What to Support

6.3.1. Communication within EPC contractor

The rigid boundaries between functional units hinder across-function communication. The operator can play a role in facilitating the cooperation among those units.

Sales and other functions

At the very early stage of project execution (or even before project award), the operator needs to ensure that all the discussions it has had with sales department of the shipyard are shared with other functional units of the organization which actually work on the project. It is often the case that the sales function does not communicate some of the key elements negotiated and agreed upon with other functions, such as construction and engineering. Thus, it is recommendable for the operator to verify if the communication among the shipyard functions is effective enough to establish same understanding among all the functions regarding what has been agreed with the operator. The operator may request the involvement of construction and engineering department personnel in the negotiation process. One of the interviewees noted that, on some occasions, some of sales department personnel, who get directly involved in the negotiation and conclude the contract with operator, are engaged in the project execution phase at the shipyard construction site. This helps facilitate communication between the operator and the shipyard and reduce the risk of dispute resulting from miscommunication among the shipyard functions.

Construction and Engineering

Cooperation between the construction and the engineering department is crucial for smooth progress of the project. In particular, the communication in low level personnel in different department is important.

They are the ones who actually work on the project, recognize problems, and initiate the discussion. The operator may encourage the low level personnel in different functions to get together and facilitate interaction among them. This can help early recognition of the problems and efficient discussion among the low level personnel across functions, thereby contributing to a better solution. Still, low level personnel do not have enough authority to make decisions or take initiative within the shipyard organization. The operator can support low level engineers by communicating with managers who can

77 assign more resources and back up those engineers. If solving a problem requires involvement of even higher level managers and the issue is important, the operator can help the low level personnel raise the issue upward along the hierarchical structure. The operator needs to communicate the same message to the managers positioned between the low level engineer and the high level manager who can make decision on the issue. In doing so, the operator ensures that everyone in the decision making process chain has the same understanding of the problem and, thus, facilitates the discussions among the shipyard organization.

6.3.2. Communication between EPC contractor and sub-contractors

The operator should remain objective and neutral in relation to conflicts between the EPC contractor and its sub-contractors so that it can play a role of mediator.

Engineering sub-contractor

It is often the case that operator has already establish communication channel with the international engineering sub-contractors, leading the sub-contractor to contact the operator directly when it has a conflict with the EPC contractor. This does not help to solve the problem. It will only make the shipyard feel marginalized and take a more skeptical view of the relationship between the operator and engineering sub-contractor. It is, thus, important to make the communication line transparent by involving the EPC contractor in the discussion between the operator and the sub-contractor.

Oversea vendor

The operator can support procurement activities of the shipyard by baking its engineering capability.

Having engineers support the shipyard’s procurement personnel helps produce technical input for the POs to be issued to overseas vendors. Such aid from operator also assists the shipyard function in addressing technical queries from overseas vendors efficiently.

6.3.3. Engineering management of EPC Contractor

The lack of multi-disciplinary engineering functions and challenges from functional requirements are other critical issues that demand the operator’s support.

Strengthen engineering capacity within operator’s project organization

To deal with such issues, the operator is expected to have extensive discussion and cooperation work with the shipyard, which in turn requires more input of resources. Interviews revealed that, as it stands now, the engineering function of the project organization of the operator is not sufficient enough to help the

78 shipyard fill the engineering capacity gap. Engineers in the operator’s organization are already occupied by daily work and do not have enough resources to support shipyard in this respect. Within the operator’s project organization, it seems natural that most of the important decisions made for the project concerns engineering issues given the significance of technical challenges arising during project execution. Many of such decisions involve discussions between the project director, project manager, and engineering manager. In particular, the engineering manager provides valuable information that serves as a basis for the decision making process. However interviewees pointed out that the engineering manager is often so busy with many tasks that he cannot focus on core issues including engineering support to shipyard. More assistants can relieve the engineering manager of the heavy burden of administration work so that he can concentrate on critical engineering items.

Having more senior engineers in the project organization is also helpful. They can get involved in communication with the engineering department of the shipyard directly to reinforce the multi-disciplinary engineering capability of the department. It appears that most of the South Korean shipyard uses Norwegian 3D modeling software. For the operator it is also a good option to bolster engineering capability of shipyard by using the customer education program run by the Norwegian 3D modeling software provider in South Korea. In cooperation with the Norwegian software company, the operator can provide the shipyard with a program designed to educate them how to actively use 3D modeling programs and apply it in practice for the project.

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