A PLAN FOR THE NAVAL SHIPBUILDING INDUSTRY FUTURE SUBMARINE INDUSTRY SKILLS PLAN

FUTURE SUBMARINE INDUSTRY SKILLS PLAN ___

A PLAN FOR THE NAVAL SHIPBUILDING INDUSTRY

www.defence.gov.au/dmo/publications/fsisp.cfm Acknowledgement

The CEO DMO would like to acknowledge the major contributions from the study team of Mr Andrew Cawley, Mr Mel Melnyczek, Mr Paul Curtis and the contributions of Rear Admiral Oscar Hughes (ret’d) and Rear Admiral Rowan Moffi tt. In addition CEO would like to acknowledge peer review comments provided by senior personnel within Defence and industry.

© 2013 Commonwealth of Australia

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The following organisations have provided images and graphics for use in this publication:

Austal Australian Marine Complex AWD Alliance ASC BAE Systems Australia Defence SA General Dynamics Electric Boat Forgacs Engineering Raytheon Australia SAAB Systems Australia Thales Australia FUTURE SUBMARINE INDUSTRY SKILLS PLAN ___

A PLAN FOR THE NAVAL SHIPBUILDING INDUSTRY CONTENTS

FOREWORD> IV MR WARREN kING & MR ANDREW CAWLEY> IV MR DAVID MORTIMER AO VI

INTRODUCTION> VIII

EXECUTIVE>SUMMARY> X

SECTIONS

01 WHAT IS A SUBMARINE? XVI 02 WHAT IS A NAVAL SHIPBUILDING PROJECT? 8 03 WHY WE NEED A PLAN 22 04 THE INTERNATIONAL SUBMARINE MARkET 32 05 STRUCTURE AND SCOPE OF REPORT 40 06 DESIGNING A SUBMARINE 46 07 SkILLS FOR SYSTEM DEVELOPMENT 64 08 SHIPYARD CAPACITY AND SkILLS 80 09 THE AUSTRALIAN WORkFORCE 108 10 BUILDING THE SkILLS 118 11 A FUTURE FOR AUSTRALIAN NAVAL SHIPBUILDING 136 12 CONCLUSION 146

ANNEXES

A TERMS OF REFERENCE 156 B AUSTRALIAN INDUSTRY CONTRIBUTIONS 158 C SHIPYARD WORkFORCE SCENARIOS 160 D SELECT BIBLIOGRAPHY 182 FOREWORD THE AUSTRALIAN GOVERNMENT HAS COMMISSIONED THIS PLAN BECAUSE OF THE WARREN KING & IMPORTANCE OF THE NAVAL SHIPBUILDING INDUSTRY TO THE NATIONAL SECURITY ANDREW CAWLEY OF AUSTRALIA. AUSTRALIA IS A MARITIME NATION, WITH INTERESTS THAT STRETCH FROM ANTARCTICA TO THE TROPICS. THE ROYAL AUSTRALIAN NAVY PLAYS A kEY ROLE IN MAINTAINING OUR INTERESTS AND SECURITY OVER THAT VAST AREA. THEY COULD NOT DO IT WITHOUT THE AUSTRALIAN NAVAL SHIPBUILDING INDUSTRY, COMPANIES BOTH BIG AND SMALL, AND THE THOUSANDS OF SkILLED MEN AND WOMEN THAT CONTRIBUTE TO THAT WORk.

While the plan has an end goal of preparing for the future submarine project, this plan covers all naval shipbuilding projects because the organisations, people and skills involved are inextricably linked. Shipbuilding is about skilled people working on design, production engineering, production, testing and delivery of warships and their combat and platform systems. Shipbuilding is about the creation of highly complex computer programs, and integrating them with other software systems; the manufacture of large hull structures and integration of powerful machinery and a multitude of equipment. Through projects like ANZAC and Collins, and now the Air Warfare Destroyer and Landing Helicopter Dock warships, Australia is on the right track to developing a world class, competitive naval shipbuilding industry. There is more work to be done to build the high performing industry that Australia needs to support Navy. Industry needs to keep growing its skills and experience; and through practice and investment become more profi cient and more productive. We believe that these goals are well within this country’s ability. This plan sets out principles to improve the planning of the whole scheme of future naval shipbuilding projects. Plans can be optimised to deliver warships when required as well as foster the development of industry skills, improve productivity and so reduce the costs and risks associated with these naval shipbuilding projects. This benefi ts the Australian Defence Force, Government,industry and ultimately the Australian people. It helps the nation and protects our security. Achieving the potential described in this plan will take dedicated and persistent effort, we need to protect against complacency and any assumption that improvement will just occur. We have to make it happen and this plan is just the fi rst step. We appreciate the opportunity the Minister for Defence and the Minister for Defence Materiel have provided in asking the DMO to prepare this plan. We would also like to take this opportunity to thank our colleagues in Defence, David Mortimer and all the members of the Expert Industry Panel for their time and effort in helping to develop this plan. Their contributions have been invaluable.

WARREN>KING ANDREW>CAWLEY CHIEF EXECUTIVE OFFICER, HEAD, AUSTRALIAN SHIPBUILDING DEFENCE MATERIEL ORGANISATION INDUSTRY PLANNING 15 March 2013 CHAIRMAN, EXPERT WE HAVE BEEN GIVEN A GREAT OPPORTUNITY BY THE AUSTRALIAN GOVERNMENT, INDUSTRY PANEL A CHANCE TO BUILD A STRONG NAVAL SHIPBUILDING INDUSTRY IN THIS COUNTRY, David Mortimer A CAPABILITY THAT WILL PROTECT AUSTRALIA’S NATIONAL SECURITY. Within a month of the terms of reference for the Future Submarine Industry Skills Plan being released in early May of 2012, I chaired the fi rst meeting of the Expert Industry Panel at Parliament House. It was the fi rst time the heads of the shipyards, systems houses, unions, industry groups and government bodies sat down together and looked at the current state of naval shipbuilding in Australia, the problems we face and what we could do to fi x it. One thing I asked from each of these leaders then was the need for them personally to be involved in the Panel. They had to act in a cooperative, open manner and not out of commercial self interest. The future of naval shipbuilding in this country is a serious matter and any hope of resolving the issues the industry faces requires a serious commitment from these leaders. I must say they responded superbly: even though busy, they attended meetings, engaged in an informed way in the discussions and provided every assistance to the team developing the report. I would like to thank them here for their time and efforts so far. This report would not be as informative as it is without so much help from industry. If we are really going to make something out of this report, that cooperation and commitment must continue. Without it, the plan will not succeed. We can no longer afford to acquire new defence capabilities on a project by project basis, as we have done in the past. We need to look at our acquisition program as a whole, and think about planning for the long term. The naval shipbuilding industry has enormous potential to do better for Defence given the chance. Government and Defence must develop a long term acquisition schedule that provides a fairly steady fl ow of work, not one that overloads industrial capacity one decade and allows it to wither the next. In return for certainty in the schedule, Industry must commit to benchmarking and substantially improving productivity, increasing skills, building as well as maintaining an experienced workforce. With predictable and practical schedules, with improvements to productivity, Australia will have a shipbuilding industry that can deliver ships to the Royal Australian Navy cheaply and reliably. We have a real chance to create something that will benefi t Defence, industry and Australia. We must not be afraid to seize the opportunity.

DAVID>MORTIMER>AO CHAIR, EXPERT INDUSTRY PANEL INTRODUCTION

AUSTRALIA IS PREPARING TO EMBARk ON ITS BIGGEST DEFENCE ACQUISITION: TWELVE CONVENTIONAL SUBMARINES THAT WILL BE ASSEMBLED IN SOUTH AUSTRALIA.

The Australian naval shipbuilding industry, that If we are going to build submarines in this is the designers, the systems developers and country, we cannot afford to lose the skills and integrators as well as the ship construction experience we already have here. Defence must companies, must be ready before the submarine understand the challenges that face industry project starts building what will be the most and provide long term predictable work that complex piece of equipment that the Australian allows industry to develop capabilities and Defence Force will use. We can only do that make investments for the future. through proper planning and preparation. With Defence and industry working together, This report, entitled the Future Submarine Australia can have a naval shipbuilding industry Industry Skills Plan, outlines what Defence that is effi cient, productive and will be capable and the shipbuilding industry can do to prepare for of delivering the warships the Royal Australian that fi rst day. This Plan and its recommendations Navy needs. are an input into the 2013 Defence White Paper where Government will outline its decisions regarding future naval projects. The Defence White Paper in turn will inform the Defence Capability Plan 2013. With the shipbuilding projects currently underway in this country, we are starting from a good base. Our designers have had experience in designing warships, and in developing and adapting established designs. Systems teams have worked on developing and integrating combat and platform systems into our current fl eet and the new warships that are coming into service. Our major naval shipyards have the capacity to build the future fl eet outlined in the Defence Capability Plan. The people working in those shipyards have developed sets of skills and experience that will grow further by working on other naval projects. By keeping those skills and experience active in the industry, it will become more productive and profi cient. EXECUTIVE SUMMARY

TODAY AROUND 4,000 PEOPLE ARE BUILDING WARSHIPS IN AUSTRALIA. THESE PEOPLE and experienced warship designers, with a good outfi tting) and production engineering (shipyard HAVE SkILLS AND EXPERIENCE GAINED OVER THE PAST 20–30 YEARS FROM WORkING record in designing patrol boats and support build strategy, safety management, engineering, ON SUCH DIVERSE NAVAL SHIPBUILDING PROJECTS AS ANZAC FRIGATES, COLLINS ships. Against international competition, the planning, procurement, materials handling, test WA company Austal designed the Independence and trials, quality control and administration). SUBMARINES, MINEHUNTER VESSELS, ARMIDALE PATROL BOATS, AIR WARFARE variant of the US Navy Littoral Combat Ship. Shipyard productivity has also been assessed as DESTROYERS AND LANDING HELICOPTER DOCk SHIPS. GIVEN THE RIGHT CONDITIONS, Submarines are the most complex warship to part of an ongoing annual benchmarking program. THEY CAN CONTINUE TO BUILD THEIR SkILLS AND MAkE AUSTRALIA A WORLD–CLASS design and while Australia has some skilled Our study has found that the shipyards have more NAVAL SHIPBUILDING NATION. people that can contribute to the design of a new than enough capacity in their facilities to build the submarine platform, we will need to partner with warships planned, with the exception that some a proven submarine design organisation to meet The Future Submarine Industry Skills Plan is opportunity to invest, develop skills and improve investment will be required to develop a suitable this challenge. That organisation will contribute about Australia developing a national security performance over a longer period. This comes at a launch point for the very largest support vessels. asset. It is most certainly not about subsidising sizeable cost and with delays to projects as well as people to the design team and provide a proven an industry. Companies skilled in building and the erosion of productivity. framework of tools and processes. In terms of people, over the last fi ve years the maintaining equipment for the Australian Defence shipyards have grown the size of their workforce by Without impacting the Australian Defence Force’s Australia has good skills in the development and Force are a vital part of the Defence contribution several thousand people in support of the current capability, current naval shipbuilding plans can be integration of combat and platform management to our security. Directly supporting Navy, a skilled shipbuilding projects. There are about 4,000 people adjusted to allow industry to develop world–class systems. Australia has also developed world– naval shipbuilding industry is important to all the now working for the four shipyards. While that skills and consequently deliver warships to Navy leading skills in sub–systems development in pillars described in Australia’s National Security number is at the sustainable level required for all on time, cheaper, and that meet the operational areas such as electronic warfare and sonar. These Strategy: countering terrorism, espionage and future projects, experience levels are low overall. performance standards expected. National skills have been built up over several decades, foreign interference; preserving border integrity; This is the result of the decline in shipbuilding security remains the preeminent requirement, but benefi tting from the continuity of work and the promoting a secure international environment; in the mid–2000s. As a consequence, current shipbuilding plans can be optimised to provide challenge of successive projects. These skills and the Australia–United States Alliance. productivity levels are low. industry with more predictable, better sequenced should be preserved and developed to meet the Recognising the importance of the naval and longer term work, necessary foundations for challenges of the future submarine and other The impact of rebuilding from a low base for shipbuilding industry, the Australian Government business investment, productivity and performance naval projects. One of the key steps to doing this the current Air Warfare Destroyer and Landing commissioned the Chief Executive Offi cer of improvement. For the Royal Australian Navy and is to ensure all major shipbuilding projects Helicopter Dock ship projects was substantial the Defence Materiel Organisation to prepare the Defence Materiel Organisation, optimisation (current and future) have an embedded research and expensive. At the outset of these projects, The Future Submarine Industry Skills Plan. As means early and better planned projects, with and development component that works to steadily the premiums in the prices tendered were it currently stands, the scheme of shipbuilding lower risk to execution founded on a partnership evolve the design baseline of successive ships. considerable. This was the price difference projects in the Defence Capability Plan creates with industry. For Australia more broadly, A permanent element of a rolling build program, between a cold start shipyard and a fully gaps for the Australian shipbuilding industry optimisation means a small but profi cient naval directly connecting research and development to operational, profi cient shipyard—not the difference with a decline in project activity that has already shipbuilding industry, performing at world ship production, means costs, schedules and risks between local or overseas locations. If Australian commenced and reaching its lowest point in benchmark levels and driving innovation in the are controlled and innovative ideas have a practical shipyards had the opportunity to build skills and about 2017. Depending on which projects will advanced manufacturing sector of this nation. This and important destination. experience and improve productivity, they too would offer lower prices. At Government Second be selected for Australian build, this fall in the does not mean that all ships must necessarily be Surveys and benchmarking of Australia’s four Pass approval neither project could present a workforce could be quickly followed by a steep rise built in this country: an optimised scheme may main naval shipyards: ASC, Austal, BAE and schedule that met the original delivery dates in activity around 2020. Such a cyclical pattern of contain a combination of local and overseas build. Forgacs were part of a comprehensive analysis specifi ed in Defence’s capability plans. This cold work means skilled people will be lost to industry completed for this study. Along with a capacity Work in support of this study and earlier work by start also caused problems for the projects as as work fi nishes, followed by a rapid rebuilding assessment of the facilities in the shipyards, a the RAND Corporation and other organisations they were executed. This is typical of an industry of capacity as the work returns. These peaks capability assessment covered both production show that Australia possesses a number of skilled in a rebuilding phase, and the impact can amount and troughs further deny industry the serious (structural fabrication, pipework, blast and paint, to billions of dollars for individual projects. ___

EXECUTIVE SUMMARY ___

With the cost of all planned naval projects being that is constantly managed and adjusted as RECOMMENDATIONS 3.> The Defence Materiel Organisation should somewhere above $75 billion, a profi cient and circumstances change. Projects building an engage in more detailed discussion on a The following set of recommendations draw upon productive shipbuilding industry would produce evolving series of ships are better than a set frequent and ongoing basis with organisations all sections of this report. They are deliberately overall savings to the Defence budget in the of short–run projects. Given that the run-down involved in naval shipbuilding, companies, written as principles rather than a long list of tens of billions of dollars. of certain workforce groups has already unions and industry groups. No plan should specifi c tasks. commenced, for example in areas of early be approved that is not broadly seen as being What is also evident from current projects is project work like design and structural To build the skills to build the future submarines practical in terms of industry capability and the substantial benefi t of experience to a large, fabrication, quick action is required to and the other warships required for the future capacity, schedule and budget. complex naval shipbuilding project. The benefi t retain key skills and experienced people. fl eet, the following actions are recommended. is not limited to better workforce productivity; 4.> Defence sponsorship of individual skills other benefi ts accrue: initial project estimates are With growing pressure on Government budgets, 1.> Without adversely impacting the Australian development schemes such as Skilling more accurate, risks are better understood and it is essential that industry also commit to better Defence Force’s capability, planning of the Australia’s Defence Industry has been problems that cause additional cost and schedule performance. Through investment, innovation and whole scheme of naval shipbuilding programs worthwhile for people involved in naval blow outs are anticipated and avoided. The Air improved productivity, delivering cheaper warships should be optimised to provide industry shipbuilding, particularly apprentices, and Warfare Destroyer project inherited the core of is the dividend industry needs to deliver. The more predictable, better sequenced and long should continue. The Defence Materiel the combat system team that did the successful companies, unions and organisations represented term work: the necessary foundations for Organisation should develop and maintain a Collins submarine replacement combat system on the Expert Industry Panel have all said they are innovation, business investment, productivity nationwide skills matrix based on matrices project. This experienced team has been able to prepared to make such a commitment. and performance improvement. This of course already used in the shipyards, extending to execute their work on schedule and budget; and does not mean that all naval projects in the systems development, and use this to guide Government, Defence and industry need to develop they had the knowledge and resilience to deal Defence Capability Plan will necessarily be skills development sponsorship. Options to an itemised view on what naval shipbuilding with problems as they emerged. built in Australia. Rather it means that naval second select people to organisations with capability needs to be developed in Australia. shipbuilding projects should be planned with active submarine design and build programs To meet the challenge of the future submarine A diminishing number of warship suppliers in the aim of retaining wherever practical the should be investigated. and other naval projects, shipyard workforces will the global market, increasingly generic designs current Australian workforce to place Defence 5.> Industry should develop a clear plan to need to evolve to achieve the right balance of skill and the limited ability to buy the best technology and industry in the best position possible at improve shipbuilding productivity in Australia, groups, strengthen skills and most importantly means Australia should position itself to be more the start of the next generation of projects. including setting specifi c targets, and commit grow experience. Shipyard organisations will self–reliant in the design and manufacture of Defence and Government should take early to Defence and Government to delivering need to refi ne their engineering, planning and warships in the longer term. Complex warships action to ensure current workforce reductions these dividends. Defence should continue to production processes and innovate to improve like submarines and surface combatants need are not causing the loss of skills important to benchmark productivity on an annual basis. productivity. For Australia’s shipyards, there is to be at the forefront of that plan. future projects. no fundamental impediment to achieving world– 6.> Defence should structure the Future Australia should use the next tranche of naval class performance. We must not be frightened 2.> Defence should consolidate planning for all Submarine Program as a rolling build projects to further develop the skilled workforce of pursuing this objective. new warship programs into one group centred program, including establishing structured, that will take on the projects that lie beyond the around the people managing today’s projects funded and ongoing engineering and science Creating the opportunity to become a world– future submarines. Our national security strategy so that genuine and current experience is and technology programs to deal progressively class naval shipbuilding nation depends upon must be supported by a detailed, practical and applied. The initial schedule planning of with equipment obsolescence and capability Defence and industry working in true partnership economical naval shipbuilding industry strategy. naval projects for fi rst entry into the Defence changes. to optimise the whole scheme of naval projects. This will not be a large, expensive industry. In Capability Plan should be done by the Defence 7.> Defence should pursue the opportunity at The hallmark of improved Defence planning will a national manufacturing industry of about one Materiel Organisation based on warship need the completion of the three ship Air Warfare be an integrated, long range plan for all naval million people, shipbuilding will be a small, dates and capability requirements provided Destroyer Program to fl ow key skills and shipbuilding projects that sets out practical profi cient and innovative industry founded by Chief of Capability Development Group and expertise into the Future Frigate Program. plans for each project and balances inter– on a workforce of about 5,000 skilled people. Chief of Navy. dependencies; it must be a plan developed in genuine consultation with industry; and a plan ___

EXECUTIVE SUMMARY ___

8.> Working with industry and the Defence Science and Technology Organisation, the Defence Materiel Organisation should, as part of these programs, research the practicality and worth of a common architecture for Australian warship combat and platform management systems. This architecture would guide investment in technologies and products over the longer term. 9.> Defence should re-examine the Offshore Combatant Vessel program to determine if technology and system readiness levels are suffi cient for new types of equipment likely to be required to make the common platform solution technically viable and economical. Technical risk and other reasons might point to a better solution being to separate the patrol boat requirement from other requirements and consider separate projects. 10.>The Department of Defence, through the Defence Materiel Organisation, should work with the Australian Customs and Border Protection Service and the Australian Antarctica Division of the Department of Sustainability, Environment, Water, Population and Communities to coordinate and optimise Australian Government shipbuilding programs. 11.>Refl ecting its worth in the development of this Plan, the Expert Industry Panel should be a part of the implementation process. As a guide, the panel might meet every three months for the fi rst year and six monthly thereafter to provide views and feedback on the development of naval shipbuilding plans and preparations for the future submarine program. 01

WHAT IS A SUBMARINE?

Attack Periscope

Induction Mast Radar & Comms Masts

Search Periscope ECM Masts

Exhaust Ports Bridge

Torpedo Equipment Space Induction System Intercept Array Escape Tower Weapons Embarkation Hatch Towed Array HP Air Bottles Towed Array Drum Generators Exhaust Mufflers Exhaust System Upper Accommodation Space

Main Motor Aft Batteries Propulsion Control Diesel Engines Main Compression Tank Fuel Tank Galley Control Centre Forward Batteries Weapons Stowage Launch Tubes Free Flood Space

Main Ballast Tanks Lower Accommodation Space Fuel Tank Tube Space Future Submarine Industry Skills Plan / page 2 page 3 / Future Submarine Industry Skills Plan

___ what is a submarine? ___

SUBMARINES ARE UNDERWATER WARSHIPS. THEY ARE DESIGNED TO OPERATE that may be part of, or outside, the pressure hull. A snorting submarine is more vulnerable to INDEPENDENTLY AT GREAT OCEAN DEPTHS AND REMAIN UNDETECTED FOR LONG A casing sits on top of the pressure hull which is acoustic, thermal, radar or visual detection. PERIODS OF TIME. THEIR STEALTH IS THEIR DISTINGUISHING CHARACTERISTIC. designed to reduce drag, turbulence and improve Sensor systems are therefore at high alert while acoustic signatures and stealth. The overall shape snorting, looking for early indication of any threat. AS THE ONLY TRULY COVERT MARITIME PLATFORM, SUBMARINES HAVE A DISTINCT of the hull is slender, generally cylindrical over the If a threat is detected from an aircraft, ship or ADVANTAGE OVER OTHER TYPES OF WARSHIPS AND ARE A SIGNIFICANT THREAT TO mid section and tapered at the rear. The casing another submarine, the diesel-electric submarine OPPOSING MILITARY FORCES. THIS ACTS AS A DETERRENT AND EXTENDS THE BENEFIT includes a vertical structure, called the fin or immediately stops snorting and manoeuvres to OF A SUBMARINE BEYOND JUST ITS OWN MILITARY FIREPOWER. FOR THIS REASON, sail, that houses communication equipment, avoid detection. THE SUBMARINE IS A CORE DEFENCE REQUIREMENT FOR MARITIME NATIONS. periscopes and other devices. Some conventional submarines use air The pressure hull has a number of compartments, independent propulsion (AIP) systems as a The stealth, range and endurance of submarines It is essential therefore to determine the roles and a watertight bulkhead separates each of secondary method of generating electricity. allow them to access areas denied to other and capabilities of a submarine during the early these so that in an emergency a flood can be The benefit of AIP is that it avoids the use of warships. Their roles include surveillance and stages of concept design. Submarines that contained. The exact layout of the systems and diesel engines and enables the submarine to intelligence gathering, surface strike, land strike, operate over great ranges, such as the Australian equipment, pressure hull compartments, locations sustain low-speed patrol operations (typically anti-submarine warfare, battle space preparation, fleet, are generally larger as greater submarine of bulkheads and other reinforcing structures is for one or two weeks). AIP helps a submarine support of special forces and offensive sea mining. displacement is roughly proportional to greater highly dependent on the flooding recovery and maintain stealth when operating in a high-threat operational range. Smaller submarines are limited safety philosophy of the designer. Many iterations environment where snorting would pose an Designing a Submarine in the number of weapons and sensors they can of the design are required to ensure harmony is unacceptable risk of detection. carry and have smaller crews capable of achieved between space for equipment, strength Non-nuclear energy—typically diesel engines a narrower range of roles. of the hull, adequate range and minimal size to and batteries—power conventional, or so-called Signature Control Systems maintain stealth. ‘diesel-electric’ submarines. These are one of the Larger submarines tend to have more sensors, Some designers maintain that smaller submarines most complex of all military machines, with more weapons and bigger crews capable of managing are more difficult to detect, and so produce very parts and assemblies than both modern aircraft multiple roles for several months. The Collins Propulsion and Energy Systems compact and dense designs. Other designers, such and modern surface ships. For example, there are submarine, one of the largest conventional The energy storage and propulsion system is what as those for the Collins class, use greater volume over 70 systems in most conventional submarines. submarines in the world, displaces over 3,000 generates and stores the energy needed to service to provide higher shock clearances to allow noisy This high degree of complexity, coupled with tonnes, has a crew of about 60 and can carry out the submarine and propel it through the water. equipment to be isolated. However the submarine the very difficult operating conditions, presents multiple roles. A submarine of this type operates Conventional submarines use a hybrid diesel- can still leave detectable trails—acoustic, substantial challenges to submarine designers. far from home in close proximity to an adversary’s electric propulsion and energy storage system. thermal and magnetic. For a submarine to mask its presence, it must be capable of reducing or Most of a submarine’s design is determined by base or exercise areas. To enable this, designers Diesel fuel stored in tanks is fed to generators eliminating these. its military capabilities and the nature of the aim to maximise range and endurance while taking that produce electricity to charge the main storage intended missions. For example, the operational into account the likely environments in which the batteries. The energy from the batteries is then To do this, passive and active controls may be range will determine the quantity of fuel and other submarines would operate. These include water supplied to the main propulsion motor to propel implemented onboard the submarine. Sound consumables, such as food, that are required. temperature and sea states. the submarine (the ‘propulsion load’) and to all absorbing tiles on the hull reduce the chance of The level of machinery automation will influence other electric equipment (the ‘hotel load’). detection by enemy sonar systems and torpedoes. the number of crew, the maximum dive depth will Hull and Hull Equipment A degaussing system, which consists of electrically determine the strength of the vessel, and overall A diesel-electric submarine recharges its batteries charged coils distributed over the entire length A pressure hull, constructed of thick, high-strength size will influence some of the submarine’s stealth every day or so by running its generators when of the submarine, minimises the magnetic field characteristics. No feature can be thought of in steel, forms the primary barrier that protects the submarine is close to the surface, inducting produced by the metal hull. Radar absorbing isolation. Each must be considered with how it the crew and equipment from the high pressures air into the submarine via a ‘snort’ or ‘snorkel’ materials are also used on submarine masts interacts with other features in the overall design. encountered when submerged. Hull sections mast. At slow speeds the battery endurance is to reduce their radar signature. Attempting to enhance a single feature will often at the bow and stern contain ballast and other a number of days, but at the highest speeds, detract from other performance characteristics. water tanks, torpedo tubes and other structures battery endurance may be as low as an hour. Future Submarine Industry Skills Plan / page 4 page 5 / Future Submarine Industry Skills Plan

___ what is a submarine? ___

Managing the emitted acoustic, magnetic, Combat and Weapons Systems electronic warfare, navigation, communications on the fin or the forward casing and electrical and thermal signatures also influences and radar systems. Periscopes and photonic masts are generally disconnected at high speed. Submarines were originally designed to destroy the design of just about all systems and submarine can operate in daylight, infrared and lowlight ships by firing straight-running torpedoes. Conventional submarines are fitted with components. For example, large rotating modes, and enable the operator to search, detect Their role was expanded to include anti- propellers, rather than propulsors, for machinery (such as the diesel generators) is often and identify air and surface contacts and threats. submarine warfare as the capability to detect efficiency, noise and weight reasons. mounted on isolation rafts to reduce vibration and High data rate communications are increasingly other submarines and engage them with guided help prevent sound passing through the hull into important in a networked military force. The need torpedoes was developed. Although many Surfaced submarines can stay on the surface the water. External components of the submarine, to maintain stealth dominates sensor employment, advances have been made since their early because their ballast tanks are empty, providing including the hull, casings, rudder and propeller, so generally active modes are avoided. designs, dual-purpose (anti-submarine and positive buoyancy. To dive, the submarine’s ballast are designed for hydrodynamic efficiency that tanks are flooded with seawater. To surface, the anti-surface) guided torpedoes are still the The passive sonar system is the most important reduces the noise of water flow emitted by these. seawater is blown out with compressed air while primary element of a conventional submarine’s submarine sensor. Sonar operates at all times the submarine is moving through the water with The extent to which coatings and materials weapon system. when a submarine is dived to detect, track and the control surfaces in a down or rise attitude. (anechoic, radar absorbing materials, drag classify contacts and threats by passively listening Current weapons systems also include missiles for Conventional submarine ballast tanks are usually reduction, infrared and visual) are used to to their emitted noise signatures. An active sonar land and maritime strike as well as an emerging located externally to the pressure hull, generally minimise detection far exceeds that used for system on the other hand, transmits a pulse of capability for air defence, mines to block foreign on the bow and stern sections. surface combatants, and submarine designers sound and then identifies the presence of objects ports or military shipping routes, counter- go to extremes to minimise radiated noise and by listening for the reflected sound. Active sonar is measures to confuse and draw enemy sensors The ballast tank volume is normally around shock vulnerability . used to detect obstacles and manoeuvre safely in and weapons, underwater vehicles to help deploy 10 per cent of the dived displacement, so a shallow waters. special forces, and surveillance sensors and high modern submarine’s reserve buoyancy is low— only one tenth of its displacement would need Electrical Systems speed torpedoes to launch rapid strikes. The navigation system allows the submarine to to flood before it could no longer surface. Some Some installed equipment, such as compressors conduct a mission safely using a combination of A tactical control system (or combat management submarines have emergency systems which and pumps, need high direct current voltages inertial navigation units (compasses), logs (speed system) draws data from ship sensors and enable the ballast tanks to be blown quickly. which are supplied directly from the main storage measurement), depth meters, echo sounders and weapons as well as external data links to produce This produces a rapid gain in positive buoyancy battery through breakers and switchboards. Other global positioning system (GPS) receivers. GPS an overall picture for the submarine command and allows the vessel to surface before flooding equipment, such as lighting and ventilation fans, relies on an antenna being exposed above water. team. The system also generates solutions to exceeds the reserve buoyancy. need lower voltages. Electronic equipment such launch and guide weapons to their targets. as communications and combat system hardware Manoeuvring A submerged submarine must be maintained even need lower voltages and multiple frequencies. The weapons system also includes the complex in neutral buoyancy so it does not need to A submarine must be agile and highly machinery required to store, load and launch—or use speed to maintain its depth. Weight The power distribution system consists of manoeuvrable. It must be able to accelerate to position and recover—weapons and vehicles. compensating and trim tanks are fitted throughout cables, circuit breakers and switchgear. It quickly, turn rapidly, change depth swiftly These supporting systems enable weapons to be to allow for changes due to hull compression, connects the main storage batteries through and increase speeds while remaining as quiet deployed fast, lengthy docking times to be avoided water density, fuel use and weapon launch. power conversion equipment (commonly solid as possible. Such capabilities are a result of and also reduce the dangers of handling weapons. These systems enable a submarine to maintain state devices, rather than rotating machinery) numerous design features, including the location depth with the least amount of energy, which to the installed equipment. and configuration of the control surfaces as well as Sensing and Communication Systems is especially important for a conventional the entire hull. Control surfaces are mounted aft submarine. A submarine that is ‘out of trim’ can All submarines have a range of onboard sensors (rudders) and forward. The aft control surfaces are maintain its depth by increasing speed so that its that can be used in either active or passive modes. usually mounted in a cruciform (+) configuration control surfaces have more effect, but this detracts On a modern conventional submarine, the range ahead of the propeller, but some submarines have from the vessel’s stealth. A submarine that is ‘in of sensing and communication systems available X-form rudders that enhance manoeuvrability. trim’ can slow down or stop to avoid detection includes periscopes and photonic sensors on Forward control surfaces can be mounted either without losing control of its depth. non-penetrating masts, passive and active sonar, Human Factors Crew effectiveness is integral to operating a submarine successfully, so it is critical that the vessel’s living and operating conditions support the crew and its peak performance for long periods. The submarine environment is different to any other workplace. It is surrounded by water and has no contact with the atmosphere, except while snorting. A submarine also often needs to be entirely independent for the duration of a mission, so it must have good accommodation, food storage spaces, and messing and recreation facilities. Crew endurance is directly related to the size of the submarine. Small crews have limited capacity to absorb the stresses caused by prolonged operations in intense threat environments, the need to repair defective equipment or to react to a change in objectives. Larger crews are better able to absorb these changes and so are likely to be more effective on longer patrols. Life support systems are essential for the wellbeing and safety of the crew. All modern conventional submarines have some mechanism for generating oxygen, removing carbon dioxide and providing drinking water. Heating and cooling systems control the temperature of the air, and the humidity is closely monitored and maintained throughout the duration of a patrol. If there is a fire or air is contaminated, there is a readily accessible supply of emergency breathing air.

Summary The conventional submarine’s wide-ranging roles, flexibility and robust construction all combine to produce a unique combat machine. Stealth remains paramount to covert underwater operations and will remain the submarine’s primary advantage. The high degree of complexity, coupled with unique and difficult operating conditions, present major challenges for submarine designers. 02

What is a Naval Shipbuilding Project? Future Submarine Industry Skills Plan / page 10 page 11 / Future Submarine Industry Skills Plan

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A naval shipbuilding project involves thousands of people, billions of however, and the blocks are brought out for Similarly, the test and activation stage involves dollars and runs for about a decade if not longer. They are complex consolidation, it is easy for those outside the specialist skills. While design and production can engineering enterprises that deal with the most advanced technology and shipyard to see these massive steel structures rest on foundation trade and engineering skills, and masts that will eventually form the familiar production engineering and test and activation sophisticated engineering designs, all the way through to traditional heavy shape of a warship. are highly dependent on genuine and current industrial activity. Naval shipbuilding projects have been some of the biggest >> Test and activation—as the ship is assembled expertise which comes from experience and a engineering endeavours undertaken in Australia, and are often referred to and equipment installed, groups of specialist deep understanding of the whole shipbuilding as nation building. While this may be a bold claim, they are certainly at the technicians come on board to check the endeavour. The rigour involved in testing warships centre of Australia’s advanced manufacturing industry. installation, set to work equipment and put aligns with the complexity of their military role. it through an extensive and rigorous range Thousands of operational requirements have to be This section gives an overview of a naval designers and experienced shipbuilders do the of tests to ensure it functions correctly. This precisely tested in very specific conditions, often shipbuilding project and aims to provide a sense work of building the ship. Other professionals, is not the first time testing has happened. harsh, to ensure that every piece of equipment, of what is involved in their execution. Some of the such as project managers, safety managers, Before installation onboard the ship, testing separately and together, will function as expected activities described will be familiar, but much of human resources staff, warehouse managers, is undertaken on the factory floor to ensure when the ship is in combat. the work is largely hidden to outsiders and very purchasing officers and many others, set each piece of equipment performs according The four stages described above are not run often critical to the success of these projects. up and operate a shipyard. Outcomes of this to specification. Sometimes there will be separately or in isolation from each other. stage include a detailed build strategy, usually problems and the technicians will need to fix Production engineering work will (or should) Project stages involving modular construction and sometimes problems such as incorrect cable connections, start at the same time as functional design and two or more block manufacturing shipyards. misalignment of machinery, and defective continues through the production and test and A typical naval shipbuilding project can be Once the build strategy has been decided, components. This work covers moderately activation stages of the project. For example, as characterised as having four main stages: design, detailed work orders will then be written for simple equipment such as freshwater pumps, the designers are sketching out the structure production engineering, production, test and each and every task to be completed, bills of all the way through to the very precise of the ship, the production engineers will be activation. Operation and sustainment of the material created, contracts with hundreds alignment of the main propulsion train and identifying where the block breaks will occur to ships follow after these stages. While there are of suppliers drawn up and signed, extensive weapon systems. Once the equipment has enable the ship to be fabricated using the modern many different ways to break down a shipbuilding and complex schedules of work developed, been set to work correctly, the next step is to method of block construction. They will suggest project, the following provides a summary. inspection and test procedures written conduct thousands of tests to prove that each ways for the designers to make it easier to build The skills and activities in each stage are: for all aspects of construction, workforce piece of equipment, both on its own and when the ship. As equipment is designed, specified and management plans and financial control integrated with other systems, performs to the manufactured, experts in test and trials will be >> Design—from a set of top-level customer systems put in place. design and contract specifications. extracting information to plan their trials as well requirements, this stage involves engineers and >> Production—this is the face of shipbuilding as providing input to the designers to make testing draftsmen creating the warship’s engineering Most people believe shipbuilding is simply that most people recognise. It has thousands easier. Well before production commences, experts design, which covers all the systems described design and construction. What is not so widely of skilled trades people cutting and welding at the shipyard will be assessing the design to in section 1 of the report. This includes the hull, recognised and understood is the need for steel, installing pipes, electrical cable and determine requirements including trade skills, propulsion, weapons, combat management production engineering and test and activation ventilation trunking. These people work for workforce numbers, recruiting and training needs, system and communications. A key product that accompanies the other stages. Production years to build something so large it is on a infrastructure upgrades and warehousing. from this stage will be a computer model of engineering is critical: it is a highly skilled scale rarely seen in industrial manufacturing. the ship from which two and three dimensional engineering and construction control activity As well as welders and electricians, production drawings and specifications can be extracted. and the success of a naval shipbuilding project also involves technicians installing computer depends on getting this right. Poor production >> Production engineering—this is the term systems, radar systems, missile launchers, engineering will result in poor shipyard used to describe the engineering and other large gunmounts, gas turbines, propulsion productivity, budget overruns and late delivery, activities required to take the static design shafting and propellers. Most of this work takes as well as poor quality work and ultimately a of the warship and generate the information place in large build halls at the shipyards. defective ship that might not be fit for purpose. required to build it. Specialist engineering As the shipbuilding project progresses, Future Submarine Industry Skills Plan / page 12 page 13 / Future Submarine Industry Skills Plan

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Systems engineering The systems engineering process is the thread For a submarine or a destroyer, the top level An experienced competent design house will that runs for the entire duration of a naval requirement set will typically number in the take many years to produce a detailed, functional Warships are very complex machines. In fact shipbuilding project to ensure that what is order of 10,000 distinct requirements. Following design for a destroyer or submarine. Research submarines are more complex than almost all delivered meets the customer’s performance a disciplined systems engineering process, and analysis specialist RAND has measured other man made machines, and are on par with specification. The simplest depiction of this very designers produce a functional architecture that the duration of a new design from the start of the space shuttle. As technology advances and sophisticated process is shown below, the classic allocates each requirement to a system, and concept to delivery of the first of the new class. operational requirements increase, warships are systems engineering ‘V diagram’. The V represents then design that system to satisfy all allocated The duration depends on the complexity of becoming ever more sophisticated and there is no the idea that requirements are translated into the requirements. Ensuring the warship meets all the requirement, any schedule and budgetary end in sight to this advance. Systems engineering construction of the system, say a warship, and requirements, and that the design of equipment constraints, and the skill and proficiency of the is a discipline developed over past decades that then proven through a series of tests to meet the is harmonised so that it all fits inside the ship, design workforce. As a benchmark for the design involves a top down, structured approach to the customer’s requirement. is an incredibly challenging task and one that duration, the US Navy’s Ohio, Seawolf, and Virginia design, development and construction of highly typically involves thousands of skilled people class designs took approximately 15 years taken complex machines that must meet a challenging over many years. from the start of the conceptual design to the set of customer requirements. delivery of the first boat (RAND MG-608, pg 30).

___ Typical project schedules The level of effort was an estimated 35 million work hours for the Virginia class design. Figure 2.1: Systems engineering ‘v’ diagram Construction projects for the ten ANZAC class frigates and six Collins submarines both ran for To provide a basic measure of the time involved about 20 years, while the project to build three in production engineering and production, two SYSTEMS COMMISSIONED Air Warfare Destroyers will run for about 15 periods are quoted: time from preliminary design ENGINEERING SYSTEM MANAGEMENT OPERATIONS & review to start of construction, and duration of PLAN MAINTENANCE years. This is typical of major warship projects. construction for each ship. The following diagrams SYSTEM VALIDATION PLAN Building smaller or simpler ships does not take as long. The Armidale Patrol Boat project, which show those schedules for a range of international CONCEPT OF SYSTEM provided 14 boats for the Royal Australian Navy, warship projects. As an indication, it takes about OPERATIONS VALIDATION

D EOTN FI A N D D E C O M P OT SNI ran for about five years, and the two ship Landing two years from late in the design process to the SYSTEM VERIFICATION PLAN Helicopter Dock project will run for about eight start of production. This varies depending on years. Inside Defence, planning for these programs the number of designers and draftsmen that SYSTEM LEVEL SYSTEM REQUIREMENTS VERIFICATION extends several more years. can be applied to the task. This doesn’t mean all SUB-SYSTEM production engineering is completed in two years VERIFICATION PLAN Typically in Australia, major warship projects —just enough is done to start production work. SUB-SYSTEM involve purchasing an existing platform design REQUIREMENTS SUB-SYSTEM For a surface ship, the designer and shipyard will (HIGH LEVEL VERIFICATION and core combat system. The Collins submarine DESIGN) COMPONENT typically concentrate on the keel blocks as the VERIFICATION INTEGRATION AND TEST and Air Warfare Destroyer projects started with an PROCEDURE priority. For a submarine, this period is usually existing platform design and existing core combat longer than for a warship and production would COMPONENT DETAILED COMPONENT system. A considerable amount of design and DESIGN VERIFICATION typically start on the central blocks (or ‘rings’). development went into adapting these designs For the Air Warfare Destroyer project, production to Australian requirements, but none of these started a little more than two years after the TRACEABILITY projects involved a design from first principles. Spanish F-100 platform design was selected (at IMPLEMENTATION Government Second Pass), noting the project had HARDWARE & SOFTWARE (CODING & TEST) been assessing the design for construction in Australia for over a year before that final decision.

TIME Future Submarine Industry Skills Plan / page 14 page 15 / Future Submarine Industry Skills Plan

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______Figure 2.2: Warships: Preliminary Design Review to Start of Construction Figure 2.4: Submarines: Start of Construction to Delivery

DDG90 15 YUSHIO SS-573 54

LCS 16 HMS SPLENDID S106 55

F100 AEGIS 18 HMS SPARTAN S105 56

DDG92 23 HMS SCEPTRE S104 63

DDG51 FLTIIA 27 HMS TRAFALGAR S107 64

DDG51 28 KD TUN ABDUL RAZAK SCORPENE 70

TYPE 45 30 HMS SUPERB S109 71

anzaC 36 KD TUNKU ABDUL RAHMAN SCORPENE 71

lpd17 40 HMS HELSINGLAND 73 CARRERA SCORPENE 84 0 5 10 15 20 25 30 35 40 45 HMS VIGILANT (S30) 84 MONTHS O’HIGGINS SCORPENE 85 HMAS COLLINS 92

HMS VENGEANCE (S31) 97 In terms of production duration, which includes periods, and generally settled on a period of HMS VANGUARD (S28) 98 test and activation and all other pre-delivery about five years being optimum in its shipyards’ HMS VICTORIOUS (S29) 100 activities, the typical period for a complex warship circumstances. Given that the Air Warfare TYPE 092 XIA CLASS CHANGZENG 6 123 is about five years. The first of class takes longer Destroyer project commenced from a cold start HMS ASTUTE 130 than the subsequent ships. In its DDG-51 destroyer that resulted in problems with early production, HDWTYPE 214 PAPANIKOLIS S120 131 program of more than 60 ships, the US Navy the build duration for the first Air Warfare HNLMS WALRUS S802 165 experienced noticeably shorter and longer build Destroyer has grown from five to six years. 0 20 40 60 80 100 120 140 160 160

MONTHS ___ Figure 2.3: Warships: Start of Construction to Delivery

For submarine programs such as the US Navy’s Establishing comprehensive data on the cost of 24 LCS Virginia class, build duration is typically 60 months. warships built overseas is difficult: it is closely 41 ANZAC The first Collins class submarine took 92 months guarded, inflation and exchange rate changes DDG90 46 from steel first being cut to delivery. are often left out, and the scope included in many DDG51 FLTIIA 46 publicly announced prices is never made clear. DDG51 46 The Defence Materiel Organisation has published DDG92 54 Typical project budgets an analysis of the cost of ships and submarines, LPD17 57 According to published figures, the Air Warfare and their trend over time. Other agencies have F100 AEGIS 62 Destroyer project will cost about $8 billion, and the done similar work. The trend in warship prices TYPE 45 63 Landing Helicopter Dock projects about $3 billion. AWD 75 is that they are increasing at about twice the rate The ANZAC ship and Collins submarine projects of inflation because of their growing complexity. 0 10 20 30 40 50 60 70 80 are often quoted as costing $5 billion, which in MONTHS today’s dollars would be about $9 billion. Future Submarine Industry Skills Plan / page 16 page 17 / Future Submarine Industry Skills Plan

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The overall cost of a naval shipbuilding project ______Typical project workforce depends on a multitude of factors, the obvious Figure 2.5: Air Warfare Destroyer Figure 2.6: Air Warfare Destroyer Combat System Today, the Air Warfare Destroyer project has a ones being the number of ships required, whether Budget Breakdown Budget Breakdown direct workforce of around 1,800 people who the project includes a new design or uses an work for ASC, Raytheon Australia and Defence. existing design, and the complexity of the ships. They include engineers, accountants, business Size or displacement of the vessel is not a linear 7% 3% 1% 7% 10% managers, safety officers, human resource indicator of cost. An old rule used to be the cost 8% 3% 0% managers, logistics specialists, warehouse to design a warship used to be about equal to the 5% 31% experts, welders, electricians, painters and crane production cost of one ship. So for a four ship operators. They are primarily based in Adelaide program, 20 per cent of the project budget would 13% 10% and Sydney, with small numbers in Melbourne be spent on non-recurring engineering. Clearly, and Newcastle as well as in the United Kingdom the more ships, the lower the overhead will be and United States. on each one. This ratio for design seems to be 2% increasing—not just in quantum but proportionally 4% Extensive research by Tasman Asia Pacific into the as ships become more sophisticated. The number ANZAC ship project determined that in 1994–95, and complexity of systems and their many approximately 2,560 people were directly employed interfaces is increasing, and it is taking more by Tenix and its sub–contractors to produce 54% ten ANZAC frigates. Of these, some 1,223 were engineering effort to design in proportion to the 42% cost of each piece of equipment. For the most employed directly by the prime contractor, Tenix sophisticated submarines and destroyers where on the project (Tasman 2001, p.78). system count and density is high, indications are Similar research on the Mine Hunter Coastal that the non-recurring engineering proportion project determined that over nine years, the might now be equivalent to two or more ships. PROGRAM MANAGEMENT ABOVE WATER WEAPONS project generated or sustained an average of To illustrate a typical budget of a major warship PLATFORM SYSTEM DESIGN AUSTRALIAN TACTICAL INTERFACE more than 1,800 full-time equivalent jobs each project, the following diagrams show different COMBAT SYSTEM AVIATION SUPPORT year. The Mine Hunter Coastal project in Newcastle built six Huon class ships from 1994 to 2003 that levels of budget breakdown for the Air Warfare SHIP CONSTRUCTION COMMUNICATIONS & INFORMATION SYSTEM Destroyer project. Within the two major groups of were 52 metres long and weighed about 700 combat system and ship construction, there are CORE AEGIS WEAPON SYSTEM tonnes. The hull of the first ship was manufactured labour and equipment costs that extend beyond The cost of the combat system depends on ELECTRONIC WARFARE in Italy, but fitted out in Newcastle. the prime contractors right through the many tiers the operational, functional and performance NAVIGATION In 2005, there were only a handful of people of the supply chain. The first diagram illustrates specification. For the Air Warfare Destroyer, working on the Air Warfare Destroyer project a typical split for a warship project based on the operational requirements reflected its sea OTHER USN FMS EQUIPMENT & SERVICES before it was decided to set up the headquarters an existing platform design and demanding control combatant role with a complete range SHIP SYSTEMS for the project at the Air Warfare Destroyer operational requirements of the combat system. of very demanding sub-system requirements. It THROUGH LIFE SUPPORT ELEMENTS Systems Centre in Adelaide. Since then, a new Design services are still required for the platform also included the development of the Australian ASC shipyard and adjacent Government of to integrate a new combat system. The effort Tactical Interface, which interfaces Australian UNDERSEA WARFARE South Australia’s Common User Facility have to construct a ship is dependent on the volume selected equipment to the core Aegis combat VERY SHORT RANGE DEFENCE been built which represent an investment of of the ship and the complexity of its design. management system. The following diagram about $500 million in shipbuilding facilities. Split another way, the budget roughly divides illustrates the breakdown of the combat system There are now about 800 white collar workers into 50 per cent for labour and 50 per cent for budget by sub–system. in the systems centre and shipyard, as well as materials and equipment. about 700 blue collar workers and apprentices. Future Submarine Industry Skills Plan / page 18 page 19 / Future Submarine Industry Skills Plan

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Beyond the three principal organisations system and production engineering functions at Summary A typical shipbuilding project will employ involved in the Air Warfare Destroyer project the beginning before the production workforce thousands of people, including engineers Modern warships are complex. Submarines (ASC as lead shipbuilder, Raytheon Australia grows. Notable is the continuation of this and draftsmen who design the vessel and its are some of the most complex machines ever as the combat system integrator and Defence engineering support throughout the project. systems, shipyard production engineers who built. Projects to build such machines can be Materiel Organisation), there is a multitude of break down the design into step-by-step work As mentioned, not everyone working on a split into four main phases: design, production subcontractors whose workforce also numbers packs for trades people who use them to turn shipbuilding project is an engineer or welder. engineering, production, and test and evaluation in the thousands. Large sub-contractors include steel, pipes and electrical cables into a ship, the Of the 1,000 people in the Air Warfare Destroyer of the completed vessel. They require a workforce Forgacs, which at its shipyard in Newcastle has technicians who install its combat system and non-production workforce, on average only 30 with wide ranging skills and can run for about 15 about 750 workers, and BAE Systems, which communications suite, computers and equipment, per cent are engineers, with the proportion being to 20 years. If an existing design is chosen for the has at its shipyard in Melbourne a workforce of and the engineers and technicians who test the higher in the combat system team as compared project, it will take at least two or three years to around 200 manufacturing Air Warfare Destroyer vessel once it is complete. There is the shipyard to ship construction. In the Adelaide production adapt and develop it for Australian requirements. hull blocks. Other organisations contribute team who keep production running: schedulers, workforce of about 650 people, about 100 are Producing a design from scratch will add years skilled workers to the project in the supply of warehouse staff, the finance people, and the scaffolders, crane operators, stores workers to the project. Beyond the design requirements, major off-the-shelf systems such as Lockheed administrators. Throughout the project, it is the and trades assistants. This shows that major production schedules must take account of the Martin who design and construct the core Aegis systems engineers who are tasked with making naval shipbuilding projects involve people with time needed for production engineering, the combat system. sure the ship meets the customer’s requirements. a wide range of skills, many of which are not majority of which can only start once the design There are many more who work in the supply chain The workforce growth profile for the Air Warfare unique to shipbuilding. In terms of building is well developed. that provides materials, equipment and services to Destroyer program is shown in the following teams for projects like the future submarine, The cost of naval projects is increasing as vessels the projects. diagram. It includes all three shipyards: ASC, BAE many of the skilled workers can come from become more complex, increasing at about twice Systems and Forgacs. The graph shows a typical other industry sectors. Large defence companies and small to medium the rate of inflation. The proportion of the project workforce build up profile, and emphasises combat enterprises employ those working on naval budget for design and non–recurring engineering shipbuilding projects, and these jobs are located is increasing as specifications become more all around Australia. For some, it will be the first ___ demanding. For a submarine or destroyer, that time they have helped build a warship, while for Figure 2.7: Air Warfare Destroyer Workforce Breakdown work can cost two or more times the production others, it this been their life’s work for 30 years. cost of each vessel.

3000

2500 FORGACS 2000

1500 BAE ASC PRODUCTION 1000

SHIPYARD MANAGEMENT & ENGINEERING 500

COMBAT SYSTEM 0 PLATFORM DESIGN SERVICES

03

Why we need a Plan Future Submarine Industry Skills Plan / page 24 page 25 / Future Submarine Industry Skills Plan

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Why we need a Plan ___

THIS SECTION EXAMINES KEY ISSUES THAT WILL AFFECT FUTURE PROJECT SUCCESS, The lack of experienced workshop engineers and The combat system architecture for the Air Warfare INCLUDING LESSONS LEARNT FROM RECENT PROJECTS AND THE CURRENT PLAN shipyard supervisors also affected the project. Destroyer was approved in 2004 based on a core FOR NAVAL SHIPBUILDING PROJECTS. AN ANALYSIS OF THE SKILLS CURRENTLY AVAILABLE The problems with early block manufacturing Aegis combat system from the US Navy. Raytheon across all the shipyards were symptomatic of Australia was selected as the Air Warfare Destroyer IN THE SHIPBUILDING INDUSTRY AND DESCRIPTIONS OF THE SKILLS REQUIRED FOR THE inexperience, and action by all companies to combat system integrator in 2005. This allowed FUTURE SUBMARINE PROJECT ARE PROVIDED IN FOLLOWING SECTIONS. attract and recruit more experienced supervisors Raytheon to transition their core team that had been resulted in immediate improvements. working on the Collins submarine replacement Recent naval shipbuilding by government, ASC had to establish a project combat system to the Air Warfare Destroyer combat What is also clear is that if these issues had not management and production-planning workforce. system. The benefit of having an experienced team in Australia been faced and resolved in Air Warfare Destroyer From 2009, all the shipyards had to build up a at the beginning of the AWD project was enormous. block fabrication, the very same problems In late 2009 when work started on manufacturing production engineering and production workforce. the steel hull blocks for the Air Warfare would have affected the manufacture of Landing The advantage of capturing an existing team is Destroyers, it had been many years since The impact of this on the Air Warfare Destroyer Helicopter Dock blocks in Australia and caused not just that a certain number of experienced Australian shipyards had built a warship. In project was that production capacity could delay in delivery of those ships. people can be easily recruited. A far greater Melbourne, the BAE shipyard delivered its last not be increased as quickly as planned. The benefit is the established processes and dynamic Today, across the three shipyards there is a ship in 2007—the Canterbury, a sealift and lack of experienced shipbuilders also meant team work that is obtained. The engineering production workforce of about 1,800, which amphibious support vessel for the New Zealand productivity was low and mistakes were made. task of developing and integrating a new combat is supported by a production engineering navy. In Newcastle, Forgacs last undertook work To an experienced shipbuilder, the result was system, even from an existing core like Aegis, organisation of about 1,000 people. The problems on manufacturing blocks for the ANZAC ships predictable. Various experts who reviewed the is considerable. What the Air Warfare Destroyer seen two years ago are gone, people have learnt in 1999, although it did complete a luxury yacht project commented that the problem was not experience showed was that speed and efficiency from the experience and are dealing with the for a commercial customer in 2005. In Adelaide, unusual and that similar situations had been can be achieved with a proven team. If the task challenges of block fabrication as part of their ASC completed the last of the Collins class experienced elsewhere. had been undertaken by a new team, it would normal routine. Having gained the basic skills, submarines, Rankin, in 2001. have required many more people because of low The problem was not an inability to recruit a trade the next objective is to improve productivity. productivity, considerable investment in new tools This gap in work meant the Melbourne and workforce—trade recruiting has generally gone This will take practice and time. and process, time to prove and tailor all those Newcastle shipyards had each reduced to a to plan—but rather building up the expertise and tools and processes, and time for the team to work workforce of about 100 people. During the capacity of production engineering organisations, Recent combat systems out roles and dependencies. Most of all, the team ANZAC ship project, the shipyard prime and and a shortage of experienced workshop engineers development in Australia would not be anticipating and avoiding problems. subcontractors had a peak workforce of over and supervisors. In contrast to the shipyard situation, when systems From a core of about 50 people, and backed by the 1,600 people and Forgacs had a peak In relation to the first issue, the project team development began on the Air Warfare Destroyer tools and processes of a global company, the Air workforce of about 600. across all the shipyards could not generate project in 2005, a lot of development work was Warfare Destroyer project has built a team of about In Adelaide, ASC retained from the Collins production work packages—documentation and still underway on the replacement combat system 400 to work on the combat system, to integrate the construction project a workforce of about 700 material—quickly enough to feed the production for Collins class submarines, which was being system into the platform, and to manage overall people to provide through life support and full cycle operation. There were several causes for this: led by Raytheon Australia. Work on the ANZAC project planning and control. The project did not dockings for the submarines. The shipyard facilities >> the time needed to complete the Australian class combat system led by Saab Systems was miss any design reviews scheduled for its first required for Air Warfare Destroyer construction did modifications to the detailed design of the in a sustainment mode, which involves a level of three years (system design, preliminary design and not exist, so while ASC had experienced people in Spanish F-100 platform development, but not the peak activity and workforce critical design). This is almost entirely because the its submarine facility, and had moved some of these required in the primary development stage. >> a limited number of people experienced in task was started by an experienced, proven team. across to the Air Warfare Destroyer shipbuilding developing build strategies, detailed plans project, the company in effect had to establish a and schedules new workforce and a new shipyard. >> lack of capacity to process the volume At that time, a lot of skilled and experienced of documentation in all the production shipbuilders had left the industry. From 2007 when work packages the Air Warfare Destroyer project was approved Future Submarine Industry Skills Plan / page 26 page 27 / Future Submarine Industry Skills Plan

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Why we need a Plan ___

Defence Capability Plan As well as its submarine component, the Royal The Defence Capability Plan 2011 set out a naval but the problem that became characterised Australian Navy aims to maintain a fl eet of 12 to shipbuilding program that resulted in a total as the ‘valley of death’ was still present. Two major naval shipbuilding projects are 14 major warships along with patrol boats and shipyard workload profi le as shown in Figure 3.1. currently underway in Australia: three Air Warfare The schedule set out in the Defence Capability auxiliary ships. While fl eet numbers have remained This is not a fi nancial budget graph, rather it is a Destroyers and two Landing Helicopter Dock Plan presents a problem: a steep decline in activity relatively static, the vessels have grown in size, graph of calculated shipyard workload expressed ships. While not strictly a naval project, Austal are that has already started reaching to almost zero capability and complexity over the decades as as full time equivalent workers at a reasonable rate also constructing eight Cape Class patrol boats in 2017, followed by a massive increase in activity illustrated in Table 3.1. of productivity. Note also that this particular graph for Australian Customs. The 2009 Defence White a few years later from 2020. If all these ships does not include the shipbuilding work done in Spain Paper also defi ned a fl eet of 48 new warships were to be built in Australia, local industry would for the main hulls of the two Landing Helicopter to be acquired over the next 20 years as part of struggle with the loss of skilled people, then a Dock ships. The Defence Capability Plan 2012 made Force 2030: 12 submarines, eight frigates, up demand profi le that is very steep and peaks higher some changes to the naval shipbuilding programs, to 20 multi-mission offshore combatant vessels, than current capacity. The consequence would be six heavy landing craft, one strategic sealift ship and a replenishment and logistics support ship. ___ Figure 3.1: POSSIBLE Shipyard workloads under the Defence Capability Plan 2011 ___ Table 3.1: Royal Australian Navy fleet statistics

10000 1992 fleet 2012 fleet 2030s fleet 9000 Submarines Five Oberon class (2,030t) Six Collins class 12 future submarines (3,050t) 8000 Destroyers Three Perth class (4,600t) Three Air Warfare 7000

Destroyers (6,700t) 6000 Frigates/destroyer Five Adelaide class (4,100t) Four Adelaide class (4,100t) Eight future frigates 5000 escorts (4,000+ t) Three River class (2,600t) Eight ANZAC class (3,600t) 4000

Patrol boats 13 Fremantle class (220t) 14 Armidale class (305t) 20 offshore combatant 3000 SHIPYARD WORKFORCE OR (DOES NOT INCLUDE COMBAT SYSTEM ENGINEERING) PLATFORM Minehunters vessels (2,000t) Two Bay class (180t) Six Huon class (720t) 2000 Survey vessels HMAS Flinders (750t) Two Leeuwin class (2,550t) 1000

HMAS Moresby (2351t) Four Paluma class (310t) 0 4 4 7 Four Paluma class (310t) 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

Auxiliary Ships HMAS Jervis Bay (8,915t) HMAS Choules (16,200t) Two Landing Helicopter AWD/LHD future subm arines Dock ships (27,500t) HMAS Success (18,000t) HMAS Sirius (25,020t) future fri g ates OCVs Two supply ships strategi c seali f t SUPPLY SHIP HMAS Tobruk (5,800t) HMAS Success (18,000t) HEAVY LANDI NG CRAFT CAPE CLASS PATROL BOATS HMAS Westralia (40,900t) HMAS Tobruk (5,800t) Heavy Three Balikpapan class Six Balikpapan class (316t) Six landing craft heavy landing craft Note: (1) While not a project in the Defence Capability Plan, the workforce numbers of the (316t) Cape class patrol boats have been included to show the current workload of the Australian naval shipbuilding industry. (2) The AWD schedule was rebaselined in late 2012 and now extends through to 2019. Future Submarine Industry Skills Plan / page 28 page 29 / Future Submarine Industry Skills Plan

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Why we need a Plan ___

higher costs and schedules that would not meet the size of groups that work on early phases of a Problems to be solveD As is typical of all manufacturing activities, such Defence’s timelines. Even with a mix of onshore and shipbuilding project; for example people involved in new workforces start with low productivity which offshore construction, the acquisition of these new ship design and block structural fabrication. People capability and capacity leads to larger labour budgets on a project. vessels will require careful management to ensure are being recruited for the new phase tasks, such The most recent experience with the Air The low base in terms of facilities and people also Australian shipyards are ready for this work, can as electricians. This reshaping of the workforce Warfare Destroyer and Landing Helicopter meant schedule was impacted. For legitimate, operate at reasonable productivity levels and are will continue as the projects complete each phase, Dock projects identifi es some of the problems practical reasons, at Second Pass neither project able to deliver ships in the timeframes required. for example Air Warfare Destroyer will complete and consequences that Defence and industry could present a schedule that met the original hull block fabrication in about 2015.That workforce Today, skilled and experienced people are being face, except that the much larger volume of warship delivery dates specifi ed in Defence’s changes have already started places a priority on lost across the naval shipbuilding industry as work work and greater complexity that is typical capability plans. reviewing shipbuilding plans to ensure key skills on current projects moves into different phases. of a submarine project would mean the are not being unnecessarily lost. This cold start also caused problems for the Several of the shipyards have started to reduce consequences would be much greater. projects. As one much publicised example of the The impact of rebuilding from a low base on the problems encountered, there were production ___ Air Warfare Destroyer and Landing Helicopter issues at the beginning of AWD hull block Figure 3.2: POSSIBLE Shipyard workloads under the Defence Capability Plan 2012 Dock ship projects was substantial and expensive. fabrication. This was fundamentally due to lack At the outset of these projects, the premiums in of experience across production engineering and the prices tendered was considerable. Analysis production supervision. The ultimate impact of 10000 conducted for the DMO showed that the effective this issue was a project delay of about 18 months 9000 rate of assistance ranged from about 30 per cent and extra costs in the order of $200 million when for the AWDs to over 100 per cent for some LHD all direct and indirect costs are accrued. Another 8000 options, and amounted to billions of dollars. It is example is that the production engineering effort 7000 important to understand here that this was the required for the projects was underestimated 6000 price differential between a cold start shipyard because there were not suffi cient experienced and a fully operational, profi cient shipyard—rather people who knew the real scale of effort required 5000 than the difference between local or overseas to prepare even existing designs for production 4000 build locations. If Australian shipyards had the in a new shipyard. 3000 opportunity to build skills and experience and What is also evident from the Air Warfare SHIPYARD WORKFORCE OR (DOES NOT INCLUDE COMBAT SYSTEM ENGINEERING) PLATFORM improve productivity, they too would offer 2000 Destroyer project is the benefi t of experience. lower prices. 1000 Experience has a substantial impact in a large, The shipyards invested tens of millions of dollars complex naval shipbuilding projects. The benefi t is 0

4 4 7 in their facilities and equipment. In Adelaide for not simply limited to better workforce productivity; 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 example ASC invested more than $100 million other substantial benefi ts accrue: initial project in building a new shipyard. The Government of estimates are more accurate, risks are better AWD/LHD CAPE CLASS PATROL BOATS South Australia invested over $300 million in the understood and problems that cause additional future fri g ates OCVs construction of a Common User Facility, which cost and schedule blow outs are avoided. The AWD HEAVY LANDI NG CRAFT SUPPLY SHIP includes a shiplift, wharf, large hardstand area project inherited the core of the combat system future subm arines and training centre. BAE and the Government of team that did the successful Collins submarine Victoria invested over $85 million in upgrading replacement combat system project. This facilities at the Melbourne shipyard. The shipyards experienced team has been able to execute their Note: (1) While not a project in the Defence Capability Plan, the workforce numbers of the in Adelaide, Melbourne and Newcastle needed work on schedule and budget; and they had the Cape class patrol boats have been included to show the current workload of the Australian naval shipbuilding industry. to recruit and train a workforce of more than knowledge and resilience to deal with problems (2) The AWD schedule was rebaselined in late 2012 and now extends through to 2019. 600 people in a short time, and more since. as they emerged. Future Submarine Industry Skills Plan / page 30 page 31 / Future Submarine Industry Skills Plan

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Why we need a Plan ___

The problems described here are typical of an Shipbuilding productivity the total workforce required to build all the ships industry in a rebuilding phase, and the impact of planned for Navy would be about 5,000. This would Integral to the question of how many people are these issues can amount to billions of dollars for be a small, proficient, innovative and competitive required to build these warships in Australia is the individual projects. Given the greater magnitude Australian naval shipbuilding industry. question of productivity. As described in section and complexity of work in the future, especially 8, the Defence Materiel Organisation has been for the future submarine project, the cost and benchmarking the planned and actual productivity Conclusion schedule impact of a cold start would be much of Air Warfare Destroyer shipyards each year. greater than for the current projects. With the cost Recent experience on the Air Warfare Destroyer Shipyard productivity is being measured using an of all planned naval projects being somewhere and Landing Helicopter Dock projects in Australia internationally recognised gauge of man–hours above $75 billion, a proficient and productive demonstrate the problems and consequences per compensated gross tonne. shipbuilding industry would produce overall of a cold start for a major shipbuilding project. savings to the Defence budget in the tens of Today, shipyard productivity on the Air Warfare This emphasises the importance of having a good billions of dollars. If future projects involve new Destroyer project is low by world standards for number of genuinely experienced shipbuilders designs or more developmental systems for small, naval construction activities. ‘Small’ means at the core of a project, and the importance platforms and combat systems, then a whole a low number of ships in a build project—less than of planning for a steady, not rapid, growth in new set of problems can be anticipated, with six. This is a like-for-like comparison: there is no shipbuilding capacity. The cost savings can be additional consequences for cost and schedules. value in comparing high volume or commercial measured in billions of dollars. shipbuilding to low volume naval projects like Air The other obvious challenge with the naval What has been achieved since 2009 is impressive— Warfare Destroyer and Landing Helicopter Dock shipbuilding program as it stands is the increasing Australia’s naval shipbuilding industry has grown ships. The productivity gains that can be achieved volume of work. Figures 3.1 and 3.2 above show from a low base to a workforce of over 4,000 people are substantial, and are not small percentage that shipyard workloads would more than double across four shipyards. It proves that Australia margins. The Air Warfare Destroyer project if all the work was done in Australia. One solution can grow its shipbuilding capacity and that it is should achieve a productivity of about 80 man– is to purchase some of the ships overseas; capable of building complex warships. However, hours per compensated gross tonne in its short however, even if that is done, the capacity of today some of these skills are being lost as current run of three ships. local naval shipbuilding will still need to grow. shipbuilding projects move into new phases, which World benchmarks for small, naval projects are places an imperative on Defence to review its plans A key lesson learned from current projects is as low as 50 man–hours per compensated gross to ensure skills that will be important to the future that Australian naval shipbuilding capacity can tonne. This difference in productivity between submarine project are not being irretrievably lost. increase, but the rate of growth has a practical 110 and 50 man–hours per compensated gross limit. As illustrated in the graphs above, the issue tonne produces a cost difference of about $5 – 10 is not the height of the peak, but the slope to get billion for direct shipyard labour when applied to there. The size of the Australian manufacturing the whole scheme of planned naval shipbuilding industry and competition for skilled workers is projects. There would be further savings in labour discussed in section 9. The conclusion is that costs throughout the supply chain as productivity building a sustainable naval shipbuilding industry and efficiency increases. involving about 5,000 shipyard people can be achieved, and would be a key part of an Australian In regard to the future of naval shipbuilding in manufacturing sector that employs around one Australia, if the industry is given the opportunity million people. to build skills and experience, and invest in facilities, then production costs can be substantially reduced. With good productivity, 04

THE INTERNATIONAL SUBMARINE MARKET Future Submarine Industry Skills Plan / page 34 page 35 / Future Submarine Industry Skills Plan

___ the international submarine market ___

Countries wanting to operate submarines today either design New generation submarines are designed to spend Submarine Exports and Prices little time surfaced, and mostly remain submerged and build vessels for themselves, or contract foreign companies Germany’s Howaldtswerke-Deutsche-Werft GmbH to avoid detection by increasingly pervasive that are allowed to export their designs or submarines. (HDW) is the most prolific exporter of submarines. surveillance capabilities. Stealth in all the various In the past five decades, 36 submarines have been detectable signatures—acoustic, thermal, visual, produced for the German navy, while 120 complete Countries that design and build submarines Submarine Production magnetic and electronic—has attracted ever submarines or material components have been fall into two broad categories: Since World War 2 increasing attention and investment in research delivered to foreign navies. HDW has exported and development. >> those with a domestic demand large enough to Before World War 2 the submarine was a the Type 207 and Type 210 to northern European sustain the national design and build capability developmental weapon. Great leaps in capability New capabilities have developed rapidly and countries, and Type 209 to South American over the long term occurred during the war and the demonstrated have also been incorporated into vessels, countries, southern Europe, Indonesia, South Korea, >> those with a domestic market that is utility of the submarine accelerated development. including anti-submarine as well as anti-shipping India and South Africa. More recently, the German not big enough to achieve that viability. Designs began as fairly simple but evolved capability, intelligence collection, surveillance, company’s exports have included five Dolphin class quickly. Submarines did not take long to build reconnaissance, mine warfare, land attack using submarines to Israel, Type 209PNs to Portugal and Countries without a viable domestic market must and were generally not in service very long. These missiles, support to special forces, and unmanned Type 214s to Greece, Turkey and South Korea. These export their designs or submarines to provide the characteristics enabled countries that produced vehicles. As a consequence, submarines have submarines are all 2,000 tonnes or less. volume of work needed to sustain their industry. submarines to easily sustain their skilled design become much more expensive: their increasing They either build submarines in their shipyards The French company DCNS is the world’s second and shipyard workforces. complexity means design, integration and build or, increasingly, the vessels are built in the ranked submarine supplier with sales of Daphne all take much longer. The advanced technology purchasing nation. Where this occurs, there is Until the late 1960s, submarines were submersible and Agosta class submarines to Portugal, South now used has become much more sensitive and usually a high level of technical help between the ships. The submarine design and operating Africa and Pakistan. The Daphne design was also therefore more closely guarded and less likely to parent designer/builder and customer nation. concept was such that the vessels spent much sold to Spain and locally built for the Armada. In be made available by the countries developing it. of their time surfaced and were submerged 1990 Pakistan began manufacturing three Agosta Submarines for export are not built speculatively, only to meet operational demands. Designs 90 submarines. More recently, the French Scorpene but only to fill firm orders. There are no production were relatively simple and countries with basic Current Submarine Production design has been sold to Chile and Malaysia with lines in the traditional factory sense. They are industrial skills could build the ships. local manufacture of a further six in India and four based on designs that evolve slowly over time, Countries that are self-sustaining in submarine in Brazil. Again, these submarines are all 2,000 usually with some tailoring to meet the specific Three technological advances in the following design and production are China, France, Japan, tonnes or less. India leases nuclear submarines requirements of each buyer. They are expensive, two decades contributed to a staggering Russia, the United Kingdom and United States. from Russia, while Brazil has purchased the built in low numbers and have a life of 20 to 40 change in capability: The United Kingdom and United States design technology to manufacture a single nuclear years. Customers usually buy between two and six and build only nuclear powered submarines. Only >> the explosion of computing technology powered submarine of about 5,000 tonnes. at a time, so purchases are made infrequently— France and Russia offer conventional designs or typically every few decades at most. >> the advent of highly reliable solid state submarines for export. Kockums of Sweden is a relatively new entrant electronics applied to submarine weapon in the export market and Spain’s Navantia shows For countries that export submarines or Germany and Sweden have exported conventional systems and guided weapons aspirations. South Korea is a new exporter following submarine designs, the sensitivity of key designs and submarines for many years because >> nuclear propulsion. its recent contract to provide three Type 209 technology is an issue that is managed very their domestic markets are too small to sustain submarines to Indonesia. carefully. Designing nations that invest heavily in These developments transformed submarines into an industrial base. South Korea and Spain are new research and development for their own purposes potent strike weapons with very long range and exporters but both are yet to sell a design of their The submarines these suppliers offer are all usually keep the best technology for their own use endurance, and capabilities that went well beyond own. South Korea has a contract with Indonesia to designed for similar, generic operating concepts and export less capable designs and equipment. just sinking ships. build submarines based on a German design. so they appeal to the largest number of buyers in a difficult market. As a consequence they are all similar in size, capability and performance. The markets they target make them very different to the Collins class submarines designed for Australia. Future Submarine Industry Skills Plan / page 36 page 37 / Future Submarine Industry Skills Plan

___ the international submarine market ___

Imported submarines are not necessarily cheaper. For reasons of national security, nations usually Only Japan and South Korea have announced plans Summary Accurate data on real prices, either for complete keep their best technology for their own use for new conventional submarines of a similar or Submarines are not products that are readily submarines or technical support for local build and export less capable designs or submarines larger size to the Collins class. In both cases, they available from a production line—only nine programs, is very hard to obtain. The reported (complete or systems). From a national security will be indigenous programs that will not help the countries have the ability to both design and build price generally only represents the amount and industrial perspective, any country making survival of European builders. Unless Germany, a submarine in their industrial base. Setting paid to the submarine builder for the bare boat. submarine technology available to another will be Spain and Sweden go on to place additional orders aside nuclear powered submarines, that number The cost generally excludes the combat system, very sensitive to that technology finding its way into for new submarines, the future of the industry in reduces to seven for conventional submarines. weapons and communications equipment, which the hands of a third country. Licensing submarine those countries is uncertain at best and potentially While several other nations build submarines, are often provided to the builder as government technology intellectual property and classified data bleak. For the next 10 to 20 years, Australia’s they depend on one of these principal nations furnished material. is therefore tightly controlled, and only the minimum future submarine program may be as big as for design and technical assistance. information necessary to construct or operate the the rest of the world’s demand for conventional Subsidies expressed as offsets or some other submarine is released. Australia’s experience with submarines combined. There are substantial constraints on the global device play an important role in most sales. the Collins class program has shown how difficult market for submarine design. They concern both Another factor is trade incentives and cheap A number of navies, particularly in South America, it can be to manage intellectual property. national security and industrial sensitivity, and have long-term financing by the exporting nation, for operate old submarines and have not announced a real impact on what countries can purchase and example loans made to Greece and Portugal to The practical implications of this are significant. replacement programs—rather they have extended under what conditions. purchase submarines. For example, the limited release of information the lives of their existing vessels. Likewise, it is and intellectual property constraints mean that a unclear whether the Netherlands, Norway and Firstly, as countries typically do not allow the sale Exchange rates also affect quoted prices. The price purchasing country is bound to the parent design Canada will replace their submarines when they of their best technology, exported submarines for a Type 214 or Scorpene is often quoted at about company or nation for all design development work reach the end of their lives in the 2020s, although will be less capable than the parent design, and US$500 million. This is misleading as this figure through life. The situation is more complicated if the Netherlands appears to be considering a life so will not provide the same level of security to related to number of commercial sales when the major systems are provided by different nations extension of its current boats. the importing nation. What is usually considered US dollar was at parity with the Euro, which has and data has to be tightly controlled to ensure highly classified information—the performance since declined. Based on recent sales, the current The only real potential for submarine sales in no crossover. For example, with the Collins class of the purchasing nation’s submarines—is now cost for European built submarines of around the medium term is in the Asia Pacific region. submarine, Australia has to ensure United States also known to and dependent upon the country 2,000 tonnes is between €500 and €600 million, Thailand, Indonesia and Taiwan have all expressed data is not revealed to Sweden (in compliance with exporting the submarines. which equates to US$650 to US$800 million. interest in new submarines, but have not followed US International Traffic in Arms Regulations), and These estimates do not include government through with budgets or orders. Again, these Secondly, intellectual property controls mean must ensure Swedish data is not revealed to the furnished equipment as discussed above. submarines are all in the small coastal class that countries purchasing submarines must United States. of approximately 2,000 tonnes or less. India is depend on the support of the exporting nation Security and Industrial Constraints looking to replace its HDW Type 1500 and Russian for the life of the vessel. Future Conventional Kilo class submarines and have announced a Future indications are that the number of The advanced technology used in modern Submarine Production $10 billion program to build six conventional submarines is the result of substantial investment companies and nations both designing and The international submarine market has submarines, larger than the Scorpene class. in research and development, and delivers the building submarines will reduce, so market more suppliers than foreseeable demand can These are planned to include air independent operational advantage all nations pursue for supply will shrink. Despite the current global sustain. Australia’s future submarine program propulsion systems. their military equipment. For reasons of national financial situation however, market demand for is the biggest planned conventional submarine security and industrial sensitivity, the countries With the emergence of Russia and possibly China conventional submarines could reasonably be acquisition publicised in a world market. that develop the technology closely guard it. This as submarine suppliers—both likely to be offering expected to rise in the longer term. There appears to be little else in prospect, and creates challenges for countries like Australia products at lower prices than western builders— none of it very certain. With the recent global that do not produce much in the way of original countries seeking to replace or buy submarine financial crisis and the increasing cost of submarine technology and so must purchase capability may well look to these countries for submarines, there seems little chance of this most of it from overseas. their future needs. trend being reversed so the future of current players in the market is uncertain. If Australia purchases submarines or designs from overseas, we obtain less than best technology and so consequently a sub-optimal level of operational capability. Importing the technology also means that another nation possesses and has control over classifi ed data that is important to Australia’s national security. As the number of suppliers diminishes, the current perceived price advantage for buyers—created as a consequence of the global fi nancial and market situation—is also doubtful. A reduced number of suppliers also reduces the range of submarines available, and these will be less likely to suit Australia’s needs. A nation can only really call itself a builder of submarines once it both designs and constructs its own boats. Building Collins was a fi rst for Australia, but the submarine is a Swedish design. While we did a good job on the project, it does not make Australia a fully fl edged submarine building nation. 05

structure and scope of report Future Submarine Industry Skills Plan / page 42 page 43 / Future Submarine Industry Skills Plan

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Structure and scope of report ___

The 2009 Defence White Paper announced the Australian Government’S different there: Austal builds small aluminium intention to purchase 12 conventionally powered submarines with patrol boats, but BAE Systems and ASC and other greater range, longer endurance on patrol, and expanded capabilities companies are involved in maintaining large steel frigates, submarines and support ships. compared to the current Collins Class submarine. No doubt there is some crossover of people, but the two activities are separated to the extent that In 2012, the government announced four pursued, and the advantages and disadvantages each workforce is largely dependent upon its own options that are being considered for the of various commercial models, are implementation demand factors. future submarine: details the program is yet to finalise. Where competition between the two activities will >> an existing submarine design available be an issue for the future submarine project is Sustainment off-the-shelf, modified only to meet Australia’s in Adelaide. ASC and its supply chain in Adelaide regulatory requirements This report does not provide a full analysis of is currently focused on sustaining Collins class >> an existing off-the-shelf design modified to the workforce needed for warship sustainment. submarines, specifically the full cycle dockings incorporate Australia’s specific requirements, Much of the activity involved in building ships is which are deep level maintenance activities and There is also potential for a project to extend including combat systems and weapons not directly relevant to supporting those ships take about three years for each boat. ASC is also the service life of the Collins class, which is in service. The tasks are different and while >> an evolved design that enhances the capabilities the lead shipbuilder for the Air Warfare Destroyers, currently referred to as the Collins Service Life there is an overlap of some skills, particularly in of existing off-the-shelf designs, including the manufacturing hull blocks in its shipyard and Evaluation Program. While this is not an approved platform design and systems development, the Collins class consolidating the entire ships on the Government Defence project and its scope is yet to be defined, levels of effort are certainly not the same. The of South Australia’s Common User Facility >> an entirely new developmental submarine. it would be like a mini-submarine project and key link between acquisition and sustainment adjacent the ASC shipyard. involve design, systems development, production This report does not discuss the acquisition is the transfer of engineering know-how and engineering, production, and finally test and data in both directions. strategy for the future submarine program or ___ activation. the strategic or military need for submarines. Figure 5.1: construction and sustainment To sustain a warship effectively, knowledge is The nation’s submarine workforce may be Whether Australia needs submarines and, if so, required of the platform design. But sustainment in australia the capability and numbers required, is a matter stretched to meet the needs of both the evaluation requires nowhere near the number of people with program and future submarine project, but with for Defence and other national security analysis. DARWIN those skills as is needed to create the design. For proper coordination, the Service Life Evaluation It is also outside the scope of this report to debate combat systems, knowledge of the architecture Program should be seen as an excellent CAIRNS the broader macro-economic policy aspects of and design is required for sustainment, but the opportunity to grow the skills required for the building warships in Australia versus purchasing level of effort needed in this area depends on the future submarine project. them at a cheaper price overseas. There are rate of change to operational requirements that certainly more than just economic issues to drives system upgrades. This connection means When construction starts on the future consider when looking at a local shipbuilding that the future submarine and other shipbuilding submarines, Defence and the various companies HENDERSON projects are in competition with warship involved will have to manage workforce demand industry, and arguments can be made for and NEWCASTLE against the concept. In the end, it is a decision for sustainment for only some of the skills. to ensure those other activities are not impacted. ADELAIDE One option is to migrate all Collins sustainment government. This report does however examine In Australia, build and sustainment teams tend SYDNEY the international market for submarines and to Perth, so ASC’s submarine workforce in to be separated by geography (see Figure 5.1). sustainment MELBOURNE discusses current and future pricing of such Adelaide can be dedicated firstly to the Service In general, warships are built in Newcastle, construction overseas purchases. Life Evaluation Program, then gradually to the Melbourne, Adelaide and Perth, but are home new submarine project. While the analysis takes into account the ported and maintained in Sydney, Perth and effects that different options may have on skills Darwin. Perth appears the only common location, requirements, details on how each should be but the build and sustainment work is very Future Submarine Industry Skills Plan / page 44

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Structure and scope of report ___

The report Structure Much has been written on the subject of navy The first sections in this report have set the scene shipbuilding, its challenges and rewards, its and rationale for developing the Future Submarine problems and their fixes. Industry Skills Plan for Australia. This report has been written for those with a The next three sections will examine the skills general knowledge of navy shipbuilding and in needed to deliver the future submarine project. no way covers every aspect and detail of what is This analysis is structured in three parts: an endless topic. To keep the report a reasonable designing a submarine, developing the complex length, indepth data and detailed explanation of systems to install onto a submarine, and the analytical rationale that underpins the findings manufacturing the submarine. has been kept to a minimum. One section will deal with the wider Australian The aim of the Future Submarine Industry Skills workforce setting which encompasses navy Plan is to build the plan to build the skills to build shipbuilding and how skills can be developed the future submarines. It will also examine all with education and boosted through migration navy shipbuilding projects now underway and if necessary. new projects included in the Defence Capability The last sections of the report outline the plan. Plan. The skills plan must also focus on projects This report will present principles rather than preceding the Future Submarine Program because explicit recommendations, with actions to cover Australia’s ability to execute this depends on our the four levels of skill as defined in this report: preparations before it starts. The skilled people individual skills, workforce numbers, proficiency who are ready on day one to start building our and experience. A vision for the long-term future submarines will be key to their successful future of Australia’s naval shipbuilding capacity delivery. No doubt skills will be further developed is presented. The report also includes a series as the project progresses, but success is laid down of overall conclusions and recommendations. in the earliest stages of the project. One expert on systems engineering, Eberhardt Rechtin, puts it simply: “all the serious mistakes are made the first day”. 06

designing a submarine Future Submarine Industry Skills Plan / page 48 page 49 / Future Submarine Industry Skills Plan

___

DESIGNing A SUBMARINE ___

This section describes the challenges of designing a submarine, the skills available in Australia and the skills required for the task. It deals mainly CASE STUDY : with the hull, mechanical and electrical systems, including hull form and AUSTAL CAPE CLASS‑‑A THIRD GENERATION DESIGN physical integration of the combat system. The design of the combat system, Drawing from the experience of designing, building >> Manufacturing feedback improved control and other integrated data systems, is dealt with in section 7 on skills for and maintaining the Australian Customs and Border of weld shrinkage and material distortion. system development. Protection Service’s Bay class patrol boats in the >> Increased number of switchboards late 1990s, Austal created its 56 metre Armidale to simplify electrical system upgrades. AUSTRALIAN WARSHIP DESIGNS Technology Organisation. Austal also adapted their class patrol boat design for the Australian Navy commercial high speed ferry concepts to produce in the early 2000s, with 14 boats built between From operational lessons learned, Australia has designed warships in the past and the Joint High Speed Vessel (JHSV) design, with 2004 and 2007. In 2011, Austal then developed its the design incorporated; today possesses good skills in naval architecture, contracts to build ten of these vessels for the third generation of this design, the Cape class, >> meant in the broadest sense as the people Increased internal volume of US Navy and US Army. for Customs. This design benefitted from the the ship to maximise crew comfort. involved at all levels in the design, construction, experience of building the Armidale vessels as Sustained and developed over the years, Austal >> New arrangements for transportee maintenance and operation of marine vessels. well as feedback from navy crews and people who has developed in–house an efficient and effective accommodation on main deck improve Australia has not designed a modern, large have been maintaining those ships for many years. design process. While they have not designed a access for persons with reduced mobility. naval support or amphibious ship, destroyer Cape class also benefited from experience with destroyer or submarine, the team has skills that or submarine from first principles, but has design and build of the LCS and JHSV ships. >> Changed boarding party room location to would make a useful contribution to the future extensive experience in the adaption of designs Some of the development are listed below. enhance operational efficiency and safety to local requirements. Australia, specifically the submarine and other naval projects. However, through improved access to the ships boats West Australian company Austal, has designed this know how is now being eroded with Austal Comparative values between Armidale and proximity to the bridge. modern high speed ferries, patrol boats and in the process of downsizing its design capability and Cape class patrol Boats (CCPB) >> Optimised ventilation in machinery and surface combatants. due to a lack of new orders. >> CCPB has 20% more range. internal spaces by modelling air flow Over the last 20 years Austal has developed >> CCPB has 30% more internal volume using Computational Fluid Dynamics. an innovative and self-contained approach to for only two metre increase in length. >> Improved materials and detail design vessel design from first principals, through the >> CCPB can carry 40% more transportees to simplify maintenance. completion of approximately 110 first of class in better comfort. designs from concept to production and vessel >> delivery. Austal designed the Bay, Armidale CCPB operates with 40% fewer crew. and Cape class patrol boats for the Australian >> CCPB crew accommodation is 7% quieter. Navy and Customs Service. The Cape class is >> CCPB is 5% faster for same displacement. an evolution of the bay and Armidale designs, >> CCPB garbage store is 500% larger. and the benefits of this evolution are described in the following case study. From build lessons learned on Armidale, the Cape class design incorporates; Through international competition, Austal designed the Independence variant of the >> Modified structural and equipment Littoral Combat Ship (LCS) for the US Navy and arrangements to improve installation are contracted to build ten of these warships. efficiency by facilitating better access. The Austal LCS design is an innovative trimaran >> Changed build sequence to allow construction, which incorporates features more access during hull assembly. developed in collaboration with the Australian Maritime College and Defence Science and Future Submarine Industry Skills Plan / page 50 page 51 / Future Submarine Industry Skills Plan

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DESIGNing A SUBMARINE ___

THE SUBMARINE CHALLENGE This includes aspects such as the combat system, Designing is an iterative process with designs ___ propulsion system and power supply as well as conceived, tested and changed, at an individual Figure 6.3: team hierarchy Much has been written on the challenge of factors that are not as obvious such as the crew’s equipment level and ultimately integrated at the designing a submarine and preservation of the daily living needs. Properties such as acoustic whole system (submarine) level. The process specialist skills required. Most recently, the signatures and boat survivability also need to be used in the Air Warfare Destroyer evolved design Defence Materiel Organisation commissioned designed and balanced to meet the specification. (ultimately not selected) and detailed in the RAND the RAND Corporation to report on the skills One of the primary requirements of a submarine report is described as spiral, and is shown in the PROGRAM required to design the future submarine. RAND LEADERSHIP when submerged is that they need to remain following diagram. has authored many similar reports in the United neutrally buoyant, and maintain stability with little Kingdom and United States. Skills Australia also DESIGN ANALYSIS or no forward motion. This means that what may published a report on the skills needed to deliver ___ appear superficially to be small changes in any Figure 6.2: spiral design the future submarine project. AREA DESIGN INTEGRATION one of these elements can lead to significant re-

As section 1 illustrates, submarines are very design of the boat. REQUIREMENTS sophisticated machines and take hundreds of RAND and other agencies describe a design PRINCIPAL skilled people several years to design. The process DIMENSIONS THE TEAM OF DESIGNERS effort that starts with developing concept designs, COST begins by defining the top level requirements and HULL merging to detailed designs, then support GEOMETRY works its way through all the systems engineering SEAKEEPING construction and ultimately through life support. steps described in section 2. This process of Various labels are used to describe this process, decomposing and allocating requirements, STABILITY ARRANGEMENT and it can be performed in isolated sequence or understanding technology, working within budgets The diagram stresses the importance of leadership concurrently. The following diagram is the sort from experienced people and the importance and other engineering constraints applies to WEIGHTS RESISTANCE of time–effort profile used to illustrate the design all elements of the submarine including its of analysis and area design. The analysis level, activity. The cycle of concept design to detailed AUXILIARY PROPULSION about 20 per cent, represents the experts, hull structure, propulsion and combat system. SYSTEMS design to construction support repeats itself many SYSTEM Ultimately all elements in the design have to be typically engineers, that validate performance times through life as capability upgrades and STRUCTURE harmonised to fit inside a functioning submarine. characteristics including shock survivability, obsolete equipment replacement is required. signature management, war fighting and so on. Source: J.H.Evans, Basic Design Concepts,Naval Engineers This involves computational analysis and other Journal, Vol.71, No.4.Used With Permission. Rand MG1003-2.2 ___ modelling of the various aspects of the submarine Figure 6.1: design activity design and requires an extensive and coherent To create a design requires a range of skills, a set of tools and processes, the sort of resource workforce with the capacity to complete the task only possessed by experienced submarine design in the time allocated, and a workforce with the organisations. The area design level, again about tools, data and processes to develop and verify 20 per cent, represents the skilled team leaders the design in a proficient manner. The last and, experienced in the efficient creation of integrated to most commentators, most important ingredient submarine designs. The process is shown in the is experience. In RAND and other reports on the following picture. topic of submarine design, it is always clear that experience in submarine design is critical to the success of any practical endeavour. The following diagram often accompanies the diagram above and provides a simple illustration of the hierarchy of importance of the elements that make a good CONCEPT DESIGN DETAILED DESIGN design team. CONSTRUCTION SUPPORT THROUGH LIFE SUPPORT Future Submarine Industry Skills Plan / page 52 page 53 / Future Submarine Industry Skills Plan

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______Figure 6.4: the design process Figure 6.5: competencies required in submarine design

SKILL COMPETENCIES EXAMPLE ACTIVITIES/PRODUCTS Draftsmen Electrical Electrical system component, electrical analysis, electrical design, power generation Mechanical Mechanical component, mechanical system, mechanical system design INDIVIDUAL SYSTEM Piping/HVAC Piping design, heating, ventilation, and air conditioning design, fl uid system SIZING AND DEVELOPMENT design, hydraulic system design Structural/ Structural engineering, structural arrangement, system design TEAM BASED AREA INTEGRATION arrangements Engineers Signature analysis Acoustic, wake, thermal, electromagnetic and other signature analysis Combat systems Combat system integration, combat system design, ship control and navigation and ship control Electrical Electrical motor and generator designs, distribution, control, load analysis, DESIGNED FOR component design and safety PRODUCTION WITH FIRST Fluids Hydraulics, chilled and cooling water, fl ow analysis, computational fl uid MODULES ARE BASED ON MANUFACTURING ASSEMBLY PLAN TIME SUCCESS dynamics (CFD), fl ooding and casualty analysis Mechanical Mechanical components, mechanical systems, mechanical design, weapons-handling systems, rotating machinery, auxiliary machinery Naval architecture Hydrostatics, hull equalibrium, speed and powering analysis, stability Beyond the engineering skills needed to design Computer fi les of the different computational Planning and Scheduling, manufacturing planning, production strategy development, a modern complex surface combatant vessel, analysis and performance modelling will production producibility analysis, production support, zone and block outfi tting, submarine designers must consider submarine- be provided to demonstrate performance. procurement unique requirements such as underwater Material specifi cations, equipment lists, test hydrodynamics, stealth, survivability, atmospheric procedures and a vast array of other technical Structural/ Hull design, casing design, deck layouts and design,equipment arrangements, control, noise, signatures and safety. For documentation will also be produced. This effort arrangements shock analysis, foundation designs example, a submarine’s unique safety criterion is is immense: the page count for the drawings Testing Component and system testing, test and trials plan development withstanding the enormous pressures at maximum and documentation of a submarine design will Management Programme management, technical management; supervision dive depth. Figure 6.5 from the RAND report shows run into the tens of thousands. Engineering Non-engineering support, such as technical computer and information the wide range of skills and competencies required support technology specialists in designing a submarine. Other engineering Life cycle support, cost, availability analysis, risk management, safety, The output of the design effort will include a environmental, materials large three dimensional computer model of the submarine and all elements within (3D CAD Source: RAND MG-1033, fi gure 2.1 model). From this will be extracted the general arrangement and other two dimensional drawings, which will be used in the construction process. Future Submarine Industry Skills Plan / page 54 page 55 / Future Submarine Industry Skills Plan

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Production engineering Publicly released in December 2011, the ___ RAND report Australia’s submarine design Figure 6.6: estimate of design team required It is important to recognise that finalising the capabilities and capacities opened with the design is not the end of the engineering effort. following statement: In simple terms, the design is a description of — what the submarine has to look like when it is The Commonwealth of Australia will need a RAND ESTIMATE OF NUMBER OF DRAFTSMEN AND ENGINEERS REQUIRED BY INDUSTRY TO DESIGN A LARGE, CONVENTIONAL SUBMARINE, BY YEAR (15-YEAR, 8-MMH DESIGN EFFORT) finished. What also happens in parallel with the domestic workforce of roughly 1,000 skilled functional design is production engineering, which draftsmen and engineers in industry and 1200 TOTAL also encompasses design. The shipyard team government to create and oversee the design 1000 ENGINEERS has to develop a build strategy, manufacturing of a new, conventionally powered submarine for DRAFTSMEN plans, build sequences and schedules, bills of the Royal Australian Navy. Although a workforce 800 material, assembly and test procedures, and more of this size and capabilities does not exist in to enable construction of the submarine. Shipyard Australia today, under the right circumstances FTE 600 design effort includes designing jigs and fixtures one could be cultivated over the next 15 to 400 to aid construction, bracing and support systems. 20 years. However, the Commonwealth could The output of this effort is an equally large set shorten the duration and lessen the costs 200 of drawings and documentation that enables the of designing a new submarine if it were to 0 production workforce to build the submarine. collaborate with foreign design partners rather 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Production engineering is described further than rely exclusively on a domestic workforce YEAR in section 8. to design the vessel. (RAND MG-1033, pg xxiii)

The intent is not to summarise the entirety of Source: RAND MG-1033, figure 3.6 RAND report the RAND report, but there are key observations In 2009, the Defence Materiel Organisation that are central to this broader study. The assumptions in RAND’s analysis are worth required, what RAND describes as the ‘US model’. engaged RAND Corporation to answer four examining. For the purposes of its work, RAND Given the experience level of the design workforce questions: Future submarine design workload reasonably assumed the future submarine will is more likely to be low than high, it should be be a new design—larger and more complex than expected that the design effort will be at the higher 1. What is involved in designing a new submarine In terms of workforce capacity, there are many Collins—with the first boat delivered 15 years after end of the scale, towards 12 million man-hours. and what is the demand for various design decisions yet to be made in the progression of design commences. Of the other assumptions, resources during the design program? the Future Submarine project that are critical to In general, these man-hour numbers compare two stand out that lean toward the higher person determining the effort required to design the new reasonably to other projects, although such 2. What design resources currently exist hour estimate being the more likely scenario. submarine. It is simply too early to say precisely comparisons always require caution because in Australia? RAND discusses the interpretative power of the how many people will be required. Furthermore, of the many different ways these numbers are 3. What is the gap between what is needed construction shipbuilder, that is the ability of the time allowed in the schedule to complete recorded and quoted. The design effort on the and what is available? the shipyard workforce to work off less detailed design will obviously determine the peak Collins class was about seven million man- information because of extensive experience and 4. What is the cost and effectiveness workforce required. hours, the Royal Navy Upholder class was similar ingrained know-how. Experience on contemporary of options for closing the gap? and the US Navy Virginia class about 18 million RAND identified an upper and lower number of shipbuilding programs has been that more effort man-hours. Today’s submarines are taking more hours it believes are required to design the future than expected has been required to provide time to design because of increasing complexity, submarine. The range was eight to 12 million a sufficient level of design information to the more challenging performance requirements and man-hours. This equates to a peak design shipyard planners and production workforce. more stringent safety requirements. This will be workforce of between 600 and 900 engineers This is understandable given the inexperience true for the future submarine. and draftsmen. This workforce profile for levels of the new workforce. For the future a 15 year design period is shown in Figure 6.6. submarine, the higher level of effort will be Future Submarine Industry Skills Plan / page 56 page 57 / Future Submarine Industry Skills Plan

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DESIGNing A SUBMARINE ___

RAND also used a workforce model to estimate Destroyer or other projects. At the time when ___ the impact of experience levels of people in future submarine design would start, expected to Figure 6.8: results of workload models a workforce. It found that man-hours would be in the latter half of this decade, much of this increase by 14 to 18 per cent if only 20 to 40 per work will still be continuing: Collins sustainment — cent of the Australian experienced workforce was will be ongoing, with the potential of additional EXAMPLE REQUIRED VERSUS ACCOMPLISHED WORKLOAD MODEL RESULTS available, noting that there are too few workers work for the Service Life Evaluation Program, with experience to meet the peak demand. RAND’s and while the Air Warfare Destroyer project will 500 view on individual productivity and experience is finish in early 2019, new projects such as the 450 REQUIRED shown in Figure 6.7. future frigates and offshore combatant vessels 400 ACCOMPLISHED will replace it. Caution is required to believe the 350 Similarly, the schedule increases by two to four situation requires little or no action. 300 years using the same assumptions. This is shown 250 in Figure 6.8, where inexperience results in slower 200 than planned progress with design, and production Design technology areas

WORKFORCE 150 cannot commence until design products are ready, The RAND analysis breaks down this task of 100 typically around the peak of the work profile. designing a submarine into three functional 50 technology areas: combat systems, hull form Throughout its analysis, RAND highlights a caution 0 design, and internal hull, mechanical and 1 5 10 15 20 that almost all of the submarine experienced electrical (HME) systems. people now working in Australia are fully occupied YEAR working on Collins sustainment, the Air Warfare Source: RAND MG-1033, figure 11.1 ___ Figure 6.7: individual productivity levels by years Combat system design responsible for the design of a hull form on a new submarine’ (RAND MG-1033, pg 179). There RAND concludes that Australia has sufficient is a very real risk of underestimating the sort of engineers with applicable technical and 120% enterprise it takes to successfully develop a fully management skills, and facilities to support future documented new submarine design. design. This can be strengthened in terms of skills, 100% experience or capacity by company reach-back When building complex warships like a destroyer and partnerships with foreign companies and or submarine, Australia has typically worked from 80% governments. This study has reached the same existing designs. Adapting an existing design to conclusion, but key questions remain about how Australian requirements and Australian build is 50% to: 1) simply retain the existing workforce; and 2) not a trivial task, and sometimes even that has improve their skills. This is discussed in section 7. been under estimated. For example, it is generally said that Australia under estimated the task of 40% Hull form design, and internal hull, evolving the Swedish (Kockums) Västergötland mechanical and electrical systems submarine design for the Collins class. 20% In terms of hull form design, RAND also concludes The expert industry panel involved in this study was unanimous in its view that Australia had a 0% that Australia has a core group of skilled people 1 2 3 4 5 capable of supporting a new submarine design, but good range of skills that could contribute to the design of a complex warship like a destroyer or YEAR stresses that there is the ‘big difference between individual research projects or engineering submarine, with such a project requiring the modifications to the Collins class and being partnership of an established, overseas designer. Future Submarine Industry Skills Plan / page 58 page 59 / Future Submarine Industry Skills Plan

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RAND identified a greater problem for the future In the United States, this is referred to as Skills gap‑‑workforce size that precede the future submarine to retain and submarine in the design of hull, mechanical integrated product and process development. develop the skills of those people will be an RAND’s conclusion is that if the new design and electrical systems. The hull form of nuclear important action for Defence. They need to be A core group of Australians would be integrated option is selected, there are not enough powered and conventional submarines is similar kept working. It might be on new platform design into the team according to their skills, along with experienced submarine designers in Australia or in their design challenge, so partnering with challenges or working on designs to support new local recruits. Some Australians would assist all the necessary facilities, tools and processes. other governments and international firms can upgrades or obsolescence in existing ships. It in developing the design, others would perform a RAND also observes that because of the bring the skills required to the task above those does not even have to be pure design work: it government oversight role, and others would focus demands of Collins sustainment and other naval already available in Australia. On the other hand, might be general engineering work to support a on preparing for an Australian build. Similarly, shipbuilding projects, there may be only 100 to 200 the internal mechanical and electrical systems in maritime project. While design skills fade when some of the tools being developed in Australia submarine-experienced draftsmen and engineers a conventional submarine are noticeably different people are not engaged in designing a submarine, would be merged into an existing structure. available to support a new submarine design. With to a nuclear submarine. It is likely that the future the fact that they are working on, say, a support the support of the expert industry panel, this study submarine will be bigger than the Collins class ship project will at least retain these people in the The following paragraphs look at each of the four agrees with that conclusion. submarine, and while very capable design support aspects of the term ‘skill’ being used in this report: shipbuilding industry. The disappearance of skilled can be obtained from the international vendors individual, team numbers and capacity, proficiency This confirms that an experienced design partner people is a much worse problem than fading skills. of the various sub-systems, there will be a new and experience. (either company or government) will be required Building the number of people in the workforce, design challenge in harmonising all of these if Australia decides to build submarines based on and increasing all their skill and experience levels, systems into what may be one of the largest a new design. The suggestion that Australia could Skills gap‑‑individuals is clearly the objective of the plan. Having people conventional submarines around. alone embark on a plan to put together its own work on the new projects, getting them to deal At the education and training level, neither the submarine design capability within the timeframe with the front end engineering task that such RAND report nor this study have identified any of a single project is not practical. Not only would it an enterprise requires, whether it includes new specific university or trade course that is not take an extraordinary amount of time, designing a design or not, is one action to build skills. Starting available in Australia and which may be needed to submarine is a skill that requires real work to build on engineering tasks for the future submarine, provide the basic qualifications required to design up a design philosophy. It requires a substantial be they parameter modelling of concept designs the future submarine. Indeed, the RAND report investment in experimental submarine design and or detailed designs of certain sub-systems, can had many good things to say about the Australian build projects, and it is unlikely the first attempt be another useful action. Taking an equipment Maritime College in Launceston, Tasmania: will meet all requirements. When a design partner design through to land-based testing is important is selected, it is not the static design of their ‘The Australian Maritime College appears proof of effort, and such experiments are great latest submarine that is important, rather it is unique, offering both undergraduate and learning opportunities. This work needs to be the heritage of experience that has built a design graduate-level courses in naval architecture, more than just a high-level concept design—it philosophy and codified set of design practices marine and offshore systems, and ocean needs to reach into detailed design for production. engineering. The college offers significant and specifications. An Australian platform design Work on hull, mechanical and electrical sub- expertise and facilities that both industry and Australia should make every effort to retain the systems for conventional submarines should be If a new platform design is to be created for the the government could leverage in designing group of skilled shipbuilders that it has now. a focus, including air independent propulsion. future submarine, the likely practical approach a future submarine.’ We have a team of combat system engineers All this work should engage the Defence Science is that Australia would partner with a foreign It would be a worthwhile collaboration for the working on the Air Warfare Destroyer and Landing and Technology Organisation in the science and company and government. Those organisations Defence Materiel Organisation and the Australian Helicopter Dock projects as well as ANZAC and technology aspects, and Defence in terms of safety would bring to the task not only skilled, Maritime College to work together to develop and Collins upgrades, and the submarine hull form and other engineering requirements. Using new experienced leaders and designers, but also their enhance the design skills base in Australia. Of and hull, mechanical and electrical engineers are technologies in the future submarine will increase proven set of tools and processes. Australia would note, it was disappointing to hear that NSW TAFE doing some work in updating Collins submarines, design work, and might possibly call for new skills. set the requirements for the new design, but the but they are likely to move onto other projects if recently cancelled their Naval Architecture courses Such planning has commenced in the Future process would be managed by the established there is no further work in the maritime sector. at the Sydney Institute, which had a reputation of Submarine Program Office in the Defence company, with the backing of its government. Arranging the other naval shipbuilding projects producing good graduates with practical skills. Materiel Organisation. Future Submarine Industry Skills Plan / page 60 page 61 / Future Submarine Industry Skills Plan

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There is an important difference between: for the enterprise. Becoming proficient in this Australia has a number of people with the skill Military off the shelf design environment is not a trivial task, and allowing and decades of experience to lead these teams. >> the level of experience in individuals If the future submarine is not a new design, but time for this learning will be an integral part What is particularly important however is to retain in a workforce (the above analysis) an evolved or updated design, the project will of the design schedule. The early selection of these senior people and ensure organisations still require designers. If the option to update the >> the experience level of a unified team, design partner and establishment of the design have effective succession plans to bring up Collins design is chosen, the project will need a which is discussed below. development environment will allow this learning the next generation. As mentioned above, this sizeable platform design team to work through to start and not cause delays. needs Defence to optimise its schedule of naval equipment obsolescence, reliability and other Skills gap‑‑proficiency shipbuilding projects to sustain a reasonable work Another option already suggested is to second known performance issues with the current program for these people, both in industry and Proficiency in submarine design depends on the Australians to international submarine design Collins design. Defence. Ultimately, it will not be possible to fill whole enterprise of people, facilities, tools, data houses to gain experience with the tools and all the key positions with Australians and some Until decisions are taken on the cost benefit and processes. process and creating designs, especially detailed experienced people will undoubtedly come from trade off of difference changes, and the scope of designs. Maximum benefit will come from In terms of facilities, RAND identified that our design partners. redesign is set for the project, it is not possible this investment if people are seconded to the organisations such as the Defence Science and to know the precise make-up of such a design selected design partner, which again reinforces Technology Organisation and the Australian team. But to differing degrees, depending on the value of early selection. This mentoring of Collins service life Maritime College have good facilities to support the option chosen, the project will need area Australians by the design partner should continue eVALUATION program certain aspects of design such as tow tanks and design teams as well as individual sub-system right through the life of the project, and would cavitation channels. Not unexpectedly, Australia Collins class submarines have a design service designers. The changes proposed will need to be especially important if Australia is to stand does not possess all the facilities desirable in life of 28 years and Defence is investigating options be verified at the whole boat level, with analysis up a complete design capability for the following developing a new submarine design. for an extension. The Service Life Evaluation work into submarine survivability, stealth, safety generation of submarines. Program for Collins is considering various design and other criteria. The whole redesign will need The one facility RAND specifically identified as modifications that would be required to overcome to be captured in an integrated product data needed by Australia was an integrated propulsion/ Skills gap‑‑experience reliability and maintainability problems and environment and controlled by an integrated energy test facility. This land-based test site would equipment obsolescence. product and process development like framework. integrate all elements of the propulsion and energy The RAND analysis described above dealt systems including diesel generators, propulsion with the relationship between experience and The program can be seen almost as a submarine As an indication of the level of effort required, the motor, energy systems (batteries and possibly air productivity of the individual. The chart at design and build project on a smaller scale. adaption of the Spanish F-100 existing platform independent propulsion), electrical distribution, Figure 6.7 shows that a person with only two year’s The project steps of concept and detailed design, design for the Air Warfare Destroyer required cooling and associated test and recording experience in submarine design is 60 per cent as engineering for construction and through life about one million man-hours of design work. systems. Government has announced plans to efficient as someone with five years. A cure to this support, followed by construction work on the The Australian warship incorporated a newer establish such a facility. When the design partner problem is to employ more people, and while that submarines themselves, would be replicated in a version of the Aegis Combat System to the Spanish is selected, it will then be possible to determine increases costs to some degree, it will not cause life extension project. The Service Life Evaluation warships, and included a number of additional what facilities are available in the collective design project failure. Program would provide a learning platform for sub-systems such as a towed array sonar. From a workforce that will be engaged for the future team, the gaps and whether they can be obtained Where experience really counts to project success this experience, it can be seen that even the submarine program. The team at ASC’s submarine elsewhere or should be built in Australia. is at the higher levels of project leadership. As smallest changes in requirements can result design organisation, Deep Blue Tech, could depicted in the diagram at Figure 6.3, particularly in substantial effort to adapt an existing design. In terms of tools and processes, because Australia gain experience by designing the modifications important to success is experienced leadership of does not have an experienced, proven submarine required, engineers would be engaged in the design project, and of the area design teams design capability, it naturally does not have the full integrating the system upgrades into the platform that produce the integrated arrangements of each suite of tools necessary to complete the task. In while the production workforce would make the submarine hull block. The density or packing partnership however, Australia will obtain the tools required changes to the platform. and processes required. The issue for this study factor achieved in a submarine drives complexity, is the skill of Australian people to work within the and requires a higher skill level to produce designs framework of tools and processes established for efficient block construction. Summary Submarines are sophisticated machines that require a team of hundreds of skilled people to design—from initial concept to detailed design, construction support and through life support. An experienced workforce is critical to its success. While Australia does have a core of experienced engineers working in the combat system area, there are fewer working in hull form design, and hull, mechanical and electrical systems design. Austal has a proven capability in the design of certain classes of warship like patrol boats and one variant of the US Navy Littoral Combat Ship, but the size of this design team is now being reduced. Efforts should be made now to retain the experienced engineers, draftsman and other people currently working in the industry. Until key decisions are made on the design of the future submarine, it is not possible to determine the effort required to design it. The 2011 RAND report estimated that around eight to 12 million man-hours would be needed to design a new submarine, or between 600 to 900 engineers and draftsmen working over 15 years. That time could be shortened if experienced submarine designers were brought into the team. A collaborative effort with a foreign design partner will be required. 07

skills for systemS development Future Submarine Industry Skills Plan / page 66 page 67 / Future Submarine Industry Skills Plan

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This section describes the complex nature of combat and other electronic Science and Technology Organisation and Thales For example, during the Air Warfare Destroyer data system design, development and integration. It also describes the skills have collaborated to evolve towed array sonar project there was an initial requirement for 64 required for the task and the skills available in Australia. The main factors technology from what was fitted to the Oberon missile vertical launch cells. That requirement submarines to the highly capable system now could not be met with the selected F-100 platform associated with productivity and proficiency of the systems workforce are also installed on the Collins. This evolutionary research design, which has 48. This single requirement examined, including qualification, experience, processes, tools and facilities. and development is now continuing on fibre optic could have driven the project to design a brand and fibre laser technologies for next generation new warship, requiring a much larger workforce The complex nature undertakings. Systems development starts with of systems. to design, develop and integrate both the combat and platform management systems. Given that of military systems the definition of top-level requirements and works In its 2011 report into Australia’s submarine top-level requirements can lead to substantial its way through all the systems engineering steps design capabilities, RAND found Australia’s The design, development and integration of combat increases in workforce size, it is imperative that described in section 2. current capability and capacity in this area is also and other electronic data systems in warship systems engineering starts early, so enough time not limited to these specific groups, with other and submarine projects is a complex activity Current warship projects in Australia have involved is available for systems engineers to thoroughly areas of defence (land, air and joint projects) often involving the integration of large numbers the development of a complete system by adapting check the completeness and coherence of the and the non-defence engineering sector having of products from multiple vendors. Layers of existing combat and platform management requirements, and to examine different solutions workforces with skills that could contribute to sub-systems need to be designed, produced and sub-systems and installing them in an existing to find the optimum balance. systems development in naval shipbuilding. integrated to form larger systems, which in turn platform design. From this and experience on the While these external skills can be useful, defence With the current profile of naval shipbuilding integrate into the overall mission system. Typically Collins project we know systems development systems development experts say understanding projects over the next 20 years, at its peak a submarine would incorporate about 70 systems requires a wide range of skilled people including the warship domain is very important. Australia will require just under three times and hundreds of items of equipment. systems architects, naval architects, systems the present workforce to support systems engineers, software, safety, mechanical and The number of people required to successfully Recent major warship projects in Australia development, as shown in Figure 7.1. The electrical engineers, as well as integrated logistics deliver shipbuilding projects can vary substantially have not developed complex systems from the systems workforce numbers are a rough order support specialists. A wide variety of specialty with even small changes in top-level requirements. ground up. Australia’s approach to combat and engineering areas such as safety, security, platform management systems development reliability, availability, maintainability and human ___ has instead been to select existing sub-systems factors engineering is also required. Clearly the Figure 7.1: POSSIBLE workforce to support systems development under the Defence Capability Plan 2012 and then to modify and integrate these to provide complexity of the workforce required reflects the the necessary functional capability. Under this complexity of the activity. off-the-shelf approach, the systems workforce 1800 Work now being done in Australia on Collins, needs relatively fewer people with pure system 1600 design skills combined with a larger number ANZAC Guided Missile Frigate in-service support of people with system architecture and system and upgrade programs, the Landing Helicopter 1400 integration skills. Hardware engineers and Dock and Air Warfare Destroyer construction, 1200 has established a good team of people skilled at software developers are still needed to modify 1000 hardware and software to make it compatible with systems development and support. Australia over the overall architecture, platform services and the last few decades has also grown a group of 800

people proficient in the design and development WORKFORCE arrangements, and to create elements like the 600 computing infrastructure that connects the off- of sub-systems. Companies such as Thales, 400 the-shelf systems. Ultra Electronics Avalon Systems and Jenkins Engineering Defence Systems, often working with 200 The complexity of systems development the Defence Science and Technology Organisation necessitates a mix of skilled people supported 0 have through build and in service support projects 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 2 0 1 by sophisticated tools and processes, as well as developed specialist skills and leading edge 2 0 0 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 2 2 0 2 2 0 2 2 0 2 2 0 2 2 0 2 2 0 2 2 0 2 2 0 2 development and test facilities. Whether Australian technologies in areas such as sonar systems and AWD/LHD future subm arines projects integrate existing sub-systems or develop electronic warfare. An example is the incremental future fri g ates OCVs indigenous combat or platform management development of Australian sonar technology over systems from the ground up, both are non-trivial the last 20 years. During this time the Defence HEAVY LANDI NG CRAFT SUPPLY SHIP Future Submarine Industry Skills Plan / page 68 page 69 / Future Submarine Industry Skills Plan

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of magnitude estimate based on typical ship types new people, but also indirect because of the loss ___ because the top-level requirements for each of productivity and the loss of experienced team Figure 7.2: POSSIBLE SYSTEMS WORKFORCE SIZE ESTIMATES FUTURE SUBMARINE OPTIONS warship have not yet been finalised. The estimate leaders who can predict problems before they has been based on the systems workforce for occur and avert costly mistakes. 900 current projects along with Australian and international expert opinion. The second challenge is the current schedule for 800 naval shipbuilding in Australia that will see three major projects commence in a short timeframe 700 Skills gaps at the end of this decade. As can be seen from 600 In its 2011 study, RAND concluded that: the estimates in Figure 7.1, companies would have a very short period to raise a workforce and 500 “In the area of combat systems, our gap it is not financially viable to recruit such a large 400 analysis suggested that industry and WORKFORCE workforce in the hope they will secure work in the government have sufficient numbers of future. A steadier and more controllable program 300 engineers with the applicable technical and is required to grow the systems workforce. As can management skills, as well as a sizeable 200 be seen from the Air Warfare Destroyer experience, facility base to support future design. In it is not the peak numbers of people required that 100 addition, both industry and government is the challenge, it is the slope of the ramp to reach could take advantage of potential partners 0 1 that peak. 3 5 7 9 1 1 r 1 3 1 5 1 7 1 9 2 1 2 3 2 5 2 7 2 9 in allied countries.” r r r r r r r r r r r r r r Y e a Y e a Y e a Y e a Y e a Y e a The third challenge is to create a pipeline of new Y e a Y e a Y e a Y e a Y e a Y e a Y e a Y e a Y e a Even in the most challenging scenario of a people moving into naval systems development. brand new design for the future submarine, O P T I ON 1 O P T I ON 3 This pipeline allows new graduates to be trained Australia presently has about the right number O P T I ON 2 O P T I ON 4 and mentored, so they grow into the skilled, of experienced people to undertake combat and experienced workforce needed for future platform management systems work, considering submarine and other projects. this project in isolation. However with multiple Skills gap—individuals projects commencing at about the same time, Key decisions including the design option for the the steepness of the ramp up and the level of future submarine and underlying choices regarding The key skills involved in developing and simultaneous demand are a problem. The time sub-systems and production will dramatically integrating combat and platform management gap between the ramp down of the Air Warfare affect the size and time profile of the workforce systems can be broken down into a number Destroyer and Landing Helicopter Dock projects required to undertake systems development across of engineering categories and other skills as and the forecast ramp up exacerbates the problem all the projects. As a result, precise estimates of shown in Figure 7.3. Each of these skill areas for the systems companies, just as it does for the the number of people within each systems skill has further levels of breakdown. For example shipyards. This leads to three key challenges. category needed for each future submarine option, systems engineering breaks down into a further 10 combined with the other projects, is not possible skills areas, but for the purpose of this report the The first is that Australia needs to retain this given the number of variables. discussion will examine skill sets at the higher level. experienced workforce if it is to be in the best position possible at the start of the future Systems companies represented on the expert submarine and other naval shipbuilding projects. industry panel provided estimates for the systems A decline in work over the intervening period as is workforce size and time profile across the options forecast will result in real problems and substantial being considered for the future submarine as shown costs to re-establish this capability, not just in in Figure 7.2. This shows the total number of people terms of workforce numbers, but more because of required with systems skills will vary substantially the loss of proficient and experienced teams. The depending on which option is chosen. cost is both direct in terms of recruiting and training Future Submarine Industry Skills Plan / page 70 page 71 / Future Submarine Industry Skills Plan

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___ and throughout, projects, is critical to facilitating Numerous estimates exist of the number of Figure 7.3: individual key skills areas the transition from acquisition to operational skilled workers in the sector. From a limited acceptance” (ANAO 57, pg.22). survey, RAND determined that approximately 3,000 people work in systems technical disciplines in Key skill areas To successfully deliver the future submarine it is the defence sector. A 2010 study by the Defence clear that irrespective of the option chosen, the Science and Technology Organisation and project will need skilled and experienced systems Defence Materiel Organisation into the systems >> Systems engineering >> Integrated logistics support engineers. To develop that skilled workforce, post integration capacity of Australian industry >> Software engineering >> Supply chain management graduate courses in systems engineering should found that around 3,500 people work in systems continue to be supported by Defence. >> Electrical engineering >> Configuration management development and integration in the defence >> Electronic engineering >> Project management sector. Depending upon which option is chosen Skills gap—workforce size >> Mechanical engineering >> Contract management for the future submarine, Australia either has or is able to develop over time the workforce needed >> Other specialist engineering >> Financial management As stated earlier, the number of skilled people to successfully deliver the combat and platform (e.g. safety, security, reliability, required for the future submarine and other naval management systems required for all planned availability, maintainability, projects depends on many factors such as the naval shipbuilding projects. human factors) chosen design and relative timing of all projects. The number of experienced people available When looking at the demand for these skills at the start is a factor that determines not only across other sectors of the economy, Skills the number of new people to be recruited and Australia, in its 2012 report Building Australia’s trained, but also the time it will take to grow the defence supply capabilities analysed the projected Each of the key skill areas of software, mechanical, Control Project. In the case of University of South workforce required. The rate of workforce growth national demand and supply for a number of electrical and electronic engineering along with a Australia, its Master’s Degree in Military Systems is limited by the number of skilled, experienced major professions. For the skills categories in number of specialist area courses such as safety, Integration has been sponsored through Defence’s people available to mentor new people and lead the systems development domain, its analysis security, reliability, availability, maintainability, Skilling Australia’s Defence Industry program. inexperienced teams. concluded a surplus would exist for those and human factors engineering are offered The other post graduate program in systems categorised as engineering professionals. through undergraduate and post graduate study engineering is through the Royal Melbourne To forecast demand, major systems companies in most tertiary institutions in Australia. Training Institute of Technology. Typically, student numbers in Australia provided estimates of the number Regardless of the design option chosen for the in integrated logistics support, supply chain are small in comparison to undergraduate degrees of people required to work on the development, future submarine, the lower end estimate means management and configuration management are (electrical, civil, mechanical etc.). implementation and integration of the combat and Australia needs at least to retain the current also widely offered as part of undergraduate or platform systems in future submarine projects. experienced systems workforce. The upper end Systems engineering plays a critical role in the post graduate degrees, or stand alone courses. The estimates range from a peak workforce of estimate means Defence and industry need to plan development of large complex systems for defence about 250 people in the case of a military off-the- and control the gradual build up and professional In contrast, education in systems engineering is projects. The Australian National Audit Office noted shelf option to over 800 people in the case of a new development of this workforce to create the not offered on such a wide scale. At the graduate in its report into acceptance into service of Navy design in Australia. Approximately 60 per cent of experienced, proficient teams required for the level, only The University of Queensland, the capability, that “successful delivery is dependent this workforce consists of people with systems, naval shipbuilding projects planned. University of South Australia and the University upon effective organisational structures, high software, hardware and other technical skills and of NSW at the Australian Defence Force standards of management cooperation and 30 per cent with project management, financial Proficiency and productivity Academy have regular programs. The University coordinated effort, supported by adherence to the and other project support skills. A variety of of Queensland’s Master’s Degree in Systems best systems engineering practices available” assumptions underpin these estimates. Naturally, In the design, development and integration of Engineering was sponsored through a Defence (ANAO 57, pg.17). The ANAO report also said that the time allowed for the systems development combat and platform systems, the concepts Strategic Industry Development Agreement, adopting a good systems engineering process effort has a major impact on the peak numbers of proficiency and productivity are difficult to initially for the High Frequency Modernisation to reach agreement on top level requirements required, with a shorter duration requiring a quantitatively measure as no two projects are Project and then the Airborne Early Warning and and how to assess compliance “at the outset of, much larger peak of people working in this area. the same. Each project has its own challenges. Future Submarine Industry Skills Plan / page 72 page 73 / Future Submarine Industry Skills Plan

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For example the systems development task on Air What is clear is that proficiency in combat Warfare Destroyer involved integrating the latest and platform management system design, variant of the US Navy’s Aegis Combat System with development and integration depends upon the Case study: a set of sensor and weapons systems selected by whole enterprise of people, tools, processes Early Selection of Combat System and Combat Australia from local and international suppliers. and facilities. Qualitatively a number of factors System Integrator for Air Warfare Destroyer This effort required a different number and range such as well-defined requirements, the early of people as compared to the integration of the involvement of industry, the retention of key The Air Warfare Destroyer combat system architecture was selected in 2004 based on the Aegis system in either a US Navy Arleigh Burke personnel, the use of simulation, and the early US Navy’s Aegis Combat System and a tender was released for the combat system integrator class destroyer or the Spanish Armada F-100 adoption of organisational structures, processes role in the same year. This enabled the early selection of Raytheon Australia in 2005 and its frigates, which have different sensors and tools are major factors in enabling a early involvement in the refinement of system requirements. Orders for long lead items for and weapons, and associated interfaces. productive systems workforce. Aegis were also placed in 2005. Defining the combat system architecture early provided a stable foundation for other ship design elements to be developed. Early selection of key elements within the architecture, such as Aegis and missile types, provided a solid basis for the whole Air Warfare Destroyer design sequence and is a primary reason for the good progress that has been achieved with combat system development on the project. A stable architecture supported better equipment selection, created harmony in the design development process, and avoided the cycle of clashes that occur when trying to develop combat and platform system designs simultaneously. In the case of the combat system architecture, there has been little change since 2007 because the early start allowed time for the comprehensive analysis of requirements and detailed development of the architecture. Principles underpinning the development of the architecture were:

>> minimise total ownership cost. >> proceed with manageable risk. >> use proven off-the-shelf equipment. >> provide interoperability with Australian Defence Force, US Navy and coalition forces. >> minimise crewing. >> support technology change and capability growth. >> maintain the verification boundary of existing systems: sensor, command and control and weapons. >> Aegis maintains the master track database. >> leverage off existing Australian Defence Force infrastructure. Future Submarine Industry Skills Plan / page 74 page 75 / Future Submarine Industry Skills Plan

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As can be seen from the Air Warfare Destroyer and systems analysis, in addition to domain early in a project leads to large cost savings in to initial capital cost, not realising the longer term case study, one of the critical success factors for knowledge. These are the sorts of people who later phases. In a May 2010 report by the US cost benefit derived from better up front decisions. systems development is the early engagement commenced the Air Warfare Destroyer combat Government Accountability Office, it was noted of industry, which allowed enough time for a system integration task in 2005. Moreover, it was that successful projects ‘pursued capabilities Systems Development comprehensive systems engineering process. the same core team that had worked on the Collins through evolutionary or incremental acquisition and Test Facilities The key industry people needed at this early stage replacement combat system that transitioned strategies, had clear and well-defined include the chief engineer, chief system architect, to the new project. The benefit of having an requirements, leveraged mature technologies and Australia has many facilities devoted to the design, and senior system engineers (typically the people established proven team is much greater than production techniques, and established realistic development and integration of complex military who later lead the various project integrated generating a new team of experienced people. cost and schedule estimates that accounted for systems. BAE Systems, Boeing, Lockheed Martin, product teams—above water warfare, undersea The team comes with people who know each risk’. Cost savings made from improvements in Raytheon, SAAB Systems and Thales, along with warfare, communications, etc.). other—teamwork and proven tools and processes. early requirements definition are not marginal many small to medium enterprises, have facilities improvements but are substantial savings in the across Australia supporting all aspects of systems These people need skill and considerable Throughout systems and software engineering overall project budget, as well as greatly reducing development, upgrade and maintenance. experience in systems architecture, system literature, it has been well documented that the risk of schedule overruns. requirements development and allocation, understanding and documenting requirements On recent projects such as the Air Warfare Retaining experienced engineers and integrated Destroyer and the ANZAC anti-ship missile product team leaders also drives productivity defence upgrade, these facilities played a critical improvement in a systems workforce. The project role in systems development. These facilities and technical knowledge these people build up allow system developers to progressively test their over time means practical plans are developed, designs and fix faults prior to installation on the previously seen problems avoided and problems ship. Doing this work after equipment is installed encountered quickly solved. This lack of rework on the ship is very expensive, and any problems and overall efficiency means substantial cost delay the entire project. So savings in time and savings and fewer cost blowouts. The need to money by land-based testing are considerable. retain key staff and prevent the loss of corporate knowledge was a lesson learned from the Collins and other naval projects. The improved use of modelling and simulation to evaluate requirements and technology choices early in a project enables good decisions to be made about system architecture and sub-system selection. Simulation of combat and platform system interfaces and performance characteristics at the time requirements are still being refined provides a much better understanding of the risk and benefit of each variable and trade off, and allows the development of mature requirements and a stable systems architecture. In addition, modelling and simulation provides a cost efficient means of verifying key requirements that might otherwise be costly or dangerous to actually test. Some projects do not invest in modelling and simulation to support design development due Future Submarine Industry Skills Plan / page 76 page 77 / Future Submarine Industry Skills Plan

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Often in the past, land-based test facilities have model that measures, guides and improves an These people represent the core of the naval Summary been built at the beginning of a project using the organisation’s performance, such as Capability systems workforce in Australia, they are skilled Combat and other electronic data system design, equipment from the last ship. The facility is then Maturity Model Integration, benefits its systems and experienced. If nothing is done to manage development and integration is a complex activity dismantled at some interim point in the project so capability, which in turn improves overall the shipbuilding workload, Australia may need that requires a range of skilled, experienced people the equipment can be sent to the shipyard. This project performance. to build the workforce to meet demand as outlined to be successful. Australia has about 600 people leaves the project without a support facility for in Figure 7.1. As stated previously, it is very As outlined in section 6, tools play a critical working in current naval shipbuilding projects the final ships, and Defence without a facility for important to retain experienced systems engineers role in the successful design, development and with more people working on naval systems through life support, maintenance and upgrades. and architects to lead systems development for integration of systems. Tools are required to sustainment. These individuals have the skills and Unless it is a very basic system or there are only future projects. capture and trace top-level requirements through experience necessary for the design, development one or two ships, the best approach is to include to detailed design decisions, while other tools Also important is the retention of experienced and integration of large, complex naval systems. in the project scope dedicated equipment for assist in the design and documentation of the teams. The transition of a proven team from It takes time to grow individual skills and more a land based test facility that will support both system architecture as well as software design the Collins replacement combat system project time to grow proficient teams. acquisition and sustainment. With careful design, and development. Considerable time is spent directly to the Air Warfare Destroyer combat the cost is relatively small in proportion to overall The key to systems development for the future when new teams are established in both setting system meant that from the outset, the team had project budget. submarine is to retain this workforce, preserve up a workable tool infrastructure and on people momentum and was anticipating and avoiding established teams (tools, processes and facilities), Until decisions are made regarding systems learning to use new tools. This takes time in problems. What this experience shows was the and engage the mission systems integrator early design for future submarine, it is not possible to the critical early stage of a project, which can speed and efficiency of a proven team. If the task to help refine requirements and create the systems estimate the scale and precise nature of facilities be avoided by engaging established teams. To had been undertaken by a newly formed team, architecture. The extent to which this workforce required to support systems development. What improve productivity in this area, Defence should it would have required more time and budget might need to grow will be dependent on decisions is clear is that Australia already has substantial leverage off proven teams, tools, processes and because of low productivity and time spent by the about the design of future submarine and timing infrastructure that should support this work along accreditations in planning the overall scheme of team working out roles and dependencies. of other naval projects. with the skills and experience to adapt and extend naval projects. them to meet the requirements of the future submarine project. Experience levels In the area of systems design and development, Processes and tools it is especially important that project directors, Proven processes and tools underpin team integrated product team leaders, senior systems productivity and are a cornerstone of successful engineers and system architects have considerable systems development. Organisations involved in experience in the development of large, complex the design, development and integration of combat systems. RAND in several studies suggests it takes and platform management systems require 8 to 10 years working in naval systems to have the well-defined processes, with a matching tool set. experience required to perform these roles. The ability to continuously improve processes As outlined in the workforce section above, through the adoption of a framework such as estimates of the number of systems people Capability Maturity Model Integration has been currently working in the defence sector range recognised by US Department of Defense, which between 3,000 to 3,500 people. Of this number, mandates a Capability Maturity Model Integration there are about 600 currently working on systems Level 3. Organisations should invest in improving for the new Air Warfare Destroyers and Landing processes to improve systems development Helicopter Dock ships. There are other people effectiveness and efficiency. Recent studies have working to maintain and upgrade in-service shown that organisational commitment to a systems on the Collins and ANZAC warships.

08

SHIPYARD CAPACITY AND SKILLS Future Submarine Industry Skills Plan / page 82 page 83 / Future Submarine Industry Skills Plan

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This section provides an assessment of the four major Australian naval In addition to assembling and completing the maintenance activities. The total site area is shipyards—ASC in Adelaide, Austal in Henderson, Western Australia, BAE ships, the shipyard is building nine of the 31 blocks 200,000m² and facilities include 14,000m² of covered Systems in Melbourne and Forgacs in Newcastle. As well as an overview of required for each ship at its shipyard in Osborne, fabrication area, 8,500m² of office space and South Australia. The remaining blocks are around 5,000m² of covered warehousing. The main the facilities, the capacity and capability of each shipyard is assessed in the subcontracted to other shipyards. construction point is the hull outfitting hall which context of building the future submarine and the other naval projects is capable of building two submarines in tandem. ASC is Australia’s largest naval shipbuilding in the 2009 Defence White Paper and 2012 Defence Capability Plan. It also Launching and retrieval is carried out using the company, employing over 2,400 personnel and covers the construction of an Antarctic support vessel, referred to as dedicated 5,000 tonne ship-lift on the ASC site. contractors across three facilities in South an icebreaker, which is another potential Australian Government project. The shipyard was purpose designed for submarine Australia and Western Australia, including more construction but its layout and facilities make it It also provides an in-depth analysis of the current level of skills of the than 380 engineering and technical specialists. workforce employed in the shipyards. suited to integration of smaller surface vessels. ASC’s Osborne facility, located 20 kilometres Although the ship-lift limits the size of vessel that north-west of central Adelaide, is composed can be launched, production of even the largest The information presented here has been drawn ramps up in preparation for future shipbuilding of two shipyards: ASC North and ASC South sized blocks required by the vessels in the Defence from an analysis prepared in late 2012 for the projects. Calculations of the minimum numbers (Figure 8.1). The two shipyards are separated Capability Plan is possible. Future Submarine Industry Skills Plan by First required to keep that experience in the shipyards by the Common User Facility—part of Techport Marine International, a consultancy group from the and potential rates of growth while maintaining The newer ASC South has a total site area of Australia, which is owned and operated by the United Kingdom that provides specialist services appropriate experience levels are made. Given the 140,000m² and includes 11,000m² of covered Government of South Australia. to the marine industry. The company’s expertise current labour market, the shipyard companies fabrication area, 4,000m² of office space and includes shipyard benchmarking, advising on reported that they see no issues in achieving a ASC North was where the Collins class submarines over 2,200m² of covered warehouse. The site improvements to existing shipyards, designing new reasonable rate of growth. were built. It now conducts Collins full cycle docking was purpose designed for the construction shipyards, and shipyard performance improvement ___ programs. It has previously conducted shipbuilding Overview of the major naval Figure 8.1: ASC South (left), Common User Facility (middle) and ASC North (right), Adelaide studies for the Defence Materiel Organisation, shipyards in Australia the United States Department of Defense, the United Kingdom Ministry of Defence, most recently ASC the Canadian Government, as well as many The Australian Submarine Corporation began shipbuilding companies around the world. operations in 1985 when Kockums became part The data collected by the study shows that the of a joint venture with the Australian branch of four major Australian shipyards have the capacity Chicago Bridge & Iron, Wormald International and to build the ships outlined in the White Paper and the Australian Industry Development Corporation Defence Capability Plan, with some investment to construct Collins class submarines. In 1987, required to develop launch facilities for the largest it was selected to design and build the Collins supply ships. It also shows the shipyard workforce, class, delivering six boats between 1996 and currently totalling around 3,500 people, generally 2003 before commencing a 25-year through-life has the range of skills to build the ships required support contract. The company was subsequently for the surface fleet, although there are a number nationalised in April 2000 and in 2004, changed of skills groups that would need to grow. its name to ASC to reflect its position as a supplier of naval combat vessels, in addition Above all, First Marine International emphasise to its original heritage of being a specialist the need to retain experienced workers in the submarine supplier and maintainer. In 2005, shipyards, both for maintaining skills in the ASC was selected as shipbuilder for the three- shipyard and for a mentoring role as the workforce ship Hobart class Air Warfare Destroyer project. Future Submarine Industry Skills Plan / page 84 page 85 / Future Submarine Industry Skills Plan

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of the Air Warfare Destroyer and is therefore employs 5,000 staff in Australia, the United States, ___ well suited to similarly complex vessels in the Asia, Europe, the Caribbean and the Middle East. Figure 8.2: Austal’s main shipbuilding site at Henderson, Western Australia Defence Capability Plan such as the frigate Its main products include passenger and freight and the offshore combatant vessel. Similarly to ferries, luxury yachts and patrol boats. Austal ASC North, production of even the largest sized has designed both the US Navy’s Independence blocks is possible due to the size of the buildings class Littoral Combat Ship and the US Navy and and capacity of the cranes. Critically, the site is Marines Joint High Speed Vessel and is currently supported by access to the Common User Facility, constructing these at its facility in Mobile, which has the main construction, launch and Alabama, USA. wet berth facilities capable of accommodating Austal’s company headquarters and Australian all vessels in the Defence Capability Plan except shipyard operations are located in Henderson, the largest supply ships. The shiplift has been Western Australia. This facility does defence designed with expansion in mind, and can and commercial work, employing around 500 be lengthened to carry the larger supply and people. Figure 8.2 shows its main shipbuilding Landing Helicopter Dock ships. site. In addition to this, there is a second facility Of particular relevance to the future submarine approximately 500 metres along the waterfront. project is Deep Blue Tech, which is an ASC-owned The facility and its equipment are well suited to company focused on submarine design research covered construction and outfitting of vessels and development. There are currently about 50 in their primary markets such as aluminium people employed to create concept designs that patrol boats and large aluminium high speed have been used to investigate capabilities that may ferries. Sub-assembly bays and assembly bays potentially be used on the future submarine, to are contiguous and the ground transfer system identify the technologies required and to acquire delivers vessels directly to the launch facility. the associated technical knowledge. The Henderson shipyard operations cover a total ASC also operates a shipyard in Henderson, Austal also built the 14 Armidale class patrol boats BAE Systems Australia employs 5,600 people in area of over 70,000m². Around 14,000m² of covered Western Australia, currently dedicated to (57 metres) for the Royal Australian Navy between its resources, aerospace, land and integrated production area is available, over 2,000m² of office submarine in-service support. This could 2004 and 2007, and are currently constructing systems, defence logistics, and maritime sectors. space and over 1,000m² of under-cover storage. potentially be used as a construction point to eight Cape class patrol boats for Australian With over 1,300 people, the maritime division is The site has a marine railway for launching and increase capacity for a number of ship types in Customs and Border Protection Services. headquartered in BAE Systems’ Williamstown a pier for wet berthing. the Defence Capability Plan. Shipyard, Melbourne, where just under 1,000 of There is a second facility which was modified to BAE Systems these employees are located. The division’s other Austal provide additional sub-assembly and assembly locations are a smaller shipyard in Henderson, BAE Systems is a global defence company bays with similar dimensions to those in the Western Australia, and a design office in Sydney, Austal is a global defence prime contractor. employing around 85,000 people worldwide. main site, as well as additional launching, wet New South Wales. These employ around 270 and Founded in 1988 and listed on the Australian Stock Products and services cover air, land and berthing and office facilities. It is not currently 70 employees respectively. Exchange in 1998, Austal specialises in the design, naval forces, as well as advanced electronics, used for shipbuilding. construction and maintenance of high speed security, information technology, and support BAE Systems acquired the Williamstown vessels for defence and commercial purposes. At their Australian facilities, Austal have built services. Both submarines and naval surface shipyard in January 2008 when it purchased Austal has a global footprint with strategically nearly 250 vessels in its 25 year history. While its ships are designed, constructed and supported the assets of Tenix Defence. The 115,000m² site, located design, construction and service facilities main work has been with large fast ferries, for within the group. The group is represented shown in Figure 8.3, is located in the northern around the world serving its three business example the 113 metre Leonora Christina for the in Australia by BAE Systems Australia, which part of Port Phillip Bay, adjacent to Port of segments: ships, systems and support and Nordic Ferry Services that was launched in 2011, includes an indigenous shipbuilding capability. Melbourne commercial operations. Future Submarine Industry Skills Plan / page 86 page 87 / Future Submarine Industry Skills Plan

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______Figure 8.3: BAE Williamstown shipyard, Melbourne Figure 8.4: Forgacs Tomago (left) and Fitzroy Street (right) shipyards, Newcastle

Examples of construction undertaken by the Forgacs has two principal shipbuilding sites Melbourne shipyard include the 118 metre ANZAC near Newcastle. The first is Tomago shipyard, class frigates for the Royal Australian Navy and a 73,000m² site about 10 kilometres north-west The facilities make the Williamstown shipyard construction where hulls are consolidated and the smaller Protector class Offshore Patrol Vessel of Newcastle. The second is Fitzroy Street, a ideally suited to the construction of small to systems integrated on a level surface before (85 metres) for the Royal New Zealand Navy. Most 38,000m² site in Carrington leased from the medium-sized frigates or similar complex vessels. launch. recently, BAE Systems has manufactured blocks NSW Government. Both shipyards are shown The facility was recently upgraded to construct There are 25,000m² of covered production area, for the Air Warfare Destroyer project and is now in Figure 8.4. Air Warfare Destroyer blocks and to complete the a similar amount of office space and 5,000m² of integrating the superstructure and systems in the Landing Helicopter Dock ships. The upgrades The two sites provide a total of about 15,000m² under-cover storage. Several piers and wharfs first Landing Helicopter Dock hull that arrived included new steel production workshops, block covered production area, 4,000m² of office space provide block load-out and wet berthing facilities from Spain in late 2012. construction points and blast and paint facilities. and 3,000m² of under-cover storage. However, part for vessels after launch. of the covered block assembly area is provided by The shipyard’s main construction point is an Forgacs BAE Systems Australia also operates a shipyard temporary shelters, which is not ideal, and much inclined berth, which is not optimal in the context located within the Australian Marine Complex in The Forgacs Group is Australia’s largest of the equipment is dated. of modern ship construction. The slipway could Henderson, Western Australia, which could be privately owned ship construction and repair be modified to accommodate the wider beams The site at Tomago has two land-level construction used as another construction point to increase company, serving commercial and naval markets (18 metres) of the large vessels. If this was done, points using either a hydraulic tipping side launch capacity. This site has a ship lift, dry berths and in a number of locations. The company has with the exception of the submarine and the or tapered way side launch, neither of which is a number of fabrication facilities which have been facilities in Newcastle, Sydney, Brisbane and supply ship, all vessels in the Defence Capability optimal in the context of modern ship construction. used for the refit of ANZAC class frigates, the refit Gladstone. Forgacs balances its involvement Plan could be constructed on the inclined ways. Both would require re-commissioning and of Collins class submarines, and the production in the commercial shipping and engineering However, there would be a productivity penalty dredging may be required. This type of launch of mast modules for Canberra class Landing sectors with defence contracts. The Forgacs when compared to a more modern approach to method means the shipyard is unsuitable for Group employs about 800 people in Newcastle Helicopter Dock ships. the integration of submarines and frigates. on the Air Warfare Destroyer project. Future Submarine Industry Skills Plan / page 88 page 89 / Future Submarine Industry Skills Plan

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There are also air and water draft restrictions. The 95 metre Aurora Australis, the current supply Approach to construction The analysis considers the capacity of the shipyard With some investment in facilities, the shipyard vessel for the Australian Antarctic Division, was companies to build each vessel type in the Defence Although some vessels in the Defence Capability could potentially be used for the integration built and launched at the Tomago shipyard in Capability Plan in isolation, and does not evaluate Plan are most suited to construction in a of icebreakers, heavy landing craft and supply 1990, and the same shipyard built the 41 metre the effects of the shipyards being involved in more single shipyard, it is possible that a dispersed ships. There are no wet berths but a shipping Seafaris super yacht in 2006. While it only fitted than one project at a time, be it construction of construction plan would be adopted for the berth provides block load out capability for all out the first vessel after it was built in Italy, the new vessels or sustainment of the current fleet. upcoming projects, similar to that currently vessel types. Fitzroy Street shipyard built the other five of the six Defence, being aware of the capabilities of each applied to the Air Warfare Destroyer. Therefore Huon class Minehunters (53 metres) from 1994 to shipyard as outlined by this report, would have the The Fitzroy Street shipyard has a construction each shipyard may contribute to a ship 2003. At present, Forgacs is constructing 42 hull role of managing the schedule of the naval projects hall suitable for the integration of the small patrol construction project in one of three ways: as a blocks for the Air Warfare Destroyer program, split so that the shipyards are not overloaded and can boats as well as a marine railway for launching. block builder, as a hull integrator, or as a single between the Tomago and Fitzroy Street shipyards. use their facilities and workforce efficiently. While it does not have suitable facilities for shipyard that builds blocks and integrates them. constructing and launching the other vessel types First Marine International determined that the The basic assumptions regarding the construction in the Defence Capability Plan, the shipyard is The Defence Capability Plan 2012 collective shipyard facilities assessed in this report of the vessels in the Defence Capability Plan that capable of block construction and load out for all have the capability to build each of the vessel types To determine the current and potential capacity have guided the approach to the capacity and skills vessel types. A wharf provides berths for the patrol in the Defence Capability Plan. This is subject to and capability of Australian shipyards, First Marine analysis are as follows: boats and vessels launched at Tomago. In addition, International initially reviewed the naval projects a suitable launch position being developed for the there are land and waterfront facilities on the outlined in the 2009 White Paper and Defence >> For surface ships, the general approach to large supply ship, for example through upgrading adjacent ship repair facility, which could potentially Capability Plan 2012 and made an estimate of the construction would be similar to Air Warfare facilities at Adelaide, Melbourne or Newcastle, be used. The repair facilities at Fitzroy Street also types of warships that may be built for the Royal Destroyer with limited grand blocking and assumes that some specialist equipment is offer some potential, including wet berths, offices Australian Navy. While the icebreaker is not a >> For submarines, the general approach purchased and that some aspects of production and covered and open storage. Defence project, it is an Australian Government would be similar to Collins are subcontracted. Figure 8.5 provides a high project and so has been included in this study level summary of the shipyards’ capabilities. The facilities and equipment make the Forgacs >> There would be high levels of advanced as it is of relevance to the shipbuilding industry. shipyards suited to roles such as block building outfitting on blocks and integration of lower complexity vessels. Once estimates had been made of the vessel >> The current production technology, and the types required in the future, the analysis then Current capacity is either constrained by office and processes and practices used to support determined the capacity and capability of warehouse or by blast and paint facilities and the production in the shipyards would remain Australian shipyards to build those vessels, construction point. With investment, it is possible the same as they are taking account of: vessel size; the inherent to relieve current painting and construction >> Shipyard productivity is based on current complexity of design; construction methods point capacity restrictions, but it would be performance rather than potential performance for those vessels; shipyard infrastructure, relatively simple to increase capacity restricted by >> Single shift working for 48 weeks a year work practices and productivity. warehouse and office space by finding additional >> 37.5 working hours per person week for areas either on or off-site. Forgacs also operates The schedule for producing the projects in the 48 weeks a year, equating to 1,800 working an additional site at Cairncross in Queensland, Defence Capability Plan will have a significant hours per person per year. which includes a 267 x 35 metre graving dock. influence on industry efficiency, the ability of the >> The ratio of engineering and support staff This has potential for construction of a number shipyards to deliver, and on project cost. Design to production workers would be typical for of ship types including the larger supply ship. lead times, the maturity of a ship’s design at the naval construction, but varies by product type Plans for the redevelopment of this site have been start of construction, the viable rate of workforce with more complex vessels requiring a high produced. Forgacs Engineering also has several build-up, and the further development of industry proportion of shipyard engineering staff. machine shop facilities in the area that could skills all need to be taken into account in the supplement the capabilities there. Defence Capability Plan schedule. Future Submarine Industry Skills Plan / page 90 page 91 / Future Submarine Industry Skills Plan

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___ such facilities would either need to be developed Three aspects of shipyard productivity have been FIGURE 8.5: summary of combined enterprise facilities or the work subcontracted as is already being done considered: core productivity, rate of improvement by some shipyards. in core productivity, and first-of-class performance Capacity model Total combined enterprise facilities available by ship type drop-off related to initial shipyard productivity parameter The facilities examined only have a small number Frigate Heavy Submarine Offshore Supply Icebreaker in building a series of vessels. Core productivity Landing Patrol Ship of post-launch dry-docking options. Depending is the best productivity a shipyard can achieve Craft Boat on the build strategy employed, this may not be with its current production technology and a Preparation and sub 11,729 11,729 11,729 11,729 11,729 11,729 a problem as there is enough capacity within mature design. Shipyards do not always work assembly area (m²) Australia as a whole to deal with any requirements. at this level of productivity because first-of- Unit and blocking area (m²) 42,904 37,334 38,156 42,934 42,934 42,934 In addition to absolute constraints, there are class effects, interference between contracts, Blast and paint footprints 12 17 19 15 8 15 characteristics of the design and layout of a facilities development and other disruptions cause Current construction points 1.5 5 2 4 0 2 shipyard which determine how efficiently it could actual productivity to be lower. First-of-class be used for a particular ship type. Some are performance drop-off is the degree to which actual Potential construction 2.5 9 2 5.5 1 4.5 flexible enough to produce vessels which may productivity drops off when the shipyard builds points not be best suited to the facility. For example, a a new first-of-class ship. Starting a new class Wet berth positions 4 15 8 10 3 10 shipyard more suited to building smaller more of vessel generally causes a decline in shipyard (exc. double banking) complex vessels could take on blocks for larger, productivity due to: immature and complex Post-launch dry 1 6 2 3 0 2 simpler vessels. This may be necessary to meet designs, ineffective planning, decreased worker docking positions the needs of the Government shipbuilding program efficiency, and lack of production optimisation. but the shipyards would not necessarily be Low levels of shipyard experience with respect Current covered 19,381 19,381 19,381 19,381 19,381 19,381 operating at their most productive. to the vessel type, less effective pre-production warehouse area (m²) processes, low levels of design maturity, and In addition to the sites included in the capacity Current office area (m²) 41,528 41,528 41,528 41,528 41,528 41,528 complex vessels tend to result in higher analysis, there are other facilities available around first-of-class performance drop-offs. the country which could support integration or Existing launch facility dimensions indicate that at expenditure is often required on naval projects. other aspects of naval ship construction projects. Core productivity is influenced by the level of least one suitable building site currently exists for To do so would introduce too many possibly Such sites would include Strategic Marine and shipbuilding technology employed—the ‘best each vessel type, with the possible exception of the controversial and subjective variables into a the Common User Facility at Henderson, Western practice rating’, which is explained below—the supply ship. The assumed dimensions and launch clinical analysis of current capability. Exceptions Australia, Incat in Tasmania, and others. skills of the workforce and the suitability of weight of the supply ship exceed the capacity of to this are a relatively minor modification to the product for the facilities. Figure 8.6 below existing launch points and the suitability of two the building berth in Williamstown and the re- Productivity shows the relationship between productivity and construction sites at Forgacs Newcastle requires commissioning of the side launch in Tomago. overall best practice rating by principal product Productivity has a significant influence on the further investigation. Accordingly, the supply ship These have been considered in the potential type, which has been derived from First Marine capacity and capability of a shipyard. It affects design will need to consider the existing launch capacity analysis to provide the ability to build International’s global benchmarking studies. the man-hours required to produce each vessel capabilities or alternatively, the capability of the frigates, icebreakers and the heavy landing craft Shipyards that are lean and make effective use and the calendar time required to produce whole launch point will need to be developed to suit the in Williamstown and the supply ship in Tomago. of their technology tend to fall on or below the vessels and their interim products including ship. There are other facilities in Australia which appropriate trend line, while others tend to be Cutting facilities for heavier plate may be blocks. The measure of shipyard productivity may be suitable, including the Common User above the line. required depending on the sites chosen to used in the study is man-hours per compensated Facility at either Osborne in South Australia or construct some vessels. Some sites lack gross tonne (see Annex C for an explanation The best practice rating is determined through Henderson in Western Australia, or the graving warehouse and office space, particularly when an of these terms). The man-hours used in the measurement using the First Marine International dock at Cairncross, Brisbane. integration role is being considered although this calculation are the hours of the total shipyard shipyard benchmarking system. The system The First Marine International analysis did not could be overcome by creating more space onsite workforce, including direct, indirect and contains 83 elements of shipbuilding technology evaluate details about investments to increase or sourcing local offsite space. Outfitting facilities subcontractors. It is therefore a measure grouped into 10 functional areas of shipbuilding the number of berths, blast and paint footprints, such as electrical and electronic workshops and of the efficiency of the whole organisation. practice which cover the pre-production, and unit and block assembly areas, although such pipe manufacturing workshops limit capacity so Future Submarine Industry Skills Plan / page 92 page 93 / Future Submarine Industry Skills Plan

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______Figure 8.6: best practice and productivity FIGURE 8.7: productivity assumptions

Vessel type Number in Average first- Average Average U.S. MID 1990S series of-class productivity on productivity naval builders average (validation required) performance first of class assumed for 80 drop-off (hrs/CGT) typical series EC BELOW AVERAGE(1992) assumed length (hrs/CGT) U.S. AVERAGE 70 SMALL COMMERCIAL 1999/2000 ASSUMED SHIPYARDS LARGE YARDS AUSTRALIAN Submarine 12 93% 135 62 RANGE EC BELOW 60 AVERAGE(1992) U.S. AVERAGE 2004 Frigate 8 45% 96 69

Offshore 50 20 45% 96 62 EC AVERAGE combatant SKOREA(1992) (1992) EC AVERAGE(1992) 40 Supply ship 2 40% 93 84 FINLAND(1992) EC ABOVE AVERAGE(1992) Heavy landing 30 EC AVERAGE(2000) craft 6 33% 92 74 EC ABOVE AVERAGE(1992) JAPAN SKOREA(1999) 20 JAPAN SMALL (1992) Icebreaker 1 50% 100 97 (1992) EC ABOVE AVERAGE(2000) 10 JAPAN(1999)

CORE PRODUCTIVITY (MANHOURS PER CGT) 0 To summarise, requirements of Australian are currently involved in submarine maintenance 1 2 3 4 shipyard companies to achieve good levels as they are likely to be involved in construction of

OVERALL BEST PRACTICE RATING of productivity in their work include: the future submarines. >> a skilled experienced workforce: efforts must be In addition to having the necessary qualifications made to retain those workers with appropriate and training, ideally a proportion of people in each production and supporting processes. The technology, a core productivity of between 60 and skills and experience in shipbuilding to act as skill group need to have experience with the type benchmarking system describes five levels of best 70 man-hours per compensated gross tonne was a core group to drive productivity gains of vessel to be constructed. The proportion and practice use in each element of each group. In assumed for the basis of the study, although there >> current technology allied with efficient work the degree of experience required vary by skill broad terms, the levels correspond to the state of are examples of Australian shipyards achieving practices in the shipyards: shipyards must group. For example engineers and production development of leading shipyards at different times higher levels of productivity on some ship types. invest in infrastructure managers should have a high level of relevant over the last 30 years. Those shipyards that are The capacity model uses the average productivity experience, however very little vessel-specific less advanced remain at the level of technology of >> longer production runs: productivity is inevitably achieved over a series as a basis for the estimate experience is required in production support an earlier period. On the basis of interviews and low when a new design is built in the shipyard of capacity, and core productivity would not roles such as rigging or staging. The requirements inspections carried out during the survey, a “level but with a longer production run of at least four normally be achieved until at least the fourth that have been assumed in this study for the of technology” mark is assigned to each element. vessels and a stable design, productivity will vessel in a series with a stable design. As stated minimum number of years of experience The scores are aggregated, first, for the individual reach core levels. above, a number of factors influence the degree and the minimum proportion of experienced groups and, second, for the whole shipyard. people required in each skill group are shown of performance drop off and therefore different Current workforce numbers While the four Australian shipyards were not degrees of first-of-class performance drop-off in the second and third columns of Figure 8.8. in Australian shipyards formally benchmarked to this level of detail as part have been assumed for each shipyard depending They were developed by First Marine International of this study, First Marine International estimated on these factors. It has also been assumed that a Information on the workforce at the four shipyards, in conjunction with experienced shipyard senior the general level of technology applied during continuous performance improvement program relating to current numbers, proportion of managers, and are considered to represent the the shipyard visits. The estimated range of best will result in core productivity improving at a rate employees with vocational qualifications, and minimum requirements for mature shipyards practice rating for all the Australian shipyards is of two per cent a year in all shipyards over the life levels of shipbuilding experience, be it commercial, in a steady state with good productivity. shown on the figure above. By considering this, of the series. The assumptions made have been naval or submarine, was gathered by First Marine The numbers of people listed as being experienced the results of direct productivity calculations, their averaged across the shipyards and vessels and International, aggregated for the combined have at least the numbers of years’ experience perception of the degree of leanness and the use of are presented in Figure 8.7. enterprise and is presented in Figure 8.8. The listed in column three of the chart. numbers include the workforce at ASC North who Future Submarine Industry Skills Plan / page 94 page 95 / Future Submarine Industry Skills Plan

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___ Workforce profile It is only in this small set of skills groups that FIGURE 8.8: workforce size and experience the level of experienced personnel exceeds the First Marine International has found that, while proportion regarded as the minimum for effective Total Minimum Minimum Actual number of the existing proportion of engineering employees and efficient production. For many groups, current workforce number of proportion employees with the across the shipyards can support the construction years of experienced minimum length of experience levels are insufficient to maintain the of all vessels in the Defence Capability Plan, experience personnel experience required minimum capability described in workforce growth required required the ratio varies considerably between shipyards Naval Submarine (%) section, even though the absolute numbers may be shipbuilding construction and the assessment does not account for the above what is needed. CEO and senior management 37 10 50% 21 10 additional workload associated with dispersed build strategies. There is, however, insufficient Finance and accounting 82 2 25% 38 22 experience currently in the engineering workforce Production workforce Sales and marketing, and 34 4 50% 14 7 employed in the shipyards to build the submarines communication Painting, sheet metal and joinery are generally and larger surface combatants with a reasonable subcontracted and the low capacity for these in Project management, commercial 152 8 50% 53 36 level of productivity. and contract management terms of in-house employees is to be expected. This is also because current shipbuilding projects Purchasing and supply chain 100 5 25% 19 11 Qualification levels were found to be appropriate across the shipyards and there are practically are just starting to reach the outfitting phase. Estimating, planning, production 341 8 50% 87 36 Excluding these, the lowest capacity groups are and cost control no instances of experienced employees that remain unqualified. All of the shipyards have good electricians, boiler makers and pipe welders, Human resources and training 66 4 25% 16 1 methods of understanding the skills requirements shortages of which are supported by interviews General clerical 162 2 0% 43 63 of their business and maintaining qualifications with the shipyards. Production management 364 10 75% 125 87 through a pertinent, rolling training program. The In production, the capabilities of the shipyards and supervisors resulting levels of training vary between shipyards are strong in pipe fabrication and reasonable for Production engineering and 46 5 50% 23 9 but have been found to be in line with or above structural steelwork in the commercial sector. performance improvement international norms, which is as expected for an However, the experience levels of boiler makers Engineering quality, test and 154 10 75% 57 14 industry investing in building up its skills base. and welders is less than ideal for both ships and commission, and metallurgy The experience requirements for both submarines submarines, and shipyards have reported difficulty Facilities 79 4 25% 27 9 and surface ships was assessed, with the in recruiting these trades. Steelwork capabilities Engineering support—electrical 170 10 75% 56 30 assumption that no other work is being carried for naval construction were also found to be a little Engineering support—hull 171 10 75% 52 34 out by the shipyards that reduces the availability weak, particularly for thin plate. Experience in these areas is improving through the naval shipbuilding Engineering support—mechanical 153 10 75% 56 37 of employees. The effect of a notional split of work projects currently underway in Australia. Draftsmen 124 5 50% 6 1 across the ship construction industry between submarines and surface ships was examined Boilermakers 669 5 25% 95 39 There is little recent experience around the assuming that the submarine project would shipyards of the thick plate construction required Welders 347 2 25% 68 94 benefit from the most experienced personnel. for submarines and icebreakers. In fact, without Electricians 204 5 25% 25 7 The assessment showed that in the majority of the submarine-specific welding skills groups, less Mechanical fitters 226 5 25% 33 79 cases for both submarines and surface ships, than one in 10 of the whole production workforce there is not a sufficient proportion of appropriately Pipe fitters 185 5 25% 46 15 has any meaningful experience of submarine experienced personnel for effective support of the Pipe welders 93 2 25% 14 22 construction. The mechanical fitters are unusual in inexperienced members of the group. The notable that over 40 per cent have submarine experience. Sheet metal, carpenters 138 4 0% 30 2 exceptions are: This is driven by the fact that over 90 per cent and insulation >> of the mechanical fitters are employed by ASC Painting 32 2 0% 14 1 for submarines: mechanical fitters, welders, and finance and accounting and demonstrates that submarine experience Production support 270 2 0% 87 27 is skewed towards outfit rather than steel—a >> for surface ships: senior management Totals 4,399 1,105 693 consequence of the majority of the experience and finance and accounting. coming from Collins refit and repair work. Future Submarine Industry Skills Plan / page 96 page 97 / Future Submarine Industry Skills Plan

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Production experience in naval surface ships There is also a lack of experienced production Subcontractors The potential workforce size estimate has been is better, with the average experience periods engineers and skills in design for production used as the basis for determining potential Although there are commonalties between exceeding those felt necessary for effective are scarce. Production engineering is a critical shipyard capacity. It should be noted that only the items subcontracted, the subcontracting production. From a capabilities viewpoint however, function and becomes even more so when a the core skills relating to building vessels in the philosophy varies between the shipyards. The weaknesses have shown up for electrical work and workforce lacks core experience and needs higher Defence Capability Plan have been included. proportion of work subcontracted varies from particularly fibre reinforced plastic construction. levels of production engineering support. This is a Employees involved in the following activities approximately one per cent to approximately Although the requirement for this is low in all key area for the development of Australian staff as have been excluded: 20 per cent. The list below shows the typical sectors, its use is on the increase so a small well as recruiting internationally. With sufficient subcontracts for the group. The most commonly >> research and development capability, probably provided by subcontractors, production engineering skills in place early, it may subcontracted items are at the top of the list: may become important. also become possible to use this resource to train >> provision of third-party training engineers in design for production and produce >> specialist non-destructive testing >> conceptual and first-of-class design work Capabilities for the installation of outfit are less appropriate guidance for designers. than ideal although these vary somewhat between >> manufacture of outfit steel (ladders, >> integrated logistics support outside normal the shipyards. There are also indications of limited A key area where the capabilities of the workforce pipe hangers, hatches, foundations etc) shipbuilding contracts. capability in the installation of specialist systems have been found to be less than ideal is in >> painting and electronics across the vessel types as this management, supervision and the organisation >> insulation ___ tends to be subcontracted to combat system of shipyard work. Planning departments appear FIGURE 8.9: current and potential workforce size >> specialist engineering analysis equipment suppliers, which is sensible. to be well resourced in terms of qualifications. However, the levels of experience for planning, >> sheet metal work and ducting Current Potential Workforce Workforce Shipyard engineering steel and outfit scheduling, work preparation, >> pipe manufacture Blue Collar 2,164 3,220 and support workforce and production control have been found to be >> plate and stiffener cutting and forming too low for these critical roles. White Collar 2,235 2,980 For all ship types in the Defence Capability Plan, >> fabrication of structural sub-assemblies Total 4,399 6,200 there is a shortage of people in the shipyards with For the commercial and administrative sectors, it >> installation of electronics and weapons appropriate experience for the following skill sets: has been found there is little relevant experience systems integration across all of the vessel types in purchasing and Comparing the maximum potential workforce >> metallurgy and non destructive testing >> heavy lifts and movements training. That said, the capabilities of the various size to the workload in the Defence Capability >> fibre optic contentions >> electrical engineering purchasing departments were found to be Plan, high-level analysis suggests that the peak >> mechanical engineering reasonable. Finding personnel for recruitment and >> assembly of junction boxes workload as calculated by compensated gross training is not considered to be a problem given the >> structural arrangements. >> on-board machining. tonnage in the Defence Capability Plan might be wide source of cross-sectorial labour resources achieved by a ship construction industry workforce available and the reasonably short periods of Shipyards rely on subcontractors to complement Maximum workforce size of more than 6,000 employees, which is of the their in-house capability in some of these skills experience necessary for these skill sets. same order as the 6,200 employees shown in sets. In contrast to the above, the engineering The maximum potential controllable workforce the chart. However, the distribution of skills management group is highly experienced in Multi-skilling size was assessed for each shipyard and the and other resource deficiencies means that the commercial, naval and submarine construction. results are shown in Figure 8.9. The following effective capacity would be much lower than this, There are a number of multi-skilled employees in It seems that while shipyards are struggling to find was considered: and indicates that the ship construction industry the workforce but the level of multi-skilling has not experienced engineers throughout the disciplines, will be unlikely to meet the delivery schedule set been developed to the extent achieved by leading >> shipyard strategies and senior it has the benefit of experienced engineering out in the current Defence Capability Plan. The international shipyards. Unions appear not to be management opinions leadership. Much of this experience has only been shortfall will vary depending on the placement of blocking multi-skilling. >> historical workforce size added since the Australian shipyards have started vessel types around the shipyards and the phasing on the current ship construction projects. >> reported local labour market trends of the projects. >> shipyard recruitment policies for growth. Future Submarine Industry Skills Plan / page 98 page 99 / Future Submarine Industry Skills Plan

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Minimum size-maintaining capability attrition, the demographics of the labour pool, ___ age profile, and succession planning. However, in FIGURE 8.10: minimum workforce size Through the Collins, ANZAC, Landing Helicopter broad terms the minimum level is considered to be Dock and Air Warfare Destroyer projects, the the target number of people required multiplied by Skills group Minimum numbers to retain experience base to Australian Government has invested in developing (abbreviated description) support a workforce of 5,000 the minimum proportion of experience required. the capabilities of the indigenous ship construction So if 500 electricians where required in the future Submarine Surface Combined workforce. Although it has been higher in the and 25 per cent of them need experience with the Senior management 8 18 25 past, currently there is a relatively low level of product concerned, then it would be necessary to experience in warship construction but this is Finance and accounting 6 13 19 retain 125 experienced electricians through the increasing as current naval projects progress. trough. The assumptions made by First Marine Sales, marketing and communication 3 7 10 If the vessels in the Defence Capability Plan are to International in the study regarding the proportion Project management 38 72 109 be built in Australia at a level of productivity that of experienced people required in each skill group Purchasing and supply chain 17 31 47 is close to international naval norms, then the are listed in Figure 8.8. skill base needs to be maintained. There are some Estimating and planning 45 88 133 The future size of the ship construction industry good international examples of where the erosion depends on the work it will be required to undertake Human resources 9 22 31 of skills between projects has resulted in some and the productivity achieved. Work on both new very significant cost overruns on subsequent naval General clerical 0 0 0 construction and warship support needs to be projects. In Australia this recently occurred to the taken into account. First Marine International has Production management 79 186 265 detriment of the Air Warfare Destroyer project. calculated that a submarine construction project Production engineering 14 37 51 In naval shipbuilding the first-of-class with an output of one boat every two years carried Quality, test and metallurgy 79 131 210 performance drop-off (that is, the lowering of out at the same time as a frigate project with an productivity levels) that occurs at the start of a output of one ship a year would employ about 3,200 Facilities 2 4 6 new series in a mature shipyard can be as high as people. A longer build duration for the frigates, at Electrical engineers 23 47 70 50 per cent. There are examples of this increasing a keel interval of one ship every two years would to about 130 per cent in new shipyards with reduce the numbers required. Depending on the Naval architects 20 32 52 inexperienced personnel. Over a series of four schedule, a further 1,000 could be required to build Marine engineers 15 26 41 typical frigates, this additional drop-off would cost other vessels in the Defence Capability Plan, and Draftsmen 13 23 36 between seven million and 10 million man-hours allowing another 800 for Collins maintenance, the and there would be further costs associated with overall ship construction industry would therefore Boiler makers 60 143 203 the schedule extension and possible technology need to employ about 5,000 people, with about Welders 30 74 104 transfer. Retaining the skills base helps to avoid 30 per cent engaged in submarine work. This total these costs and reduce project durations. excludes people engaged in first-of-class design. Electricians 26 92 118 Of course, the actual size of the workforce would Mechanical fitters 36 22 58 As explained in the section on workforce numbers depend on the phasing of the projects. and profile, First Marine International assessed Pipe fitters 14 42 56 that for each skills group there are a minimum On the basis of a submarine workforce force of Pipe welders 7 21 28 proportion of experienced personnel required to 1,500 people and a surface ships workforce of allow a ship to be constructed with a reasonable 3,500 people, the minimum number with the Sheet metal and joiners 0 0 0 level of productivity. If shipyard workforces level of experience specified in Figure 8.8 is Painting 0 0 0 contract as the result of reduced workload, and presented in Figure 8.10. To retain the necessary Production support 0 0 0 then needs to ramp up again for a new projects, experience levels for a ramp up to 1,500 people the experience levels need to be maintained at a in submarine construction and support, the total Total shipyard engineering 368 736 1,104 level which can support the ramp up. Determining number of people involved in this sector cannot Total production 172 394 566 the minimum number is a complex problem as it drop below 540. The equivalent number for surface depends on the period of the downturn, workforce shipbuilding, to support a ramp up to 3,500, is 1,130. Total 540 1,130 1,670 Future Submarine Industry Skills Plan / page 100 page 101 / Future Submarine Industry Skills Plan

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Because of the higher level of experience required, Workforce growth rate Assuming suitably qualified people are available of the proportion of experienced people and a higher proportion of the engineering shipyard in the labour pool, the maximum rate of growth the minimum years of experience required in The rate at which a shipyard workforce can grow skills needs to be retained. For some production therefore depends on the following: Figure 8.8. These curves assume that the new has been considered for two circumstances: skills such as painting, which does not require workforce can be assimilated into the organisation >> the minimum ratio of experienced to a significant level of product-based experience, >> growth from current workforce size at the rate shown, although in practice this may inexperienced personnel required in each it would not be necessary to retain experienced up to maximum workforce size not be possible. skills group people in these skill groups. The only reason to >> growth from the theoretical minimum size Two examples are shown on the chart. For a do so would be that it was extremely difficult to >> the time taken for inexperienced personnel to required to maintain capability up to maximum typical trade skills group, the proportion of people re-recruit people with these skills during a ramp gain the required level of experience (the time workforce size. requiring relevant experience is 25 per cent and up. As in welding, there may also be some key for each skills group assumed in this study is it takes two years to acquire the experience. This specialist skills in the other skills groups that The two circumstances vary because the level shown in Figure 8.8) means that if there are 100 people employed, the would need to be maintained regardless and of experience that the workforce begins with is >> the number of experienced personnel already minimum period to grow the workforce to 200 this may not be reflected in the distribution in different in each case. employed in each skills group people will be one year. However, as 10 years’ Figure 8.10. The numbers and proportion of experienced >> the rate of attrition. experience and a minimum proportion of skilled personnel that exist within a skills group are The best way to maintain experience levels is Maximum growth is achieved by maintaining people of 75 per cent has been assumed for the influenced by three factors: to employ people in a continuing shipbuilding the minimum proportion of experienced people production management and supervision, it would project. If this is not available, other arrangements >> attrition rate through the growth period. Based on this take five to six years to grow this group over the would have to be made. As there is an imbalance same range. The dotted curves shown on the chart >> growth rate assumption, Figure 8.11 shows the time taken between engineering and production workforces to grow the workforce for each combination represent the maximum growth rates allowing for in the minimum levels, if arrangements were >> the number of years of experience required. ___ made to employ all the production personnel on Attrition reduces the absolute numbers of both a ship construction project there would be an experienced and inexperienced personnel. Figure 8.11: relationship between experience requirements and growth excess of about 60 per cent of the engineering Attrition rates in international shipyards tend people. These people would need to be employed to be less than five per cent. Australian norms 1000 on another project such as developing a new have been quoted at around 13 per cent for the 900 design. The imbalance means that it would only manufacturing sector and in some shipyard be possible to employ about 650 people effectively individual rates have been found to be higher than 800 on a construction project which is equivalent to this. Higher attrition in Australia may be to do 700 building about one frigate every four years or two with patterns of transience between the resources 600 small patrol boats a year. There would have to be and manufacturing sectors or the fact that low a high level of flexibility within the engineering unemployment means there is competition for 500 and production areas with about 30 per cent of people. Regardless of the reason, it is important 400 the production workers in trades other than their for the shipyards in the combined enterprise to 300 principal trade. reduce attrition to retain experienced personnel. 200 1 YEAR

To effectively retain the minimum surface It is important to understand that if a shipyard is to NUMBER OF EMPLOYEES TOTAL >6 YEARS 100 ship engineering workforce on a ship grow its workforce without suffering a significant construction project, the workforce would productivity or capability penalty, a sustainable 0 have to be increased to about 1,850 people, ratio of experience to inexperienced people needs 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 which is equivalent to about one frigate a year. to be maintained throughout the growth period. YEARS There would also have to be a high degree of The minimum ratios assumed by First Marine engineering workforce flexibility required. 25% with 2 yrs experience 50% with 10 yrs experience International for this study are shown in Figure 8.8. 50% with 5 yrs experience 25% with 5 yrs experience 50% with 2 yrs experience 75% with 10 yrs experience Future Submarine Industry Skills Plan / page 102 page 103 / Future Submarine Industry Skills Plan

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an attrition rate of 13 per cent a year. These curves case, the rate was felt to be reasonable although Data relating to the availability of people working be achieved at a growth rate of around 40 per cent demonstrate how much more difficult it is to grow not without some consequent loss of productivity. outside the ship construction industry who have a year. This would bring the ramp-up period down an experienced workforce while experiencing Without additional information regarding the the appropriate skills is not available. There to between three and four years. this level of attrition. For the groups that require external availability of skills in each area it has have been some indications that legacy skills 75 per cent of the workforce to be experienced, it not been possible to temper the opinions of the from the Collins program remain in-country. Summary shows that growth is almost impossible to achieve shipyards with hard data. For those areas where the skills are at a without directly recruiting experienced personnel. premium—that is, the most specialised such as The assessment by First Marine International has The achievable growth rates reported by the engineering or testing—it may be possible for shown that, on a project by project basis, the four The curves assume that it is only possible to shipyards vary but for ASC, BAE Systems and the future submarine project to unearth latent main shipyards have the capacity to build the ships recruit qualified people who do not have the level Forgacs the rates are all less than 25 per cent skills. However, this is felt to be unlikely for the in the 2012 Defence Capability Plan apart from of experience required and that there is always the a year. Figure 8.11 demonstrates that in these following reasons: the large supply ships, and with some investment minimum proportion of people in the workforce instances maintaining the required proportions into launch facilities, could construct those as with experience. Clearly, if experienced people can of experienced personnel is likely to be feasible >> the passage of time since Collins well. Similarly, in general, the current shipyard be recruited or experience levels are higher at the except for the more demanding skills groups >> the global demand for similar skills workforce in Australia has excellent skills and outset, the rate of growth can be increased. where 75 per cent of the employees are good submarine and shipbuilding knowledge in required to have 10 years experience or more. >> ability to translate skills across sectors some skills groups. However, experience levels Figure 8.11 shows how difficult it is to sustain These groups are: are low when compared to international norms an experienced workforce while growing the >> demand in shipbuilding means that those and numbers are limited in some groups. workforce through the recruitment of qualified >> production management and supervisors motivated to stay in the sector are likely to currently be employed in it. but inexperienced employees. For those skills >> engineering quality, test and commission, The submarine skills base will need to be groups identified previously as lacking enough and metallurgy expanded to construct new submarines and experienced personnel, it may be necessary Growth from minimum capability maintain the existing fleet at the same time. As >> engineering support—electrical to recruit experienced personnel or accept a The minimum size of workforce that is required to new construction will not begin for some years, >> engineering support—hull lower ratio of experienced employees during maintain capability within the combined enterprise arrangements will need to be made to maintain the growth phase and accept the corresponding >> engineering support—mechanical. is discussed in detail in workforce growth rate and further develop the skills base through the drop in productivity that this will bring. As there interim period. This may require experienced The achievable growth rate reported by Austal sub-section. The growth rate that can realistically is not much relevant submarine experience in people to be recruited into a few key roles at is around 60 per cent a year. Although the move from this minimum size to the maximum the Australian labour pool, it is imperative that the right time. The surface ship skills base is situation for Austal is different because it workforce size across the shipyards is not subject industry retains the experienced workforce it being expanded through the current Air Warfare would be returning to the workforce size of a to the constraints set out in Figure 8.11, as there already has. It is also likely that achieving a Destroyer and Landing Helicopter Dock projects few years ago, First Marine International felt is no need to further develop the experience within sufficient number of experienced personnel will and perhaps some of those skills and experience that this rate of growth is perhaps optimistic and the workforce, only the inexperienced but qualified require international recruitment. can be later applied to the future submarine would result in low proportions of experience in workers. Therefore, the only limits to growth are project. As the skills pool is shared between the workforce. the availability of qualified candidates and the Growth from current workforce size speed at which a shipyard can assimilate new, surface ships and submarines then transferring Combining the predicted growth rates for the skills to one project could be detrimental to the All of the shipyards surveyed have demonstrated qualified employees into its workforce. The high shipyards gives a combined rate of around others. This and the interaction between projects high rates of workforce growth over recent years. rates at which Australian shipyards have grown in 700 employees a year. This means that a must be carefully managed by the Defence For many, this has been in response to the Air recent history demonstrates the upper end of what ramp-up period of less than three years would Materiel Organisation. Warfare Destroyer and Landing Helicopter Dock may be achievable, although this resulted in a low be required to bring the shipyards up to their projects workload. For some, the recent growth level of productivity for a long period. potential workforce capacity. However, a collective rates have been very high and there has been an Factors limiting maximum ramp-up of this nature may lead to competition The combined industry growth rate of 700 people associated loss of productivity. shipyard capacity in the labour markets and may reduce the speed a year would lead to a ramp-up period of over The shipyards have reported a forward-looking at which the shipyards can employ qualified six years to go from the minimum to maximum When viewed as whole, and taking the current growth rate at which they would expect to be able personnel, although the numbers required for the workforce size. It is felt that this could be improved proposed acquisition schedule of the 2012 to recruit candidates from the local skills pool and ship construction industry is small in comparison upon given the level of experience in the core Defence Capability Plan into account, the situation absorb them into the current workforce. In each to other sectors. workforces and that the ramp-up could realistically is somewhat different. As it currently stands, Future Submarine Industry Skills Plan / page 104 page 105 / Future Submarine Industry Skills Plan

___ shipyard capacity and skills ___

the requirements of the Defence Capability Competition can drive performance improvement In terms of the facilities and the skills and >> Stability in the acquisition schedule would Plan present a significant challenge for the ship but it can restrict communication and sharing experience of the workforce, some shipyards allow the shipyards time to develop their construction industry. Based on a high-level of best practices, learning, and resources. It are better suited to certain vessel types or facilities and grow their workforce, skills and analysis of the requirements, the phasing of can also result in project-focused, short-term roles within a project. Rationalising the types experience in preparation for the start of new the current plan appears to create high peak horizons which inhibit longer-term investment in of ships to be built for the Royal Australia Navy, construction projects. demands and the workload is not well balanced people and facilities and make an industry less adjusting the phasing of the Defence Capability First Marine International made the following against shipyard capacity or the requirement to attractive to work in. As resources are limited Plan acquisition schedule, and allocating recommendations: develop the industry’s skills base. There appears and the ship construction industry needs to work between the companies to take account to be bottlenecks, principally in skills but also in unite to build the skills base and construct the of available capacity and workforce will have >> Technology transfer programs should be used facilities, which means that there is unlikely to be vessels in the Defence Capability Plan, First a significant influence on shipyard use and to maintain and develop submarine skills. sufficient capacity to deliver all the vessels to the Marine International recommend that the Defence therefore productivity and capacity. If possible, this could include international schedule envisaged. Materiel Organisation should consider alternative placements for shipyard engineering personnel strategies that promote development through before the future submarine project starts. In addition to aspects such as construction points, Suggestions cooperation. An enterprise-wide cooperation >> Succession planning should be developed for crane capacity and buildings, the number and the The acquisition schedule laid out in the Defence strategy that includes members of the ship key shipyard production and engineering skills. skills of the workforce and shipyard processes and construction industry, the supply chain and the Capability Plan 2012 is unworkable. The current practices also limit capacity. With the exception of >> Skills should be built up on the current and Defence Materiel Organisation, will assist in plan sees work in the Australian shipyards almost submarine construction, where capacity is limited future complex surface ship projects and improving performance. cease in the latter half of this decade before it has by the berth cycle time (that is, the time taken to ramp up substantially as the construction of transferred to the future submarine project. to consolidate the submarine in the workshop), Although manufacturing hull blocks at a the future submarine and the offshore combatant >> Personnel should be seconded to Collins in the majority of scenarios considered by First number of sites and integrating elsewhere may vessels begin in the early 2020s, and the future support to build submarine skills. Marine International, it is the availability of people ultimately be required to balance capacities, frigates start a few years later. If nothing is done, >> Workforce skills that take time to grow with appropriate skills and experience that is the in general a dispersed construction program the shipyards will most likely lose their workforce, should be identified and prioritised for limiting factor. leads to lower levels of productivity. Constructing they will not invest in infrastructure or update early development. vessels of the same class simultaneously in equipment at the shipyards, and may even close. Improving shipyard productivity will reduce different shipyards increases capacity but, due To aid the skills plan, a nationwide skills matrix the number of people required to deliver the to the existence of multiple learning curves and First Marine International suggest that any should be developed and maintained. Although output and alleviate the skills deficit to a large the additional coordination required, overall considerations regarding changes to the Defence this may appear to be a substantial undertaking, extent. Raising the level of productivity will productivity is reduced. Capability Plan should include the following: such matrices are already used in the shipyards require processes and practices within the so it would only be necessary to standardise >> The acquisition schedule must be smoothed shipbuilding enterprise, government and industry, Electricians are the trade that most often limits them and combine the information at a national out to avoid leaving shipyards underused. to be improved and skill levels to be increased. current capacity across the shipyards. Importantly, level. This should be coordinated by the Defence Continuity of work, ideally at a reasonably steady there are also some key shipyard engineering The ability of the shipyards to retain their Materiel Organisation. level, will also be necessary. The project dates skills, such as production management, workforce that has been built up through their work on the Air Warfare Destroyer, Landing Clearly, a systematic approach is required to envisaged in the Defence Capability Plan would production engineering, project management Helicopter Dock ships and Cape class projects address the issues with the Defence Capability need to be changed to achieve a reasonably steady and planning, in which increased levels of skills depends on having a predictable schedule. Plan, Defence and a ship construction industry. It workload across the ship construction industry. and experience are required. Potential capacity is may also be helpful when considering construction Design maturity and the reduction of work content based on the shipyards’ opinion of the number of >> The Defence Capability Plan must allow scenarios to extend the work done by First Marine through designing for production will also be people that could be recruited. Clearly capacity time for production engineering of projects. International to produce an index or matrix that important. As has already been recognised by the would be higher if it were possible to employ The shipbuilding industry must work with quantifies the degree of suitability of each shipyard Defence Materiel Organisation, the commercial more people. The extended use of on and off-site Defence to develop sensible construction to construct particular vessel or block types. environment created by contracting arrangements subcontractors would also increase the capacity. timelines, rather than try to conform to This would take both facilities and workforce also needs to promote performance improvement. overly ambitious schedules. characteristics into account.

09 page 109 / Future Submarine Industry Skills Plan

the Australian workforce Future Submarine Industry Skills Plan / page 110 page 111 / Future Submarine Industry Skills Plan

___ the australian workforce ___

This section describes the workforce environment in which naval shipbuilding At the same time as the ANZAC frigates were being Through the cycles of activity described above, operates in Australia. This covers the broader Australian manufacturing built, Australia was also constructing the Collins many people are denied the option to pursue a sector, cycles in shipbuilding activity, competition for skilled workers, class submarines, the first time the country had life–long shipbuilding career because of lack of ever built such a vessel. Six submarines were opportunity. As previously mentioned, there is a promotion of technical careers in schools, and options to recruit overseas constructed in the new ASC shipyard in Adelaide tendency for people who leave the shipbuilding workers. This section also covers some of the broader activities of Defence between 1990 and 2003, except two sections of the industry in the down periods, not to return. to promote skills development and careers in engineering. first submarine manufactured in Kockums’ shipyard in Malmo, Sweden. The consensus across people involved is that shipbuilding is a highly desirable career: it deals Australian manufacturing industry Shipbuilding cycles The third cycle is now underway with the with the science and engineering of new and construction of the Air Warfare Destroyers and Manufacturing is important to Australia. It makes Since World War II, Australian naval shipbuilding sophisticated technology, and the construction Landing Helicopter Dock amphibious ships, and the has gone through three cycles. After the war, the of large complex machines. In talking to people a large, direct contribution to national output, Cape class patrol boats built by Austal for Australian first major warship projects in Australia were in and around shipyards, what is very clear is a employment, investment and innovation. The Customs and Border Protection. Using a modular the Daring and River class destroyers built at the passion for the challenge and reward of building manufacturing sector produces 29 per cent of construction program, the blocks for the three Air Williamstown Naval Dockyard in Melbourne and exports and contributes eight per cent directly to Warfare Destroyers are being built in shipyards warships. When the Air Warfare Destroyer project Cockatoo Island Dockyard in Sydney in the 1950s Australia’s Gross Domestic Product, and more located in Adelaide, Melbourne and Newcastle, started in Adelaide in 2006, there were 20 people and early 1960s. These projects ended up with indirectly through connections with other sectors employing a production workforce of over 1,800 in the headquarters. Two years later, there were large cost overruns: the Daring class ships were of the economy. people. Over 400 people in Adelaide and Sydney are more than 300, with many moving from interstate twice as expensive as the same ships built in working on developing and integrating the combat and overseas. One reason given was because Air Manufacturing employs close to one million Britain, and the River class ships were three times system. Melbourne is also home to the Landing Warfare Destroyer is one of the most prominent people, and more than half of these are employed over budget. They were late as well. Helicopter Dock project, where the superstructure, warship projects happening globally. by small to medium manufacturing enterprises. It was 15 years before another large warship combat and communication systems will be In comparison, the mining and resources One of the attractions of a shipbuilding career was built in Australia. In 1985, the keel was laid integrated to the two main hulls being constructed is city living—ships are built by the sea. Project sector employs 275,000 people (Australian for HMAS Melbourne, one of the two US Navy in Spain. There were early production issues on management and engineering operations are done Bureau of Statistics, 6291). There are 50,000 FFG–7 class ships built in Victoria. Melbourne was the Air Warfare Destroyer blocks, with respect to near the shipyard or in another capital city. The Air small manufacturing firms that employ 200 or accepted in 1992 and the second, Newcastle, in dimensional control and welding heat distortion. fewer workers. Manufacturing accounted for 1994. The Australian Frigate Project budget was These problems were solved as people became Warfare Destroyer project’s main operations are in 35 per cent of all traditional apprenticeship $830 million (1983 prices, about $2.3 billion today). more familiar with ship construction techniques, Adelaide, Melbourne, Sydney and Newcastle. The completions in 2009. and with the introduction of some very experienced Landing Helicopter Dock project is based mainly Building two frigates was the critical start the shipbuilders and production supervisors from the in Melbourne, Austal’s Australian operations are The size of the manufacturing workforce has been Melbourne shipyard needed to make the ANZAC United States and United Kingdom. Austal are at Henderson near Perth. These are population declining for decades. Since the global financial project the success it was. Had the shipyard building eight Customs patrol boats at their facility centres and attractive locations for people who crisis the sector has lost over 100,000 workers and not got that work, construction of the ANZAC in Henderson, WA. These are a development of the are looking to move from outback mining towns ships would have run into all the same cold start projections indicate that at least another 85,000 Armidale class patrol boat which Austal built for the for family and lifestyle reasons. may go (Smarter Manufacturing, p.12). Overall, problems seen on other projects. Such instability Royal Australian Navy between 2004 and 2007. productivity growth is slow. at the beginning of that program would have taken several years to work through and in such Competition for skilled people While Australian manufacturing cannot compete Attracting skilled circumstances the project would not have earned There is considerable commentary about future with the low paid workforce overseas, what people to shipbuilding its good reputation. Construction of the ANZAC competition for skilled workers in Australia. Studies strengthens the sector is an emphasis on ships commenced at what is now the BAE shipyard The previous three sections of this report by the Defence Materiel Organisation, Defence advanced manufacturing. Naval shipbuilding in 1992. Ten ships were built, eight for Australia, emphasised the importance of retaining skilled, Science and Technology Organisation, RAND, Skills is one such area where the destroyers and two for New Zealand. ANZAC was delivered in 1996, experienced people. Beyond the specific reasons to Australia and others have examined the supply and submarines are some of the most advanced and the last ship, Perth, in 2006. do this that they describe, an overarching question demand for certain skills across broad elements manufacturing programs undertaken in Australia. is whether shipbuilding is an attractive career. of the defence sector such as systems integration, Future Submarine Industry Skills Plan / page 112 page 113 / Future Submarine Industry Skills Plan

___ the australian workforce ___

through to narrower domains such as future very specific engineering and systems skill Examining worst case demand for a naval Attracting young submarine. Research done for this study by First sets, the proportion is higher, but overall naval shipbuilding workforce, the peak rises to about Australians to shipbuilding Marine International examined shipyard workforce shipbuilding is not an industry dominant employer 10,000 people. This would be the demand only Nation building enterprises such as the Snowy supply and demand, including past experience in of skilled workers. if, firstly, nothing was done to level off the Mountains Hydro-electric Scheme, the National building up workforces for new projects. None say peak workload at the end of the decade, and The Skills Australia report Building Australia’s Broadband Network, and future submarines the competition for workers is disabling. secondly, nothing was done to improve low Defence Supply Capabilities was published are projects that inspire the next generation of levels of productivity. Removing sharp peaks According to the latest Australian Bureau of in September 2012 and indicated there was scientists and engineers. Building a submarine in workload is something Defence can do in Statistics data (August 2012), the total Australian competition for skills from the resources sector, offers great challenge and reward to the people planning future shipbuilding projects. Based workforce numbers just over 11,466,000 people. which was able to pay high wages for electrical and involved, most of who are currently in school. on First Marine International’s benchmarking Of those sectors concerned with production, mechanical engineers. The report also noted that of Australian shipyard productivity compared to Promoting science and engineering studies to manufacturing and construction each account electricians would be in short supply over the next world’s best practice, continuing work and ensuing students is important. Through the Industry for close to one million workers. The mining and decade, and that demand for construction skills in productivity gains mean the workforce could be Skilling Program Enhancement scheme, Defence resources sector provides employment for 275,000 the resources sector would peak well before the smaller than today. supports initiatives that encourage high school workers. The trends in these sectors are shown in end of the decade, before those skills might be students to study science, technology, engineering the following graph. required in naval shipbuilding. Anecdotal evidence The outcome portrayed to this study is a national and mathematics—known as STEM subjects: provided to Skills Australia during consultations naval shipbuilding industry whose workforce needs Research for this study shows there are about for its report suggested that resource sector to develop particular skills, increase experience >> the Defence Materiel Organisation sponsors 4,000 people working on naval shipbuilding in workers spent on average two to three years in levels, adapt to new projects and improve the Re-engineering Australia Foundation (REA) Australia today. This is less than 0.05 per cent the sector and increasingly even shorter times. productivity, but does not need to appreciably F1 in Schools Technology Challenge, which of the Australian workforce of 11 million people, It seems that recruitment of these workers is an grow in size. provides opportunities for school students and 0.5 per cent of Australia’s manufacturing opportunity for defence industry. to develop skills and build an interest in workforce of 960,400 people. Broken down into Competition for skilled workers was discussed engineering and manufacturing through hands- at the expert industry panel, where all the major on team activities. The aim is to raise student ___ companies involved in shipbuilding, unions and awareness of engineering and defence industry Figure 9.1: employment per economic sector over the last 10 years industry organisations were represented. The careers. A submarine challenge could be consensus was that the numbers of people introduced into this framework. 1200 potentially needed for future shipbuilding programs is something that can be managed by >> the Defence Materiel Organisation also funds

1000 the companies—it is something they have done three school pathways programs: the Advanced before. Clearly the challenge is made easier if Technology School Pathways Program in South workloads are forecast well ahead of time, and the Australia, the Marine Industry School Pathways 800 time allowed then to ramp up is practical. Program in Western Australia, and the Advanced Manufacturing School Pathways Program 600 The research by First Marine International also in the Hunter region of New South Wales. showed that Australian shipyards are actually good These programs introduce students to skills THOUSANDS at building up workforces, the result of having to 400 used in defence industry and aim to increase do it regularly. First Marine International found the number of students studying science, that shipyards are reasonably confident they could technology, engineering and mathematics. 200 further raise capacity and saw no major risk with the sort of workforce numbers they might need to Also helping to promote careers in the science 0 recruit in their regions. and technology sector are initiatives like the Maritime High School Program in South Australia F E B 1 1 A U G 1 1 A U G 0 2 F E B 0 3 A U G 0 3 F E B 0 4 A U G 0 4 F E B 0 5 A U G 0 5 F E B 0 6 A U G 0 6 F E B 0 7 A U G 0 7 F E B 0 8 A U G 0 8 F E B 0 9 A U G 0 9 F E B 1 0 A U G 1 0 F E B 1 2 A U G 1 2 at the Le Fevre High School. Around 150 students MINING MANUFACTURING CONSTRUCTION

Source: Australian Bureau of Statistics, 6291 Future Submarine Industry Skills Plan / page 114 page 115 / Future Submarine Industry Skills Plan

___ the australian workforce ___

undertake vocational training that provides In the shipyards, BAE used SADI funds to Labour agreements form a subset of the them with an insight to maritime work and trade sponsor about 50 apprentices over the past four Employer Nomination Scheme. They are formal career pathways. Scientific courses have also years—23 in heavy metal fabrication—and put 40 arrangements between an employer and the been developed in ship design, electronics, radar, people through warship familiarisation training Commonwealth, effective for two to three years, GPS and navigation technologies. There is a in preparation for the Air Warfare Destroyer and allow an agreed number of overseas skilled similar program at the Aviation High School and Landing Helicopter Dock projects. ASC has workers to be recruited for specific skilled in Clayfield, Queensland. used SADI funding to place students on project positions. Companies might consider using these management and systems integration courses, agreements when the required skills are not Promoting science, technology, engineering and for diesel training, and for apprentice supervision. listed on the Skilled Occupation List or covered mathematics subjects and pathways to defence In the last four years, nearly 400 Forgacs workers by the Australian and New Zealand Standard industry careers develops the flow of young people have benefited from training sponsored by SADI, Classification of Occupations. into naval shipbuilding. There is a range of state and another 100 are enrolled in SADI programs and national programs that are doing well in in the first half of 2013. More than 150 people at In 2011–12, 68 per cent of total migration numbers promoting these outcomes. Austal have been helped with similar programs. entered Australia via the Skilled Migration Members of the expert industry panel were very Program, or about 126,500 people. Over the same Defence industry sponsorship complimentary of the SADI program and there period, the number entering under a temporary visa totalled 68,310. Relating to shipbuilding, Through the Defence Industry Policy Statement is strong support for it to continue. manufacturing brought in just over 4,000 people, 2010, Defence committed $446 million to boosting while almost 5,000 entered in the professional, the competitiveness of, and provide opportunities Skilled migration programs scientific and technical category. In comparison, for, defence industry over the next 10 years. During the study, the team was asked to review construction brought in over 9,000, health care and A large part of that funding is for industry migration and visa arrangements to see if these assistance programs to improve skills, increase social assistance almost 8,000, and information could assist with the plan. the workforce by attracting students to defence media and telecommunications around 7,500. Over 46,500 permanent workers were brought industry careers, and encouraging high school Since the late 1990s, Australia has sought to build in through the employer sponsor category. Just students to study science, technology, engineering its workforce using a skilled migration program. over 30,000 were part of an employer nomination and mathematics. Under this initiative, companies can sponsor scheme and labour agreements. Defence will invest about $90 million by 2016 in skilled workers from overseas to fill positions the Skilling Australia’s Defence Industry (SADI) they have been unable to fill through training The four main naval shipbuilding companies do not program. SADI provides companies with funding or recruiting. Employees come in under either use skilled migration programs to build up their on a reimbursement basis, for completed, pre- a temporary (Subclass 457 for up to four years) capacity. A small number of people are brought approved skilling activities across a broad range of or permanent visa. Only certain occupations in to provide very specialist skills and shipbuilding technical and professional areas. Funding priority can be sponsored for entry, and virtually all the experience, such as those with experience in is given to proposals with a direct impact on the professional and trade occupations relating to building US Navy destroyers equipped with the health of a Defence Priority Industry Capability. shipbuilding are included. Aegis Combat Systems, shipbuilding dimensional control specialists and experienced shipyard All of the principal shipbuilding companies have The Employer Nomination Scheme (Subclass production supervisors. used SADI to develop skills. In 2005, ASC, BAE 186 visas) is for those skilled workers coming Systems, Saab Systems and University of South to Australia for the first time and who plan to The companies represented on the expert industry Australia developed a proposal to develop and stay for more than four years. This visa also panel said they were able to work within current deliver of a Masters of Engineering, Military caters for workers who come to Australia on skilled migration programs and had no plans to Systems Integration. This submission was Subclass 457 visas, and who work for two years expand foreign worker recruitment. successful, with SADI funds granted to develop the before being offered a permanent position by course as a joint industry/academic effort. Industry their employer. committed to send 54 students to the first three courses for the three-year part-time program.

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buildING the skills Future Submarine Industry Skills Plan / page 120 page 121 / Future Submarine Industry Skills Plan

___ building the skills ___

This section outlines actions to build the skills to build the future The keel interval of the build project will affect be arranged where practical to preserve the submarines in Australia. The actions cover all naval shipbuilding activities the average size the workforce. A slower project current skilled workforce. Also, future submarine that come before the start of the future submarine project because how with longer keel intervals requires fewer people, a project schedules should be coordinated with that higher cadence will require a larger workforce. plan so the different skill groups can move across well we execute that project is dependent upon how well Defence and without a gap wherever practical. industry are prepared on day one. What the analysis in sections 6 to 8 show is that the current shipbuilding workforce is around Proficiency 4,000 people. As detailed in section 8 on ship The actions proposed are described as BUILDING INDUSTRY SKILLS construction, the number of people in shipyards As described at the beginning of this report, principles rather than specific tasks because could reduce to about 1,700 to preserve the the third dimension to skill is proficiency: the of the complexity of the entire scheme of naval Workforce size minimum core of skilled and experienced people. combination of knowing what to do (effectiveness) shipbuilding projects. Each project involves an How many people and the specific skills that The workforce would then be able to grow at a and using the least resource (efficiency). Given the array of variables that can result in different are needed to build the future submarines is realistic rate of not more than 25 per cent a year, right number of people with the right education execution plans, and every project is different. not something that can be precisely calculated or about 700 people a year. In this calculation, it and training, the challenge is then to turn them Furthermore, plans change and projects encounter at this time. There are many variables that affect would take up to six years to bring the shipyard into a team proficient in all aspects of a submarine problems, so the situation is continually changing. this result. workforces up to their maximum capacity—which project. That requires training, professional This dynamic requires guiding principles and is not the capacity required to deliver the Future development, mentoring and sheer practice. active management. The four options being examined for the future Submarine Program. submarine program will require different skill All the naval shipbuilding projects preceding future BUILDING INDIVIDUAL SKILLS sets, and key features of the plan to execute the The analysis describes the many disadvantages submarine are an opportunity to develop these project will also vary the number. As described and risks of such a theoretical approach, such skills in Australia. Working on non–submarine The analysis done for this study and in earlier above, a new type of submarine will require many as lower productivity meaning larger workforces shipbuilding projects provides good exposure to work such as the 2011 RAND report, shows more engineers to complete the functional design, are required, adding cost. High attrition rates the various tasks undertaken, tools and processes that Australia educates and trains people with which will also delay the start of manufacturing, mean that for skill groups that require 75 per used, interdependencies with other work groups, the foundation skills needed to build the future hence build-up of the production workforce. If the cent of the workforce to be experienced, growth the sequence of events and schedules, mistakes submarines. Universities and other higher new design is bigger than existing conventional is almost impossible to achieve without directly made and breakthrough results. The action education institutions provide the engineering, submarine designs, which is the general opinion, recruiting experienced personnel from overseas. required is for Defence to formulate those other computing science, accounting, business, law then more production workers, or time, will be Given all the challenges a new submarine project project plans with these benefits to the future and other degrees required in a shipbuilding required to build the boats. presents, taking a risk on substantial workforce submarine project in mind. DeakinPrime also project. Vocational training organisations and downsizing just before the start does not seem noted the benefits of this ‘whole of force’ approach apprenticeships deliver the welders, fitters, When the first submarine is required will greatly prudent. The realisation of just a few risks in in their Future Submarine Training Feasibility electricians, and other trade skills required to change the workforce time profile, and that date building up the skilled workforce could delay Study (DeakinPrime 2011, p2–3). build warships. is dependent upon several variables: improving the project by many years. Collins submarine reliability and availability, the Of course there are particular tasks, tools and For the Future Submarine Program, the main area actual life of type of the Collins, whether money The best way to have sufficient skilled people processes in a submarine project not seen in of skill difference between the four options is in is invested to extend that service life and by to build the future submarines is to retain the surface ship projects. One small action would be the functional design of the submarine. Obviously, how much, as well as strategic considerations entire existing workforce, where everyone is to sponsor training programs for people likely to military off–the–shelf options do not require the about the capability of the submarine force. In gaining experience even if numbers are not yet be involved in the project in tools and techniques level of skilled design effort that the other options addition to setting the timing for build–up of adequate. In practice, workloads and workforces specific to a submarine project. The problem is need, but some design skills will be necessary. the production workforce, the sooner the first within existing projects change and new projects that until the final companies are chosen, the The particular foundation skill affected is naval submarine is required the higher the peak design would not preserve precisely every job. What is precise tool set and approach to design will not architects and all advice to this study is that and production engineering workforce that will be needed are future shipbuilding plans that are be known. That does not make such training Australia has the education programs required. needed to prepare the shipyards and construction developed with this principle in mind. Where worthless, and while some trained people will For the Future Submarine Industry Skills Plan, data and materials. possible, the scheme of all current and new be lost, it will still be of value. the questions are whether there are enough projects leading up to future submarine should qualified people and whether experience levels are adequate. Future Submarine Industry Skills Plan / page 122 page 123 / Future Submarine Industry Skills Plan

___ building the skills ___

Another option would be to carefully select In ship construction, productivity is currently low Planning naval shipbuilding projects In summary, given the military requirement, the Australians who are almost certain to be working in Australia because the shipyards are rebuilding planning of naval shipbuilding projects needs: The Future Submarine Industry Skills Plan was on the project within Defence or industry and their capability. Continuing with the current routine commissioned because the current schedule >> to be done early and with a very long to sponsor them on two year secondments measurement of actual productivity in shipbuilding for future naval projects will cause serious skill time horizon to a range of active submarine design offices projects is important, and the shipyards have to set problems for Navy, Defence, government and and construction shipyards. For example, to and achieve improvement targets. Without improving >> Defence to have an expert understanding of the industry. Shipbuilding activity was forecast to Electric Boat in the USA, BAE Systems in the UK, actual productivity to world’s best practice, and then shipbuilding task and the shipbuilding industry decline to almost zero in about 2017, followed by Navantia in Spain, HDW in Germany, and so on. continuing to steadily improve core productivity, >> constant, detailed engagement with the a large rise around 2020. The current schedule The destination needs no link nor infers any link to the required competitiveness of Australia industry shipbuilding industry would result in the departure of most of the skilled ultimate decisions on design, designer or builders will not be achieved. This is a commitment the and experienced people from the industry, and >> to encompass all shipbuilding projects, with for the future submarine. The immersion in active shipbuilding companies need to make. create major problems as industry tried to rebuild a clear understanding of interdependencies projects is what is important. to execute new projects, which will result in higher >> to be done with a clear vision of how we want The Skilling Australia’s Defence Industry scheme THE APPROACH costs and project delays the Australian naval shipbuilding industry has been successful in helping companies involved The work in developing the Future Submarine to support the nation in the very long term. The problems seen with the current shipbuilding in shipbuilding to improve the skills of select industry Skills Plan showed that the most projects in the last few years are the direct result people. That should continue. One adjustment important action is to organise all the projects Planning individual projects of having to rebuild Australian shipbuilding, given would be for the Defence Materiel Organisation to leading up to future submarine so they retain as its decline after the ANZAC and Collins projects. What is clear from engagement with industry develop the nation-wide skills matrix discussed in much of the skilled workforce as is reasonably As described in section 3, shipbuilding projects during the development of this plan were several section 8 and use that to target specific skills gaps possible, and provide an opportunity to build that start up after any such decline cost more: practical points about individual projects: for sponsorship. skill in terms of proficiency and experience. New facilities have to be built or upgraded, and workers foundation education and training courses are not >> projects start too late to replace ships before Ultimately, it will not be possible to prepare have to be recruited and trained. This also leads to required. Recruiting people before work starts is their known end of life everyone to an optimum level of skill. Identifying also not necessary because there is a respectable schedule delays, cost over-runs, low productivity >> the duration of projects was too short skills gaps in the available workforce will be core of skilled people already in Australia who, and issues with production that would have been a critical task for the directors of the future with careful planning, can help grow the workforce. avoided by an experienced workforce. >> time allowed between approval and submarine project. Some targeted recruiting of skilled people by delivery of the first ship was too short to Defence does not plan acquisition projects to companies will be required for some submarine allow for proper systems engineering and Productivity is also important. In systems sustain company revenue or jobs. Defence’s plans specific skills, especially where extensive other upfront activities development, the labour effort is proportionally are about delivering warships economically and on experience, in some cases 10 years or more, is >> industry had many good ideas that could much smaller than in ship construction, but required. This issue was also highlighted in the time in order to sustain national security. What is help without interfering in Defence business. efficiencies can be achieved through professional recent Skills Australia report which made note that clear though, is that informed and early planning development of people and sensible investment ‘ebbs and flows in procurement activity inhibit the of projects can deliver substantially better To create more practical timelines for individual in better tools and test facilities. Though very ability of organisations in Defence industry to grow, outcomes for everybody: more reliable on time projects, the capability planning process difficult to measure in simple quantifiable attract and retain specialist skills’. delivery and lower costs. The problems described should be adjusted so military planners set the terms, productivity in systems development in above are typical of industry in a rebuilding phase, The remaining elements of this section deal with date new ships are to be available to replace Australia seems reasonable. This result is due to and the impact of these can amount to billions key principles to be applied to planning naval older platforms and define their operational a consistent work program for the few companies of dollars for individual projects. The cost of all shipbuilding projects with the objective of best requirements, then all preceding project that do this work, and because they often benefit planned naval projects may be somewhere above preparing Australian industry for the challenges durations and milestones are set out by the from the backing of their multinational parent $75 billion. By having a proficient and productive of the future submarine project. As discussed at Defence Materiel Organisation. As discussed companies. Those global companies invest the beginning of the report, the plan is not about shipbuilding industry, overall savings to the above, the Defence Materiel Organisation needs large sums of money to improve their tools and job protection or industry subsidies, it is about the Defence budget would amount to tens of billions to do that on the basis of a better understanding processes based on feedback from a great number skills and industrial strength that are fundamental of dollars. of the industrial task and with close and early of global projects and as a result the Australian to successful naval shipbuilding projects which consultation with industry. This is a small, subsidiaries benefit from this reach back. underpin our national security. but important change, for three reasons: Future Submarine Industry Skills Plan / page 124 page 125 / Future Submarine Industry Skills Plan

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>> When project plans are created with a capability >> Ensure time for production engineering is Integrated planning of all shipbuilding projects Sequencing the timing of ship production viewpoint, there tends to be an optimism clearly provided for, and that the size and across multiple projects is more difficult When the whole set of naval shipbuilding that confirms their achievability, qualified by experience levels of the available production because that period of activity in each project projects is considered, other problems emerge: statements about risk that do not portray its engineering workforces are consistent with can be substantially different. Production in some no opportunity for continuous productivity true impracticality. This conspiracy of optimism the time allowed. projects might only run for five years, projects improvement, no opportunity to improve is evident in mega-projects—defence and civil, like future submarine will run for closer to 25 >> From international benchmarks, set realistic proficiency or grow experience levels, no viable and all around the world. Once a statement years. What needs to be avoided is aligning the build durations for first of class and follow-on basis for industry to make long-term investment, is made about how a project can be done, production build-up phase of multiple projects. ships, allowing for both new design and first of insecure jobs, and simultaneous competition for ambition takes hold and it is very difficult Projects need to be allowed reasonable time type productivity drop off in the shipyard. skilled workers. to change plans. to build up production capacity. Providing the >> Using typical ship types and current productivity In the 2012 Defence Capability Plan, three front-end engineering is done properly, shipyards >> In setting out a plan, the Defence Materiel measures and benchmarks, analyse the build major projects are set to start in about the 2020 are able to steadily build up capacity over time Organisation not only has people working in effort required using methods similar to the timeframe: future submarine, future frigate, and by recruiting qualified tradespeople who have naval shipbuilding projects that have practical First Marine International analysis in this offshore combatant. Such timing aligns the peak not worked in shipbuilding. With training, good experience and daily contact with industry, report. This will ensure the build duration, of activity of all three projects for each stage supervision and a short, but reasonable period they are closely connected to people managing available workforce size and productivity of work: systems engineering and design, then of time, they can quickly become productive. the current fleet, so are part of a continuous are realistic. production engineering, then production and conversation about the ageing and service By the time the first three stages are aligned >> Ensure time allowed for workforce build up so on. Each project would be competing for the life of ships, rising costs of sustainment and across multiple projects, especially if is calculated using methods such as those same core of experienced people, and competing timelines to replace. production is of dramatically different durations, described in section 9, and not simply guessed. to recruit the same sort of new people to bring >> The daily contact with industry also means that it may be impossible to align the final test and Ensure any assumptions are realistic. them up to the required capacity. They will also the Defence Materiel Organisation can predict activation stage. This is where enough time be retrenching skill groups in similar timeframes. workload patterns and set individual project The plan will naturally encompass the timing of for the likely available resources needs to be The precise pattern depends on several factors, timelines to optimise the overall scheme government decisions (first and second pass) and allowed in the schedule, by both Defence and such as number of ships, but in basic terms this of projects and achieve a better result for affect investment profiles, but longer time horizons the companies engaged. synchronous phasing is counter productive. Defence. For example, starting a project earlier and practical plans that avoid project delays or This plan will not propose one specific view on than might be necessary to take advantage avoid added investment to keep older ships running As discussed in section 2, a shipbuilding project how all the projects in the Defence Capability of an opportunity to compete a project when is the objective. Also, the time between first broadly has four stages: systems engineering and Plan should be sequenced. There are too companies are looking for work. and second pass needs to be set with a detailed design, production engineering, production, and many variables and choices that mean a single knowledge of the engineering task. Too short, and test and activation. They all overlap, but achieve Lessons learned that guide good planning include: prescription is not sensible. During the study, design and project data developed is too shallow each peak of activity in that sequence. different scenarios were examined (see Annex C), >> Allowing ample time between final government and results in a poor decision; too long, and money In the scheme of all naval shipbuilding projects, which revealed different benefits. Development of approval and the start of hull block fabrication is wasted generating more and more data that does the aim should be continuity of each individual the optimum solution for prevailing circumstances for a rigorous systems engineering process not add to the quality of the decision. element, not the nose to tail continuity of whole will take further analysis in cooperation with the to be completed. Any flaws in the requirement projects. The major design phase of each project teams developing force structure options for the set at this stage of complex warship should be timed so they run nose to tail. Similarly, Defence White Paper. development are very expensive to fix production engineering should be spaced at any later stage in a project. In terms of the whole schedule of naval generally to allow industry to apply experts to shipbuilding projects, as for individual projects, >> This time must also allow for development one major project at a time. If this is not possible the action required is for the Defence Materiel and review of the shipyard build strategy, which because of other constraints, then more time can Organisation to undertake planning with a clear covers manufacturing strategy, facilities, tools be allowed for simultaneous activities because of understanding of all capability needs and the and processes—especially any upgrades— limited resources. and the build schedule. An expert third party entire industrial setting, and in discussion with should review all of these. Future Submarine Industry Skills Plan / page 126 page 127 / Future Submarine Industry Skills Plan

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capability planners and industry. Discussing Part of the overall plan for naval shipbuilding entire workforce, but that consideration is part Operational capability different needs and planning options will optimise needs to consider retention of a core of skilled, of the detailed planning. For example, it may For warships, there is always a need to upgrade solutions and produce a better plan. This is not a experienced workers. This is discussed further in mean the seemingly obvious location for the systems to keep them effective against evolving one off or short-term task, this is an ongoing role section 8. Evaluating options has to consider cost work is not chosen. threats. New technology delivers new threats, and for the Defence Materiel Organisation. The plan differentials. If it was more expensive to execute new systems are required in response. To maintain will only remain viable if it constantly adjusts for a project in a way that solved a broader workforce ROLLING BUILD PROGRAMS the operational effectiveness of warships, scientific changes in requirements, budgets, developments retention problem, that additional cost has to be research and development programs are needed in industry, new technology, new practices and balanced against the higher cost of starting a Rolling build program is the term used in this to develop new technology and new systems to progress and problems with projects underway. future project with an inexperienced workforce. report to describe an ongoing shipbuilding project. steadily evolve the design baseline of successive The First Marine International analysis and This is where ships are built at a steady cadence The Australian Government has shipbuilding ships. They need to be a permanent, funded various RAND studies point to these additional supported by an engineering program that deals projects beyond Defence, notably patrol boats for feature of a major naval shipbuilding project. costs being substantial. In the case of Air Warfare with equipment obsolescence and minor system Australian Customs and a replacement by 2018 Embedding these programs inside a major project Destroyer, the cost impact of the cold start could changes, and also a research and development for Aurora Australis, Australia’s Antarctic research directly connects research and development to have been avoided if a lower cost project had program that develops new technology for major and resupply vessel. The three agencies involved ship production, which means costs, schedules been done to retain a core of skilled, experienced equipment and capability upgrades. should coordinate plans to optimise outcomes and risks are controlled and ideas have a practical shipbuilders during the downturn between ANZAC, for government. Unlike the start and stop nature of pre-defined and important destination. A rolling build program Collins and Protector projects and the start of build projects, these projects are set up to run allows changes to be introduced progressively Air Warfare Destroyer. In the case of ASC and Workforce retention for an indefinite period. Ideally, the project will be into a class of warship. The US Navy DDG-51 submarines, Adelaide has had the advantage of designed to build ships at a certain interval, for project is a rolling build program. The first ship, The expert industry panel agreed unanimously Collins maintenance to retain skilled workers. a certain life of type so that when the last ship is the USS Arleigh Burke, was laid down in 1988 that when people leave the shipbuilding industry Submarine construction skills will have faded built, the first requires replacement. For example, and the latest ship under construction, the USS as it declines, they rarely return. Instead they find to some degree, and some people departed, for a fleet that requires 10 ships of a certain type, Thomas Hudner, is the 65th ship of the class. similarly challenging but secure employment in but many remain. the rolling build program could build ships with a Over that 24 years, the ship has evolved through other sectors, and stay there. This is not new—it 20-year life delivered at two yearly intervals. three major upgrades, called flights or batches, has been evident for many shipbuilding cycles In service upgrades with a fourth under development, and countless over past decades. What it does mean is that in Just as important as the build cadence are the Sometimes referred to as mid-life upgrades, major minor equipment changes. One of the US Navy the past each new cycle is built upon a largely engineering, science and technology programs systems upgrades to ships in service are another principles is to ‘design a little, build a little, test a inexperienced workforce and this results in that continually support the build of current and important opportunity to retain and develop skills. little’. Over time, all sub–systems can be upgraded problems, particularly low productivity. future ships. A project without this support will For the Future Submarine Program, this will be a fail. For example, even with a stable design, ships or changed, without causing a dramatic shock to There are different ways to solve this problem. key factor in considering the Collins Service Life in construction require engineers to design and the momentum of the industry team executing the Ideally, each skill group can find continuity of Evaluation Program. Arguably, what this Program develop solutions for equipment and materials no projects, which occurs when projects are stopped their particular work, so not only retaining the does for submarine design and construction skills longer in production, or where the manufacturer and started. people, but building their skills and experience. is equally important to the Future Submarine changes its equipment configuration. This happens Clearly that is not always possible. What can be Program as it is to the Collins class. This is all the time in shipbuilding and manufacturing in Defence budget done is to allocate work that occupies the skilled recognised in Defence. general, sometimes it is forecast and other times When budget priorities change and the amount workers, even if it is not in their specific domain. There will be other warships that need major it comes as a complete surprise when equipment to be invested in shipbuilding needs to reduce, For example, people skilled in welding submarine system upgrades in the future, and that needs to turns up in the shipyard. However it occurs, and it rolling build programs provide the flexibility to pressure hulls will not advance those skills be an influential part of the planning for both new requires a proper engineering design process to lower annual cash demand by extending the keel welding thin, mild steel for a support ship. But they construction and those upgrades. As discussed in make the change. interval. Again, this avoids a shock to industrial are at least retained in the industry, which is far section 5, often acquisition and sustainment work momentum. Similarly, if budget priorities change better than their departure and having to rebuild is done in different cities, so will not benefit the and more funds can be allocated, the keel interval the skill set from zero. can be shortened. The effect on budget demand is substantial. Future Submarine Industry Skills Plan / page 128 page 129 / Future Submarine Industry Skills Plan

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___ Figure 10.1: ROLLING BUILD PROGRAM

• MEET MILITARY NEED BY CHANGING KEEL INTERVAL • THROTTLE EXPENDITURE BY CHANGING KEEL INTERVAL

SHIp CONSTRUCTION DATA PACKAGE SHIp CONSTRUCTION DATA PACKAGE SHIp CONSTRUCTION DATA PACKAGE SHIp CONSTRUCTION DATA • DESIGN INTENT TRANSLATED INTO THE SHIP CONSTRUCTION SYSTEMS ENGINEERING & DESIGN DATA PACKAGE • AVOID INTRODUCING FURTHER CHANGE DURING BUILD

OBSOLESCENCE UPDATES

• SYSTEM LEVEL OBSOLESCENCE UPDATES AND CAPABILITY UPGRADES • ONLY INTRODUCE CHANGE WHEN PRODUCTION READY I.E. WHEN NEW THREAT SYSTEMS NEW SYSTEMS HAVE BEEN DESIGNED, BUILT AND LAND-BASED TESTED CAPABILITY UPGRADES • PROGRESS FROM R&D TO ENGINEERING WHEN TECHNOLOGY IS SUFFICIENTLY MATURE RESEARCH AND DEVELOPMENT EXPLOITATION Future Submarine Industry Skills Plan / page 130 page 131 / Future Submarine Industry Skills Plan

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As an example, consider a warship whose The other benefi t is that a rolling build program Shipbuilding productivity improves with every ship substantial non-recurring engineering and start- average price is $2 billion. If the series of ships underpinned by a proper engineering, science that is built in a series. Generally referred to as up costs, which can equal the cost of one to two is delivered at two yearly intervals (24 months), and technology program is doing the very work the learning curve, this is a basic manufacturing ships, the savings from one long project versus the average budget demand is $1 billion a year. required to keep the in-service fl eet up to date. principle. The same effi ciency gain is not made two or more short projects are considerable. The ships would take longer than two years to In short run projects, that engineering, science between every ship in a series, typically the build, but that is the average rate of effort. If and technology tends not to be done for the few same percentage reduction is achieved as output Future>submarines the keel interval is extended to 30 months, the ships that are built. If the know-how and data doubles. So the gain from hull one to two in a You do not need 50 ships in a class to have a rolling average annual cash demand reduces by $200 is not effectively transferred from the project to series is about the same as the gain made from build program; the logic can apply to smaller million to $800 million. Reduced to 18 months, support organisation, in–service support becomes hull two to four, then four to eight, and so on. In fl eets. The future submarine program of 12 boats the average annual cash demand rises by $333 a problem as described by the recent Coles Report warship construction, learning curves of eight to is clearly a candidate for such an approach, and million to $1.3 billion. Clearly not something that into Collins class sustainment. In a rolling build 10 per cent are typical, but it can be higher for there has been much discussion about fl ights or can be adjusted on a daily basis, changing keel program, that engineering, science and technology inexperienced shipyards and there are other fi rst batches of these submarines. When the details interval is useful fl exibility in long-term planning work is essential. The ship modifi cation packages of class effects that lower productivity for the fi rst are settled and construction approved, it will be that does not injure the core skills of the industry. required to overcome obsolescence in build or ship in a series. The following graph shows an important for the project to develop the design of It would reduce employment levels because deliver capability upgrades can basically be eight and 10 per cent learning curve. the submarine over the long term and for there to slower construction means a smaller workforce applied to ships in service without additional For the future submarine program, just on learning be a vision to evolve industry capability to meet the is required. Controlling expenditure by governing non-recurring costs. curve effect alone, the effort to build the 12th challenge of the next generation of submarines. projects over time (horizontal control) is much submarine should be at least 25 per cent less than better than starting and stopping them (vertical Industrial>benefi>ts In basic terms, the project might be designed for the fi rst. Note that First Marine International control), which costs money later to rebuild to deliver submarines at a steady keel interval There are also important industrial benefi ts with assesses that the fi rst of class productivity drop industry skills and capacity. of two years with a design life of about 25 years, a rolling build program. A steady work program off for the fi rst submarine in a series can be as noting each submarine will take about fi ve to six allows shipbuilders to improve productivity Changing>strategic>requirements high as 95 per cent (see section 6). Add to this the through practice and investment, and major This approach to controlling projects is also gains are proven to be achievable. A steady ___ very important fl exibility for national security. If work program also allows systems companies Figure 10.2: LEARNING CURVES strategic circumstances change and government to become more effi cient though practice and decides to increase the size of the naval fl eet, this investment. And it is not just basic man-hour 120 can be done simply by reducing keel intervals. productivity that improves, a practiced industry

Obviously this is not instantaneous, but it is faster makes savings in almost everything it does. 8% than rushing through a new project, which will An experienced workforce knows the pitfalls 100 10% inevitably face problems, premium prices and and avoids mistakes, which are complete likely delays. savings not just percentage improvements. 80

In-service>support A rolling build program allows the retention of the core workforce while allowing for steady changes 60 Two benefi ts accrue for in-service support from in workload in the different areas, as well as a rolling build program. Firstly, a fl eet of common reasonable levels of staff turnover. A rolling build warships substantially reduces the cost of program also allows for investment and long-term 40 integrated logistic support compared to a fl eet of development of highly skilled people. For example, MAN HOURS PER CGT two or more types of warship. Only one training systems architects, people who design highly 20 system (instructors, facilities, courseware, training complex combat systems, take about 15 years of aids, simulators etc.) is required, not two or more. experience and specifi c training to develop. There 0 1 2 3 4 5 6 7 8 9 10 11 12 Spare parts management is simplifi ed though the are skills in shipyard production that take similar quantity is obviously not halved. development periods, and without the certainty of VESSELS a rolling build program, these specifi c skills do not get developed to anywhere near the same extent. Future Submarine Industry Skills Plan / page 132 page 133 / Future Submarine Industry Skills Plan

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years to build. There should be a longer delivery Smaller ships and projects One of the arguments against a rolling build In addition to an ongoing management structure, interval between the first and second boats to program for small, simpler ships is the constant consideration will have to be given to the Rolling build programs are not suited to all deal with first of class issues. There does not overhead burden. This has to be challenged. people and other resources needed to fulfil any projects. There is no hard and fast rule, but the need to be a longer interval between batches Not only can we expect better and improving Government direction to implement this plan. key variables are the number of ships required, because the engineering, science and technology productivity in shipyard production, we can expect Complacency and any assumption improvements complexity of systems, design life and the pace programs that would deliver new designs can and should demand the same for design and will just happen must be avoided. Given the of technology upgrade required to maintain their work in parallel to the build project so that all production support organisations. importance of not losing skilled, experienced relative fighting capability. designs, equipment and production data is ready people, early attention will need to be paid to the One of the observations of the expert industry for the first ship in a batch without disrupting the While modern patrol boats incorporate some workforce reductions that have already started. panel was that technology and systems are momentum of the build project. complex systems like larger warships, their probably not mature enough to make a common smaller size means their construction period platform viable today for the Offshore Combatant Surface combatants is shorter and shipyards tend to build them Vessel. One concern is the off-board mine hunting with shorter keel intervals. For example, for the Major surface combatants are another class of systems needed to work with a platform not Cape class project, Austal in Western Australia warship suited to a rolling build program. They are specifically designed for mine hunting are not is building eight ships each with a construction required in similar numbers to future submarines yet proven or in production. and are similarly complex. Known as destroyers duration of two years, all delivered in three years, with a design life of 20 years. This means that the and frigates, there is little in the modern use of DEFENCE MANAGEMENT STRUCTURE these terms to distinguish the ships. The Royal construction project will take six years overall, with Australian Navy typically operates a fleet of 12 an interval of 14 years before the first replacement The last point in the terms of reference for this to 14 surface combatants, with the fleet today has to be delivered. For a similar navy patrol boat work sought a proposal for arrangements within comprising eight ANZAC and four FFG-7 frigates. project, this could be adjusted to a keel interval Defence, particularly the Defence Materiel of two years so that by the time the last ship Organisation, for ongoing management of the The current destroyer project is scheduled to is delivered the first replacement is required. naval shipbuilding program. The change proposed deliver its last ship in 2019. Initiated by the 2009 Whether this is an economical approach depends is small as most of the capability planning and Defence White Paper, the future frigate project on precise circumstances, but it would at first acquisition process is in place. is scheduled to commence in about 2021 with appear not as viable as one short production run. first ship delivery in about 2026. Merging these However, if there was the demand for more ships Described above is an adjustment so that the two projects in to one rolling build program is an in the class, or to constantly upgrade the systems Defence Materiel Organisation leads the initial opportunity worth close examination. onboard the ships, it might well be cheaper to formulation of project scheduling for all naval extend the keel interval and steadily introduce shipbuilding projects, given the operational A rolling build program for major surface change as each ship is built. requirements and need date from capability combatants does not mean all ships are the planning. The second adjustment is internal to the same. The essence of these programs is that, For a more complex ship like the Offshore organisation and involves placing the management underpinned by engineering, science and Combatant Vessel that has different systems of all naval shipbuilding projects in one group technology, they can progressively evolve design fitted in a common hull, a rolling build program rather than across divisions, that is, developing to meet different operational requirements. Every could well be the right approach for 20 ships for a “start up team”. That group needs to be centred proposed change needs to be examined and shown several reasons. Capability planners might want on the people managing current projects, so to be achievable, but it seems practical that the Air to reprioritise delivery of the different mission the realities of project execution and current Warfare Destroyer could evolve to meet the needs ships, so exactly which model is required can be knowledge of the shipbuilding industry truly of the future frigate. Using the US Navy principle changed before the detailed build configuration influence the planning decisions. of ‘design a little, build a little, test a little’, the is finalised for each. Rapidly changing evolved ship might in the longer term be quite technologies and systems can be incorporated different in configuration to the current ships. as they become available.

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A FUTURE for australian NAVAL shipBuildinG Future Submarine Industry Skills Plan / page 138 page 139 / Future Submarine Industry Skills Plan

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There is a future for naval shipbuilding in Australia for two reasons: Shipbuilding and the nation Naval shipbuilding cannot be justified simply because it is manufacturing. Shipbuilding can be primarily for national security, but also for its worth to the nation Naval shipbuilding is at the core of this country’s a part of Australia’s manufacturing industry, but more broadly. advanced manufacturing industry. Submarines not as an endlessly subsidised component of this and destroyers are amongst the most complex industrial base. Today, when the price of ships and largest machines manufactured in Australia. Planning for a national shipbuilding capability submarine and Armidale patrol boats, is generally built overseas is compared to local prices, there is Building them develops a wide range of assumes Australia will still need warships in 50 good. The projects each had their problems, argument that local build premiums are too high manufacturing skills and drives innovation, both or 100 years’ time, whether they be submarines, no project is ever perfect, but given experience, and economically not justifiable. The problem with in technology as well as manufacturing practice. destroyers, frigates, patrol boats, minehunters, Australians have shown the ability to handle the this is that Australian naval shipbuilding is, once hydrographic, amphibious or support ships. This challenges and keep learning and improving. With continued contraction of activity in again, largely inexperienced, and prices quoted are report works on that assumption. Discussion on The aim of a long-term plan for naval shipbuilding the Australian manufacturing sector and a burdened by the cost of re-building shipbuilding the importance and nature of military capability is, in Australia is to enable Australia to acquire changing national economy, there has been skills and capacity. Also, as discussed previously, as stated previously, a matter for Defence White warships as required, safely, with cost and extensive debate about the future of the overseas prices are not always consistent and Papers and other national security assessments. schedule at least as good and reliable as any industry. In August 2011, the Prime Minister some contain subsidies. commissioned a ‘high-level taskforce [to] map A high performing naval shipbuilding capability other world source. To achieve optimum levels To make a reasoned judgement on the value of out a shared vision for the future of Australia’s is a national effort, involving many companies, of shipbuilding performance means having very naval shipbuilding in Australia requires industry manufacturing sector and help strengthen local education and training institutions and government experienced people leading teams of skilled people to be given the opportunity to achieve world-class firms as they adapt to changes in our economy, agencies. That national capability is about skilled with varying levels of experience, taking on graded performance. In 2010, the Air Warfare Destroyer including the rise of Asia.’ people employing a wide range of proven tools, challenges in designing and engineering warships. project commenced manufacturing hull blocks in processes and facilities to design and build Experienced production managers and workshop Released in August 2012, the final report of three shipyards: one shipyard was brand new, the warships. The people have to be skilled in systems supervisors lead teams of skilled workers who the non-government members of the taskforce other two established but inactive in shipbuilding. engineering, ship design, production engineering, work in profitable shipyards with impeccable safety concluded ‘manufacturing is an important and Skill and experience levels were patchy. Three ship construction and mega-project management records, well proven processes and machinery, dynamic part of the Australian economy with years later, productivity is low, but the level of skill, to deliver safe, quality and efficient shipbuilding and high, ever increasing levels of productivity. deeply embedded and mutually reinforcing links experience and manufacturing technology that projects. Optimum performance is not achieved in With a long-term and ongoing shipbuilding plan, with primary production, utilities, construction has been grown is very respectable. All indications one project, or even in one generation of projects. experience and time, this can be achieved. industries and the services sector. Manufacturing are that this learning is not slowing and with more To become a truly proficient shipbuilding nation can and should continue to play a key role in experience, the capability could be impressive. requires a clear vision, and a plan that spans a the development of the Australian economy and Shipbuilding and national security The evidence is Australia has been very good at number of decades. its ongoing strength, diversity and resilience.’ shipbuilding in the past, has quickly rebuilt some The Spanish Armada and the shipbuilding The ‘technology edge’ is becoming more and more Further, ‘manufacturing makes large direct of that capability today, and can learn quickly. important in military capability. Security controls and indirect contributions to national output, company Navantia have been involved in a similar While the industry redevelops shipbuilding skills, are tightening on the sale of advanced military employment, investment and innovation. It makes effort to build a national shipbuilding capability. prices will be higher because of the investment technology and Australia will be able to buy disproportionally large contributions to exports The Defence Materiel Organisation would like required for recruiting, training, facilities and warships from very few countries in the future if it and research and development’. These themes to acknowledge the help and encouragement productivity improvement. Given the chance, wants the advantage of the latest technology. As a were echoed in the Australian Government’s recent that they have provided during the development Australian naval shipbuilding can be world-class. of the Future Submarine Industry Skills Plan. principle of sovereignty, Australia should possess Industry and Innovation Statement: “a vibrant Cooperation in the future with projects like the an industry able to design and build the destroyers manufacturing sector is essential to a dynamic Spanish F-110 or United Kingdom Type 26 frigate and submarines central to its maritime defence. and diverse Australian economy”. depends upon clear long term plans that enable Expert industry panel input into this study makes early, practical planning on shared research, it clear that industry believes Australia will need development and engineering efforts. a real shipbuilding capability in the future. This is Australia has proven it is capable of designing not self-serving; their rationale is national security and building warships. Performance on the most and the changing global shipbuilding environment, recently completed projects: ANZAC ship, Collins not company business. Future Submarine Industry Skills Plan / page 140 page 141 / Future Submarine Industry Skills Plan

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As this experience shows, each step needs Planning the future for Australian to be taken and consolidated, and it would be naval shipbuilding Manufacturing into the future, Professor Göran Roos foolish to try and skip levels. A long-term visionary plan for a national naval Manufacturing, or the business of making things, is a critical For Australia it is also particularly important to shipbuilding industry can succeed. The hallmark component of any advanced economy. Manufacturing globally is: note the cost structure of each level. When there of a good plan is to steadily and continually >> the biggest spender on applied research and innovation, is no naval shipbuilding industrial base, imported build up experience and capability over several with flow-on effects for the rest of the economy ships are cheaper than the nation’s first efforts decades and projects. Take only one step up in to build their own, which causes the hesitation industrial capability with each project, and start >> a key driver of productivity improvement all nations experience in taking this step. Co- with the simpler warships and move progressively >> responsible for the biggest share of world trade and critical for export earnings designing a new warship is also structurally more to the most complex—submarines. What the >> the largest driver of high-value services expensive than buying an off-the-shelf design, Spanish effort also shows is that it requires >> the largest generator of employment, with between two and five which causes another hesitation. But having commitment and perseverance to push through jobs created in the rest of the economy for each job in manufacturing. established an indigenous design and production the more expensive layers to achieve a competitive capability, ships should cost no more than from industry that can economically deliver its own 2011, Manufacturing into the future, Professor Göran Roos. foreign suppliers, and will probably be cheaper nation’s warships . because interface layers are removed. When Developing this for Australia will require detailed export sales are achieved, overhead costs are planning, and it will need to be flexible and amortised and ship prices reduce to what should adjust as circumstances evolve. The plan will A successful vision made real Key points to note are that the plan is long-term. be their lowest cost structure. The global price need to embody the principles outlined above. It takes a graduated approach to building up the for a warship depends upon factors external to To illustrate that it can be done in Australia, the Current projects need to build up ship production different skill groups involved in shipbuilding, each project, including currency exchange rates, Air Warfare Destroyer and Landing Helicopter capability and experience. The next generation of and it works progressively from simple to national labour costs, shipyard throughput and Dock projects have provided a good insight to the projects have to consolidate that expertise, and complex warships. subsidies. All these global factors are changing, shipbuilding vision of Spain. In the period before build the next level. and there is no guarantee they will favour the 1980s, Spain was in a similar position to Conceived in the late 1980s when the Spanish importing warships for much longer. In the following generation, select projects will Australia; navy ships were generally imported with were dissatisfied with a project aiming to deliver focus on co-designing carefully chosen elements local construction of some ships using imported, a common European frigate, the plan recognises The Spanish plan also shows a sensible of a warship. Different projects will take on off-the-shelf designs. Then the Spanish Navy and that the stages of growth for indigenous naval progression within each layer. Start with the different elements, one might be used to develop industry worked together to create a long-term shipbuilding are: simpler challenges—patrol boats and supply small hull form and structure design skills, plan for indigenous naval shipbuilding. ships—before progressing to the more complex >> fully imported warships another might focus on elements of the combat amphibious ships and frigates, and take on the The plan has been successful. Spain has designed system, while another might develop an indigenous >> imported off-the-shelf designs and local build, most complex challenge of a submarine last of all. and built patrol boats, frigates and amphibious which builds up indigenous production skills integrated platform management system. ships. It has designed a submarine and the first >> In the generation of projects after that, all those boat is now in production. The country is now progresses to co–design, working with an skills come together to undertake the design the third largest exporter of warships in world established foreign designer to build up of a complete warship, starting with something rankings. Naturally these projects have had their indigenous warship design skills (separately like the offshore combatant vessel, then the next challenges, but the clarity of and commitment covers both platform and combat systems) destroyer, then the next submarine. to the long-term vision held means Spain is now >> consolidates the industrial base with locally regarded as a genuine naval shipbuilding nation. designed and built warships, and then >> The diagram on page 142 illustrates its plan. moves in to the export market for designs or complete warships. Future Submarine Industry Skills Plan / page 142 page 143 / Future Submarine Industry Skills Plan

___

A FUTURE FOR AUSTRALIAN NAVAL SHIPBUILDING ___

___ Figure 11.1: SPANISH EVOLUTION

international POV Venezuela sales: design Chakri Naruebet F-310 Norway AWD Australia Thailand DESIGN LHD Australia Chile AND build Malaysia DESIGN/ CO-BUILD BVL Scorpene India Venezuela

Action Maritime Ship – BAM

Combat local design Replenishment Ship with local NG Frigate build NG Submarine Corvettes Landing Helicopter F-100 Dock ships S-80 Replenishment Oiler

co-design with local build Scorpene Landing Platform Dock

Destroyer Escort Guided Missile Frigate foreign design with local build Aircraft carrier SUBMARINES SUPPORT SHIPS

S-60 AMPHIBIOUS SHIPS PATROL VESSELS S-70 LEGEND FRIGATES

foreign design with foreign build

1960 1970 1980 1990 2000 2010 2020 2030 While much of that design will involve existing technology, work should also be done to research and develop selected technologies. With a plan developed in close consultation with both industry and the Defence Science and Technology Organisation, this science and technology work should be an integral part of each shipbuilding program so the practical objective of ship installation remains clear. If surface combatants (the destroyers and frigates) become a rolling build program, part of the underpinning science and technology program should look at the feasibility for developing an Australian warship combat system. This feasibility study would need to examine architecture, future operational requirements, future technology, costs, benefits and all risks and opportunities. Any implementation would need to be in small, measured steps. Such a system should be scalable so that functional elements of it can be used in patrol boats and support ships, as well as high-end surface combatants and submarines. Developing architectures for combat and platform systems is important underpinning to discussions regarding cooperation with other nations’ projects such as the United Kingdom’s Type 26 or Spanish F-110 frigate. The architecture enables detailed, practical agreement about shared investment in technology research or specific sub¬system development such as the Integrated Platform Management System.

Summary A naval shipbuilding industrial base in Australia will be important our future national security, and benefit the nation more broadly. A competitive Australian naval shipbuilding industry will depend upon people skilled in systems engineering, ship design, production engineering, ship construction and mega-project management. Australia can achieve world-class levels of performance; however, this optimum outcome will take vision, perseverance, planning and time. 12

Conclusion Future Submarine Industry Skills Plan / page 148 page 149 / Future Submarine Industry Skills Plan

___ conclusion ___

FROM THE EARLY 1980S, AUSTRALIA BUILT A VERY CREDIBLE NAVAL SHIPBUILDING ABILITY Given the scale and complexity of the future Conduct of the study submarine project, all practical actions should be THROUGH THE COLLINS SUBMARINE AND ANZAC SHIP PROJECTS, BUILDING A TOTAL OF Firstly, thank you to all the people who contributed taken to retain and develop the skills that project 16 WARSHIPS FOR THE AUSTRALIAN AND NEW ZEALAND NAVIES. MINEHUNTERS AND to the expert industry panel that supported will need. The project will always be a challenge, PATROL BOATS WERE ALSO BUILT. A WORKFORCE OF MANY THOUSANDS WAS BUILT UP this study. In particular, thank you to Mr David but any stumble at the start would have very Mortimer AO who chaired the panel. Many IN THE VARIOUS SHIPYARDS AND SYSTEMS COMPANIES. expensive consequences. organisations participated and virtually without Today, Australia has some options to purchase exception it was the chief executive who attended. Numbers declined to a very low level as the Work in support of this study also shows that submarines and complex warships from overseas. This is a clear reflection on the importance of the projects finished in late 1990s and early 2000s, Australia has a strong cadre of people who can As the global market retracts and technology Future Submarine Industry Skills Plan. before rising again with the commencement build complex systems and construct warships. release becomes more restrictive, these options of the current era of naval shipbuilding with Australia has good skills in the development The panel was a vital element of this study. will reduce. There is a good argument to be made the Air Warfare Destroyers, Landing Helicopter and integration of combat and platform It allowed the principal companies and other that Australia may not be in a position to buy Dock warships and patrol boats for Australian management systems. Australia has also organisations involved to talk about naval conventional submarines or their design from Customs. Today, there are around 4,000 developed world–leading sub–systems in areas shipbuilding projects, lessons learned, problems, overseas for the generation of submarines that Australians involved in naval shipbuilding such as electronic warfare and sonar. These risks and opportunities that affect Defence will in 20 to 30 years replace the future submarine. in Australia. Much of this workforce was skills have been built up over several decades, and industry today, and those that lie ahead. Furthermore, the design of a submarine is highly generated in the last five years. benefitting from the continuity of work and Discussions by the panel can be characterised sensitive national security information. challenge of successive projects. by their practicality and strategic nature; they Submarines are very complex machines, with Australia should use the next generation of certainly were not about the interest of individual many unique design features. A submarine Shipyards have the facilities to build the warships naval projects, future submarine included, to companies or industry profitability. Discussions project is the most difficult of all shipbuilding required, although some investment would be establish a genuine national capability to design centred around how Defence and industry could projects. A general principle offered by one very required to develop launch points for the larger and build complex warships. Government, work together to understand the whole scheme of experienced shipbuilder was that every element supply vessels. A weakness with ship production Defence and industry would need to develop an shipbuilding and be able to optimise the outcome of a submarine project takes more time and effort today is low productivity, which is due to the itemised view on what naval shipbuilding capability for Defence: warships at lower costs, delivered to complete than for all other warship projects industry being built up following the decline in needs to be developed in Australia. Complex on time and with the requisite capability. Industry (leaving aside basic scaling factors such as size shipbuilding in the 2000s. The consequence of warships like submarines and surface combatants and its workforce can also benefit from a more and number built). allowing skills to decline to very low levels has need to be at the centre of that plan. This does not integrated and optimised long term plan. been shown in current projects to cost time and Work in support of this study and earlier efforts by necessarily include support ships because they money. There is truth in the maxim that the most The study was also well supported by First Marine RAND and other organisations show that Australia are built to commercial shipping standards, where expensive thing you can do in shipbuilding is stop. International. Damien Bloor and the team from does possess a core of skilled and experienced there are more global suppliers and no classified its UK and USA operations did good work on warship designers. Australia has a good record To meet the challenge of the future submarine technology issues. benchmarking the capability and capacity of the in designing patrol boats and support ships, and and other naval projects, shipyard workforces Our national security strategy needs a detailed, principal naval shipyards and analysis of the it was the design by WA company Austal that will need to evolve to achieve the right balance practical naval shipbuilding industry strategy. potential of this industry in Australia. was chosen against international competition for of skill groups, strengthen skills and most This will not be a large, expensive industry. the Independence variant of the US Navy Littoral importantly acquire experience. Shipyard In a national manufacturing industry of about Combat Ship. Submarines are the most complex organisations will need to refine their engineering, one million people, this will be a small, warship to design and while Australia has that planning and production processes and innovate proficient and innovative industry. core of skilled people able to contribute to the to improve productivity. Productivity is something design of a new submarine platform we will that can be relatively easily improved with good need to partner with a proven submarine design leadership and practice. For Australia’s shipyards, organisation. That organisation will contribute there is no fundamental impediment to achieving people to the design team and provide a proven world–class performance. framework of tools and processes. Future Submarine Industry Skills Plan / page 150 page 151 / Future Submarine Industry Skills Plan

___ conclusion ___

RECOMMENDATIONS 3. The Defence Materiel Organisation should 8. Working with industry and the Defence Science engage in more detailed discussion on a and Technology Organisation, the Defence The following set of recommendations draw upon frequent and ongoing basis with organisations Materiel Organisation should, as part of these all sections of this report. They are deliberately involved in naval shipbuilding, companies, programs, research the practicality and worth written as principles rather than a long list of unions and industry groups. No plan should of a common architecture for Australian specific tasks. be approved that is not broadly seen as being warship combat and platform management To build the skills to build the future submarines practical in terms of industry capability and systems. This architecture would guide and the other warships required for the future capacity, schedule and budget. investment in technologies and products fleet, the following actions are recommended. 4. Defence sponsorship of individual skills over the longer term. 1. Without adversely impacting the Australian development schemes such as Skilling 9. Defence should re-examine the Offshore Defence Force’s capability, planning of the Australia’s Defence Industry has been Combatant Vessel program to determine whole scheme of naval shipbuilding programs worthwhile for people involved in naval if technology and system readiness levels should be optimised to provide industry shipbuilding, particularly apprentices, and are sufficient for new types of equipment likely more predictable, better sequenced and long should continue. The Defence Materiel to be required to make the common platform term work: the necessary foundations for Organisation should develop and maintain a solution technically viable and economical. innovation, business investment, productivity nationwide skills matrix based on matrices Technical risk and other reasons might point and performance improvement. This of course already used in the shipyards, extending to to a better solution being to separate the patrol does not mean that all naval projects in the systems development, and use this to guide boat requirements from other requirements Defence Capability Plan will necessarily be skills development sponsorship. Options to and consider two separate projects. built in Australia. Rather it means that naval second select people to organisations with 10. The Department of Defence, through the shipbuilding projects should be planned with active submarine design and build programs Defence Materiel Organisation, should the aim of retaining wherever practical the should be investigated. work with the Australian Customs and current Australian workforce to place Defence 5. Industry should develop a clear plan to improve Border Protection Service and the Australian and industry in the best position possible at shipbuilding productivity in Australia, including Antarctica Division of the Department of the start of the next generation of projects. setting specific targets, and commit to Defence Sustainability, Environment, Water, Population Defence and Government should take early and Government to delivering these dividends. and Communities to coordinate and optimise action to ensure current workforce reductions Defence should continue to benchmark Australian Government shipbuilding programs. are not causing the loss of skills important to productivity on an annual basis. 11. Reflecting its worth in the development future projects. 6. Defence should structure the Future of this Plan, the Expert Industry Panel 2. Defence should consolidate planning for all Submarine Program as a rolling build should be a part of the implementation new warship programs into one group centred program, including establishing structured, process. As a guide, the panel might meet around the people managing today’s projects funded and ongoing engineering and science every three months for the first year and so that genuine and current experience is and technology programs to deal progressively six monthly thereafter to provide views applied. The initial schedule planning of with equipment obsolescence and capability and feedback on the development of naval naval projects for first entry into the Defence changes. shipbuilding plans and preparations for Capability Plan should be done by the Defence 7. Defence should pursue the opportunity at the future submarine program. Materiel Organisation based on warship need the completion of the three ship Air Warfare dates and capability requirements provided Destroyer Program to flow key skills and by Chief of Capability Development Group expertise into the Future Frigate Program. and Chief of Navy. Future Submarine Industry Skills Plan / page 152 page 153 / Future Submarine Industry Skills Plan ANNEXES page 157 / Future Submarine Industry Skills Plan

ANNEX A terms of reference

4.2.7 propose alternate scenarios for 5.4 The review will examine shipbuilding projects sequencing Defence projects that will now underway and those described in the better deliver the capacity and capability Defence Capability Plan (DCP). The naval STUDY INTO THE DEVELOPMENT OF other warships for the Navy, as well as from required to successfully deliver the Future shipbuilding projects in the DCP encompass SKILLS REQUIRED FOR AUSTRALIA’S the various education and training programs Submarine Project; landing craft, supply and support ships, available to people in Defence and industry, FUTURE SUBMARINE PROGRAM offshore combatant vessels and frigates, including trade apprenticeships. 4.2.8 propose improvements to the education and training programs that will better along with the future submarines. Other TERMS OF REFERENCE 4 OBJECTIVES deliver the capacity and capability required; future shipbuilding activity in Australia might include a major modification of existing ships 4.1 The purpose of the study will be to design a 4.2.9 propose other actions required to deliver the 1 AUTHORISATION and submarines to extend their service life. unified plan for naval shipbuilding projects, capacity and capability, including industry 1.1 The Minister for Defence and Minister for The naval shipbuilding program should be education and training programs and productivity, required to successfully deliver Defence Materiel have commissioned this configured to grow industry’s capability and other actions that will sustain and grow the Future Submarine Project; and study to develop a plan that will produce the capacity so that it can proficiently deliver the the competence and proficiency of the skills across Defence and Australian industry 4.2.10 propose a management arrangement largest and most complex of all the upcoming Australian shipbuilding industry so that required to successfully deliver the Future within Defence, particularly the DMO, projects, the Future Submarine Project. it can successfully deliver the Future Submarine Project. for the ongoing management of a 5.5 The review will assess the need for skilled Submarine Project. sustainable naval shipbuilding program. 2 PURPOSE workers for the Future Submarine Project. 4.2 The broad objectives for this study are to: Discussions will be held with various tertiary 2.1 The purpose of these Terms of Reference 5 METHOD OF CONDUCT 4.2.1 determine the type of skills required institutions on the development of courses is to specify the scope of the study into the to successfully deliver the Future 5.1 The review will be managed by the CEO DMO to develop skills specific to shipbuilding. development of skills to successfully deliver Submarine Project; and the review team led by General Manager The review will also discuss with companies the Future Submarine Project. Programs, DMO. 4.2.2 determine the size and profile of the and vocational institutions the role of 3 CONTEXT workforce required to successfully deliver 5.2 There will be an Expert Industry Panel apprenticeships, temporary visas or skilled 3.1 The Future Submarine Project is a major the Future Submarine Project; Chaired by David Mortimer AO and migration in boosting the number of skilled national undertaking and is of a scale, comprise representatives of the DMO, workers. An assessment will also be made 4.2.3 determine the current capacity and capability complexity and duration never before of skills funding programs offered by Federal of the Australian shipbuilding industry, in Navy, DIISRTE, Skills Australia, unions, experienced in Australia. About 2,000 workers and State governments. terms of skills and workforce; the CEOs of the four principal Australian will be directly employed in the construction naval shipbuilding companies; ASC, Austal, 5.6 The review team will also involve companies 4.2.4 determine the current productivity of the of the submarines, while two or three BAE Systems and Forgacs Engineering and with expertise in specific aspects of Australian shipbuilding industry and establish thousand more will be working in the industry the CEOs of the principal naval systems shipbuilding, such as productivity comparable international benchmarks; supply chain to support the project. integration companies: Lockheed Martin, benchmarking, to assist in its analysis. 3.2 The skills needed will include systems 4.2.5 analyse the naval shipbuilding projects Raytheon, Boeing, Thales, Saab Systems design, naval architecture, propulsion and currently in the Defence Capability Plan and and BAE Systems. 6 TIMING calculate the effect these projects will have combat system engineering, production 5.3 The review will naturally consult widely, 6.1 The review will commence in May 2012, on growth of the capacity and capability of the engineering, project planning and control, capturing input from all levels of the with work to establish the detailed scope of Australian shipbuilding industry; production scheduling, material procurement, Australian shipbuilding industry including the the tasking. Consultation with the interested risk management, budget control, financial 4.2.6 analyse current education and training manufacturing sector as well as platform and parties, that is tertiary institutions, state accounting, contract management, systems programs, including apprenticeships, and combat system designers. The review will governments and industry groups, will integration, and trade skills such as welder, calculate the effect these programs will engage with industry associations, unions, take place in June and July. boilermaker, and electrician. have on growth of the capacity and capability companies currently involved in shipbuilding 6.2 The review will present a report for 3.3 These skills will be generated from of the Australian shipbuilding industry; as well as those that may wish to become Government consideration by the end experience in designing and constructing involved in the shipbuilding industry. of the year. Future Submarine Industry Skills Plan

page 159 / Future Submarine Industry Skills Plan

ANNEX B australian industry contributions

Expert Industry Panel meetings Date Location 30 May 2012 Australian Parliament House, Canberra, ACT Expert Industry Panel members 14 August 2012 Forgacs Engineering, Newcastle, NSW David Mortimer AO Chairman, Future Submarine Industry Skills Plan Expert Industry Panel 11 September 2012 Raytheon Australia, Macquarie Park, NSW Chairman, Crescent Capital Partners 13 November 2012 BAE Systems Australia, Canberra, ACT David Allott Managing Director and Chief Executive Officer Australia 15 February 2013 BAE Melbourne Shipyard, Williamstown, VIC BAE Systems Australia Submissions and consultation John Allcock General Manager Integrated Solutions, Raytheon Australia Advanced Manufacturing CRC Deborah Anton General Manager, Competitive Industries Branch, Department of Industry, ASC Innovation, Science, Research and Tertiary Education Austal Paul Bastian National Secretary, Australian Manufacturing Workers Union Australian Industry and Defence Network Andrew Bellamy Chief Executive Officer, Austal Australian Industry Group Garry Ferris New South Wales Government Department of Trade and Investment, Australian Manufacturing Workers Union Regional Infrastructure and Services Australian Marine Complex, Western Australia Andrew Fletcher Chief Executive Officer, Defence SA Australian Marine Technologies Australian Maritime College Raydon Gates Chief Executive, Lockheed Martin Australia BAE Systems Australia Kim Gillis Vice President and Managing Director, Boeing Defence Australia BMT Design and Technology Peter Haddad Defence Industry Unit, Victorian Government Department of Business and Innovation Boeing Defence Australia Andrew Jackman Director Maritime, Defence SA DCNS Deep Blue Tech Chris Jenkins Chief Executive, Thales Australia Defence Materials Technology Centre Chris Lloyd Vice President, Maritime and Aerospace, Thales Australia Defence SA Tony Lobb General Manager, Forgacs Defence Teaming Centre Steve Ludlam Managing Director and Chief Executive Officer, ASC Department of Immigration and Citizenship Jack Mahoney General Manager Maritime and C4SR/Ground Based Radar Programs, Department of Industry, Innovation, Science, Research and Tertiary Education Lockheed Martin Australia Electric Boat Engineers Australia Gonzalo Mateo-Guerrero Director, Navantia Australia HunterNet Co-operative John O’Callaghan Australian Industry Group Defence Unit Institute of Marine Engineering, Science and Technology Richard Price Vice President and Managing Director, Saab Systems J&H Williams Graham Priestnall National President, Australian Industry and Defence Network Lockheed Martin Bill Saltzer Director of Maritime, BAE Systems Australia Navantia New South Wales, Department of Trade and Investment Malcolm St Hill Business Development Manager, Hunter Industry, Innovation and Investment Raytheon Australia Davyd Thomas Vice President Defence, Austal Royal Institute of Naval Architects Michael Ward Managing Director, Raytheon Australia SAAB Systems Australia SonarTech Atlas South Australia, Department of Further Education, Employment, Science and Technology Thales Australia University of South Australia page 161 / Future Submarine Industry Skills Plan

ANNEX C

SHIPYARD WORKFORCE SCENARIOS

The workforce scenarios presented here are the Gross Tonnage by the CGT coefficient produces a The estimates of ship dimensions, gross tonnage Once the CGT data has been determined, the representations of the workforce numbers that may figure for Compensated Gross Tonnage (CGT) and it figures, CGT coefficients and customer factors made number of hours required to build a ship can then be be required by shipyards to build the types of ships is this figure that allows a comparison of the relative by First Marine International and used in developing calculated by multiplying the vessel’s CGT by shipyard that have been proposed in the 2009 Defence White amount of work required to build different vessels. these workforce scenarios are shown in figure C.2. productivity, described in terms of man-hours Paper and the Defence Capability Plan 2011 and 2012. See figure C.1 below and Craggs, et al 2004 for a per CGT. First Marine International has made an detailed description of the methodology. assessment of the productivity of the major Australian A formula has been developed by First Marine ___ shipyards working on the Air Warfare Destroyer International to compare the amount of work required CGT coefficients are based on typical commercial Figure C.2: Maritime Projects under project, and while productivity is currently low, it is to construct different vessels. There are two major contracts which require little external oversight Consideration expected to improve to a target rate of 80 man hours/ variables: the first is a ship’s gross tonnage (GT) figure but naval design and construction projects require No. Estimated dimensions CGT. It was also determined that the shipyards could which is a measure of the ship’s internal volume. It is the shipbuilder to commit proportionately more SEA 1000 12 Length: c 80 m achieve a better productivity rate, based on their not the same as a ship’s displacement or dead weight. management, technical and administrative Submarines GT: over 800 layout, infrastructure and work practices, and takes The second is the ‘CGT coefficient’ that represents resources as the customer requires the shipbuilder CGT coefficient: 55 into account an experienced workforce working with the complexity of the vessel design and allows a to adopt practices for warships not required in Customer Factor: 1.15 a mature ship design, with minimal changes. Core comparison to be made across different types of commercial shipbuilding. This additional effort CGT: over 51,000 (normal) productivity, however, would not be expected vessels: a tanker, while large, is a relatively simple needs to be taken into account so the CGT SEA 1180 20 Length: c 90 m to be achieved until at least the fourth ship of a design and so will have a much lower CGT coefficient coefficient is adjusted accordingly with a Offshore GT: over 3,300 production run. compared to a modern complex warship. Multiplying correction called the customer factor. Patrol CGT coefficient: 9 To complete the workforce profile for each project, Customer Factor 1.1 ___ the build schedule needs to be determined, with CGT: over 32,000 Figure C.1: CGT Comparison estimates made of the length of time required to build SEA 1654 2 Length: c 170 m Supply Vessels one vessel as well as the rate at which the ships are GT: over 16,000 produced, the keel interval as it is called. It is these CGT coefficient: 2.5 two variables that produce the production ‘drumbeat’, Customer Factor 1.07 the rate of work in the shipyard. Changing either the CGT: over 43,000 build time or the keel interval will affect number of SEA 5000 8 Length: c 150 m Frigates* workers required: a quicker drumbeat will obviously GT: over 7,000 require more workers to keep up the pace, while a CGT coefficient: 7.6 slower rate will need fewer people in the shipyards. Customer Factor 1.1 CGT: over 62,000 The date when each project starts is based on JP2048 Ph 5 6 Length: c 65 m information outlined in the most recent public version Heavy Landing GT: over 2,000 of the Defence Capability Plan (Defence Capability Craft CGT coefficient: 2.68 Plan 2012). It provides dates for important milestones Customer Factor 1.07 in each project’s schedule. In terms of production, the CGT: over 5,000 important ones are the ‘Year of Decision’ (also called Icebreaker 1 Length: c 90 m Second Pass) which gives the final approval for the GT: over 4,000 project and the Initial Materiel Release (IMR) date, CGT coefficient: 2.8 when production has finished, the vessel is launched Customer Factor 1.07 and is available for testing. See figure C.3 over leaf. CGT: over 11,000 Future Submarine Industry Skills Plan / page 162 page 163 / Future Submarine Industry Skills Plan

___ 8. The length of the construction phase takes account The scenarios are presented as a set to give an Figure C.3: Defence Capability Plan schedules of the time taken to build each vessel and the keel indication of the sorts of changes that might be to keel interval. possible. The scenarios are deliberately not presented Defence Capability Plan 2012 project schedules (FY) 9. The shipyard workforce numbers calculated in these with an extensive analysis of the advantages or Initial Initial scenarios are for production workers (blue collar) disadvantages of each or any indication of specific First pass Year oF Materiel Operational preferred options. Vessel type approval Decision Release Capability and supervisors including production engineers (white collar). It does not include the design team, Heavy Landing Craft 2013/14 to 2014/15 2017/18 to 2020/21 2020/21 to 2022/23 2022/23 to 2023/24 In general terms, the objective of such a combat or platform system engineering staff. rearrangement is to optimise the pattern of work Future Submarines 2013/14 to 2014/15 2016/17 to 2017/18 2019/20 to 2025/26 2025/26 to 2026/27 10. Productivity is calculated as Man-Hours/ for the industry in order to improve proficiency and

Offshore Patrol 2014/15 to 2015/16 2016/17 to 2019/20 2017/18 to 2021/22 2018/19 to 2020/21 Compensated Gross Tonnage (Man-Hours/CGT). increase productivity: independently considering 11. The workforce projections have been determined all the major skill sub-groups in the systems Supply ship 2012/13 to 2013/14 2014/15 to 2017/18 2018/19 to 2020/21 2018/19 to 2022/23 on a base productivity level of 80 man-hours/CGT. architecting, production engineering, and production workforces. An example of the sort of profile that Future Frigates* 2018/19 to 2020/21 2021/22 to 2023/24 2026/27 to 2028/29 2027/28 to 2029/30 A high level of productivity is assessed at 50 man- hours/CGT, while a low level of productivity is 110 moves towards that goal is scenario 16. This scenario Ice breaker Not included in DCP 2012 man-hours/CGT. features staggered project start dates, longer build programs and longer keel intervals that promote 12. The average shipyard worker works 2000 * Note: the schedule provided in the Defence Capability Plan 2012 for SEA 5000 Future Frigate refers only to Phase 1A of the project, skills development, facilities investment, more the development of a high-power phased array radar demonstrator. The schedule dates used above are from the Defence Capability hours/year which includes an allowance stable and sustainable workforces, opportunity to Plan 2011. for typical overtime worked. grow experience, and so on. This in turn improves workforce proficiency and productivity, develops The Scenarios Assumptions 4. Gross Tonnage figures are estimates made by better anticipation and avoidance of problems and A selection of possible shipyard workforce scenarios First Marine International based on current naval ultimately lower costs and more reliable schedules. The scenarios shown here are based on the following is presented in this section. Given the number of vessels that fit the general description of the The scenarios do not show the ‘learning curve’ effect assumptions: variables, it would be impossible to present every capabilities outlined in the Defence White Paper on productivity levels that that would come from a permutation here. Projects can be brought forward or 1. The AWD, LHD and Cape class workforce profiles 2009 and the Defence Capability Plan 2012. long term rolling build program. postponed; it may be decided that some ships could are based on actual data and workforce projections. 5. Values for the CGT Coefficients and be built wholly overseas or as a hybrid local/offshore Workforce profiles for future projects are based on Customer Factors are based on advice program; construction programs may be accelerated the typical shipbuilding project profiles. from First Marine International. or lengthened by changing either the build schedule 2. The scenarios presented show the total workforce 6. Important decision dates for the maritime projects for the vessel or the keel interval between ships. numbers required for projects in the Defence are based on the Defence Capability Plan, the 2011 Capability requirements for certain vessels may Capability Plan and selected other Government version for Scenario 1 and the 2012 public version change. An experienced workforce will become shipbuilding projects. This analysis does not infer for the scenarios after that. It is assumed that more productive and efficient. that all such work will be done in Australia. decisions will be made early in the range listed. One change to any shipbuilding project will vary 3. The vessels will be built to either an existing or 7. One year from the Second Pass decision date the overall shipyard numbers needed to complete Australianised Military Off-The-Shelf (MOTS) design. has been allowed for production engineering and the projects, and as seen in these scenarios, a If a new design was being considered, much more other start up activities before start of fabrication. combination of changes can produce dramatic time between Second Pass and start of construction Experience shows that more than one year may effects in workforce requirements. will be required. be required. Future Submarine Industry Skills Plan / page 164 page 165 / Future Submarine Industry Skills Plan

SCENARIO 1: Defence Capability Plan 2011 SCENARIO 2: Defence Capability Plan 2012

10000 10000

9000 9000

8000 8000

7000 7000

6000 6000

5000 5000

4000 4000

3000 3000

2000 2000

1000 1000

0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD future subm arines AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

strategi c seali f t SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

HEAVY LANDI NG CRAFT CAPE CLASS PATROL BOATS future subm arines

Baseline assumptions: BASELINE ASSUMPTIONS:

Target productivity of 80 man-hours/CGT. Target productivity of 80 man-hours/CGT. Air>Warfare>Destroyer/Landing>Helicopter>Dock:>Production schedule as of May 2011. Air>Warfare>Destroyer/Landing>Helicopter>Dock: Production schedule as of May 2011. Cape>Class>Patrol>Boats: Production starts 2011, 18 months build per boat, three month keel interval. Cape>Class>Patrol>Boats: Production starts 2011, 18 months build per boat, six month keel interval. Future>Frigates: Second Pass 2022; Production starts 2023; fi ve years build per ship, one year keel interval. Future>Frigates:>Second Pass 2022; Production starts 2023; fi ve years build per ship, one year keel interval. Heavy>Landing>Craft>(LCH): Second Pass 2017; Production starts 2018; two years build per vessel, Heavy>Landing>Craft>(LCH): Second Pass 2018; Production starts 2019; two years build per vessel, six month keel interval. six month keel interval. Future>Submarines: Second Pass 2017; Production starts 2018; six years build per boat, one year keel interval. Future>Submarines: Second Pass 2017; Production starts 2018; six years build per boat, one year keel interval. Offshore>Combatant>Vessels: Second Pass 2018; Production starts 2019; two years build per vessel, Offshore>Combatant>Vessels:>Second Pass 2017; Production starts 2018; two years build per vessel, six month keel interval. six month keel interval. Supply>ship: Second Pass 2016; Production starts 2017; three year build schedule. Supply>ships:>Second Pass 2015; Production starts 2016; three years build per ship, 2 year keel interval. Strategic>Sealift: Second Pass 2019, Production starts 2020; three year build schedule. Future Submarine Industry Skills Plan / page 166 page 167 / Future Submarine Industry Skills Plan

SCENARIO 3: Defence Capability Plan 2012; effect of high productivity SCENARIO 4: Defence Capability Plan 2012; effect of low productivity

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines

CHANGES: CHANGES:

Same as Scenario 2, except for: Same as Scenario 2, except for: High productivity of 50 man-hours/CGT. Low productivity of 110 man-hours/CGT. Future Submarine Industry Skills Plan / page 168 page 169 / Future Submarine Industry Skills Plan

SCENARIO 5: Defence Capability Plan 2012; rebaselined AWD schedule SCENARIO 6: Defence Capability Plan 2012; rolling build program for future submarines

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines

CHANGES: CHANGES:

Same as Scenario 2, except for: Same as Scenario 5, except for: Air>Warfare>Destroyer/Landing>Helicopter>Dock: Rebaselined AWD Production schedule as announced Future>Submarines: Second Pass 2017; Production starts 2018; six years build per boat, two year keel interval. September 2012. Six years build per ship, one and a half year keel interval. This represents the current forecasted schedule for the acquisition of Defence maritime projects. Future Submarine Industry Skills Plan / page 170 page 171 / Future Submarine Industry Skills Plan

SCENARIO 7: Defence Capability Plan 2012; connected build SCENARIO 8: Defence Capability Plan 2012; connected build program for future frigates with 18 month keel interval program for future frigates with two year keel interval

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2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines

CHANGES: CHANGES:

Same as Scenario 5, except for: Same as Scenario 7, except for: Future>Frigates:>Based on the Air Warfare Destroyer hull and built as a connected program. Future>Frigates:>Based on the Air Warfare Destroyer hull and produced in a rolling build program. Production starts 2016; six years build per ship, one and a half year keel interval. Production starts 2016; six years build per ship, two year keel interval. Future Submarine Industry Skills Plan / page 172 page 173 / Future Submarine Industry Skills Plan

SCENARIO 9: Defence Capability Plan 2012; connected build program SCENARIO 10: Defence Capability Plan 2012; offshore combatants moved for future frigates with two year keel interval, rolling build for forward in schedule future submarines

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines

CHANGES: CHANGES:

Same as Scenario 8, except for: Same as Scenario 5, except for: Future>Submarines:>Second Pass 2017; Production starts 2018; six years build per boat, two year keel interval. Offshore>Combatant>Vessels:>Moved forward three years. Second Pass 2014; Production starts 2015; two years build per vessel, nine month keel interval. Future Submarine Industry Skills Plan / page 174 page 175 / Future Submarine Industry Skills Plan

SCENARIO 11: Defence Capability Plan 2012; supply ships moved forward SCENARIO 12: Defence Capability Plan 2012; fourth ship added to AWD in schedule fabrication schedule

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD CAPE CLASS PATROL BOATS

future fri g ates OCVs future fri g ates OCVs

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines

CHANGES: CHANGES:

Same as Scenario 5, except for: Same as Scenario 5, except for: Supply>ships: Moved forward one year. Second Pass 2014; Production starts 2015; three years build per ship, Air>Warfare>Destroyer/Landing>Helicopter>Dock:>Rebaselined AWD Production schedule as announced 2 year keel interval. September 2012. Fourth AWD added, Production begins 2016, six years build per vessel, one and a half year keel interval. Future Submarine Industry Skills Plan / page 176 page 177 / Future Submarine Industry Skills Plan

SCENARIO 13: Defence Capability Plan 2012; fourth ship added to AWD SCENARIO 14: Defence Capability Plan 2012; change to capability requirements fabrication schedule for offshore combatants

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD CAPE CLASS PATROL BOATS AWD/LHD PATROL BOATS

future fri g ates OCVs future fri g ates MHC/AGS

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines future subm arines CAPE CLASS PATROL BOATS

CHANGES: CHANGES:

Same as Scenario 12, except for: Same as Scenario 5, except for: Future>Frigates: Based on the Air Warfare Destroyer hull and produced in a rolling build program. Offshore>Combatant>Vessels: Change from single multi-mission vessel to separate Patrol Boat and Minehunter/ Production starts 2016; six years build per ship, two year keel interval. Survey vessels. Patrol Boats: Production starts 2018; one and half years build per vessel, six month keel interval. Minehunter/Survey Vessels: Production starts 2025; two years build per vessel, one year keel interval. Future Submarine Industry Skills Plan / page 178 page 179 / Future Submarine Industry Skills Plan

SCENARIO 15: Defence Capability Plan 2012; change to capability requirements SCENARIO 16: Defence Capability Plan 2012; capability requirements for for offshore combatants and brought forward three years offshore combatants changed and brought forward in the schedule, connected build program for future frigates with two year keel interval, rolling build for future submarines

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0 0

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2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD PATROL BOATS AWD/LHD PATROL BOATS

future fri g ates MHC/AGS future fri g ates MHC/AGS

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines CAPE CLASS PATROL BOATS future subm arines CAPE CLASS PATROL BOATS

CHANGES: CHANGES:

Same as Scenario 14, except for: Same as Scenario 15, except for: Offshore>Combatant>Vessels:>Change from single multi-mission vessel to separate Patrol Boat and Minehunter/ Future>Submarines:>Second Pass 2017, Production starts 2018; six years build per boat, two year keel interval. Survey vessels; and bring forward three years. Patrol Boats: Production starts 2015; one and half years build per Future>Frigates:>Based on the Air Warfare Destroyer hull and produced in a rolling build program. Production vessel, six month keel interval. Minehunter/Survey Vessels: Production starts 2022; two years build per vessel, starts 2016; six years build per ship, two year keel interval. one year keel interval. Future Submarine Industry Skills Plan / page 180 page 181 / Future Submarine Industry Skills Plan

SCENARIO 17: Defence Capability Plan 2012; capability requirements for SCENARIO 18: Defence Capability Plan 2012; capability requirements for offshore combatants changed and brought forward in the schedule, fourth offshore combatants changed and brought forward in the schedule, AWD, connected build program for future frigates with two year keel fourth AWD, connected build program for future frigates with two interval, rolling build for future submarines, icebreaker added year keel interval, rolling build for future submarines

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0 0

4 4 7 4 4 7

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 02 0 2 1 2 0 2 22 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 82 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 2 0 3 5 2 0 3 62 0 3

AWD/LHD PATROL BOATS CAPE CLASS PATROL BOATS AWD/LHD PATROL BOATS

future fri g ates MHC/AGS future fri g ates MHC/AGS

HEAVY LANDI NG CRAFT SUPPLY SHIP HEAVY LANDI NG CRAFT SUPPLY SHIP

future subm arines ICEBREAKER future subm arines CAPE CLASS PATROL BOATS

CHANGES: CHANGES:

Same as Scenario 16, except for: Same as Scenario 16, except for: Icebreaker:>Production starts 2015; three years build per ship. Air>Warfare>Destroyer/Landing>Helicopter>Dock:>Rebaselined AWD Production schedule as announced September 2012. Fourth AWD added, Production begins 2016, six years build per vessel, one and a half year keel interval. Future>Frigates:>Based on the Air Warfare Destroyer hull and produced in a rolling build program. Production starts 2017; six years build per ship, two year keel interval. page 183 / Future Submarine Industry Skills Plan

ANNEX D

Select Bibliography

Barrie 2009 ‘The Defence White Paper 2009 and Australia’s maritime capabilities’, Chris Barrie, Security Challenges 5.2, Winter 2009.

ACIL 2001 Economic impact of defence: Vol 1: main report, ACIL Consulting, 2001. Coles 2011 Collins class sustainment review; Phase 1 report, John Coles et al, Commonwealth of Australia, 2011. ACIL 2005 Skills shortages and the amphibious ships project, ACIL Tasman, 2005.

ACIL 2009 The economic impacts of the Bushranger project, ACIL Tasman, 2009. Coles 2012 Study into the business of sustaining Australia’s strategic Collins class submarine capability, John Coles et al, Commonwealth of Australia, 2012. ANAO 57 Auditor General Audit Report No 57, Acceptance into Service of Navy Capability, Commonwealth of Australia, 2011. Craggs et al 2004 ‘Naval Compensated Gross Tonnage coefficients and shipyard learning’, John Craggs et al., Journal of Ship Production, Volume 20, Number 2, May 2004. ASC 2006 Improving the cost-effectiveness of naval shipbuilding in Australia, Submission by ASC to the Senate Standing Committee on Foreign Affairs, Defence and Trade, 2006. DeakinPrime 2011 Defence Materiel Organisation: Future Submarine Training Feasibility Study, DeakinPrime 2011. ASPI 2002 Setting a course for Australia’s naval shipbuilding and repair industry, Mark Thomson and Sam Harrington, Policy Report, Australian Strategic Policy Institute, 2002. Defence SA 2009 Naval Shipbuilding: Australia’s $250 Billion Nation Building Opportunity, Defence SA Advisory Board, 2009. ASPI PA16 Keeping our heads below water: Australia’s future submarine, Andrew Davies, Policy Analysis 16, Australian Strategic Policy Institute, 2008. DCP2012 Defence Capability Plan 2012, Commonwealth of Australia, 2012.

ASPI SI4 Weapons of mass construction: Australian naval shipbuilding, Mark Thomson, Strategic Engineers Australia 2006 Naval shipbuilding in Australia, Submission by Engineers Australia to the Senate Insight 4, Australian Strategic Policy Institute, 2004. Standing Committee on Foreign Affairs, Defence and Trade, 2006.

ASPI SI22 Cutting edge: the Collins experience, Patrick Walters, Strategic Insight 22, Australian GAO-10-522 Strong leadership is key to planning and executing stable weapon programs, Strategic Policy Institute, 2009. US Government Accountability Office, 2010. ASPI SI48 How to buy a submarine: defining and building Australia’s future fleet, Sean Costello and GSIBBS 1 Global shipbuilding industrial base benchmarking study, part 1: major shipyards, Andrew Davies, Strategic Insight 48, Australian Strategic Policy Institute, 2009. US Department of Defense, 2005. ASPI SI57 Mind the gap: getting serious about submarines, Andrew Davies and Mark Thomson, GSIBBS 2 Global shipbuilding industrial base benchmarking study, part 2: mid-tier shipyards, Strategic Insights 57, Australian Strategic Policy Institute, 2012. US Department of Defense, 2005. ASPI SR25 We’ll have six of them and four of those: off-the-shelf procurement and its strategic implications, Andrew Davies and Peter Layton, Strategic Report 25, Australian Guarding Our Edge Guarding our edge: building and sustaining the future submarine in Australia, Strategic Policy Institute, 2009. Defence SA Advisory Board, 2012.

ASPI SR31 Naval gazing: the future of Australia’s naval shipbuilding and repair sector, Andrew Kokoda KP17 Sub judice: Australia’s future submarine, Kokoda Paper 17, Brice Pacey, Davies, Strategic Report 31, Australian Strategic Policy Institute, 2010. Kokoda Foundation, 2012.

ASPI PA78 The once and future submarine—raising and sustaining Australia’s underwater capability, NSR 2002 The Australian naval shipbuilding and repair sector strategic plan, Commonwealth Andrew Davies, Policy Analysis 78, Australian Strategic Policy Institute, 2011. of Australia, 2002.

ASPI PA93 Subaqueana australis-the future evolution of Australia’s submarines, Andrew Davies, RAND CT-259 Trends in the United Kingdom’s naval shipbuilding industrial base: lessons for Policy Analysis 93, Australian Strategic Policy Institute, 2012. the United States, RAND CT-259, John F Schank, RAND Corporation 2006.

ASPI PA99 What price the future submarine?, Andrew Davies, Policy Analysis 99, Australian RAND MG-236 Differences between military and commercial shipbuilding, RAND MG-236-MOD, Strategic Policy Institute, 2012. John Birkler et al., RAND Corporation 2005.

ASPI Paper 2012 Should Australia build warships?: an economic and strategic analysis, Andrew Davies, RAND MG-294 The United Kingdom’s naval shipbuilding industrial base: the next fifteen years, Henry Ergas and Mark Thomson, Discussion Paper, Australian Strategic Policy RAND MG-294-MOD, Mark V Arena et al., RAND Corporation 2005. Institute, 2012. Future Submarine Industry Skills Plan / page 184

RAND MG-326/1 The United Kingdom’s nuclear submarine industrial base, Vol 1: sustaining design and production resources, RAND MG-326/1-MOD, John F Schank et al., RAND Corporation 2005.

RAND MG-484 Why Has the cost of navy ships risen: a macroscopic examination of the trends in US naval ship costs over the past several decades, RAND MG-484-NAVY, John F Schank et al., RAND Corporation 2006.

RAND MG-608 Sustaining US nuclear submarine design capabilities, RAND MG-608-NAVY, John F Schank et al., RAND Corporation 2007.

RAND MG-725 Sustaining key skills in the UK naval industry, RAND MG-725-MOD, Hans Pung et al., RAND Corporation 2008.

RAND MG-991 Are ships different? Policies and procedures for the acquisition of ship programs, RAND-911-OSD/NAVY, Jeffrey A Drezner et al., RAND Corporation 2011.

RAND MG-1128 Learning from experience, RAND MG-1128-NAVY, John Schank et al., RAND Corporation 2011.

RAND MG-1033 Australia’s submarine design capabilities and capacities, RAND MG-1033-AUS, John Birkler et al., RAND Corporation 2011.

Roos 2012 Manufacturing into the future: summary of recommendations, Göran Roos, Government of South Australia, 2012.

Skills Australia 2012 Building Australia’s defence capabilities, DIISRTE, Commonwealth of Australia, 2012.

Smarter Manufacturing Smarter manufacturing for a smarter Australia: report of the non-government members, Prime Minister’s Taskforce on Manufacturing, Commonwealth of Australia, 2012.

SSCFADT 2006 Blue water ships: consolidating past achievements, Report by the Senate Standing Committee on Foreign Affairs, Defence and Trade, Commonwealth of Australia, 2006.

SSCFADT 2012 Procurement procedures for defence capital projects: final report, Senate Foreign Affairs, Defence and Trade References Committee, Commonwealth of Australia, 2012.

Tasman 2001 Impact of major defence projects: a case study of the ANZAC ship project, Denise Ironfield, Tasman Asia Pacific, 2001.

Tasman 2002 Impact of major defence projects: a case study of the Minehunter Coastal project, Tasman Economics, 2002.

Woolner 2009 ‘Taking the past to the future: The Collins submarine project and SEA 1000’, Derek Woolner, Security Challenges 5.3, Spring 2009.’

WP2009 Defending Australia in the Asia Pacific century: Force 2030, Defence White Paper 2009, Commonwealth of Australia, 2009.

Yule & Woolner 2008 The Collins Class Submarine Story: Steel, Spies and Spin, Peter Yule and Derek Woolner, Cambridge University Press, 2008.