Even though EU defense spending reached €418 billion in 2025, a 47% rise since 2022, and is projected to climb to €454 billion in 2026, the European Defence Agency (EDA) warns that, under current national plans, Europe's shortfalls in naval forces are unlikely to be closed by 2030.
For naval shipbuilding, the pressure to deliver more vessels, faster, has never been higher, and the constraint isn't simply dry docks, steel or skilled welders. It's fragmentation, both between countries and inside organizations. Ask how a yard keeps thousands of parts, drawings and revisions in sync across a naval program, and the answer varies widely: modern shipbuilding software in one yard, a legacy PDM system and a stack of spreadsheets in the next. Even within a single yard, engineering data is often split across systems, with an ERP that doesn't talk to either.
With a stronger push for European sovereignty and growing attention to sustainability, that fragmentation is becoming harder to ignore, and digital shipbuilding is fast becoming a necessity rather than an option.
6 data challenges holding back naval shipbuilding
Steel decides how much a yard can build. Data decides how much of it is built right the first time. In naval shipbuilding, programs run for years, requirements shift mid-build and every decision has to be traceable from day 1. In that environment, fragmented data doesn't stay contained. It cascades through every stage of a program, adding rework, delays, and stretching lead times.
1. Outdated designs on the production floor
Naval programs rarely have the luxury of a finished design. To meet delivery dates, yards cut steel for early blocks while later sections are still being engineered, and the pressure to deliver faster pushes that overlap even further.
When engineering data is split between a legacy PDM tool and spreadsheets, nobody can say with certainty which revision production is working from. In practice, that might mean a block being outfitted with a pipe route that engineering changed two weeks earlier.
2. Design changes discovered too late
A naval vessel is a tightly coupled system, and its requirements often evolve during the build as systems and mission profiles change. Swap one piece of equipment and the change can ripple into structure, weight, cabling, ventilation and the bill of materials. When that information sits in disconnected files, the ripples surface late, on the production floor, where they cost the most to fix.
3. Mismatched bills of materials
Engineering defines what the ship is made of. ERP buys, plans and schedules it. When the two aren't connected, people bridge the gap by hand: re-typing part data, reconciling lists, chasing discrepancies. With long-lead naval equipment, an order placed against an outdated revision can mean months of delay, not days.
4. Person-dependent approvals
In many yards, releasing a drawing or approving a part depends on a few experienced people who know how it works. With a generation of engineers retiring, that is a continuity risk. And defense customers expect every decision to be traceable, which an approval trail spread across email and spreadsheets cannot reliably provide.
5. Hidden costs and carbon footprint
Most of a vessel's cost is locked in during design, yet it is often only calculated later. When one supplier delivers late, the impact ripples through the build sequence: outfitting stalls, blocks wait in the yard, and work is resequenced or done out of order at a higher cost. On the shop floor, rework, extra labor hours and expedited parts add up without ever being traced back to the change that caused them.
By the time the real number surfaces, there is little room left to steer.
6. No transparency on program status
Defense customers expect regular, accurate progress reporting. When data is scattered, simple questions become hard: What has been released? What is waiting for approval? Which changes are still open?
And reports compiled by hand from contradictory sources rarely offer the traceable, accurate picture engineers can stand behind.
The digital thread: how digital shipbuilding connects design, production and cost
A digital thread is a continuous flow of information that connects every stage of a vessel's lifecycle, from the first design decision to the delivered ship. Where a digital twin is the virtual model of the vessel, the digital thread is what keeps that model, and every team working on it, supplied with accurate, traceable data.
By connecting design, engineering, production, cost and performance data this way, shipbuilders can create a living digital twin of each vessel, automate the handovers that slow yards down, and take control of every stage of the build.
1. Design and engineering in one model
Every change made at the drawing board reaches the parts list and the production drawings automatically. Integrated CAD software makes it possible for designers and engineers to work on the same model, and design data flows into engineering without exporting, redrawing or re-entering it. The result is fewer drawing errors and faster design iterations.
2. One source of truth for every part and revision
Every part, drawing and revision has a single home, with a clear status and history. Shipbuilding PLM software, built on product lifecycle management, assesses each change against the full product structure before release, and routes approvals through standardized workflows instead of email chains. Know-how stays in the system when experienced engineers leave, and defense customers get a complete record of who approved what, and when.
3. Engineering and business in sync
Purchasing, planning and production work from the same bill of materials, so long-lead equipment is ordered against the right revision. By connecting PLM to ERP and other business systems with tailored low code applications, released engineering data flows automatically into purchasing and planning, and nobody re-types part lists by hand. That means less reconciliation work and fewer costly ordering mistakes.
4. A shop floor that sees what engineering sees
The shop floor always builds from the latest released design, and what happens there flows back to engineering. A manufacturing execution system (MES) connected to the digital thread captures progress, rework and extra hours as they happen, and provides digital work instructions and a complete as-built record of every vessel. When a supplier is late, plans can be adjusted with a clear view of what that means for the rest of the build.
5. Cost and carbon decided while the design is still open
Teams see what a design change or supplier delay will cost before it reaches the budget. Product cost management software (PCM) calculates cost and carbon footprint while the design is still open, including complex, non-linear pricing models from suppliers. It also gives buyers a fact-based position in supplier negotiations and a reliable basis for quotes and tenders.
6. Live insight instead of manual reports
Program managers, engineers and customers see real progress as it happens, backed by data they can trace and trust. An industrial IoT and analytics layer brings data from engineering, the shop floor and the business together in tailored dashboards, with live insight into equipment performance and early warning when production drifts off plan.
7. Intelligence that moves the program forward
Intelligent process orchestration flags risks early, anticipates bottlenecks and coordinates the next step across teams and systems, so issues are resolved before they turn into delays. And because it is built on the same structured, traceable data, AI stays governed. Every action is logged, access follows the same roles and permissions as the rest of the thread, and the orchestration is tailored to each yard's own processes. That makes it compliant by design and able to scale from a single workflow to an entire program.
From spreadsheets to a digital shipyard: a CLEVR digital transformation example
With more than 30 years of experience in digital transformation, CLEVR supports PLM, manufacturing operations and application programs for multiple aerospace, defense and naval manufacturers across Europe. One of them, a leading European shipyard building naval and government vessels, faced exactly the problems described in this article.
The problem: No digital thread, no traceability
Keeping parts, drawings and specifications in sync took constant manual effort, releases and approvals depended on the know-how of individual engineers, and reporting was limited. With engineering data spread across a legacy PDM system and disconnected spreadsheets, and no link to ERP, our client needed a system that understood how a shipyard actually works.
The process: Implementing shipbuilding product lifecycle management software
Rather than treating shipyard digital transformation as a big-bang replacement, the CLEVR consultants introduced Siemens Teamcenter, an industry-leading PLM platform, in clearly defined phases. First, they implemented Teamcenter on the yard's own servers, allowing for full control over its engineering data from day one, and then, they configured it around real engineering practice. This meant mapping out how custom types and properties should describe parts, drawings and documents the way the yard's engineers actually work with them, establishing roles and access rights that define who can create, change and release what, and standardizing release workflows so every drawing and part follows a defined route from draft to approval.
The result: Value that is built to scale
That foundation is now live: every part, drawing and revision has one home and a traceable history, and approvals no longer depend on who happens to know the process. More importantly, it gives the shipyard a base to build on. Advanced workflows, reporting, CAD integration and the connection to ERP are already being rolled out, each one adding automation on top of data that is structured and trusted. Once the thread is connected end to end, intelligence can be added to anticipate issues, orchestrate work across teams and help the yard grow faster as its programs scale.
CLEVR: Your go-to partner for shipyard digital transformation
This is the true power of the CLEVR methodology.
Rather than forcing a standard template, our consultants take the time to understand how each shipyard engineers its vessels, and configure the system around that. We work in phases, so every step delivers something usable before the next one begins, and we stay alongside our customers' teams from day one. We are not rebuilding old integrations as they were, we design for fewer manual steps from the start. That is what turns a software implementation into a change engineers feel in their day-to-day work.
Want to see how a connected digital thread can help your shipyard turn growing demand into vessels delivered on time? Contact CLEVR for a consultation.
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FAQ
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What is a digital thread?
A digital thread is a continuous flow of information that connects every stage of a product’s lifecycle, from the first design decision through engineering, production and service. In shipbuilding, it links design, engineering, production, cost and performance data, so every team works from the same accurate, traceable information.
Why are naval shipbuilding programs delayed?
Naval programs are delayed for many reasons, from supply chain bottlenecks and workforce shortages to requirements that change during the build. An often overlooked cause is fragmented data: production building from outdated designs, design changes discovered late, and purchasing working from a different bill of materials than engineering. Each disconnect adds rework, and on a vessel with thousands of interdependent parts, small errors quickly turn into long delays.
What are the benefits of a digital thread in shipbuilding?
A digital thread connects the work that is currently split across systems and spreadsheets. Production always builds from the latest released design, purchasing orders against the right revision, and approvals follow a traceable route instead of email chains. Cost becomes visible while the design is still open, and project status can be read from live data rather than reports compiled by hand. The result is less rework, fewer delays and a foundation ready for automation and AI.
What should shipbuilders look for in PLM software?
PLM solutions differ mainly in scope, integration and scalability. Some cover little more than document and drawing management, while others manage the full product lifecycle. Siemens Teamcenter is one of the most widely used PLM platforms in complex manufacturing and especially beneficial for shipbuilders, because it can handle very large, complex product structures, connect to the rest of the yard’s systems, and grow with programs over decades. It is also backed by Siemens, a European technology company.
How do you start a shipyard digital transformation?
Map how engineering data, approvals and handovers really work today, including the spreadsheets and workarounds, define priorities and a phased roadmap based on where data gaps cause the most rework and delay, build a solid PLM foundation, so parts, drawings and revisions have one home, and connect that foundation step by step to CAD, ERP and the shop floor. You can then add analytics and intelligence once the data is connected and trusted, but CLEVR’s consultants can support shipyards at every step, from the first assessment and roadmap to implementation and ongoing optimization.
