To survive in the current shipbuilding industry it is of vital importance for shipyards to achieve an optimal utilization of resources, make an achievable planning and ensure that this planning is kept. Possible problems should be eliminated before production starts and if unexpected disturbances occur in the actual production the right measures should be taken. Due to the dynamic nature of the production process, the continuous variation in products and the complexity of both, all this can hardly be achieved with conventional static planning and analysis systems. Simulation provides a solution here, since this enables the modelling and evaluation of the dynamic relations between product and production process. After a global introduction to production simulation in general and the application of simulation at the Flensburger shipyard, this paper presents a tool that has been developed to simulate the various complex assembly processes taking place at shipyards. Subsequently the simulation model for the subassembly production at Flensburger, in which this tool is applied, will be discussed.