Sunday, April 19, 2015

Yard Productivity and Market Competitivness

According to Daniel Spurr's Heart of Glass, U.S. based Endeavour Yachts more than tripled their productivity between 1984 and 1988.  In 1984 they built 200 sailboats with 308 employees (2/3 boat per employee). In 1988 they built 100 boats with 50 employees (2 boats per employee).  

Contrast this to OEY's peak year, 1986, when 33 boats were built with 250 employees (that's about 1/8 boat per employee).  

If the above is representative of the world boat building industry, several generalizations can be made:

To be competitive a mid 1980's Taiwanese boatyard worker made about 1/5 of their U.S. based counterpart. 

By the late 1980's, and without major productivity increases, OEY could remain in business by paying their employees 1/15 of the U.S. yard worker or by tripling the price of their boats.  Clearly, neither solution by itself is feasible. 

Dave Howell, Nellie D. 37VT63

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