A Review of the Use of Compensated Gross Tonnes for Shipbuilding Performance Measurement

The need for a universal measure of shipbuilding performance has been recognized for many years. To meet the need, the concept of compensated gross tonnes (CGT) was developed within the Organization for Economic and Co-operative Development (OECD), initially as a means of overall comparisons between regions and perhaps nations. Over time, the use has been extended to compare individual companies and also, with a cost element, to compare ship construction costs. More recent work has looked at extending the CGT concept to warship construction. The extended use of CGT as a measure is accepted as less than perfect, but no generally agreed upon alternative has been proposed. This paper reviews the uses of CGT, highlights some of the uses in measurement of shipyard performance, and proposes alternative means of presenting the CGT information that are intended to improve its usefulness.