The core competence of any medium-to-large sized shipyard includes the panel assembly line. Ship panels are the basic building blocks of well over 60% of the interim products of typical commercial ships. Therefore the improvement of the panel assembly process could greatly reduce the number of man-hours of all assembled panels, thereby yielding significant savings to the shipyard. Using a lean methodology to make kaizen improvements to traditional panel assembly lines will greatly reduce the costs in ship production. This means that shipyards, which are barely keeping earnings above costs, will be able to increase profits. Value stream mapping is a key way of determining how lean a production process is. The wastes in production assembly are readily identified as well as the takt time and the areas where there is push as opposed to pull. In this paper, a case study of a typical commercial shipyard, which builds a product mix of vessels is analyzed. The present state panel assembly line is mapped and then using lean tools and avantgarde technologies, such as hybrid laser arc welding, the new transformed panel assembly line is demonstrated to bring man-hour reductions of over 80%, so that a typical panel is assembled using 12 man-hours as opposed to the present 72 man-hours. 1. Introduction The core competence of virtually any medium-to-large sized shipyard includes a panel assembly line. Many times shipyard management takes for granted that the panel assembly line is just fine as is and therefore it is not necessary to make analysis to improve this core shipbuilding assembly process any further. However, since flat panels make up well over 60% of the building blocks of most commercial ships, any type of significant improvement to the panel assembly line will result in important cost savings for the shipyard.