BUSINESS MODELAbusiness modeldescribes therationaleof how anorganizationcreates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction is part ofbusiness strategy.In theory and practice, the termbusiness modelis used for a broad range of informal and formal descriptions to represent core aspects of abusiness, including purpose, target customers, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. The literature has provided very diverse interpretations and definitions of a business model.

The primary motivation of this paper is to study & analyze Indian shipbuildingindustry, especially the management & operations practices, benchmark them withrespect to global best practices, identify major problem areas and explore methodsto improve the current situation. This article is based on field study of operationspractices in various shipyards in India and East Asia. Relevant inputs have been takenfrom shipyard top management, managers, engineers, naval architects, supervisors andworkers, ship owners, regulatory authorities, class surveyors, vendors,subcontractors etc. In order to preserve the confidentiality of information, the names ofthese shipyards have been changed. In this paper we will be referring to two leadingEast Asian shipyards as Shipyard U and Shipyard G. Similarly, we will be referring to three Indian Shipyards as Shipyard H,Current State of Indian Shipbuilding IndustryThe Indian shipbuilding is mainly centered around 27 shipyards comprising 8 publicsector and 19 private sector shipyards (Planning Commission, 2008). The shipyards have 20 dry-docks and 40 slipways between them with an estimatedtotal capacity of 281,200 DWT.

Analysis of Shipyard Operations1. Product StrategyA ship as a product lies predominantly in the Design to Order Make to Order Assemble to Order (DTO-MTO-ATO) range. The many small shipyards in India that donot have design expertise but get single or twin orders of the same ship type fall in theMake-to-Order manufacturers category.2.Project Initiation & PlanningTimely project initiation and planning are vital activities for successfully deliveringvessels in time.3.Ship DesignA strong design competence is essential for quickly resolving issues that arise inproduction. As of now there are less than a dozen firms in India that have basic designexpertise.

4.Production Scheduling

5. Supply Chain ManagementMaterials and Supply Chain Management is the single most important area, according toour study, which needs urgent improvement as it has a high impact on both cost andtime of a project. In most of the Indian shipyardsMaterials and Supply Chain Management isthe single most important area, according to our study, which needs urgent improvementas it has a high impact on both cost and time of a project.

JIT systems possible???

6. Shipyard LayoutIndian Shipyards have a process oriented layout wherein there are different shopssuch as steel cutting shop, fabrication shop, outfitting shop, blasting & painting shop etc.wherein the product-part has to be taken for the operation to be performed.

7. Construction MethodIntegrated Hull Construction, Outfitting and Painting (IHOP) used to be the magicformula for constructing vessels quickly.This method is extensively followed byleading shipyards worldwide.

8.Employee Training & Development

Unique Advantages of Shipbuilding in IndiaDespite the many problems in the domestic shipbuilding industry, India is blessed withsome unique advantages that ought to be leveraged upon to improve our position inthe global shipbuilding industry. The Indian subcontinent is in the form of a peninsula,with a high coastline to land area ratio. Most of the industrial cities have closeproximity to ports and shipyards and even those cities in interior regions are connecteDby an extensive network of rail and roadways. This enables the development ofa robust supply chain network linking the shipbuilding and ancillary industries. Manyof the ports are natural harbors with high drafts available for large vessels. Indianports and shipyards are also well positioned to be trans-shipment and repair hubs forvessels plying on the east-west corridor across the Indian Ocean. India can alsoboast of an abundant supply of skilled labor available at globally very competitive rates.India produces thousands of IT savvy engineering graduates every year who canbe employed in shipbuilding industry to implement IT-enabled solutions that aremore efficient.