building timber ships dating back hundreds of years.
Chattagram, a port city, was one of the best places to build wooden commercial vessels.
However, due to a failure to keep up with the evolution of new technologies, the glory of shipbuilding in this region began to fade and shifted to other regions of the world over time.
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Nonetheless, due to favourable geophysical conditions, rivers and water transports have continued to play an important role in economic and commercial activities in Bangladesh.
All of the vessels that travel on inland routes are primarily built and maintained by our indigenous shipbuilding industry, and the inland fleet is rapidly expanding.
Bangladesh has amassed a fleet of approximately 20,000 vessels for inland shipping in the five decades since its independence.
This inbuilt ability and long term heritage of the people in this region provide a strong base for building ships of international standard.
Bangladesh has so far exported its product to companies in Germany, Denmark, Finland, New Zealand, Ecuador, Tanzania, Pakistan, Gambia, Uganda, India, Kenya and the UAE.
By properly nourishing and utilising this export-oriented shipbuilding industry, our country can make significant economic progress.
Entrepreneurs are also optimistic about the prospects of a thriving shipbuilding industry in Bangladesh, owing to the country's long history of maritime activity, favourable geographical location, and availability of cheap labour.
Ships of international standard built in Bangladesh are roughly 10%-30% less expensive than ships built in Japan, Korea, China, and India. The main advantage we have over our competitor is the low cost of labour.
Nowadays, advanced technology may result in cost savings, and if we rely solely on labour costs, we risk losing competitiveness. Thus, numerous issues must be addressed to ensure the industry's long-term viability.
In recent times, the impact of Industrial Revolution (IR) 4.0 on the worldwide industries has been discussed everywhere.
It consists of a complex use of digitisation, combining the cyber and physical worlds by incorporating the internet, big data analytics, artificial intelligence, cloud computing, human-machine interaction, 3D printing, sensor technology, robotics, advanced materials technology, and so on.
Shipbuilding 4.0 is the name given to the new industrial revolution wave in the shipbuilding industry, and it is believed that the changes it will bring will be very different from the previous three industrial revolutions.
Almost all of the major players in the shipbuilding industry are preparing for the changes that will occur in the next 10 to 20 years, and they are actively working on their own steps toward the fourth industrial revolution.
Shipbuilding 4.0 encourages not only the digitisation of ship design and construction, but also the further development of process optimisation, standardisation, digital interconnectivity, information flow optimisation, and information management among other things throughout the entire supply chain. Full implementation of these steps is still a long way off.
Furthermore, while complete automation for shipbuilding is unlikely, more automation will undoubtedly come in the near future to reduce production time, manual labour, and so on.
New machines based on advanced technology will be introduced, and shipyards will require a good infrastructure to work with both man and machine.
It is possible that the method of supervision will change. Drones and automatic welding will be used to reduce risky jobs during ship construction.
Shipyards will need skilled engineers, specialists not only in technical science, but also in IT science, in the Shipbuilding 4.0 era.
Engineers must be sufficiently qualified to perform all work in a multidisciplinary environment using advanced technology and interacting with machines while the ship is in production.
Also, during the design phase, it will be even more important to collaborate and design innovative solutions with the selected suppliers.
The IR 4.0 is undoubtedly bringing about changes in the global shipbuilding industry, as well as other industries, and many countries around the world are focusing on technological advancement in order to benefit from it.
We must accept the facts and take the necessary steps to embrace IR 4.0, particularly for our promising export-oriented shipbuilding industry.
We must understand that low labour costs may not be a key competitive factor in future shipbuilding.
We must identify areas for improvement based on scientific studies, taking into account present industrial structure, future needs, and shipbuilding requirements.
The government should step forward to support this industry in improving its overall performance and becoming more competitive in the long run.
Dr. N.M. Golam Zakaria is a Professor and the Head of the Department of Naval Architecture and Marine Engineering at BUET. He can be reached at gzakaria@name.buet.ac.bd.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.
