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http://dx.doi.org/10.3744/SNAK.2009.46.3.362

Decision Supporting Methodology and System Based on Theory of Constraints for Optimal Product Portfolio Strategy in Shipbuilding Industry  

Kim, In-Il (Daewoo Shipbuilding & Marine Engineering)
Han, Seong-Hwan (Daewoo Shipbuilding & Marine Engineering)
Kwon, Min-Chull (Daewoo Shipbuilding & Marine Engineering)
Publication Information
Journal of the Society of Naval Architects of Korea / v.46, no.3, 2009 , pp. 362-371 More about this Journal
Abstract
Shipbuilding is a typical 'build to order' industry. It has a business model that generates revenues from building various ships and offshore products in accordance with owner's requirements at each production stage. Under uncertainty in shipping market, it is very essential for the shipbuilder to prepare the fast and competitive decision for product portfolio strategy in order to maximize contribution margin by exploiting production facilities and constraints. In this study, we introduce the unique decision supporting methodology for the optimal product portfolio sets based on Theory of Constraints(TOC). This methodology is established by adopting the concept of Drum Buffer Rope(DBR) in constraints planning and Throughput Accounting (TA) in management accounting of TOC. In addition, Decision Supporting System(DSS) is implemented. This DSS system provides a throughput estimator with reflecting the cost structure of shipbuilding industry and a resource simulator built on heuristic algorithms to operate major constraint-resources in shipyard such as dock, quay and pre-erection area etc. Several examples are presented to show that the proposed methodology and system can effectively support the strategic decision-making process of a global shipbuilding company.
Keywords
Theory of constraints; Drum buffer rope; Throughput accounting; Decision supporting system; Product mix;
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Times Cited By KSCI : 3  (Citation Analysis)
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