The Six Steps of Shipbuilding Corporations Selection

Liu and Hai (2006b) propose six-step procedure for selecting three shipbuilding corporations for Taiwanese Navy. These shipbuilding corporations will be illustrated:

CFSC has built for international as well as domestic customers that include Norwegian and Japanese owners, as well as the Taiwanese Navy and Coast Guard. The new shipbuilding in the past include oil and chemical tankers up to general product carriers, high-tech marine research vessels and high speed patrol boats.

CSC is a state-owned enterprise with its head office in Kaohsiung of Taiwan and two shipyards located separately in Keelung and Kaohsiung. The services are extended over commercial and naval shipbuilding, ship repairing, manufacturing and diversified operations.

JSSC is specialized in shipbuilding ocean-going vessels, with continuing elevating technical ability and improving the quality of human resources. Its product lines include fishing vessels, Taiwan Coast Guard Patrol vessel and cargo conversion.

(1) Step 1: Identify the Shipbuilding Corporations’ Criteria

DM1 use a board or group decision method to determine the criteria and sub-criteria for selecting shipbuilding corporations. These criteria and sub-criteria are individually presented to each participant that is received in Table 3-6.

Table 3-6: Summary of the performance metrics

Organization Metrics Performance Metrics

Culture

Feeling of trust (FOT)

Management attitude/outlook (MAO) Vision/strategic fit (VST)

Management

Finance/marketing/performance (FMP) Communication openness (CO)

Relationship/relationship closeness (RRC) Share of information (SOI)

Technology

Include manufacture facilities/ personnel and response capability

Quality

On time to the finish (OTF) Conformance quality (CQ) Quality philosophy (QP)

Price

Initial price (IP)

Conformity to cost structure (CCS)

Material

Supply chain management (SCM) Inventory/material strategy (IMS) Logistic support capability (LSC)

Flexibility

Service/delivery capability (SDC) Conflict resolution (CR)

Design changes (DC)

(2) Step 2: Structure the Problem Hierarchy

DM1 use a hierarchical structure to construct a complex, multi-person, multi-attribute problem, in order to separately investigate each level of the hierarchy. The reason for this step is to decompose the selected suppliers and to make criteria on a given level with respect to the related elements in the model, as shown in Figure 3-3.

Supplier Selection

Culture 0.153

Technology 0.175

Material 0.119

Flexibility 0.122

FOT 0.450 MAO 0.359 VST 0.191

SCM 0.304 IMS 0.339 LSC 0.357 SDC 0.285 CR 0.350 DC 0.366 Management 0.160

FMP 0.281 CO 0.264 RRC 0.226 SOI 0.230

JSSC 0.343 CFSC 0.308

CSC 0.349 Level 0 Level 1 Level 2 Level 3

Objective Criteria Sub -criteria Shipbuilding Corporations

Price 0.125

IP 0.504 CCS 0.496 Quality 0.145

OTF 0.351 CQ 0.331 OP 0.318

Figure 3-3: Hierarchy for selecting shipbuilding corporations (3) Step 3: Establish the Votes of Priority

(a) Priority votes of criteria and sub-criteria

Weights are assigned to each alternative on the basis of its relative contribution to each criterion. For this purpose, DM1 propose seven criteria: organization metrics (culture, management and technology) and performance metrics (quality, price, material and flexibility). DM1 show the order of the seven criteria and the votes of each are shown in Table 3-7. Then, DM1 list the priority votes of sub-criteria in fixed first criterion in Table 3-8.

Table 3-7: Priority votes of seven criteria

Criteria 1^st 2^nd 3^rd 4^th 5^th 6^th 7^th Total

Culture 1 7 2 0 0 4 1 15

Management 5 0 10 0 0 0 0 15

Technology 11 2 0 1 1 0 0 15

Quality 1 5 3 0 6 0 0 15

Price 0 1 0 7 1 1 5 15

Material 0 1 0 0 6 1 7 15

Flexibility 0 0 1 5 0 8 1 15

Total 18 16 16 13 14 14 14 105

Table 3-8: Priority votes and weights of eighteen sub-criteria

Votes Votes Criteria

1^st 2^nd 3^rd Weights Criteria

1^st 2^nd 3^rd Weights

Culture Price

FOT 13 4 1 0.450 IP 8 7 0.504

MAO 5 11 0 0.359 CCS 7 8 0.496

VST 0 1 10 0.191

Management Material

FMP 10 1 1 0.281 SCM 2 3 10 0.304

CO 3 10 1 0.264 IMS 5 7 3 0.339

RRC 0 2 11 0.226 LSC 8 5 2 0.357

SOI 2 2 2 0.230

Quality Flexibility

OTF 7 6 2 0.351 SDC 0 2 13 0.304

CQ 5 4 6 0.331 CR 6 8 1 0.339

OP 3 5 7 0.318 DC 9 5 1 0.357

(b) Priority votes of shipbuilding corporations

DM2 follow the criteria and sub-criteria that are defined by DM1. The same procedure is carried out for the remaining three shipbuilding corporations, with different sub-criteria being set. DM2 show the votes from first to third in Table 3-9.

Table 3-9: Priority votes and weights of three shipbuilding corporations

Votes Votes Votes

Corp.

1^st 2^nd 3^rd

Weights Corp.

1^st 2^nd 3^rd

Weights Corp.

1^st 2^nd 3^rd

Weights

FOT Technology SCM

CFSC 1 0 11 0.290 CFSC 1 5 6 0.306 CFSC 2 8 2 0.326 CSC 6 5 1 0.356 CSC 8 3 1 0.371 CSC 5 0 7 0.331 JSSC 5 7 0 0.354 JSSC 3 4 5 0.323 JSSC 5 4 3 0.343

MAO OTF IMS

CFSC 1 4 7 0.301 CFSC 0 2 10 0.284 CSC 1 5 6 0.305 CSC 1 6 5 0.308 CSC 3 7 2 0.333 CFSC 10 0 2 0.383 JSSC 10 2 0 0.391 JSSC 9 3 0 0.383 JSSC 1 7 4 0.312

VST CQ LSC

CFSC 5 3 4 0.340 CFSC 0 3 9 0.289 CFSC 0 3 9 0.288 CSC 5 2 5 0.337 CSC 8 3 1 0.371 CSC 8 4 0 0.375 JSSC 2 7 3 0.323 JSSC 4 6 2 0.340 JSSC 4 5 3 0.337

FMP OP SDC

CFSC 6 5 1 0.344 CFSC 2 1 9 0.302 CFSC 0 6 6 0.297 CSC 5 2 5 0.325 CSC 1 10 1 0.323 CSC 10 2 0 0.391 JSSC 1 5 6 0.331 JSSC 9 1 2 0.375 JSSC 2 4 6 0.312

CO IP CR

CFSC 2 3 7 0.309 CFSC 2 10 0 0.335 CFSC 2 1 9 0.302 CSC 1 6 5 0.308 CSC 5 0 7 0.329 CSC 2 7 3 0.323 JSSC 9 3 0 0.383 JSSC 5 2 5 0.336 JSSC 8 4 0 0.375

RRC CCS DC

CFSC 0 3 9 0.290 CFSC 1 10 1 0.323 CFSC 0 7 5 0.298 CSC 8 2 2 0.367 CSC 4 0 8 0.320 CSC 12 0 0 0.407 JSSC 4 7 1 0.343 JSSC 7 2 3 0.357 JSSC 0 5 7 0.295

SOI

CFSC 4 2 6 0.327

CSC 6 4 2 0.353

JSSC 2 6 4 0.320

(4) Step 4: Calculate the Weights

(a) Weights of the criteria and sub-criteria

TF use the votes of Table 3-7 to calculate the weights of the seven criteria by model (3-3). Figure 3-3 shows that the weights for culture, management, technology, quality, price, material and flexibility at the first level are 0.873, 0.912, 1.000, 0.829, 0.716, 0.679 and 0.698, respectively. After normalizing these data, the weights of outcome are 0.153, 0.160, 0.175, 0.145, 0.125, 0.119 and 0.122, respectively. Similarly, TF use the votes of Table 3-8 and the same procedure to determine the weights of the sub-criteria. The weights of sub-criteria are listed in columns 5 and 10 of Table 3-8.

(b) Weights of shipbuilding corporations

TF use the votes of Table 3-9 to calculate the weights of the three corporations for the specific sub-criteria, using the same methodology. TF derive the weights of shipbuilding corporations CFSC, CSC and JSSC which added up to one, as shown in columns 5, 10 and 15 of Table 3-9.

(5) Step 5: Ranking of Shipbuilding Corporations

This step required the managers to assess the performance of all the shipbuilding corporations within the nineteen sub-criteria of the second level identified as important for corporations rating. In the first row of Table 13-10, the number 0.069 is equal to the “Culture”

criterion score 0.153 product the “FOT” sub-criterion score 0.45. And then, TF use the same way to get other results. Once the weights for sub-criteria have been determined, it is relatively easy to calculate the resulting corporations rating scores. The rating value for each corporation was obtained by summing the products of the respective elements. Finally, TF calculate the scores for sub-criteria by the weights of the corporations to get the total weighted scores shown at the bottom of Figure 3-3. And the corporations CFSC, CSC and JSSC get the total weighted scores of 0.308, 0.349 and 0.343 in the last row of Table 3-10. This gives a rating score for each corporation, the higher is the rating and the better is the corporation’s performance.

Table 3-10: Rating of three shipbuilding corporations

Scores Weighted Scores

Criteria

(6) Step 6: Selection of Shipbuilding Corporations

According to the DM1, the main advantage of this methodology is that it can help them to think in a comprehensive and detailed manner, while allowing them to categorize the various issues. The CSC is the largest in the CFSC and JSSC. The CFSC is an organization that is similar in size to company JSSC. Although, the rating value for each corporation was obtained the final score and the ranking of corporation CSC, JSSC and CFSC is first, second and third, respectively. However, we find that JSSC is better than CSC for the criteria of culture, quality, price and management. The CSC company beyond the others because it has a

strength competence that is material, flexibility and technology domain, as shown in Table 3-11. Especially, the weights of CSC are more 0.008 than that of JSSC in the technology index. For both of the shipbuilding corporations, the difference of scores will change the final rank. These results will be regarded as sensivity analysis for three shipbuilding corporations.

Table 3-11: Rating of three shipbuilding corporations for seven criteria

Shipbuilding Corporations Shipbuilding Corporations Criteria

CFSC CSC JSSC Criteria

CFSC CSC JSSC Culture 0.047³ 0.052² 0.054¹ Price 0.041² 0.041² 0.043¹ Management 0.050³ 0.052² 0.054¹ Material 0.036³ 0.043¹ 0.039² Technology 0.054³ 0.065¹ 0.057² Flexibility 0.036³ 0.045¹ 0.041² Quality 0.042³ 0.050² 0.052¹

* 0.047³: “0.047” is a weight and “3” is a rank for three shipbuilding corporations.