Perspective Chapter: Beyond Automation – Building Smart Shipyards with Systems Thinking and Human Intelligence

The shipbuilding and ship repair industry is a cornerstone of global trade, yet it remains one of the slowest sectors to realize the benefits of digital transformation. Despite investments in automation and Industry 4.0 tools, many shipyards have failed to achieve expected returns because technology has often been applied in isolation rather than across the value chain. This chapter argues that the real path to smart shipyards lies in adopting a systems-thinking perspective, viewing the shipyard as an interconnected system of processes, people, and constraints, and aligning technology adoption through value chain analysis. The chapter presents a Technology Assessment (TA) framework for technology adoption that moves beyond traditional cost -benefit calculations. Drawing on Theory of Constraints principles and Porter‘s value chain framework, it shows how shipyards must first understand the interdependencies between their business processes before selecting technologies. The TA methodology is introduced as a systematic tool that evaluates technologies across four critical dimensions: impact on the entire value stream, stakeholder value creation, return on investment, and ability to achieve business outcomes. Case study analysis reveals that successful shipyards like Newport News achieved reductions in rework and improvements in quality not through advanced technologies, but through targeted solutions that addressed system constraints. The role of human intelligence is central to technology adoption, since human intelligence becomes the thread that binds technology to every value-generating activity in the firm. The chapter concludes with practical guidance for shipyards seeking to navigate their digital transformation journey which can be extended to other capital intensive and high-complexity industries facing similar challenges.