A revolutionary change was brought after the world war II into the production engineering of shipbuilding industry through the remarkable development of welding techniques. Following such technological innovation, the efforts for the modernization have continously been made and have recently been exerted actively in the mechanization and automation of manual operation mainly in welding, the introduction of electronic computer into production control, as well as the rationalization of production process by the adoption of conveyor system. In spite of these technical developments, more efforts have to be done in the solution of problem of the labour-intensive shipbuilding industry, which is suffering at present from the “prospertity without profit”. To cope with this difficulty of shipbuilding industry, the authors conducted the study on the characteristics of shipbuilding industry in comparison with the other modern industries. This study has revealed that the standardized production process can be settled on the basis of the steadiness of quality by the introduction of statistical quality control, and further that such work system with high productivity as is in general called “continuous flow production system” can be also adopted in the shipbuilding industry. Moreover, the authors have proved this fact by applying it actually to the hull construction works and have made a success of such modernization as is shown in the automation and specialization of welding in their company. Thus, it has been made clear that only on the basis of substantial improvement of production system through the application of mass prduction method, a series of modernization measures such as mechanization of manual labour, adoption of conveyor system and production control with use of electronic computer, will be realized on a full scale.