Technological improvement in comparison to technological renewal, presents a greater project challenge, because it requires a more detailed approach in terms of defining input variables to meet user demands. In context of such improvement, denominated as refitting of the panel production line within, one of the major Croatian shipyards, the authors explored various methods to determine technological improvement policy. They used a functional breakdown concept for panel production line equipment components. Refitting includes the overall replacement of driving operations on the panel production line in general, that represents objects of technological improvement. To ensure a systematic approach to define improvement policy, and to consider all relevant parameters and user requirements, the decision matrix method is applied. Due to the application of such method, cause-effect relations were established and absolute and relative priorities of observed parameters were defined. Furthermore, all panel production line characteristic and driving operations have been systematically analysed with the objective to assure required capacities and high quality of finished panels. The authors emphasize that for a successful accomplishment of refitting goals, conventional treatment of panel production line capacity, based on average panel, is not appropriate, Fafandjel [l]. Such capacity definition cannot provide information of actual throughput of stations, or technical-functional characteristics of functional units. Therefore, the authors are suggesting the appliance of panel with characteristics that makes it a most complex one for fabrication on the particular panel production line, instead of an average panel, which is defined as a standard one.