Information technologies centered on the internet in the area of shipbuilding and marine engineering further incur the needs to increase the flexibility of the organization, the dispersion of work process, and the use of out sourcing, as well as the globalization of related market. In near future, electronic commerce and concurrent engineering based on CALS/EC and the Internet will be an integral part of the environment and upon these changes, ship design and construction will become a computer supported cooperative work of many dispersed and specialized groups. As the means of active response to these environmental changes, many new concepts such as digital shipbuilding, virtual shipyard, and simulation based design are appearing. In this paper, the concept and current status of digital manufacturing in general manufacturing industry will be reviewed. Then, related technologies, area of application and methods of digital manufacturing in shipbuilding and marine industries are presented. In addition, virtual assembly simulation system for shipbuilding(VASSS), a tool for crane operability and block erection simulation in virtual dock based on 3D product model, will be introduced.