Transformation of Shipbuilding into Smart and Green: A Methodology Proposal

Abstract

Since the beginning of the last decade, digital technological achievements have ushered the economies of developed countries into the fourth industrial revolution, transforming industries into smart ones, referred to as “Industry 4.0”, enabling them to innovate as a prerequisite for sustainable development and economic growth. At the same time, the European Union’s institutions are adopting strategies and programs to transform the European industry into a climate-neutral one, aiming to achieve this by 2050. The authors, participating in the introduction of Lean tools and digital technologies into one of the European shipyards using the “CULIS” (Connect Universal Lean Improvement System) methodology, recognize the high potential of its contribution to the European Commission’s guidelines for transitioning the economy to a sustainable one, and for this purpose, they present it in this paper. Namely, the methodology in question not only theoretically results in a “quick” implementation of tools and doctrines—with an approximately 36-month total duration of the process—but also encompasses as many as three transformations: Lean, digital, and green; an analysis of a methodology with such characteristics significantly adds to the originality of this study. The current stage of the observed shipyard’s “triple” transformation process already results in significant improvements—e.g., an increase in productivity by around 21% or a reduction in sales process costs by 38%. However, given its ongoing pilot phase, (further) analyses of improvements in (European) shipbuilding competitiveness and profitability that can be achieved through digital Lean management of projects’ realization process are implied.

1. Introduction and Literature Review

The “European Green Deal” (EGD), a European Commission strategy aimed at making Europe climate neutral by 2050, was adopted at the end of 2019 and is defined through numerous initiatives, strategies, and legislative acts, with the main goal of fully transforming European society and the economy into a sustainable one [1]. In mid-2020, the policies and objectives of the EGD strategy for transitioning to a net-zero greenhouse gas emissions economy were further strengthened by the “Next Generation EU” recovery program, primarily designed to respond to the economic and global crisis caused by the COVID-19 pandemic [2].

Furthermore, in July 2021, the European Commission adopted a series of proposals as part of the EGD to achieve a reduction in greenhouse gas emissions of at least 55% by 2030 compared to the emission levels in 1990 and as a first step towards achieving the primary goal of the EGD strategy—climate neutrality in Europe by 2050 at the latest [3]. To this end, the European Union (EU) has adopted or is preparing a series of legislative proposals regarding taxes, the climate, energy, transport, and other policies. In addition to the adaptation mentioned above of legal measures in key relevant areas (the environment, energy, agriculture), the EU recognizes green and digital transitions as the main leaders in the process of achieving a climate-neutral economy. Therefore, one of the key EGD-related strategies pertains to the industrial sector, which accounts for 20% of the total newly created value in the EU, directly employs 35 million people, and involves millions more who are indirectly related to industrial activities. It also accounts for 80% of total EU exports. “A New Industrial Strategy for Europe” (NISE), adopted in March 2020 [4], defines support for the mechanisms for transforming the European industry into a digital and climate-neutral sector while maintaining global competitiveness. The twin transition support programs defined through NISE emphasize measures to strengthen the small- and medium-sized enterprises (SMEs) sector, a leader in research and innovation (as many as 99% of industrial companies in the EU are SMEs).

In 2023, the European Commission presented “A Green Deal Industrial Plan” (GDIP) as an integral part of the EGD, defined for the purpose of improving the competitiveness of the EU net-zero industry, i.e., supporting the rapid achievement of climate neutrality in Europe [5]. The GDIP aims to significantly contribute to the growth of the clean product production sector, i.e., technologies (batteries, wind turbines, solar power plants, electrolysers, and heat pumps), by ensuring a simplified yet predictable regulatory environment, enabling faster access to investment funds, and improving the skills necessary for such production [5]. As the last in the series, the GDIP, in support of Europe’s green transition, focuses on improving trade cooperation with its partners (with an emphasis on suppliers/consumers of critical raw materials for the clean technology industry), in order to ensure secure supply chains resilient to the current global geopolitical challenges [5]. Later that same year, the European Commission presented the Net-Zero Industry Act, an initiative stemming from the GDIP that aims to simplify the regulations related to the production of strategic technologies—decarbonization technologies [6]. The purpose of the act is to boost the competitiveness of the EU industry of technologies/products with a net-zero emission rate, thereby increasing its production capacities, at least to the extent necessary to meet at least 40% of the EU’s energy needs by 2030 [6].

The vast majority of developed countries are in the phase of transforming their industries or their economies as a whole into smart organizations and structures [7], recognizing the Industry 4.0 doctrines as tools for achieving sustainable growth and development. By implementing these doctrines, significant improvements are achieved, among other things, in the direction of reducing greenhouse gas emissions and facilitating a green transition. Currently, about 76% of manufacturing companies worldwide are applying new digital technologies, i.e., they are in the phase of integrating them into business systems [8].

The countries with the greatest influence in shipbuilding and maritime affairs worldwide have also begun implementing strategies to introduce trends and technologies of Industry 4.0 into shipbuilding processes since the beginning of the last decade, coordinating and guiding these efforts at the highest government levels, such as the following [8]:

• Germany, in 2013, through the governmental document “Industrie 4.0”;
• Galicia, Spain, in 2014, through the Industrial Competitiveness Agenda and in 2016, through the ACLUNAGA cluster (a GAIN—Galician Innovation Agency, IGAPE, and AIMEN Technology Center association), which were the first to introduce Industry 4.0 trends in shipbuilding;
• Korea, in 2015, through the “Manufacturing Innovation 3.0 Strategy”, with the expectation of 2500 patents related to the construction of Smart Ships in a “smart” shipbuilding environment based on Shipbuilding 4.0 technologies;
• China, in 2015, through the government’s strategic initiative “Made in China 2025”, referring to Shipbuilding 4.0 in China as “5S”, which stands for “intelligent ship operation service system” (the abbreviation is derived from the terms Sea, Ship, System, Smart, Services);
• Japan, in 2016, through a joint declaration of future Japan–Germany cooperation in Industry 4.0;
• Australia, in 2018, through the implementation of digital technologies in the Adelaide Australian Naval Shipyard, with an investment of 1.5 billion Australian dollars in design and engineering, aiming to transform it into the most advanced naval shipyard in the world.

As the objective of this research, the authors present, through a case study, one of the methodologies for integrating the technological achievements of Industry 4.0 into shipbuilding processes based on an empirical analysis of activities throughout the current (“zero”) implementation phase—recording the current state of the process or functions of the observed (European) shipbuilding system and implementing pilot project(s). At the same time, the expected time dynamics of the transformation of the shipyard from a traditional to a smart one, “Shipyard 4.0”, along with its subsequent transition to “green”, are defined. This study was performed on the case of a large, network-organized shipyard, highly challenged in productivity, i.e., profitability performance by individual and personalized orders of complex vessels of various types, as well as by frequent demands for variations during the ship building process. The observed shipbuilding system operates on the “one-stop-shop” concept, i.e., meaning it provides all work and services independently.

Considering the lack of research on the success of digital transformation within the shipbuilding industry environment, particularly the European one, this study aims to contribute to the development of theories regarding the introduction of Lean tools and Industry 4.0 technologies by providing academics (but also practitioners, such as Lean consultants) insight into the methodology proven under real conditions, along with its (further) analysis through new, follow-up research. The practical contribution is recognized in highlighting to industry professionals the potential for significantly enhancing the competitiveness of shipbuilding systems by transforming them into smart and green systems, precisely through the application of the presented methodology, which the authors qualitatively acknowledge as highly innovative.

Following an introductory discussion on climate goals and sustainable development, along with the improvement of the industry’s competitiveness through digital transformation, the literature review proceeds. The second chapter provides a summary of the scope of the anticipated applicable doctrines and technologies of Industry 4.0 in shipbuilding. In the third chapter, the research problem is stated, and the applied research methodology is described. The fourth chapter presents the principles of a dual strategy for transforming the shipyard towards green practices, along with a description of the losses in the processes and the Lean tools applicable for their reduction or complete elimination. The chapter further describes the concept of the applied transition methodology, presents the case, i.e., the business system observed in this paper, and finally outlines the content and course of the transformation of shipbuilding processes into smart or green ones. Lastly, the results, research limitations, and general applicability of the presented methodology are discussed. In conclusion, the fifth chapter presents the expected improvements in the process of realizing shipbuilding projects, announces further analyses related to this paper, and offers guidelines for further research.

Literature Review

There are different, and quite recent, views on the relationship between the Lean management of processes and the applied Industry 4.0 doctrines within them [9,10], as well as on their correlation [11]—from viewing Lean management as a mediator in the operation of digital technologies during their joint improvement of the process to suggesting the opposite viewpoint, where Industry 4.0 trends play a moderating role, interacting with the Lean methodology in process improvement activities [12]. In addition, current research also addresses approaches to the implementation of Lean tools [13] and digital technologies, naturally depending on the type and domain of the operation of the transformation subject. For example, Bueno et al. [14] developed a Lean 4.0 implementation framework suitable for the system under observation by applying the General System Theory, which combines the best practices of Lean and Industry 4.0. However, as Mamoojee-Khatib et al. [15] state in their study, the rate of unsuccessful Lean transformation closures across the industry sector in general is disheartening—ranging from 70% to 90%. Therefore, among others, Maware and Parsley II [16], in their work, explore the challenges faced by the manufacturing sector, with an emphasis on the North American region, during the implementation (and maintenance) of Lean tools and practices.

Saraswat et al. [17], through a systematic literature review, interpret their research findings on the integration of Lean manufacturing and Industry 4.0 by using five “clusters” of articles, grouped according to keywords. Their review (i) highlights the significant potential for enhancing the planning process while also optimizing the process by applying the hybrid technique “Smart Value Stream Mapping”, which combines digital technologies with Value Stream Mapping Lean tools, (ii) confirms the contribution of digitization (sensors, networking, Big Data analytics, etc.) to the quality and efficiency of production, (iii) indicates, despite the low level of practical application so far, a need to combine Lean production techniques and Industry 4.0 technologies (e.g., Cyber Physical System (CPS) and Jidoka, or CPS and Kanban)—“Lean automation”—in order to increase the adaptability and flexibility of production systems, and the added value for the customer, (iv) recognizes the potential for substantial reductions in the operating expenses of a Lean supply chain upgraded with digital technologies, particularly Artificial Intelligence (AI) and Machine Learning, and (v) highlights the role of CPS as a crucial enabler of the (further) implementation of digital technologies in a Lean-managed industrial system environment [17]. The authors further analyze the interrelationship between various Lean tools and digital technologies to determine the most compatible pairings, all of which are aimed at comprehensively increasing efficiency and improving quality [17]. The relationship between Lean manufacturing and Industry 4.0 is also analyzed by Moraes et al. [18]. Through a literature review, the authors analyze the effects of integrating different digital technologies on waste removal from production processes. They then discuss the applicability of these technologies, including their influence on various Lean tools and techniques/principles, as well as the compatibility of Lean tools with digital principles. For example, it is stated that alongside Big Data, Connectivity and Integration have the greatest impact on Lean management, while Additive Manufacturing has a somewhat smaller impact, and Industrial Automation contributes the least [18]. Similar conclusions to those in the previous two studies were drawn by Teles et al. [19] in their integrative review on the integration of Lean manufacturing and Industry 4.0—they recognize Big Data and CPS (along with the Internet of Things (IoTs)) as technologies that, in synergy with a Lean methodology, contribute the most to the efficiency or speed of production processes. According to the authors, the greatest advantages of combining the concepts of Lean methodology and Industry 4.0 relate to the use of digital technologies to support Lean tools and principles or enhance their effectiveness [19]. For example, the application of Kanban tools in a CPS environment generates “e-Kanban,” which upgrades tools by enabling much more efficient, real-time decision-making. Meanwhile, the combination of CPS and VSM (Value Stream Mapping) tools allows business system management to oversee process improvements in more advanced and realistic scenarios, as the upgraded VSM provides much more accurate, real-time feedback from the process [19]. With sensors and software, the IoTs further accelerate the processes already optimized by Lean, making their flow far more reliable, while Big Data, by collecting and analyzing large amounts of data, simplifies management’s ability to make both strategic decisions and those related to the continuous improvement of processes (upgrade Kaizen Lean tools) [19].

Research on the application of digital doctrines and technologies in the shipbuilding industry has only recently become relevant [20,21].

Zhang and Chen [22] analyze the status of this research, the differences in their research approaches, and the challenges faced by such research through a systematic literature review of 68 articles published in the last ten years. Although the paper stands out for proposing a framework for the application of Industry 4.0 technologies in the shipbuilding sector, little research is generally conducted on strategies for introducing or adapting digital technological achievements to shipbuilding processes, and quantitative analyses of their impact on these processes are almost entirely absent. [12,22]. For example, Bezerra et al. [23], in their exploratory study that combines qualitative and quantitative methods, analyze the impact of digital transformation on the competitiveness and sustainability of the (Brazilian) shipbuilding industry through their proposed theoretical model. As an important prerequisite for the transformation of shipyards into smart ones, the authors emphasize the necessity of harmonizing corporate strategic management with the management of complex projects (in a sustainable manner) [23]. Furthermore, meeting the demands of personalized orders, particularly those typical of the European shipbuilding industry, is not possible unless production is both efficient and extremely flexible. This flexibility is achievable precisely through the implementation of Industry 4.0 technologies and doctrines into shipbuilding processes [24]. In his work, Denev [25] examines the (Bulgarian) ship repair sector within the context of Industry 4.0, exploring both the advantages and the challenges of implementing digital technologies and trends in repair shipyards. The biggest challenge to the introduction of Industry 4.0 technologies is recognized in high capital investment funds (necessary for, e.g., robotization, the implementation of virtual and augmented reality (AR), and additive manufacturing), which are mostly difficult for small- and medium-sized entities to obtain, and most of these are shipyards in the ship repair industry [25]. On the other hand, these same technologies contribute both from an economic and an environmental perspective, primarily by reducing manual labor and improving energy efficiency. For example, AR technology enables quick inspections of damage or repairs, thereby improving, among others, the work planning process, which, combined with robotization, decreases the number of hours of manual labor. Additionally, 3D printing significantly shortens the supply time of the specific components of a system or device, thus also reducing the deadlines for ship overhaul [25].

2. Industry 4.0 Technologies—Shipbuilding Trends

Industry 4.0 trends are transforming traditional business processes into smart ones, integrating them in a direction that results in their execution in an efficient, adaptable, and environmentally friendly way [12]. The main directions of integrating shipbuilding processes proposed by previous research on the applicability of digital technologies in shipbuilding and their implementation methods [12,26] are as follows:

• Vertical, which integrates shipbuilding processes across plants and departments, extending through various sectors to top management, in order to achieve cost savings in processes, including savings in energy consumption, while maintaining work-safe and environmentally friendly practices. These improvements are achieved through real-time remote control of processes by transmitting signals from smart sensors and actuators installed on machines, devices, robots, and production lines, and measuring devices directly to the virtual world [27] (CPS);
• Horizontal, which integrates all stakeholders in the value chain—clients, suppliers, subcontractors, shipbuilders, supervisors, testers, and service technicians—to harmonize their specific interests in the process, potentially creating new, mutual networking opportunities to achieve individual interests (also) in potential future business models;
• End-to-End engineering, which connects stakeholders (clients, suppliers, shipbuilders, and service technicians) and functions in the process (design, supply, production, maintenance) by monitoring and analyzing entered or read data throughout the product life cycle—from (conceptual) design and construction to maintenance and dismantling—to optimally modify the product under construction, efficiently maintain the product in operation, and define the improvements applicable to the product in operation or to a new product in the production series.

These integrations presuppose the implementation of digital technologies and Industry 4.0 trends such as Digital Twin (DT), the Digitalization of all workshop machinery, AI, Virtual and Augmented Reality (VAR), Collaborative robotics, Additive manufacturing (3D printing), Autonomous guided vehicles, Cybersecurity, Big Data analytics, Blockchain, Cloud, the IoTs [12,26], and the Internet of Services [8]. Figure 1 describes the fundamental roles and functions of certain technologies and Industry 4.0 trends.

Vertical integration, with its prime enablers and some of the main results emphasized, is illustrated in Figure 2, and the horizontal one is shown in Figure 3, whereas Figure 4 shows the basics of End-to-End integration.

Some research have modelled analyses of the interplay between digital technologies and the importance of their role in creating a Smart Factory, while defining Artificial Intelligence, the Cloud, Big Data analytics, and the Internet of Things as technologies of primary importance in digitally transforming a business system, around which all others correlate [12]. Other research assumes that the CPS platform and technologies, such as the Internet of Things, Big Data, and the Internet of Services, are the main carriers of the Smart Factory concept [8]. The majority of research highlights Digital Twin—a virtual replica of the existing (physical) asset, connected to it with smart sensors and actuators—as the key technology in realizing the Cyber Physical System [28], i.e., the backbone of digitalizing a business system, through which all process integrations permeate [26,29,30]. However, regardless of all previous theoretical research, the authors suggest selecting applicable digital technologies and defining their implementation priorities based on a snapshot of the existing situation in a business system and depending on the chosen methodology of its transformation into “smart” one.

3. Problem Definition and Research Methodology

In this chapter, the authors structure the research problem along with its background, and state the resulting research question. Further, the applied research methodology is explained.

3.1. Problem Definition

Over the last decades, European shipbuilding has completely lost its market position in building cargo vessels to the Far East. Today, it competes in the market niches of passenger ships, cruise ships, ferries, and special-purpose vessels. To preserve and increase competitiveness, European shipyards are faced with the need to continuously improve shipbuilding processes. The transformation of industrial processes into smart ones achieves cost savings, increases productivity and employee motivation, and ultimately enhances customer satisfaction by delivering added value. Hence, the shipbuilding industry today also faces the challenge of rapidly adopting relevant digital technologies to enhance the performance of business processes. Profitability growth also enables an increase in the share of research and innovation activities, which must be recognized as one of the key pillars of the sustainable development and growth of modern (European) shipbuilding because innovation in technological and production processes achieves, among others, energy savings, thereby achieving the climate-neutrality goals of the business system itself. Furthermore, a high share of research and innovation activities in business can allow a system to best respond to current client demands in the maritime sector for the development and (environmentally driven [31]) construction of energy-efficient and green vessels with high autonomy in maintenance and management (“Smart Ship”), thereby ensuring market competitiveness.

This research was prompted by the challenge of achieving a rapid and cost-effective transformation of the European shipbuilding industry from traditional to smart or sustainable practices while ensuring profitability and enhancing competitiveness. Given the established and widely applied methodology for implementing Lean tools and digital technologies, the aforementioned problem raises the following research question: can the CULIS methodology, with its structure or concept, ensure the successful closure of the total twin transition of complex shipbuilding systems, characterized by predominantly the individual production of complex ships from various market niches?

3.2. Research Methodology

This research is undertaken around an industry case study in order to investigate the applicability of the already existing methodology for the introduction of Lean tools, digital trends and technologies, as well as green policies, in the shipbuilding industry. The overall goal was to develop a proposal for industry professionals on the methodology for transforming shipbuilding systems into smart and green ones. Thus, this study is structured as follows:

• A literature review: an investigation of views on the relationship among Lean methodologies and digital technologies, in order to (additionally) comprehend the CULIS methodology approach, as well as the analysis of (recent) research regarding achievements in the introduction of Industry 4.0 technologies in the shipbuilding industry;
• An analysis of digital Lean management and an elaboration of the CULIS methodology within the twin transition framework: a comprehensive overview and assessment were conducted to understand the applicability and possible adjustments of the CULIS methodology approach considering the challenges and specifics of the shipbuilding industry;
• A case study: an analysis of the current Lean transformation status of the observed shipbuilding system and a proposal of “triple” transformation steps (simplified sequence) according to the CULIS methodology, aimed at achieving Shipyard 4.0, are provided.

4. Twin Transition

The methodology of transforming a factory into a smart (and ultimately green) facility, as applied in this paper, defines the introduction of Lean management in processes as a prerequisite for approaching the digital transformation of a business system (Dual Strategy) [32].

Lean management creates more value for the customer with less engagement of working hours, energy, materials, and resources. A Lean methodology continuously improves processes by recognizing losses (Japanese “Muda”), work overload (Japanese “Muri”), and inequalities in performing activities (Japanese “Mura”), and reducing or removing them from the process. Losses (waste, “Muda”) represent everything in the process (activities, phenomena) that does not add value to the product from the client’s point of view, whereas some can be completely removed from the process (scrap material, unnecessary transport, and unnecessary activities in the process) and some can be reduced as much as possible (quality control activities, testing, as well as communication with the customer and the like) [32]. There are seven groups of losses (“Muda”) [33]:

• Overproduction (production without a sales strategy, stock production);
• Stocks (unused capital);
• Unnecessary movements (unnecessary workers’ movements, inadequate machine layout, congested working spaces);
• Transport (unnecessary transport between production operations, and congested transport routes);
• Waiting time (waiting during communication with the client, waiting for material supplies, waiting for the product between operations, and waiting for the workers on the machine);
• Excessive processing (poor product construction, oversized machines, inadequate preparation, and finishing times);
• Waste (defective products, mistakes in the process).

According to the authors of this paper, the Lean tools for analyzing and improving processes that can be implemented in the observed shipyard are as follows [33]:

• 5S, the basic tool of the Lean system, which is applied to standardize workplaces as well as improve safety conditions at work (whereby 5S stands for Sorting, Straightening, Scrubbing, Standardizing, and Sustaining);
• Standardization, written and unwritten, which includes worker habits that contribute to business efficiency (a color system for marking, marking passages, a cleaning schedule, and cleanliness) and integrates sorting, putting in place, and cleaning into one unit;
• Kaizen, which is based on workers’ suggestions for improvements on problems they identify in the work process, internal or external communication, and production technology or product construction, thus contributing to the growth of the product’s added value;
• Value Stream Mapping (VSM), the most complex Lean tool [32] used to document, analyze, and improve the flow of information and materials in the process of creating a product or service. It is one of the most applied when researching the possibility of improving shipbuilding processes by using Lean tools [34,35];
• Just in Time, a tool for modelling “Just in Time” inventory management, which refers to the production without stocks of finished products and the timely delivery of raw materials and semi-finished products without their prior storage;
• Kanban, which ensures that the shelves in a workplace are constantly filled with the materials needed to carry out the activities in the process;
• Jidoka, a tool that models a machine’s independent operation under the supervision of workers: the machine itself detects possible problems in operation and stops and resumes operation after the worker eliminates the problem—automation.

Figure 5 schematically shows the main improvements in the process achieved by digital Lean management.

4.1. CULIS Methodology Overview

The CULIS (abbreviation of “Connect Universal Lean Improvement System”) methodology for the implementation of Lean tools and Industry 4.0 technologies represents an innovative application aimed at the transformation of all types of organizations or institutions into smart, and ultimately green entities [27,36]. It was developed in 2018 by Professor Nedeljko Štefanić, PhD, from the University of Zagreb, Faculty of Mechanical Engineering and Naval Architecture. It consists of three transformations—Lean, digital, and green—which can be applied separately or in combinations, such as digital Lean and digital green [27]. The number of steps of each individual transformation depends on the characteristics of the entity (business, corporation, public institution, or similar) on which it is carried out, as well as the results of recording the entity’s existing state of (business) processes.

A Lean transformation results from the successful implementation of selected Lean tools, for example in a business system, leading to savings in the process (working hours, materials, energy), shortening the duration of process cycles, increasing product quality and customer satisfaction (thereby reducing the number of complaints), and increasing income as well as labor productivity. Ultimately, employee motivation and satisfaction increase, as well as the innovation and creativity of the business system, with better recognition of its market differentiation and advantages over competitors [32]. A Lean transformation is carried out in an average of five steps.

A digital transformation is commonly carried out in up to seven steps and results in additional process improvements compared to those already achieved through a Lean transformation. The implementation primarily focuses on employees who have prior knowledge of key Industry 4.0 technological achievements, such as DT, AI, CPS, the Internet of Things, Cybersecurity, Cloud computing, Big Data analytics, VAR, and others [27].

A green transformation, as the third step in applying the CULIS methodology, is mainly realized in three phases, emphasizing the use of renewable energy sources, achieving energy savings by implementing Lean tools and Industry 4.0 technologies, and optimizing overall energy use in business.

Figure 6 schematically illustrates the concept of the CULIS methodology [36].

The implementation project occurs through a total of four phases—three transformations in addition to the previous zero phase, i.e., the “Improve card” design phase. The “Improve card” is a purpose-developed software application through which, during the application of the CULIS methodology, changes in key performance indicators (such as resource consumption, environmental impact, business efficiency, digital transformation indicators, and others that are applicable), defined for the purpose of measuring improvements in processes, can be continuously monitored [37]. An adequate application of the “Improve card” implies an already implemented (Enterprise Resource Planning (ERP)) IT system in the observed entity. The “Improve card” actually represents a set of key indicators of the success of the transformation subject, and it is installed during the recording of the current state of business processes, i.e., the analysis of their inputs or outputs, goals, and the current KPIs of the functional units of the observed system. The “Improve card” (also) serves the purpose of correcting the functional units’ KPIs in cases of their mutual negative correlation. During the transformation process, data is entered into the “Improve card” on a daily basis, enabling the daily application of Kaizen tools, i.e., micro-management aimed at achieving constant, continuous micro-improvements. The “Improve card” settings are continuously monitored throughout the project duration, and if necessary, (usually) every three months (at so-called “project checkpoints”) they are adjusted to the results of these “interim” (quarterly) evaluations.

The CULIS methodology positions the stakeholders in business processes—workers, management, and owners—as the main focus of transformations. Therefore, the implementation plan is content-wise adjusted to the levels of participants’ prior knowledge to achieve their proactive engagement in the implementation project and their easier adoption and application of new technologies and procedures.

4.2. Shipyard 4.0 by the CULIS Methodology

The observed (European) shipyard belongs to a group of large shipyards. In accordance with the achieved international competitiveness, it is market-oriented toward developing, designing, and constructing passenger ships and cruise vessels. Such a market positioning also includes orders for prototype ships or possibly ships in a very small series, whereby the shipyard is continuously faced with the challenges of the necessity to optimize technical and technological solutions during product development, as well as improve business processes, with the primary goal of reducing costs and shortening the shipbuilding projects realization cycle. The shipyard is organized as a network, with project teams formed in accordance with each shipbuilding contract. In addition to the Project Management Office, the main functions in the shipyard include the Sales and Marketing department, which includes the Initial Design department, the Purchasing department, the Design office, the Planning and Technology department, the Hull division, and the Outfitting division. The main processes in implementing projects are (shipbuilding) sales, which include the contracting phase and the activities of making the Initial design, the 3D ship modelling process (as the core of basic and detailed design), Hull assembly, Advanced outfitting, and the Final outfitting process.

The extreme complexity of the shipbuilding projects of the “European type” is reflected in the requirements to design organizational structures and, especially, shipbuilding processes adequately. Since the shipyard’s twin transition plan defines complex tasks in the implementation phases of Lean tools and digital technologies, which involve different organizational units and can cover several processes simultaneously, it is preferable to structure these implementation tasks in a project form [12,26]. Hence, organizational knowledge of project management is desirable as a prerequisite for joining the first Lean transformation. Figure 7 illustrates the general framework for transforming a traditional shipyard into a smart one, with the desired final outcome—a “Smart Project”.

The management of the observed shipyard recognized the structure of the CULIS methodology as the best response to the challenges of transforming a highly complex business system involving over two thousand employees and dozens of stakeholders in the value chain. Given the increasing pressure from Far Asian conglomerates to participate in market niches still dominated by European shipyards, the application of the CULIS methodology is graded as the fastest way to improve the competitiveness and profitability of shipyards, with optimal transition costs and the achievement of net-zero operations.

After recording the current situation of the business processes, mainly through interviews with representatives from functional units, and considering the management’s suggestions, four departments or sectors were prioritized for implementing improvements based on their performance indicators: the Design office, the IT department, the Hull division, and the Purchasing department. At the same time, the current application of Lean tools and digital doctrines in certain functional units is of low or negligible intensity.

Following the analysis of the existing situation, the implementation project was defined, where the steps and predicted dynamics of adopting Lean tools and digital technologies were presented. The shipyard’s Improve card was designed.

The observed shipyard will evolve into Shipyard 4.0 through three transformations, in sequence, dynamics, content, and expected improvements, according to the following:

• Lean, through the application of five Lean tools or criteria recognized as appropriate for the selected functional units—VSM, 5S and visual management, Standardization and Standard Operating Procedures, Quality, and Kaizen—with their implementation taking place through a combination of employee education (Lean philosophy and tools) and the practical application of newly acquired knowledge in a real environment. Key performance indicators were defined for the functional units included in the implementation. An implementation team was established as a prerequisite for implementing the transformation, and a Lean manager was appointed. The planned transformation time is 12 months, and the following improvements are expected: an adoption of Lean thinking; process optimization, including shortening process cycle times, enhancing process flow, and reducing process costs; a decrease in the number of errors, a higher level of quality, and ultimately an increase in employee motivation.
• Digital, which is implemented through seven phases, depending on applicability and considering the characteristics of the observed shipbuilding processes as well as the client’s requirements: the delivery of Smart&Connected products, the implementation of product and service digitalization, the achievement of the optimal use of shipyard resources, an adoption of digital knowledge and skills, as well as Automation and Robotization, Standardization, and Cybersecurity. The development of a Digitalization Strategy, overseen by the shipyard’s management, is a prerequisite for the successful implementation of digital transformation. The optimization of shipbuilding processes, as a prerequisite for their digitalization, will be achieved through the prior Lean transformation, which also identifies the necessary digital technologies for implementation (if they have not already been implemented). A period of 12 to 18 months is planned as necessary for implementing the second transformation, which includes an analysis of the current level of shipyard digitalization. The expected outcome of the transformation in question primarily includes the adoption of new digital knowledge and skills by the employees. The desired results are the digitalization of key business processes, the adoption of new business models, the introduction of Maintenance 4.0, achieving a higher level of customer satisfaction, and the development of prerequisites for realizing products with even greater added value, i.e., ships with Smart&Connected features.
• Green, through the implementation of three phases or policies:

• The use of renewable energy sources, including projects for the construction of a solar power plant and the installation of heat pumps, which are already being implemented at the shipyard in question;
• A circular economy, in the sense of using waste from one process or operation in another/other operations, rather than disposing of it automatically;
• Finally, achieving a sustainable (green, with at least net-zero emissions) or socially responsible business process; this is an objective that the observed shipyard is highly aware of. For example, in the development and design of the ship, technical and technological solutions were applied that contribute not only to the environmental acceptability of the production processes but also to the products themselves in terms of their energy efficiency, and even in the application of zero-emission propulsion systems.
  The third transformation, which includes the previous analysis of “green losses”—losses resulting from inadequate resource management in processes—is planned to be implemented within 6 to 9 months. The transformation should lead to the implementation of new, green technologies in processes, a reduction in greenhouse gas emissions, and an increased use of waste materials from processes through a circular economy model, all in line with the guidelines of the Green Transformation Strategy of Shipyards, which management must adopt as a prerequisite for entering the transition. A successful implementation of a transformation implies the continuous measurement of green indicators (as one of the dimensions of Environmental, Social, and Governance (ESG) strategies/reporting).

Figure 8 illustrates a simplified sequence of the steps towards achieving Shipyard 4.0 using the CULIS methodology.

It is desirable and necessary to continuously monitor the changes achieved according to the set KPIs (through the “Improve card” program application) and by the shipyard administration itself, if not daily, then at least weekly. To achieve this, it will be necessary to adapt the existing ERP IT system in order to fully attain the vertical integration of shipbuilding processes.

4.3. Discussion

The principles of the CULIS methodology have been recognized as applicable to a large number of legal entities across various industrial branches [27,38], as well as companies and institutions from the public sector [39,40,41], achieving significant improvements in business—e.g., reduction of 83% in non-value-added time and 20% in value-added time [42,43].

Overall, the observed shipyard demonstrates a high level of knowledge about Lean methodology and digital technologies, which is evident from the implementations or improvements already achieved in the real environment, as well as the experimental and theoretical analyses conducted, all of which are taken into consideration as a part of the ongoing pilot phase of the transformation process. So, for example, the Piping fabrication department using the VSM Lean tool increased process cycle efficiency by 60%, reduced waiting time by 48%, and decreased total lead time by 45%; with the same tool, the Sales and Marketing department theoretically reduced the annual costs of the sales process by 38% and increased the productivity of stakeholders in the process by 93% [44,45]. Furthermore, through the experimental application of 5S Lean tools in the waste materials management process, 15% of the production sector area was freed entirely for use for other purposes [44]. By virtually modeling the ship in DT form, productivity in the project implementation process has increased by approximately 20%, along with at least the same amount of electricity savings [46]. Further upgrading of DT with Augmented Reality technology has experimentally determined the potential for at least 25% savings in the working hours required for performing repairs during the outfitting process, leading to an increase in productivity of approximately 1.4% [47].

The improvements achieved so far in the processes align with the (rarely available) analysis results of dual transformation in other shipbuilding systems. For example, the Puget Sound Naval Shipyard reduced the non-value-added time in project execution processes by 60% (whereas, in the observed shipyard, even a single department alone reduced waiting time by 48%), while an unnamed shipyard, also located in the USA, in the state of Mississippi, improved productivity by as much as 29% (compared to the approximately 21% achieved in the present case study) [48,49].

There are various approaches to Lean and digital transformations of (shipbuilding) systems. For instance, in some Norwegian shipyards, Lean tool implementation projects have not been conducted across the entire shipbuilding system but rather within specific business areas only [50]. A similar approach is advocated for by one of the world’s leading consulting firms: the transformation of a system is approached through the implementation of tools in two (comparative) shipbuilding processes—hull construction and ship outfitting, and the building of outfit assemblies [51]. In contrast, the CULIS methodology approaches the transformation of a (business) system by implementing Lean tools and digital technologies in selected functional units of the system. The selection of functional units is conducted based on the necessity criterion for improving business processes, aligned with the recording of the existing situation, and also in accordance with the preferences of the recorded entity’s management. A pilot implementation project is carried out in one or a couple of the selected functional units, most often the one or those with the greatest need for improvements (the “bottleneck” of the process). The pilot project also involves forming a pilot implementation team, which also includes representatives of other functional units, for the purpose of later/further transferring the Lean philosophy and digital doctrines to other (selected) organizational departments or sectors.

This approach, however, in the context of a complex organizational environment such as the one under observation, faces the challenge of an unsuccessful closure of the twin transition, along with the challenge of failing to achieve a complete (Lean and/or digital and/or green) transformation of the business system. Namely, the sheer number of organizational units (and consequently employees, given that the observed system directly provides all shipbuilding works and services) and their networked cross-functional relationships complicate the implementation project significantly.

Furthermore, given that the project lasts at least three years, the motivation of the implementation team members is tested from the very beginning. Additionally, because the CULIS methodology assumes a project-based approach to the transformation process, the generally inadequate knowledge and skills of the implementation team members in project management further endanger the successful execution of the implementation project. Even with strong commitment from shipyard management to the transformation process, established risk management practices, and employee readiness for change (where the presence of at least one of these three desirable prerequisites is considered a success), significant obstacles remain.

Finally, the authors recognize the currently prevailing theoretical character of this research as its greatest limitation; should the owner or management of the observed entity fail to maintain their commitment to change under the pretext of investment savings, thereby neglecting the overall potential for business improvement achievable through the transition of the shipyard into a smart one.

5. Conclusions

Current European strategies and regulations define the goal of making Europe climate-neutral within the next few decades, whereas the emphasis on achieving a sustainable and competitive economy focuses on the successful implementation of a twin—digital and green—economy transition. Although Industry 4.0 is already highly present in almost all sectors of European society, shipbuilding production is at the beginning of implementing digital and technological achievements and its ultimate transformation into green factories. Namely, “Smart (shipbuilding) Processes” are the foundation of (today’s) shipbuilding competitiveness because they are the only ones who can create high added value through the production of safe, energy-efficient, and environmentally friendly ships with high autonomy in management and maintenance (“Smart Ships”).

In this paper, the authors imply the necessity of a more prompt introduction of Industry 4.0 technologies and trends into European shipbuilding systems, which will achieve improved processes, allowing for a more competitive position in the global maritime industry. For this purpose, this paper presents the application of the CULIS methodology for Lean, digital, and green process transformations. Even at the zero phase of implementation, the authors recognize it as highly applicable in the shipbuilding industry sector, and as a key factor in ensuring the successful completion of a total twin transition. This also provides an answer to the raised research question. In this study, the observed shipyard applies the CULIS methodology (also) because of its concept of unifying three transformations: specifically, the possibility of structuring investment costs for a green transition based on the savings achieved through the implementation of Lean, i.e., digital, tools. The expected financial effects of the dual transformation result from planned improvements; namely, these include achieving savings in the number of working hours (up to 30%), which will result in higher energy efficiency of processes (up to 25%), a shortening of the duration of the shipbuilding project implementation cycle, and a general reduction in the use of manual labor (a reduction of operating expenses). Theoretically, the productivity increase in Shipyard 4.0 is expected to be at least 10% and up to 30%.

Based on previous analyses (surveying the current state, and pilot projects) and following the analyses from additional planned studies on the progress and outcomes of the transformation, the authors suggest conducting simultaneous research on the impact of the CULIS methodology regarding potential insights into the necessity of redesigning business processes and/or revising the organizational structure of the observed shipbuilding system.