MTG Marinetechnik GmbH, a Hamburg-based German company, is well-known worldwide as the leading expert for independent warship design, engineering support and cost risk estimation for the naval procurement processes.

MTG was invited to the RINA Warship 2012 ‘The Affordable Warship’ conference to speak about the overall naval ship planning process as well as the cost and risk estimation during ship procurement programmes, sharing more than 40 years’ experience.

The ship design process, as invented by MTG and used over several decades for many national and international naval projects, was introduced by Mr Guido Gerdemann, the deputy managing director. He was addressing the issues to balance budget restraints and customer requirements and introduced the MTG methodology of the planning process called VORGES (procedural model for Total Ship System Engineering). VORGES as an iterative process starts with finding the right requirements to find a promising preliminary design by evaluating and competing conceptual designs to finally evaluating the selected design by means of simulation and special evaluation methods. As a final result, our customer, in most cases the Defense Acquisition Organization, will receive a reference design along with full documentation to generate building specifications meeting the Navy´s and given budget requirements.

Mr Michael Rudius, one of MTG´s experts for cost estimation and risk analysis, was given the opportunity to speak about the MTG´s approach and methodology for CRA (cost risk analysis). The process itself is an integral part of the planning process with increasing importance for the overall planning process, focusing on the estimation of cost margins and confidence intervals, approximate the probability of exceeding certain values/budgets and the identification of risk drivers. He introduced CRA as a valuable concept to advance an existing cost estimation process and achieve higher transparency when dealing with cost estimates. Mr Rudius showed how to quantify uncertainties using traditional cost risk estimation methods like parametric estimation with CERs (cost estimation relationship) and methods to simulate cost estimations using methods like Monte Carlo or Latin Hypercube sampling. As a final result of our cost risk analysis, the MTG customer will receive a cost histogram showing an approximation and the corresponding probability of the bandwidth of the expected costs and a full analysis of risk driver for the overall procurement process.

The participation at the RINA conference was a great success for MTG and a good opportunity to describe our advanced methods for a total ship design enabling our customers to most efficiently use their budgets to find the right equipment for their Navies.