Notable Point ยท 1:45:06-1:48:50

Small contract batches leave shipyards carrying expansion risk

A promised long programme and a contract for a few ships create different incentives for a yard to expand.

Notes

Drachinifel's criticism of fixed industrial limits on a Bilge Pumps discussion introduces the argument about procurement risk. A stated intention to build forty ships over twenty years differs from a binding order for them. In the example, contracting for only four leaves the yard exposed if it expands and no further work follows. Short batches therefore encourage planning around the possibility that each order is the last. The account of switching tooling from Burkes to Zumwalts and back illustrates the disruption caused by changing production plans.