Effective decision-making in ship design under high degree of market uncertainty

The acquisition of a new ship represents a substantial investment to a shipowner. Deciding what is a better vessel to invest in is a critical decision that, by nature, is surrounded by uncertainty. This uncertainty may be the result of lack of information or lack of definition of factors and words -epistemic uncertainty- relating to, for example, the prediction of vessel speed, newbuilding price or steel weight, or relating to the definition of needs and expectations. Uncertainty, can also result from variability, such as market rates, fuel prices or newbuilding prices. Behavior also plays an important role in the perception and generation of uncertainty, as it can be the interpretation of Rules and Regulations, the inefficient communication between stakeholders and the interpretation of performance (what is better). Most of the existing literature on uncertainty-handling in ship design is dominated by many single-perspective approaches, which limit their evaluation of uncertainty to a single factor (context, input, etc) or a single source (fuel price, vessel demand, sea state, etc). The lack of a systemic view of uncertainty in the ship design process may lead to overemphasizing uncertainty types and its sources, which do not have a substantial effect after all, on the effectiveness of the design process and subsequently on the performance of the final vessel design. To enhance future ship design processes, it is paramount to understand how different uncertainty sources and uncertainty factors influence the performance of the design process and the overall performance of the final vessel design. As part of this PhD research work, a research model has been developed to quantify the level of uncertainty in ship design decision-making as perceived by ship owning companies, and its relation to the effectiveness of the design process. The model is operationalized through a questionnaire sent to national and international shipowners. A total of 23 answers were registered and used to evaluate the research model.

This research work: 1)proposes a summary model of different uncertainty handling strategies; 2)proposes and validates an investigative model to measure perceptual uncertainty and decision-making effectiveness in ship design processes; 3)identifies and quantifies the perception of uncertainty by shipping companies in conceptual ship design; 4)points to areas for improvement for ship design practitioners to reduce the perception of uncertainty and increase the effectiveness of the conceptual design processes; 5)has tested the implementation of two frameworks for system design under uncertainty, namely ABD and RSC; 6)has explored quantitatively the effects of uncertainty in the performance of new vessel design; 7)has demonstrated the value that additional information can have in the conceptual design phase of a new vessel; 8)has proposed and tested a set of metrics to measure the level of misalignment among stakeholders expectations and support more effective communication among them.

Ship design is a complex engineering activity. It requires a multidisciplinary consideration in arriving at relevant design objectives and constraints. The ship design process is, at the same time, as stated by Ulstein T. and Brett P.O. (Ulstein et al, 2015), a critical and complex decision-making process, which typically leads from a set of given vessel requirements to a full operational system definition and description. An efficient decision-making process in ship design consists of, according to several authors selecting the better vessel design solution to perform a mission or set of missions, within the expectations and constraints imposed by the stakeholders involved, the market needs and conditions prevailing at any one point in time and over the ship lifetime. When those market needs and expectations are uncertain, not easy to foresee and define and not really being reliable information, the decision-maker needs alternative methodologies to handle this complexity to be able come up with the better vessel design solution to fit the uncertain future market, operational and technological demands. The most common way to handle uncertainty in ship design processes today is to add margins and/or safety factors, which often could lead to uncompetitive ship design solutions. These uncertainties are unfortunately complemented by more uncertainty generated by life cycle considerations. When a large number of uncertainties have to be handled at the same time in decision-making complexity increases dramatically. This is a major limitation to effective decision-making in vessel design, which I want to study and expand upon in my PhD work. My research work will explore the existing methodologies and practices applied and explore for possible alternative ways to enhance those to effective decision-making in vessel design to better handle uncertainties.