I once read that ancient scholars didn’t bother with eulogies because all they wanted to know was whether or not a deceased had passion. For Richard D. Chirillo, educated in logic by Jesuits, a teacher in Japan, and who for some years during his illness assisted in the search for more effective shipbuilding methods; that question is best answered by something he wrote more than twenty years ago:
Analytical Quality circles
Richard D. Chirillo
for the University of Washington
Ship Production Technology Course – 3 October 1983
Most people think that quality circles have their origin in human development studies. Nothing could be further from the truth. Quality circles were discovered
as a by-product of other, even more profound, management innovations. True quality circles are part of an overall management system that relies on a product work breakdown structure (PWBS) and statistical control of manufacturing (SCM). Quality circles grew out of statistical techniques first introduced into Japan in the 1950s.
PWBS is highly organized work. Work is organized according to the problems inherent in manufacture. Using this principle, it becomes possible to arrange flow lanes for the many different things in varying quantities that shipbuilders must deal with, e.g., parts, sub-blocks, blocks, etc. Shipbuilding work becomes repetitive enough to yield significantly more meaningful measurement data. Work becomes susceptible to mathematical analysis.
But, simple arithmetic is not sufficient because of the existence of variation. How to measure variation is the key to production control. Statistics is the branch of mathematics that deals with the description and interpretation of variation.
In Japan, where PWBS and SCM were first applied to shipbuilding, an interesting thing happened. Management's system began to furnish supervisors and workers with meaningful and reliable indicators of how work processes perform. For the first time a sensitive barometer existed indicating the results of improvements in work processes. Spontaneously, supervisors and workers for each stage of a process began to discuss and suggest how to make improvements. Thus, the birth of real quality circles in shipbuilding, as in other industries, was a natural consequence of statistical methods. Subsequently, supervisors and workers were trained in basic statistical techniques to enhance their abilities to constantly improve their work. They have command of control charts, Pareto diagrams, cause and effect diagrams, etc.
PWBS, SCM and analytical quality circles are not culturally determined. If Suzuki can handle statistics so can Smith!
The challenge lies with U.S. shipbuilding managers!
before the SUBCOMMITTEE ON MERCHANT MARINE
of the COMMITTEE ON MERCHANT MARINE AND FISHERIES
HOUSE OF REPRESENTATIVES - Ninety-Eighth Congress - Second Session
on MARITIME DEVELOPMENT BANK ACT (HR 3399)
JUNE 20, 1984 - WASHINGTON, DC - Serial No. 98-57
PREPARED STATEMENT OF L.D. CHIRILLO AND R.D. CHIRILLO*
Mr. Chairman, Members of the Subcommittee:
The story of how shipbuilding leadership crossed the Pacific westward after World War II (WWII), is the story of four key individuals, two of whom, both Americans, were honored by the Emperor for their contributions to the restoration of the Japanese economy. Their names are Kaiser, Hann, Deming and Shinto.
When Hitler met with his admirals in September 1942 to assess the impressive successes of German submarine warfare, he confidently asserted that American shipyards could not build ships faster than they were being sunk. President Roosevelt’s February 21, 1942 directive for 9-million tons in 1942 and 15-million more in 1943 was dismissed as mere propaganda. 
By mid-1943 American shipyards were at last producing ships faster than they were being sunk. The vital lifeline to the United Kingdom was sustained. Hitler hadn’t bargained for Henry Kaiser the industrialist. “Fabulous Kaiser” was then known best for heavy-construction projects other than ships, e.g., The Hoover, Bonneville and Grand Coulee Dams and the San Francisco Bay Bridge. He was known for tackling the “impossible.”
Until our industrial mobilization that accompanied the outbreak of war in Europe, the Kaiser organization had never built a ship. Then suddenly, using industrial engineering principles, the newcomer Kaiser out-produced established shipbuilders.
The record-shattering performance was due to Kaiser’s introduction of the rudiments of Group Technology, i.e., organizing work by the problems inherent in manufacture. In this manner, Kaiser’s yards were achieving benefits normally associated only with production lines even while producing many different subassemblies in varying quantities as required for building ships. Kaiser’s people were working smarter.
As experienced workers existed mostly in shipyards preempted for warships, Kaiser had to train thousands, including many women, who had no factory experience. Normally, two or three months were required to successfully train a welder. The Kaiser method turned out many good welders in ten days because they were taught only down-hand
welding, i.e., welding below the waist so as to permit the weld to flow by gravity. To make a good overhead weld takes experience, but Kaiser proved, when welding was not yet fully accepted by traditional shipbuilders, that virtually anyone could weld down hand with minimal time consumed on training. Difficult and time-consuming overhead welding was minimized.
In 1942, time meant victory or defeat. So in order to facilitate welding, Kaiser built ships’ bows sideways, deckhouses upside down and the sides of ships on the ground, rather than from high, relatively unsafe and costly scaffolding. The Kaiser principle was to organize work to fit the worker instead of vice versa. 
*L.D. Chirillo Associates of Bellevue, Washington, assists the Los Angeles Division of Todd Pacific Shipyards Corporation in management of part of the National Shipbuilding Research Program.
Government records show that in building Liberty Ships alone, the Kaiser yards saved the United States more than $226,000,000 in WWII money; i.e., 25% less than costs by traditional shipbuilders. More important, Kaiser needed only two-thirds the time. When the race to build ships faster than they were being sunk was won and the survival of the United States was assured, the then Chairman of the Maritime Commission, Vice Admiral Emory S. Land said, “The most dangerous bottleneck was the shortage of men able to operate shipyards.”
After WWII, Elmer Hann, the former General Superintendent who had all production responsibilities at Kaiser’s Swan Island Shipyard in Oregon, brought the Kaiser methods to Japan. 
In America after the war, there was a glut of merchant ships. Fabulous Kaiser left shipbuilding as the wartime emergency shipyards shut down. Elmer Hann found employment with National Bulk Carriers (NBC) of New York, which at that time operated Welding Shipyard at Norfolk, Virginia.
Daniel K. Ludwig, the owner of NBC, envisioned building large carriers for the iron-ore trade between Venezuela and the United States. As the facility at Norfolk was too small, Elmer Hann was sent on a worldwide search for a place where big ships could be built. According to Hann’s recollection:
“An in-depth feasibility study of all phases of a multi-ship construction and operating program presented many problems to attain the economic level required. Of paramount importance was to obtain ownership or the use of an appropriate shipbuilding facility that would fit our budget.”
After searching in Great Britain and Germany, about “…November 1950, we heard that a portion of the Japanese Naval Shipyard at Kure might be made available if such would suit our purposes…. I had the pleasure of making the acquaintance of Mr. Amari, head of the Japanese Shipbuilding Bureau, when he was given permission to visit some U.S. shipyards.”
“Mr. Amari was most helpful and generous with his time and advice, making it possible for us to lease a portion of the Kure naval facilities.” 
Today, the misperception is widespread that Japan’s shipyards were reduced to rubble as Germany’s had been. However, before
the end of WWII Japan’s Navy was completely destroyed, her merchant marine was reduced to one fifth of its pre-war size and our submarines had effectively stopped flows of raw materials. Their shipyards were no longer able to contribute to the war effort and our military planners predicted a need for them in order to salvage and operate what was left of the Japanese merchant marine after the war. Japan’s overseas military personnel and colonists had to be repatriated and there was need for massive food shipments to avert famine. Thus, the shipyards were not bombed.
The myth that Japanese shipyards were resurrected and modernized with U.S. funds is wrong on two counts. The shipyards were not destroyed and the Marshall Plan did not apply to Japan. The massive effort to transport people and food was accomplished by the Japanese themselves.
Then, the 150,000 deadweight-ton capacity dry-dock in the former Kure Naval Dockyard, in which the world’s largest battleship (YAMATO) was built, remained undamaged. Further, the dock was equipped with a crane having a lifting capacity of 100 tons. 
Mr. Hann recalled that:
“Negotiations with the Japanese government in leasing of the facilities had to be approved every inch of the way by Supreme Commander Allied Powers (SCAP)…. A lease of ten years plus another optional five years was finally completed and approved by all concerned by mid-summer 1951.”
“One salient feature of the lease required an open door policy for Japanese ship-construction engineers along with training if so desired by bonafide companies (on a cost basis). During our tenure, between four- and five-thousand persons visited our plant and studied methods and techniques being employed.” 
Regarding technology transfer, Mr. Hann advised:
“Our all-welded construction was introduced into Japan for the first time, to the fullest extent allowed by the classification society. We used the American Bureau of Shipping…as most of our machinery…came from the U.S.A. for the first several years.”
“Job and material controls were organized into one department. Sequence and scheduling of work was carefully planned and closely monitored along with quality control and inspection which were kept separate from production departments.”
“To recount all would fill a book; basically we adhered to:
1. Careful analysis of vessel as to size blocks and shape with refined drawings, together with machinery, piping, etc. to be installed at assembly shop or area.
2. Coordinated material control
3. Allocation of labor and time schedule for each operation.
4. Installed machinery, piping and other equipment to a great extent before erection.
5. Reduced staging to a minimum.
6. Introduced inorganic-zinc coating in the assembly line.
7. The key to rapid construction is how to weld without distortion and shape of weldment
or modules that defy or resist distortion especially when such effects the vessel’s measurements and locked-in stresses.”
“We used a group of junior engineers with one or two to each department or area to study methods and procedures and shifting them frequently from one department to another. Most became top-notch supervision over the years.” 
Elmer Hann taught the Japanese: organization of work in accordance with the basic principles of Group Technology, emphasis on welding without distortion to control costs, the importance of college-educated middle managers trained in the entire shipbuilding system, etc. With such methods and only pre-WWII shipyards,
by 1964 Japanese yards were producing 40 percent of the world’s total shipbuilding tonnage. Japan’s total that year, 4,085,190 gross-tons, exceeded the combined total of the next five leading shipbuilding nations. 
No wonder, the Emperor personally decorated Mr. Hann.
Contemporary with Elmer Hann’s activities at Kure, the third key individual, Dr. W. Edwards Deming, Professor of Statistics, New York University, was also making a significant contribution.
Toward the end of 1945 in Japan, manufacture of civilian goods was begun sporadically and industrial production recovered slowly from 1946 through 1947. But products were deplorably poor in quality. The Union of Japanese Scientists and Engineers (JUSE) determined that dissemination of statistical control methods (SCM) could significantly improve quality and productivity. 
Reading foreign literature on SCM, JUSE members became familiar with the name of Dr. Deming, an American statistician who was often retained by our federal government. Dr. Deming had visited Japan in 1947 as advisor to SCAP in statistical sampling of population, nutrition, etc. JUSE learned that Dr. Deming would revisit Japan in 1950 and started an association that was the catalyst for a huge SCM drive on a national scale. 
Dr. Deming gave 35 lectures in the summer of 1950 to Japanese top managers and engineers. Six-months later he was in Japan again. By the spring of 1981, Dr. Deming made 19 trips to Japan. SCM began to permeate Japanese industry.  Regarding shipbuilding, the 1967 issue of Technical Progress in Shipbuilding and Engineering, published by The Society of Naval Architects of Japan, reported in English
that statistical control “epoch makingly” improved quality, laid the foundation of modern ship-construction methods and made it possible to extensively develop automated and specialized welding.
With such application of SCM, an interesting thing happened. Management’s’ systems began to furnish workers with meaningful indicators of how work processes performed. For the first time sensitive barometers existed indicating the impacts on work processes of even the smallest innovations. Spontaneously, supervisors and workers began to suggest how to make improvements. Thus, the birth of real quality circles, i.e., those having an analytical basis, was a consequence of statistical methods. To further exploit the human desire to work smarter, managers trained supervisors and workers in simple analysis techniques. People at all levels in a Japanese shipbuilding system participate in problem solving on a daily basis. 
In 1960, Dr. Deming was honored with an award by the Emperor of Japan.
As the teacher, Elmer Hann recognizes Dr. Hisashi Shinto as “the pupil who outdid the master.” Dr. Shinto found post-WWII employment as Chief Engineer for NBC, reporting to Elmer Hann, in Kure. Without reservation, Dr. Shinto, widely regarded in Japan as the dean of shipbuilding, stated that the NBC operation was the start of modern shipbuilding in Japan. 
With other American inputs, Dr. Shinto continuously developed the shipbuilding system even after the NBC lease expired in 1961 and the Kure shipyard became part of Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI). His study of Boeing’s B-29 drawings disclosed how composite drawings are used to designate assemblies and subassemblies, each furnished with its own material list. When visiting New York City for NBC, he observed control of skyscraper construction by providing just the materials needed in accordance with a prescribed building strategy. 
These ideas, together with a uniquely Japanese material-control system and the pervasive statistical methods, were blended so that by the time of his retirement in 1979 as President of IHI, Dr. Shinto left behind a constantly
self-improving shipbuilding system with basic Kaiser logic intact. At that time, the IHI system enabled a worker to achieve in one hour the work for which three man-hours were required in a traditional U.S. shipyard.
Recognized as an extraordinary manager, Dr. Shinto was called from retirement by his Prime Minister in 1981 and is currently President of Japan Telegraph and Telephone Public Corporation.
The story of how the same technology, highly refined, is crossing the Pacific eastward
starts with the Merchant Marine Act of 1970. Therein is the authority for our highly successful government/industry National Shipbuilding Research Program (NSRP). The program is a de-facto consortium which is cost shared and managed by a number of shipbuilders in behalf of the entire industry and supervised in behalf of the government by the Maritime Administration’s Office of Advanced Ship Development.
At first NSRP attention focused on relatively short-term goals that were for the most part hardware oriented. Research program managers joined the procession of shipbuilders and academics who toured shipyards in Europe and Japan looking for ways to improve productivity. Everyone, shipbuilding managers in particular, who made such tours before the Arab Oil-Shock of 1973 were greatly influenced by new grand-scale facilities dedicated for building ultra-large crude carriers. There were five such impressive shipyards in Japan that commanded attention yet they were not the backbone of the Japanese shipbuilding industry. Today, these shipyards are either closed or, because of superfluous facilities, are not as effective as the older, leaner shipyards.
The pilgrimages produced many photographs, reinforced myths about the beneficial impact of Japanese culture on the work force and provided little, if any, knowledge of the scientific management methods being employed. Despite the 1967 disclosure by the Society of Naval Architects of Japan, there was not even a suspicion of the significance of statistical-control techniques. U.S. industry and academia had no effective investigators pursuing the logic and principles being applied by Japanese managers.
Those of us who were concerned with outfitting matters, though impressed, did not find the grand facilities pertinent and had to investigate elsewhere. During 1976, after visits in Europe and Japan, we concluded that the IHI shipbuilding system was the most developed in the world and even regarded as such by other shipbuilders in Japan. Moreover, we discovered that the shipbuilding system was thriving and constantly being improved in IHI’s three pre-WWII shipyards, i.e., Kure, Aioi and Tokyo, particularly for one-of-a-kind ships and for end products other than ships.
On a trial basis, a research project was initiated that compensated IHI to disclose in detail how outfitting is managed. Information in Japanese-English was distributed to interested U.S. shipbuilders as soon as it was received. In 1979, the NSRP published a very illustrative booklet, Outfit Planning, which convinced many in America that there was much more to Japan’s shipbuilding successes than cheap labor, government subsidies, etc. The booklet contained proof that Japanese managers were applying methods that enabled their workers to work smarter, in safer and more pleasant environments. As the final publication was being prepared, Avondale Shipyards, Inc., responding also to other initiatives by the Maritime Administration’s Office of Advanced Ship Development, retained IHI consultants to accelerate their transition to the more effective methods.
Even before the outfitting methods were published, IHI was retained by the NSRP to record the logic and principles being applied for organization of work. The booklet “Product Work Breakdown Structure (PWBS)”, published first in 1980 and again in 1982 because of demand, was described by a senior manager of a U.S. shipyard as “a framework for change” and by the Director of Productivity for British Shipbuilders, as “a truth not to be argued with”. 
PWBS describes Kaiser’s methods as considerably developed by Dr. Shinto. Work is highly organized according to the problems inherent in manufacture. Using this principle of Group Technology, process lanes are organized by problem categories for the many different things, i.e., interim products, in varying quantities that shipbuilders must deal with, e.g., parts, subassemblies and assemblies.
Work so rationalized, even though interim products are different, has enough repetitive aspects to yield significantly more meaningful measurement data. Realizing that simple arithmetic is not sufficient because of the existence of variation, a normal occurrence in any endeavor, Shinto exploited the statistical control concepts taught by Deming, Now, IHI managers understand as a matter of common knowledge that how to measure variation is the key to analysis, without which there is insufficient production control, and statistics is the branch of mathematics that deals with the description and interpretation of variation. The result of the combination of process flows and statistical control is a shipbuilding juggernaut which constantly
“feels the pulse” of each process lane, which features constant
problem solving by all levels of the work force and management, and which is constantly
Further projects assigned to IHI resulted in the 1982 publications “Process Analysis via Accuracy Control (A/C) and Line Heating (L/H). The former describes how statistical methods are specifically applied for hull construction and the latter addresses systematized heating and cooling to very accurately form even complex curvatures in hull plates.
Heretofore, in U.S. shipyards as in most shipyards other than in Japan, line heating was mistakenly regarded as an art that could be applied by only a very few experienced workers. Today, as a result of NSRP research, hands-on teachers from Japan and grouping of work by problem categories, analytical line-heating methods have been successfully introduced to U.S. workers in five U.S. shipyards in the same manner than Kaiser introduced welding.
“A product work breakdown is the framework of any shipbuilding system that features organized production lines based on the principles of Group Technology. Statistical control of accuracy is the means used to continuously improve a system by optimizing design details, work methods and dimensional tolerances. Line heating is the work methods specifically developed to productively achieve the tolerances so identified. The three disciplines are interdependent.” 
Of the L/H publication, Elmer Hann said:
“It is by far the best publication on the subject matter that has come to my attention. It should be in the hands of all shipbuilders and fabricators whose managers should be made aware, that a practiced eye in viewing welded components for further assembly can immediately determine the quality of their finished products…. If such weldments
are not neat, without weld distortion, further problems will persist and cost control will be difficult.” 
Hann’s statement links quality and productivity and addresses a significant aspect of the most advanced shipbuilding systems. With Deming’s statistical methods substituting for the “practiced eye” of Mr. Hann’s day, the most advanced shipbuilding managers have knowledge of the variations that characterize how their existing work processes are performing. With such information, and employing variation-merging equations they routinely predict
accuracy (quality) and productivity for a ship they have never built before. Thus, potential customers and those in government who furnish support can reasonably require statistical evidence of quality and productivity before making a commitment.
The same evidence, collected periodically is a measure of the rate that a shipbuilding system is improving.
U.S. shipbuilding managers who took time to assimilate PWBS, particularly as revised in 1982 to emphasize the linkage to A/C and L/H, found themselves “in the minds” of Japanese managers. The publication introduced the idea that for an effective shipbuilding system, information, people and work should reflect problem, not craft, categories and that all should be organized in the same manner. So rationalized, hull construction, outfitting and painting can be integrated. The shift from craft- to problem-oriented organizations began in Japanese shipyards about 20-years ago.
PWBS made clear that designers and purchasing people could not remain system oriented while production was becoming zone oriented. In other words, design, material definition and material procurement have to be implemented in the same sequence specified for production. Also, PWBS made apparent that, for productivity purposes,
purchasing should be an aspect of material control which, with man-hour budgeting and scheduling, is subordinate to production control. To feed this growing understanding, in 1983 the NSRP published “Integrated Hull Construction, Outfitting and painting” and “Design for Zone Outfitting.” Both publications address what has to be done by traditional shipbuilders to advance beyond the second stage of shipbuilding technology development, shown in Figure 1-1, to achieve process lanes and zone outfitting. The distinction between traditional preoutfitting and modern zone outfitting requires emphasis:
For each ship to be built, zone outfitting features a documented building strategy, prepared by production engineers and given to designers even as they start contract design. During design there is a regrouping of information that was conceived by systems for creative purposes, into information grouped by zones to be assembled during specific stages on specific flow lanes for production purposes. Work packages which identify zones, problem areas and stages per the building strategy, are incorporated in design end products. This is the idea Dr. Shinto obtained from study of Boeing B-29 drawings. There is no need for a time-consuming planning phase after design for planners to acquire sufficient understanding and to pick bits of information from various system-drawings in order to define materials and work required to preoutfit
Where zone outfitting is perfected, college-educated shop managers and production engineers, each having some design and other-shop experiences, so that they understand the entire shipbuilding system, have refined zone outfitting into three major stages, i.e., outfitting on unit (no structure), on-block and on-board, and have divided on-block into substages so that ceilings are always outfitted upside down. Further such work is now integrated with painting as well as hull construction and much is performed on process lanes. More painting is performed down hand and painting man-hours are more evenly distributed over the entire shipbuilding process. “Percent of outfitting complete at launching” has been abandoned as a yardstick and replaced by “percentages of outfitting and painting complete at keel laying.”
In Japan Kaiser’s system, passed from Hann to Shinto and to others, remains in good hands and is constantly propelled by Deming’s admonition, “The obligation to improve the system never ceases.”
Because of NSRP initiatives, an irreversible revolution in U.S. shipbuilding methods is now underway. Breakaway from traditional methods was first achieved by Avondale Shipyards, Inc. During October 1983, Avondale delivered Exxon Charleston, a complex product carrier and the first ship built in North America, from contract design to delivery, in accordance with the Group Technology methods that were highly refined in Japan. In order to accelerate the transition, Japanese shipbuilding consultants are employed. Further motivated by Avondale’s successful bids for navy tankers (T-AO) and amphibious ships (LSD), other shipyards, realizing that there are no options if they wish to compete, are accelerating their transitions to modern zone-oriented methods. Consultants from Japan are now assisting six U.S. shipbuilding firms. However, more is required for timely creation of constantly self-improving shipbuilding systems as exist in Japan.
How many years it takes a shipyard to effect a transition cannot be answered because opportunities to build ships or other end products provide the only forums for change. Three to five opportunities for building end products of different designs
should be enough for managers to effect the organizational changes in people, information and work that are necessary. Thus, government assistance for securing work for only those shipyards committed to change, is appropriate and essential.
In developing prerequisites for government assistance of any kind, there should be no requirement for shipbuilders to disclose proprietary matters. For example, full-load displacement, light-ship weight and hull lines are means for competition among shipyards yet their disclosures beforehand have been required by Federal Maritime Board subsidy applications. A shipyard’s ability to compete with contract-design activity is vital.
 Therefore, regarding support for specific shipbuilding projects, government aid should be conditioned on performance characteristics, e.g., payload, speed and operating costs. How a shipbuilder meets such requirements are elements of competition that should remain proprietary.
We are advised that something else is required:
“The most dangerous bottleneck was the shortage of men able to operate shipyards.” Emory S. Land
“We used a group of junior engineers…shifting them frequently from one department to another – most became top-notch supervision.” Elmer S. Hann
“Only America can surpass Japan in shipbuilding. But we do not worry because America has a human problem, not enough college educated people in middle management.”
All say that we cannot ignore the need for more-educated managers. The singular difference between a traditional up-from-the-trade shop manager and a shop manager educated to think analytically about the systems nature of manufacturing, is ability to analyze
any influence for its impact on an entire manufacturing system.
Insufficient analysis by current middle management is already manifest in a way that threatens to slow shipbuilding technology development in the U.S. Where the refined technology from Japan is now being applied, some traditionally educated American managers feel that they have already perfected the “new methods” and are now introducing some innovations that would be of interest even to the Japanese. However, most are still preoccupied with parochial concerns and are not yet talking about contributions for constantly improving an entire shipbuilding system.
Why should a manager responsible for designing pipe runs, code each pipe-piece design for classification by the problems inherent in its manufacture? Such coding and simple computer routines facilitate ideal loading of pipe shops in accordance with the principles of Group Technology. They also enable top managers to assess designers’ contributions to pipe-shop productivity! What percentage are straight pipe pieces? What percentage have flanges attached when pipe lengths are straight and bent afterwards? All other pipe-piece categories are more expensive to manufacture. How do such percentages compare with those for previously built ships?
What is the average length for pipe pieces? Greater average length means fewer joints and lower costs. Are there pipe pieces designated for on-board outfitting that are too long or too heavy for one worker to handle safely? Top managers should know the answers to all such questions as they cannot otherwise set goals for and monitor productivity improvements.
With prospect for even greater adverse impact, some top managers who have implemented or are planning to implement process lanes, do not have middle managers with sufficient understanding of the critical need to statistically analyze accuracy variations. They believe that creating a separate accuracy-control department, a staff group to pay attention to accuracy, is sufficient. After all, those who have such A/C specialists
have already realized benefits. However, their approach is inherently limited. Soon they will reach a plateau
and provoke no more productivity improvements in the next 20 years than traditional shipbuilders obtained in the last 20 years.
The crucial omission is constant and meaningful feedback based on analysis of accuracy variations, describing how work processes are performing, that can only be provided by statistical methods implemented by shop managers, supervisors and workers. This is the only proven way to provoke spontaneous quality circles, i.e., a climate in which everyone, workers included, regularly and willingly participate in problem solving so as to constantly improve productivity. The possession of such capabilities in shops, is a tremendous competitive edge.
Top managers who do not have production people qualified in statistical analysis, are unable to predict
how accuracy variations per work stage merge and impact on welding during the critical hull-erection stage for a ship design not previously built. They are unable to identify potential problems having the greatest significance and cannot, as a design develops, generate feedback to direct specific changes in proposed design details, work sequence and work methods before work starts.
Managers who do not have analytical means for provoking constant
productivity improvements, cannot include rates for realizable improvements in bids for construction projects. In the very competitive market place which now exists, the absence of cost savings based on an analytically derived productivity-improvement rate, can be the difference between a successful and unsuccessful bid.
Further, managers who do not apply statistical analysis of accuracy variations, particularly for hull construction, cannot provide statistical evidence of quality before contract award as may become a routine requirement for building both commercial and naval ships.
Thus, with its nominal resources, the NSRP continues to document and promote the world’s most effective shipbuilding methods with great emphasis on organization of work and statistical analysis. The materials so generated are being used for special educational programs within shipyards and by two universities for both continuing and undergraduate education.
At the University of Michigan, required course curriculum for a Bachelor of Science degree in naval architecture includes exposure to advanced ship-production concepts, including statistical methods. Two elective sources in the College of Engineering focus specifically on ship production. All employ NSRP publications.
What is especially significant is that the University of Washington is using the NSRP publications, PWBS, A/C, etc. as texts for elective Industrial Engineering (I.E.) courses. Since building ships is more difficult than most other heavy-construction projects, students who complete the shipbuilding electives are better able to apply I.E. principles, particularly analysis techniques, to any
industrial project. Moreover, they are better able to understand how shipyard resources can be employed for end products other than ships, i.e., chemical plants, bridges, waste-disposal plants, etc. Like Kaiser, they are better prepared to build whatever the world market requires in whatever quantity, especially including one of a kind.
I.E. students having some shipbuilding knowledge have qualification for employment and career development in many
industries. All of them finding employment in shipyards, is not probable nor intended because long-term considerations indicate contraction of shipbuilding industries in all modern economies, even in Japan.  However, should there be another shipbuilding emergency or change in market conditions, like Kaiser, industrial engineers qualified to manage shipyards will be available.
Nothing less than the massive education program Deming and JUSE conducted in Japan will suffice. “Between 1950 and 1970, JUSE taught 14,700 engineers in elementary statistical methods, and thousands of foreman.”  U.S. government support of such applied I.E. education is imperative.
“Only America has the resources to surpass Japan in shipbuilding.
I mean large numbers of intelligent people.”
This testimony identifies the start of modern shipbuilding methods in America, how they were transferred to Japan and, after significant development, how they are being returned to America. Much of the history is based on interviews with, lectures by, and exchanges of correspondence with three of the four people who had significant roles. All sources point unerringly to the need for shipbuilders, and others in U.S. industry, to develop analytically applied, flexible-manufacturing systems. Much is said about the impact of analytical methods, as applied in the world’s most effective shipyards and the need for great dependence on college-educated people, particularly to manage shops.
In order to achieve such ends the following recommendations are offered:
1. As public funds should not support shipyards at any cost, government should require statistical evidence of quality (accuracy) and productivity, using such evidence from Japan as a yardstick, before making a commitment for subsidy of any kind and before awarding contracts for building ships (Navy, Coast Guard, etc.).
2. As constant
technology development cannot be sustained by a team of managers and workers without opportunities, and since modern shipbuilding systems are essential elements of defense, government aid to secure construction work of any kind should be granted, but only to shipyards which are judged to be part of the mobilization base and are demonstrably adopting analytical means for constantly improving their manufacturing systems.
3. As contract design is a vital part of a shipbuilding system involving a ship’s performance, how it will be built and its cost, no requirement for government aid should force disclosure of proprietary information such as light-ship weight, hull lines, etc. or otherwise detract from a shipbuilder’s need to control contract design during negotiations with a customer.
4. As decisions regarding procurement of materials and services are vital aspects of production control which must be balanced with man-hour allocations and scheduling, since building a file of vendor catalog items to be declared as shipyard standards is an essential productivity measure, and since statistical evidence of quality should also be demanded of suppliers, no requirement for government aid should force shipyards to deal with an inordinate number of suppliers, to procure materials and services on the basis of low bids only, or to require anything that detracts from a production-control manager having absolute control of required materials and services specifically including purchasing activities.
5. As the National Shipbuilding Research Program is a de-facto research consortium, being a cost-shared government/industry program, which has momentum and is successful, described in a 1976 Rand Corporation of government-funded efforts as one of the five most effective research programs in terms of development and implementation achieved, it should be recognized as such by government agencies, continued and further supported.
6. As more educated-managers are required, particularly to operate shops, government should support a massive education program by Industrial Engineering departments in universities, to teach Group Technology and Statistical Control methods, with some courses specifically dedicated to shipbuilding, in order to reach prospects who may ultimately be employed by shipbuilding firms, by many companies in different industries that furnish materials to shipyards and by customers for ships as well as end products other than ships that could be built in shipyards.
 Frederic C. Lane, Ships for Victory, Part I, Baltimore, The John Hopkins Press, 1951,
 “Kaiser Shipbuilding During World War II”, a paper furnished by the Kaiser Company, Oakland, p.3.
 E.L. Hann in a 3 June 1981 letter to L.D. Chirillo.
 E.L. Hann in a 17 May 1977 letter to L.D. Chirillo.
 Admiral S. Nakayama and M. Chihaya, “Japan’s Phenomenal Shipbuilders”, U.S. Naval
Institute Proceedings, August 1966, pp. 27-39.
 K. Koyanagi, “The Deming Prize”, The Union of Japanese Scientists and Engineers,
1960, pp. 1-2.
 William M. Ringle, “The American Who Remade ‘Made in Japan’”, Nation’s Business,
 W. Edwards Deming in a 6 April 1981 letter to the Editor, TIME.
 R.D. Chirillo, “Analytical Quality Circles”, University of Washington Shipbuilding Technical Course, 3 October 1983.
 H. Shinto during an October 1980 interview by L.D. Chirillo at the University of
 H. Shinto during a November 1979 interviews by L.D. Chirillo at IHI Headquarters,
 R.H. Vortmann, National Steel & Shipbuilding Co., in an April 1981 letter to L.D.
 R. Vaughan, British Shipbuilders, in a 1982 letter to L.D. Chirillo.
 “Line Heating”, NSRP, November 1982, p.1.
 E.L. Hann in a 7 January 1983 letter to L.D. Chirillo.
 L.D. Chirillo, “Scientific Shipbuilding – The Challenge”, 1984 STAR Proceedings, The Society of Naval Architects and Marine Engineers,
 J. Prescott, “Japan’s Yards May Face Big Reorganization”, Lloyd’s List,
30 May 1984.
 “Dr. W. Edwards Deming”, Military Science & Technology,
Vol. 1, Issue No. 3.
 Proof of the effectiveness of college-educated people in production already exists in the
U.S. shipbuilding industry. When the NSRP published “Photogrammetry in Shipbuilding” in
1976, photogrammetric surveys of large structure immediately appealed to traditional
managers but could only be implemented by the few college graduates having responsible
production jobs or by engineers borrowed from design offices. As modern shipbuilding is
a science in which high intelligence is the source of competitiveness, shipbuilders now have
to employ more college graduates in workshops. Their presence is necessary to exploit
modern Industrial Engineering disciplines.