Comparing Offshore Support Vessel Production Times between Different Offshoring Strategies Practiced at Norwegian Shipyards

Abstract

To save costs and build competitiveness, Norwegian shipyards usually offshore some of the processes required to produce a ship, especially steel-related tasks, i.e., they have them carried out in a country with lower factor costs. This study aims to provide some quantitative evidence of the relationship between the degree of offshoring and the production time of offshore support vessels (OSVs) delivered from Norwegian shipyards. It builds upon a recent article that introduced a typology of offshoring in ship production (Semini et al. 2018, Journal of Ship Production and Design, 34(1), 59–71). We take into account contextual factors that are also expected to affect the production time of OSVs, in particular ship size and complexity, repeat production, and the global market situation. We apply multiple regression analysis on a sample of 156 OSVs delivered from nine Norwegian shipyards between 2010 and 2018. Each of these ships was, by plan and strategy, partly produced at a foreign yard, before one of the Norwegian yards took over, completed production, commissioned, tested, and finally delivered the ship. Results suggest that the higher the degree of offshoring is, the longer is the total ship production time. Only ship size explains even more of the production time variability in the sample than offshoring strategy. In addition to these two factors, evidence suggests that also repeat production and the global market situation have a significant impact on the production time. Our study contributes to the literature on the relationship between strategy and performance in shipbuilding. It provides new insights into how offshoring strategy and contextual, product- and market-related factors relate to ship production time based on quantitative, empirical evidence. From a methodological perspective, it illustrates how multiple regression analysis can be applied to ship-specific data as a benchmarking tool to measure and compare shipbuilding performance. Findings are first and foremost valid for the ships included in the study, which opens numerous opportunities for further research.