Does British boat building have a future?

[petem]

I’d bet that Princess would need about 10x the cash that KPS already injected to build profitable processes and factories. Long term project. Would need to find management that even knew what profit could look like; not just doing the same thing and hoping for a different outcome or rearranging the deckchairs on the Titanic.

Did F/L have much capital invested 8 years ago? My impression was that it was all done on a bit of a shoestring.

They had enough capital to engage the services of Mancini and Vripack to redesign the Squadron 53 and launch some brand new models (e.g. the Targa 63). They also had enough money to grow the workforce from the 100 or so skeleton staff that they had at start-up to the 300 or so that they had until recently.

At the time, IIRC they reckoned that their break even point was around 15 boats ((in total!) a year. Obviously, making money proved to be a lot harder than they thought.

The F/L factory (museum ) comprises two or three nondescript sheds on an Oundle industrial estate so nothing like the sprawling nightmare that is the Princess factory. F/L also have a smaller testing facility at Ipswich.

People often say that automation is the cure to making the business profitable. Sadly, when your volumes are so low, this really isn't an option (aprt from some basic CNC woodwork cutting and mould manufacture.

I agree though, that investment was buttons compared to what Princess would need.

 

[henryf]

Well we seem to have descended into a warren of accounting jargon and boardroom technicalities. As someone who’s never written out a business plan I’ve had to sit out on the sidelines for a while.

At one point @jfm used words I recognise to help explain things and it all seemed to make sense.

I wonder if my fag packet methods might work here:

Annual turnover £300 million.

Number of employees 3,000

Revenue per employee £100k

Given the quality of employee required - they’re not selling burgers and chicken nuggets, you can see how things start to get squeezed when you factor in somewhere to work from and materials to work with. You’ll easily fit far more value in materials than your wage each day.

If you had fewer people and did less of the processes yourself you’d need less space and boy do we all know how expensive factory space is.

I know I keep getting told off for using automotive comparisons but car makers use just in time supply chains to great effect and each supplier is a master of their own field.

Design remains in house and you assemble. As much manufacture as possible is done elsewhere.

It also makes it really easy to reject sub standard parts because you don’t have to pay. Similarly you are free to choose the best technology, not just the technology you happen to own.

That might save enough money to keep building the wooden mock ups as well…..

 

[SC35]

People often say that automation is the cure to making the business profitable. Sadly, when your volumes are so low, this really isn't an option (aprt from some basic CNC woodwork cutting and mould manufacture.

It's not hard to imagine a bit more automation for the early stages e.g. hull layup, then a just in time pipeline where components manufactured in advance, either onsite, or elsewhere, are all joined together.

A modern car might take 24-48 hours to build. It's not a great comparison, as the volumes are much higher, but they are still quite complex things to put together.

Boat building looks more like a set of teams coming and going in sequence, taking months on end, with plenty of cups of tea in-between processes.

 

[benjenbav]

Well we seem to have descended into a warren of accounting jargon and boardroom technicalities. As someone who’s never written out a business plan I’ve had to sit out on the sidelines for a while.

At one point @jfm used words I recognise to help explain things and it all seemed to make sense.

I wonder if my fag packet methods might work here:

Annual turnover £300 million.

Number of employees 3,000

Revenue per employee £100k

Given the quality of employee required - they’re not selling burgers and chicken nuggets, you can see how things start to get squeezed when you factor in somewhere to work from and materials to work with. You’ll easily fit far more value in materials than your wage each day.

If you had fewer people and did less of the processes yourself you’d need less space and boy do we all know how expensive factory space is.

I know I keep getting told off for using automotive comparisons but car makers use just in time supply chains to great effect and each supplier is a master of their own field.

Design remains in house and you assemble. As much manufacture as possible is done elsewhere.

It also makes it really easy to reject sub standard parts because you don’t have to pay. Similarly you are free to choose the best technology, not just the technology you happen to own.

That might save enough money to keep building the wooden mock ups as well…..

I think that, as @petem suggested the core challenge is how exactly do you bring automation to a low volume process.

Somehow the future needs to be one where at every stage of assembly the right item is in the right place and there’s never a convo that begins, “Harry, what are we supposed to be putting here?” Nor continues, “give Charlie a buzz; he’ll fabricate one by lunchtime.” Nor, “it’s a 837B, but the truck’s stuck on the A30.”

It’s all got to be driven back to the customer interface as well, so that buyers have an exciting choice of options that they can have but that these options are readily deliverable, without requiring any bespoke work. Make the customers think they’re getting bespoke but really they’re not. Like the Porsche configurator - or similar that maybe works even better.

Work out financing solutions that don’t mean the customer has the sphincter-tightening experience of ponying-up 80% of the price over 12 months before they find out whether they’ve won a boat or a surprise day in court with the liquidator.

AI may feature.

…

Blimey, all this hot air from a random (me) who doesn’t even want to own a boat anymore.

 

[MapisM]

A modern car might take 24-48 hours to build.

I don't think that's a realistic representation of the process.
Happy to be corrected by someone (rafiki?) much more expert than myself, but I believe that's the time to assemble rather than really "build" the thing.
I mean, AFAIK most if not all the more complex components are built elsewhere (often by different companies!) and brought to the final assembly line ready to be screwed together.

 

[SC35]

I don't think that's a realistic representation of the process.
Happy to be corrected by someone (rafiki?) much more expert than myself, but I believe that's the time to assemble rather than really "build" the thing.
I mean, AFAIK most if not all the more complex components are built elsewhere (often by different companies!) and brought to the final assembly line ready to be screwed together.

Yes, this is the "final assembly process", and lots of stuff is made in advance.
The much lower volumes in boat building are a major difference, but similar principles could be applied if buyers were prepared to accept lower levels of customisation.
Builders like Hanse / Bavaria / Jeanneau / Beneteau have got the hang of this at the lower end of the market.
The trick would be to try and replicate this higher up, and the success of Prestige suggests that it's possible.

 

[petem]

It's not hard to imagine a bit more automation for the early stages e.g. hull layup, then a just in time pipeline where components manufactured in advance, either onsite, or elsewhere, are all joined together.

The actual moulds are already cut using massive CNC machines (I believe you can thank the windmill industry for that facility!).

After that, there's an element of manually painting / rolling gelcoat and a first layer of resin to get a really good finish. Once that's done, I believe all of the manufacturers (including Fairline) using vacuum bagging for the additional resin. So this doesn't feel to me like an area where there's much potential for cost savings.

There's lots of other smaller mouldings but I don't know if any of the manufacturers have tried getting these made offsite / somewhere cheaper. I suppose these could be made in China but you then run the risk of delays / quality issues which could be disastrous.

 

[petem]

Yes, this is the "final assembly process", and lots of stuff is made in advance.
The much lower volumes in boat building are a major difference, but similar principles could be applied if buyers were prepared to accept lower levels of customisation.
Builders like Hanse / Bavaria / Jeanneau / Beneteau have got the hang of this at the lower end of the market.
The trick would be to try and replicate this higher up, and the success of Prestige suggests that it's possible.

The difference probably is that when you include sailing boats, small day boats and merry fisher type craft then the French probably make 20+ times (my guess) as many boats as we do in the UK. So they have established businesses that the manufacturers can outsource to. We'd have to establish our own outsourcers (or import - thanks Brexit) and all it takes is for one of them to go bust and boats will be stuck in the production line. I can see why companies like Fairline want to keep as much in house as possible to minimise risk.

 

[petem]

I think that, as @petem suggested the core challenge is how exactly do you bring automation to a low volume process.

Exactly. Does anyone know what the break even point is for automating the manufacture of a wiring loom (for example) for an 80 foot boat? And what the MOQ would be?

You really need to know the answer to those questions before believing that it's a good idea.

 

[Seastoke]

So if this place was the board room , and more time spent not agreeing than building a boat. How on earth can you move forward , ok you don’t you go into administration.

 

[jfm]

If you had fewer people and did less of the processes yourself you’d need less space and boy do we all know how expensive factory space is.

... each supplier is a master of their own field [and is so close to their own business that they run it profitably].

Design remains in house and you assemble. As much manufacture as possible is done elsewhere [or by suppliers, on your premises/on the boat].

...Similarly you are free to choose the best technology, not just the technology you happen to own.

Henry with the edits above you are describing the highly profitable Italian boat building industry. Seen it with my own eyes. Nail/head.

But to get to this, Princess need new management and might need to go through insolvency/pre pack to lose their vast real estate rent obligations and lots of their workforce

 

[Bouba]

So if this place was the board room , and more time spent not agreeing than building a boat. How on earth can you move forward , ok you don’t you go into administration.

If this place designed a boat it would be sixty feet long to satisfy those who want big boats...but only nine foot wide to cater for the small boat enthusiasts. It will have three engines...because the twin engine people and the single engine people can’t agree. And seven different anchors....unless a new anchor comes to market and all the other anchors will be ditched because shinier is always better at holding a boat. The fly bridge will be downstairs and the master’s cabin will be renamed the socialist sleeping area

 

[Seastoke]

I blame No Veneer Kier.

 

[petem]

I blame No Veneer Kier.

I blame 14 years of the Tories (not that Labour are helping)!

 

[henryf]

Henry with the edits above you are describing the highly profitable Italian boat building industry. Seen it with my own eyes. Nail/head.

But to get to this, Princess need new management and might need to go through insolvency/pre pack to lose their vast real estate rent obligations and lots of their workforce

Oh dear. Can I not be the one who has to deliver the news. Is there a middle ground or am I being too British about it ?

And you don’t have to answer. I’m learning the hard lessons of corporate finance.

Maybe use all the freed up space to undertake military/ naval work. That would also give the marketing boys a bit of an edge. A special button on the helm which summons a stealth deliverer of venom if anyone tries to nick a berth from you.

 

[jfm]

Oh dear. Can I not be the one who has to deliver the news. Is there a middle ground or am I being too British about it ?

And you don’t have to answer. I’m learning the hard lessons of corporate finance.

Maybe use all the freed up space to undertake military/ naval work. That would also give the marketing boys a bit of an edge. A special button on the helm which summons a stealth deliverer of venom if anyone tries to nick a berth from you.

You're ideally placed to deliver the news. You'd do it with such flair, Henri No middle ground/Britishness. Put your Italian head on, as you did subconsciously when you wrote post #122

There won't be any "freed up space" - it will all go back to the landlords in the prepack, including the plywood mock up shed. There will be no distractions like military/naval. There will be very few marketing folks left so don't worry about their "edge-ness".

 

[henryf]

You're ideally placed to deliver the news. You'd do it with such flair, Henri No middle ground/Britishness. Put your Italian head on, as you did subconsciously when you wrote post #122

There won't be any "freed up space" - it will all go back to the landlords in the prepack, including the plywood mock up shed. There will be no distractions like military/naval. There will be very few marketing folks left so don't worry about their "edge-ness".

I can’t help but feel I’d be unpopular. Maybe if you do the pre-pack stuff and I swing in saying don’t worry everyone all is not lost. For some of you.

Of course the reality is that many would presumably find employment in the newly formed specialist supply chain. They’re just wearing Sid’s stainless steel or Wendy’s wiring loom tops not Princess ones. Scope to do well as a smaller specialist entity who possibly gets to serve more than just one company. Trend do it with the glass.

Which elements remain in house beyond assembly? Moulding and what else?

 

[kashurst]

Oh dear. Can I not be the one who has to deliver the news. Is there a middle ground or am I being too British about it ?

And you don’t have to answer. I’m learning the hard lessons of corporate finance.

Maybe use all the freed up space to undertake military/ naval work. That would also give the marketing boys a bit of an edge. A special button on the helm which summons a stealth deliverer of venom if anyone tries to nick a berth from you.

You have just described Rodman Boats in Spain. The bulk of their work is military and commercial stuff. They make very good leisure boats too. Well screwed together.

 

[henryf]

You have just described Rodman Boats in Spain. The bulk of their work is military and commercial stuff. They make very good leisure boats too. Well screwed together.

Apparently I’m not allowed to do military stuff. @jfm says it’s too much of distraction but I can’t help thinking that knowing we supply special forces as well would have given owners a bit of an edge in the yacht club bar.

 

[PowerYachtBlog]

I think what this post is missing is the cost and time per unit, and that is something which needs planning and people who can do it correctly, which are very rare.
Azimut bought the Gobbi factory to copy there system in 2001 and make there production leaner,

In 2006 Brunswick bought Cabo, what was a relatively fresh boat builder founded in 1991 by two friends and co-workers in the unusual location (for a boat builder) of Adelanto in California.
By the end nineties early noughties Cabo is already recognized as one of the best medium size sportfish builders, over taking long standing players like Albemarle, Carolina Classic and Rampage.
Cabo was up until its selling not only building the best sport-fish 30 to 50ft but also the most top selling and profitable.

For the first three years Brunswick keep everything in California, but then in 2010 in order to reduce costs switch location at the Hatteras factory in New Bern, North Carolina.
Big mistake. Each units double production time and so does the cost. Brunswick will stop production of Cabo in 2013 and then sell it with Hatteras.

When I saw the video of the Princess factory video everything looked unorganized to me, and I think to a similar extent was Fairline.
These video show a very custom approach to boat building with production results. Some custom shops look actually leaner to what Princess is doing in those films.