Naval shipbuilding has entered a period where urgency is colliding with capacity. The issue is no longer simply whether nations need more ships; it is whether shipbuilders can deliver them fast enough, with enough skilled labor, supplier coordination, production visibility, and quality control to keep pace with defense expectations. Every new vessel represents years of engineering, thousands of parts, countless inspections, and a workforce that must execute with precision under increasing schedule pressure.
For shipyards, the demand environment is exposing a deeper reality: modernization is not only about building more ships, but about transforming how complex shipbuilding work gets planned, performed, tracked, and sustained.
Defense Spending and Allied Commitments Are Raising Expectations
Global military expenditure reached $2.718 trillion in 2024, a 9.4% real increase from 2023 and the steepest annual rise since at least the end of the Cold War, according to SIPRI. Spending rose in every region, with especially rapid growth in Europe and the Middle East, while China marked its third decade of consecutive military spending growth. NATO has also reset expectations for long-term defense investment: at the 2025 Hague Summit, noting that Allies committed to investing 5% of GDP annually by 2035, including 3.5% for core defense requirements and 1.5% for areas such as critical infrastructure, innovation, resilience, and strengthening the defense industrial base.
Maritime Power Has Moved Back to the Center of Strategic Competition
For shipbuilders, this matters because maritime power has moved back to the center of strategic competition. The Red Sea has shown how quickly naval presence, escort missions, air defense, and freedom-of-navigation operations can become daily operational requirements. In February 2025, the U.S. Navy described Operation Prosperity Guardian as a mission to counter unlawful Houthi attacks on maritime shipping in the Southern Red Sea, Bab al-Mandab, and western Gulf of Aden; more than 20 nations participated, supporting one of the world’s most important shipping corridors.
In the Indo-Pacific, the demand picture is even more structural. The Congressional Budget Office (CBO) noted in May 2026 that the growing power of China’s navy and indications that Chinese leaders want the capability to invade and occupy Taiwan by 2027 have created urgency for the U.S. Navy to increase offensive capability. CBO also explained that the Navy’s distributed maritime operations concept depends on more ships capable of carrying weapons, complicating an adversary’s ability to track, target, and attack U.S. naval forces. The Department of Defense’s 2025 China military report adds that China’s 2024 exercises around Taiwan included simulated blockade operations around key ports and naval bases, with growing integration between the PLA Navy and China Coast Guard.
The Demand Is Clear. The Supply Side Tells a Harder Story
The U.S. Navy’s FY2026 budget highlights called for a deployable battle force of 287 ships and the procurement of 19 battle force ships, including submarines, destroyers, amphibious ships, medium landing ships, and logistics vessels. Longer term, the Navy’s preferred force-level goal calls for 381 manned ships plus 134 unmanned surface and underwater vehicles. The CBO estimates the Navy’s 2025 shipbuilding plan would require about $40 billion per year in shipbuilding costs through 2054, requiring U.S. shipyards to produce substantially more than they have in the past decade.
Shipbuilding Capacity Cannot Be Surged Overnight
GAO has been blunt: despite a near doubling of the Navy’s shipbuilding budget over two decades, the Navy has not increased its number of ships, and new ships have consistently faced delays, higher costs, and lower-than-promised capability. GAO also noted that infrastructure and workforce limitations worsen the challenge, including aging facilities, equipment constraints, space limitations, and the difficulty of replacing experienced skilled workers. In another review, GAO noted that the Navy primarily uses five private shipyards for surface-ship shipbuilding programs, underscoring how concentrated the industrial base has become.
The Navy is acting upon that reality. Its Maritime Industrial Base Program revealed America’s shipbuilding and repair capacity had fallen to one-third of its size three decades ago, when the Navy began its most comprehensive fleet expansion since the end of the Cold War. The same Navy update stated that the submarine industrial base must be able to deliver one Columbia-class ballistic-missile submarine and two Virginia-class attack submarines per year by 2028 while also supporting more than ten classes of surface ships.
Manufacturing Execution Challenges in the Shipyard
Shipbuilders are being asked to absorb new workers, qualify suppliers, introduce advanced manufacturing, reduce delays, maintain compliance, and execute engineering changes across some of the most complex products ever built. A Defense Department update described the Navy’s efforts to expand supply chain capacity, address workforce challenges, adopt advanced manufacturing, and update “antiquated tooling and production processes.” It also noted that the Navy supported industry efforts to recruit, train, and retain more than 12,600 employees in 2024.
Sustainment Pressures in Shipbuilding
The sustainment side is just as demanding. CBO found that maintenance for large conventional Navy ships often takes longer than planned, with DDG-51 class destroyers projected to spend an average of nine years — more than a quarter of planned service life — out of the fleet for maintenance. Maintenance events often take 20% to 100% longer than final Navy schedules estimate, with causes including aging ships, late inspections, unexpected additional work, parts delays, and poor integration of modernization with maintenance.
Modernization Must Reach the Way Work Gets Done
For shipyards and suppliers, the takeaway is clear: modernization cannot stop at new equipment or more headcount. The next leap in naval shipbuilding capacity depends on digital manufacturing operations that can make complex work repeatable, traceable, and scalable.
That means replacing paper travelers, disconnected spreadsheets, static work packets, and after-the-fact quality checks with a connected digital thread. It means giving technicians interactive work instructions at the point of work. It means giving supervisors real-time visibility into production status, quality events, engineering changes, supplier performance, and compliance requirements. And it means creating a system that helps new technicians ramp faster while giving experienced workers better tools to execute highly complex shipbuilding processes.
How iBase-t Helps Shipbuilders Move from Paper to Predictable Execution
Solumina helps shipbuilders address workforce, productivity, quality, and compliance challenges by giving operators, supervisors, and managers access to real-time digital data throughout the shipyard. The platform supports interactive work instructions, enforces compliance through production and sustainment processes, and integrates across the product lifecycle, including manufacturing execution, supplier quality, enterprise quality, and MRO.
For complex ship production, Solumina MES provides real-time tracking and control of production processes and helps communicate and implement engineering changes in real time. Solumina Supplier Quality Management helps track supplier performance, reduce quality escapes, and improve supplier communication. Solumina Enterprise Quality Management embeds quality across production and sustainment. Solumina MRO replaces paper-based processes with a centralized digital platform, improving visibility, traceability, and maintenance execution while creating a complete historical record.
Solumina is also designed for digital transformation at scale. iBase-t describes the platform as cloud-native and microservices-based, with integration to ERP, PLM, CAD, and other enterprise systems. That gives shipyards a path from paperless operations to the digital thread and ultimately to a model-based enterprise, including the ability to use 3D engineering models across manufacturing processes.
From More Demand to More Delivery
The future of naval shipbuilding will not be defined only by funding. It will be defined by who can convert funding into predictable increased output: through trained technicians, controlled processes, qualified suppliers, faster change execution, embedded quality, and traceable sustainment.
Demand for warships is rising because the world has changed. But capacity will rise only when shipbuilders modernize the way work is executed. The Navy’s new requirements have shipbuilders concentrated on model-based engineering, but the time is now to take the next step and focus on execution. iBase-t helps shipbuilders make that shift — moving technicians, supervisors, quality teams, and sustainment operations off paper and onto a digital operations backbone built for the complexity of defense manufacturing.
