L’optimisation des processus industriels déjà au coeur des préoccupations
august 2022
Industrial processes in naval defense are inherently complex. They involve the physical integration of several hundred thousand components (up to one million for an SSBN) via multiple, heavy, and often simultaneous industrial operations, combined with the functional integration of numerous systems and their through-life support (TLS). The industrial model currently adopted by the State leads the industry to deliver, for French programs, an average of one frigate every 12 months. In reality, the manufacturers mastering these processes are constantly seeking to reduce lead times to meet the needs of both domestic and export clients, while remaining competitive and high performing.
By investing several million euros in recent years, Naval Group has renewed its industrial facilities in Lorient and digitized its industrial processes, enabling it to deliver an FDI frigate every 6 months1 if required. This global momentum is built around the objective of producing a corvette in 20 months and a frigate in 30 months.
industrial capacity
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Similarly, the assembly time for 20 hull sections leading up to the launch of the Jacques Chevallier—the first of the force replenishment tankers (BRF)—was achieved in 50 days at Chantiers de l’Atlantique; she will begin sea trials less than a year after her keel-laying.
Going further to optimize processes and maximize vessel availability would require additional efforts and investment to review not only industrial capacities (infrastructure) but also the organization of the value chain (the Defense Industrial and Technological Base – DITB), which is 75% dual-use and thus subject to market logic. Human resources and the regulatory and contractual framework must also be addressed.
This note aims to formulate proposals in the event that France enters a war economy, necessitating an acceleration in the production rates of naval programs (new builds, refits, or maintenance).
1 : At Naval Group Lorient, the simultaneous and integrated design of the platform and the combat system, featuring the Panoramic Sensors and Intelligence Module (PSIM), has already optimized the industrial process by parallelizing critical paths, saving 12 months compared to the previous generation. Similarly, the hull of the first FDI frigate was assembled in under 4 months.
To increase the industrial capacity of companies in the sector, several hypotheses and associated conditions exist:
Finance investments to renovate and develop existing industrial infrastructure by mobilizing the State, local authorities, and other public/private actors (port authorities, private investors, etc.).
Consider further workload transfers, either within the same industrial group (between programs and production sites where possible) or to French and European partners.
Acquiring or partner with foreign shipyards (prioritizing Europe) to build up skills reserves or distribute production between export and national programs.
In the medium term, transform port infrastructure that could be adapted for industrial needs related to shipbuilding or ship repair.
proposals
#Proposal 1
Implement a recovery and industrial production development plan mobilizing the State, local authorities, port asset managers, and private investors.
#Proposal 2
Identify with industry players the priority infrastructure to be renovated or expanded (e.g., Basin 2, a second prefabrication hall, and an additional land-based integration platform at Naval Group Lorient).
#Proposal 3
Distribute activities across different sites or with French/European partners (e.g., for pre-outfitted or outfitted hull rings or half-hulls in shipyards).
#Proposal 4
Support shipyard owners or executives in their development strategies to acquire or utilize other industrial sites in Europe.
#Proposal 5
Launch a study group to inventory port infrastructure that could be transformed or adapted for industrial needs related to shipbuilding or repair.
Value chain integration
Increasing ship production rates in shipyards requires accelerating the pace of systems’ integration and, consequently, the ability of the entire value chain to match such acceleration, due to:
Interdependence between integrators and military equipment manufacturers: They are subject to production capacities for systems where procurement lead times are often long and on the critical path of a program. Furthermore, they may produce sensors and weapons systems for sectors other than naval defense.
Competition for supplies handled by subcontractors: Naval defense may represent only a marginal share of the activity of suppliers, most of whom are dual use. Despite a supply chain that is overwhelmingly French and European (97% of Naval Group suppliers, for example), foreign dependencies remain for certain critical equipment (engines, auxiliaries, etc.).
proposals
#Proposal 1
Establish a regulatory mechanism to reallocate subcontractor capacities previously used for civil markets to prioritize the naval defense market temporarily, ensuring the availability of equipment and supplies.
#Proposal 2
Anticipate arrangements with key suppliers to provide visibility and ensure alignment between their capacity and shipyard needs (e.g., forgings, hull plating, electronic boards).
#Proposal 3
Establish strategic or buffer stocks at a European scale with preferred partners for platform equipment, materials, raw materials, and electronic components.
#Proposal 4
Engage major French logistics groups to set up such platforms with State backing and support to stimulate operators in the sector.
#Proposal 5
For non-critical materials, authorize procurement from outside France or the EU (e.g., hull plating for surface vessels).
#Proposal 6
Establish bilateral agreements with countries supplying critical components and/or support the onshoring of industries in France and Europe (electronic boards, batteries, digital cloud).
#Proposal 7
Include a target for onshoring and autonomous production of critical platform equipment (engines, mechanical auxiliaries, etc.) in a joint sector contract between the State and industry.
Human ressources and Work rates
As a labor-intensive industry, the sector already suffers from a lack of flexibility and does not currently have all the workers it requires. Recruitment and renewal needs are significant: over 4,500 new staff joined Naval Group in three years, and Chantiers de l’Atlantique aims to hire 400 people on permanent contracts (CDI) by the end of the year.
However, at the request of the State as a shareholder, the skills threshold is sometimes kept at a ‘minimum viable’ level in certain yards. While manufacturers have organized themselves within regulations to meet peak workloads, obstacles remain that must be removed through a tripartite dialogue (State/Industry/Unions) if the State wishes to accelerate production rates:
Temporary modification of industrial shift patterns (e.g., 24/7 or three-shift systems), which incurs additional costs and faces labor law restrictions if sustained long-term.
Recourse to subcontracting, though the market remains tight in the relevant employment hubs. The industrial sector suffers from a lack of attractiveness; many production roles are already ‘under pressure’ (short-staffed), being physically demanding and requiring long training periods. Current vigorous action on training (via the Naval Industries Campus) will only truly bear fruit in ten years.
Exceptional recourse to qualified personnel from allied countries in the event of insufficient domestic labor. Current regulations limit industry access to such resources.
The use of military reserves (in the sense of the National Guard) for better cross-fertilization between the State and industry, providing potential reinforcements during a mobilization of resources.
Proposals
#Proposal 1
Maintain a volume of activity through public procurement that preserves skills, notably by accepting that manufacturers maintain a ‘capacity reserve’ in human resources to allow for rapid ramp-ups.
#Proposal 2
Strengthen State and regional support to improve training and the sector’s attractiveness.
#Proposal 3
Facilitate the entry of qualified personnel from allied countries in the event of additional labor needs linked to a war economy.
#Proposal 4
Enable the reallocation of human resources from civil markets to prioritize naval defense via a dedicated mechanism.
#Proposal 5
Study the establishment of an ‘In-company Navy Reserve’ (modelled on the UK’s Sponsored Reserves) for sea-going or shore-based roles, allowing employees to switch from civilian to military status to accelerate production or equipment trials.
Regulatory and Contractual aspects
Naval development, production, and maintenance schedules depend on the complexity of the programs, the allocated budget, and the specifications required by the Armed Forces and the DGA (Procurement Agency). Any funding gaps, changes in specifications (or ‘gold-plating’), and redundancies in qualification processes automatically lead to cycle extensions
Furthermore, in the context of rapid technological evolution, it is necessary to design, produce, and integrate capacity adaptations faster during the lifecycle of a combat vessel. While Urgent Operational Requirement (UOR) procedures exist, they do not constitute a model for continuous capacity adaptation. A new contractual approach, integrating both production and in-service support, must be standardized. This is the purpose of ‘Major Effect Programmes’ (PEM) for upgrades to existing equipment, such as the French Navy’s SSNs (PEM EVOL SNA) and first-rate frigates (PEM EVOL FREGATES). Such incremental evolution allows the fleet to adapt regularly and more quickly to new threats while limiting downtime.
Proposals
#Proposal 1
Accelerate contracting phases, avoid over-specification (gold-plating), conduct rapid demonstrations, and adapt certification/qualification processes to the ‘minimum necessary’ to reduce delays.
#Proposal 2
Clarify roles and responsibilities between State departments to optimize the system in a war economy. Avoid redundancy between the DGA (Procurement), the SSF (Fleet Support Service), and the CPPE (Naval Trials and Safety).
#Proposal 3
Strengthen the role of DGA technical centers to accelerate equipment acceptance and qualification.
#Proposal 4
Adjust competitive tendering policies for certain equipment, reducing delays where competition is maintained.
#Proposal 5
Continue standardizing a new contractual model adapted to incremental evolutions (PEM EVOL) and ensure they are appropriately funded.