For years, policymakers, journalists, and even casual observers have bemoaned the state of U.S. public and private naval shipyards; it is no surprise to most that shipbuilders are in dire straits. If one compares U.S. shipyards to their peers, such as those of our South Korean and Japanese allies—or worse, to China’s rapidly expanding yards—the shipbuilding crisis only becomes more apparent. From US Naval Institute News.
When it comes to solving the multifaceted crisis, one thing is certain: Attempting to answer it solely by piling more workers on the problem without replacing outdated manufacturing technologies is like slamming on the gas with one foot while keeping the other firmly on the brake. Put simply, outdated shipyards with antiquated processes, systems, and infrastructure must be upgraded and transformed so they can be more productive, innovative and agile.
The Navy’s recent multiyear Submarine Industrial Base (SIB) investments are part of a broader effort to take the foot off the brake. They are injecting commercially widespread advanced manufacturing methods into the nation’s shipyards to make them more efficient, increase their productive capacity, and expand their capabilities.1
As with any complex problem, solutions require addressing the underlying drivers of generational shipbuilding demand and understanding how shipyards became outdated over time. With that understanding, use cases can demonstrate how the Navy’s technology investments could and should transform outdated processes to reap significant productivity gains. In this article, the term “shipyards” will refer to new construction or maintenance taking place throughout public or private yards, and “shipbuilders” will refer to private sector corporations and their staff.
Demand, Supply, and the Imperative for Change
Navy leaders repeatedly highlight the “generational demand” for skilled workers and shipbuilders.2 This is an understatement. To use aggregate submarine construction tonnage as a rough metric for the scale at hand, submarine shipbuilding demand will need to exceed record Cold War heights within a few years.
The primary driver of increased demand is the growing threat posed by China and Russia compounded by decades of post–Cold War underinvestment. U.S. submarines have a continuous, no-fail strategic and conventional deterrent mission. Should deterrence fail, the submarine force needs many highly capable, stealthy, and lethal platforms with which to deny our adversaries access to the sea.3
In fact, there is rare consensus in Washington that China’s saber rattling, maritime aggression, and adoption of a wartime industrial footing are growing threats. In 2019, the People’s Liberation Army Navy (PLAN) surpassed the U.S. Navy as the largest in the world, and its naval force structure has kept growing since.4 Recent estimates suggest that Chinese shipbuilding capacity, bolstered by its state-subsidized civilian shipyards, is 230 times larger than the shipbuilding capacity of the United States.5 A senior fellow at the American Enterprise Institute put it in starker terms: “China has been investing so much in shipbuilding over the past 18 years that it can now build more ships in a month than the United States can in a year.”6
Unfortunately, the generational demand comes at a time when the U.S. Navy and its shipbuilding partners are striving to reverse both the macro effects of a decades-long shift from a manufacturing to a service-based national economy and the more specific effects the post-Cold War “peace dividend” had on the ranks of skilled welders, pipefitters, and technicians who once filled U.S. shipyards. Since the late 20th century, manufacturing’s share of employment and its size relative to the growing economy have declined precipitously.7 Shipyard closures in communities nationwide were part of this trend.
While many are familiar with the broader arc of U.S. deindustrialization, it is important to note that despite manufacturing’s diminishing role and size, the nation’s total manufacturing output remained strong and even grew during this period. This growth was driven primarily by technology-enabled efficiency gains.8New machinery, improved methods, and computerized systems made American workers more efficient and capable of producing more with less.9 These productivity gains were not evenly distributed across manufacturing sectors, however. From 1987 to 2000, labor productivity measured via output per worker grew markedly more in manufacturing as a whole than in the shipbuilding sector.10 Consequently, the shipbuilding sector’s real output fell before modestly waxing and waning during this period.11
Strapped for cash amid smaller defense budgets, lagging demand, and reduced defense sector competition, the innovation that allowed other manufacturers to do more with less did not reach shipbuilders.12 While others became lean, efficient, and productive, shipbuilders had fewer and fewer orders for warships and were forced to sit on the sidelines. Many advanced manufacturing innovations passed them by absent demand signals to spur adoption.
Catalyzing Transformation
The Navy has seized on the growing pressures of competition and generational demand as the catalyst to inject much-needed technological innovation into the nation’s public and private shipyards. Since 2018, the Navy has invested more than $2.3 billion in the SIB across 745 initiatives, 309 suppliers, and 33 states. Thanks to early successes, similar surface ship initiatives, and industry-wide spillover effects, the Navy recently merged its SIB-focused efforts into a broader Maritime Industrial Base (MIB) office to allocate investments strategically throughout the sector.
While most SIB funding has focused on expanding the workforce and reducing supply chain bottlenecks, $174M was dedicated to technological innovation—specifically, to inject commercially proven, data-informed, and readily scalable tools and capabilities into shipyards. Future investments are increasingly dedicated to advanced manufacturing implementation.
Many of the methods discussed here are not necessarily novel. In fact, many of the technologies the Navy’s MIB office is pursuing are the same tools already increasing shipyard productivity elsewhere. Innovation and advanced manufacturing methods have made our allies some of the most productive shipbuilders in the world. For example, South Korea’s Hyundai and Japan’s Mitsubishi shipyards pioneered many of the advanced shipbuilding methods discussed in greater detail below. Because of the systemic factors explained above, though, these methods were, until recently, underutilized in U.S. yards.
As the Navy provides funding for innovation, it is incumbent on the nation’s shipyards, traditional defense industrial base partners, and, increasingly, new entrants, such as venture capital–funded, tech-backed, and other nontraditional defense firms, to translate investment into action. Shipbuilding firms must do their part in modernizing outdated processes, systems, and infrastructure.
The Navy’s innovation implementation strategy integrates advanced manufacturing methods as the means to achieve two ends: increasing material availability; and augmenting the human workforce. These means will reduce time-intensive manual processes, increase throughput, and improve decision-making. To demonstrate how the Navy’s targeted technological investments will bear fruit, the following example contrasts how things are currently done in today’s shipyards with how they are being transformed.
Increasing Material Availability
Brittle supply chains crack unpredictably. As the COVID-19 pandemic demonstrated, seemingly inconsequential supply disruptions reveal previously unknown production bottlenecks, creating delays and limiting throughput. During the pandemic, submarine construction was often delayed when welders and pipefitters did not have raw materials or parts on hand. For example, pandemic-borne delays limited the number of hull castings—the hundred-ton metal sections that become a portion of a submarine’s structural foundation—supplied to the shipbuilders, creating further problems downstream.
Thus, we learned that just-in-time manufacturing came with risks if key materials and parts were not available to keep production moving. Advanced manufacturing technology can reduce the risk of such bottleneck-induced delays. In shipyards, this can be achieved with additive manufacturing (AM) and collaborative robots (cobots), among other new tools, that supplement productive capacity without replacing traditional methods. Increased availability can also be realized with quicker inspection techniques that reduce the time a part sits awaiting final inspection. Many of these methods are already widely used throughout the private sector.
Additive manufacturing uses digital designs to build parts layer-by-layer rather than the traditional method of pouring molten metal into molds (castings) or twisting hot metal into shape (forgings). Since 2000, more than 40 percent of U.S. casting and forging foundries have permanently closed or moved overseas, but AM can supplement traditional methods and expand productive capacity beyond a handful of suppliers, eliminating supply bottlenecks and reducing delays related to availability of materials.13
To reduce barriers to entry for would-be manufacturers, the Navy is validating the interchangeability of AM manufactured parts with those made by traditional methods instead of requiring manufacturers to invest time and resources to validate parts themselves. Without the need to acquire and maintain complex dies or molds, creating a new part can be as simple as uploading a 3D design model to a nearby AM machine. AM’s potential to increase the shipbuilding sector’s capacity is already showing promise. In many cases, ongoing pilot programs have reduced month-long production timelines to just days. Its rapid success has led the Navy to evaluate class-wide AM eligibility for aging, difficult-to-procure, or out-of-production Ohio-class submarine parts. For example, an agile team of Navy and industry experts used AM to cut the time it takes to manufacture a valve assembly last produced in the late 1990s from 2.5-plus years, to just months.
Cobots, such as the robotic arms that already populate automotive manufacturing assembly lines, are simply robots that operate with a human partner. Shipyards are newcomers to this technology, but thanks to SIB investments, that is rapidly changing. For example, at Newport News Shipbuilding, cobots have been used to reduce back-breaking movements, technique variations, or inevitable human errors that reduce quality and were, until recently, unavoidable when welding together enormous metal parts. A cobot’s bevy of sensors can detect an operator’s every move, correcting for too much pressure, a misplaced weld arc, or even simple fatigue. The sensor, motor, and human pairing can reduce the time, risk, and stress of moving heavy metal, increase a welder’s accuracy, and generate analyzable data comparing multiple welders’ performance over time. Not only do these new methods ease monotonous or dangerous tasks and make welders more accurate, but they also increase efficiency by improving first-time production quality, reducing hours spent on tasks such as reworking imperfect parts or welds. In fact, recent Navy cobot pilot programs increased efficiency and first-time production quality by more than 45 percent, and they reduced the training necessary to take would-be welders or pipefitters from the street to the shipyards.14
The final area ripe for technological innovation is the field of nondestructive testing (NDT). The suite of NDT tools includes many labor- and time-intensive processes ranging from visual inspections to radiographic x-rays. In the case of x-ray radiography, this means technicians must crawl around and expose submarine parts with x-ray emitting machines onto physical film. To prevent tampering, digitizing this film was (until recently) prohibited—meaning negatives have to be physically developed and mailed to trained inspectors, sometimes hundreds of miles away. This time-consuming process is fertile ground for improvement and is emblematic of other efficiency-improving opportunities Navy stakeholders are targeting.
Revamping NDT tools and expanding the NDT inspection suite to include newer and faster methods are already underway; from low-hanging fruit, such as digitizing the analogue radiographic inspection process, to “crawler robots” like those already used in the oil and gas industry. These new tools can help humans reduce time-intensive inspection techniques and switch from laborious methods to faster, more accurate mechanical or automated systems. A recent pilot program using commercially available NDT technology at Norfolk Naval Shipyard reduced part-inspection times by 20 percent.15 Importantly, these commercial inspection tools are used in industries in which safety, security, and accuracy are just as valued as in naval shipbuilding.
Workforce Augmentation
Even with the adoption of AM, cobots, and modern NDT tools, shipbuilding will always require thousands of workers; therefore, improving the efficiency of that workforce is the most promising way to expand and improve shipbuilding capacity.
Shipyard digitization is a broad term describing Navy efforts already underway that incorporate sensors, device interconnectivity, and data to maintain complex systems. Just as networks of sensors, handheld scanners, and routing algorithms allow UPS or FedEx to know where their packages are at all times as well as each parcel’s optimal route, shipyard digitization will allow humans, and, increasingly, algorithms, to draw insights and optimize the beehive of shipyard activity. South Korean and Japanese shipbuilders already use these methods in what they call “smart shipyards.”
Because digital tools and data management are standard practice throughout the private sector, shipyard digitization may sound mundane, but today’s naval shipyards often rely on outdated and disconnected data collection and management practices. If insight-producing data is collected at all it is often done via paper and pencil. The widespread absence of modern tools suggests digitization will have an outsized affect on increasing capacity. The Navy is exploring how to modernize paper-driven processes and increase sensory inputs to provide real-time insights, streamline production, and enhance decision-making by revamping the management of everything from material consumption and machine downtime to parts inventories.
Finally, technological innovation requires a discussion of artificial intelligence (AI). Though this article is intentionally limited to near-at-hand, proven technologies, AI has many promising shipyard applications, and the Navy is already pursuing several via various pilot programs, including machine learning (ML) algorithms for analyzing complex shipyard datasets; large language models for generating repetitive, boilerplate text or work instructions; and algorithmic schedule generation. These programs will facilitate broader implementation as the technology matures.
Innovation alone will not solve all U.S. shipbuilding problems. The advanced manufacturing technologies discussed above are, however, a key part of bringing today’s shipyards and their antiquated technologies up to date and making them more capable of meeting national security demands. The conditions to innovate are present, including mature technologies from other sectors and Navy resources and support. Congress must continue to provide and even expand those resources, and shipbuilders must implement and operationalize new technologies to expand capacity.
1. Mallory Shellbourne, “Navy Doubles Down on Submarine Industrial Base Funding in Unfunded Request,” USNI News, 26 March 2024.
2. Statement of ADM Lisa Marie Franchetti, 33rd Chief of Naval Operations, on the Posture of the United States Navy in Review of the Defense Authorization Request for Fiscal Year 2025 and the Future Years Defense Program before the Senate Armed Services Committee, 16 May 2024.
3. Mark F. Cancian, Matthew Cancian, and Eric Heginbotham, The First Battle of the Next War: Wargaming a Chinese Invasion of Taiwan, CSIS, 9 January 2023.
4. U.S. Department of Defense, Military and Security Developments Involving the People’s Republic of China: Annual Report to Congress, 2019 and 2023.
5. Alexander Palmer, Henry H. Carroll, and Nicholas Velazquez, “Unpacking China’s Naval Buildup,” CSIS, 5 June 2024.
6. Brady Africk and Mackenzie Eaglen, “China Is Rapidly Building Warships. Satellite Images Reveal the Scale,” The Washington Post, 7 October 2024.
7. YiLi Chien and Paul Morris, “Is U.S. Manufacturing Really Declining?” Federal Reserve Bank of St. Louis, 11 April 2017.
8. Drew DeSilver, “Most Americans Unaware That as U.S. Manufacturing Jobs Have Disappeared, Output Has Grown,” Pew Research Center, 25 July 2017.
9. DeSilver, “Most Americans Unaware.”
10. “Output per Worker for Manufacturing: Ship and Boat Building (NAICS 3366) in the United States.” Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis, August 29, 2024. “Manufacturing Sector: Labor Productivity (Output per Hour) for All Workers (OPHMFG).” Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis, 5 September 2024.
11. “Output per Worker for Manufacturing: Ship and Boat Building (NAICS 3366) in the United States,” Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis, 29 August 2024. “Manufacturing Sector: Labor Productivity (Output per Hour) for All Workers (OPHMFG),” and Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis, 5 September 2024.
12. Kenneth Flamm, “Post-Cold War Policy and the U.S. Defense Industrial Base,” National Academy of Engineering, 1 March 2005.
13. Alaa Elwany, Christopher Hovanec, and Nick Lalena, “Near Net Shape Workshop Report,” Department of Energy, February 2024.
14. “Establishment and Operation of a Shipbuilding COBOT Training and Development Center,” National Shipbuilding Research Program website.
15. “FY2024 Submarine Industrial Base Program Year in Review,” U.S. Navy, October 2024.
