Baggage Handling System Project at Denver International Airport - Case Study Example

Problem ment Denver International Airport (DIA) was planned to be the world’s most efficient and the nation’s largest airport. The need for a new airport had been investigated since the mid-70s and all the major shareholders like the airport users, the airlines, the pilots, the media, the general public and the regional business community had been involved. It was considered to be a technologically advanced project that would create jobs and attract new business in the region. At the planning stage it was expected that the costs would be around $1.7bn but by the time of its completion it had tripled to $5.2bn (Bainum, Ji & Kheny, 2005). When it finally opened to the public 16 months behind schedule it has 5 runways and 88 gates and in many ways represented a model airport for the future. According to the master plan the airlines tenants were expected to install their own baggage handling system, thus excluding the construction of a baggage handling system by the overall DIA project. Subsequently, United Airlines insisted on an automated high-speed baggage system. The Denver officials designed a large scale baggage handling system at a cost of $193 million that would require no manual labor (Ma¨hring, Holmstro¨m, Keil & Montealegre (2004). The design was intended to run faster and more reliable than traditional technology. The root cause of the problem is that the city failed to properly plan for the construction of the new DIA airport. They moved ahead with the designing and construction of the airport with out the input of the customers. Justification of problem statement The root cause of the problem was the faulty planning. The first and foremost reason was that the baggage handling system was not decided at the initial stage. It was a subsequent addition by which time the basic design had already been approved. In addition to the late decision of building the automated baggage handling system, during the development stage, the airlines kept changing their requirements. This led to frequent changes in the design and construction. The power systems for the revised design were not altered, which led to overloaded motors and finally mechanical failures in the system testing. The optical sensors also did not read the barcode properly which caused the system routing problem. BAE had been appointed to design and implement the automated baggage handling system. At the same time, BAE, United airlines and the City of Denver, all has their own consultants and project leaders. BAE enjoyed the reputation of being among the best and on the strength of its good work have been responsible for most of the major baggage systems in the country (Neufville, 1994). Besides, they announced freeze dates for mechanical and software design. Despite this, the airlines kept requesting for changes to the design which were not foreseen in the planning stage such as adding ski-claiming devices and odd-size baggage elevators (Bainum, Ji & Kheny, 2005). Even six months before opening of the airport, BAE was still moving equipment around, changing controls and changing software design. They were forced to complete the project in a time which is insufficient for a project of such magnitude. Added to these problems, was the death of the chief airport engineer, a champion of the automated system and who was closely associated with the negotiations with BAE. He was detailed-oriented while his replacement was consensus-oriented. In addition the project had shared leadership which led to duplication of duties. Finance came from different sources which made it difficult to coordinate between different authorities and accommodate different political, social and administrative interests. Possible alternatives In the project management context, the problem could have been averted in several ways. The first problem was that the decision to install the automated baggage handling system was not taken at the time of the inception of the project itself. It was a subsequent addition. According to Neufville (1994), Professor of Civil Engineering at the Massachusetts Institute of Technology, airlines and airports considering an automated baggage system should start assessing their design and performance of the devices far in advance of use. This has to be done before the architects fix the layout of the airport passenger buildings. This gives a realistic and conservative estimate of what automated system can achieve, this estimate should influence the design of the system. The project management team could have been better represented. Duplicity of leadership led to confusion which could have been averted had there been a better synchronization of people. A project needs to be efficiently managed with key personnel identified and responsible from the inception till the finish of the project. BEA was not granted sufficient time to run and test the project. Technologically, the fully automated baggage handling system was unique in its complexity, its novel technology and its anticipated capacity. It was an enormous technology leap over current practice which was the root cause of the problem. Evaluation of alternatives Project management requires sufficient time to gather data and then initiate discussions. Had the automated system been decided at the initial stage, it could have been incorporated in the planning stage and the project cost and time over run could have been avoided. This was the major roadblock which the project management did not pay heed to or did not understand the complexities involved. The initial design did not incorporate the CHBS as it was assumed that individual airlines would handle their own baggage as was the norm at all airports in America. The decision to add these two years into the construction was a risky undertaking specially as this called for undoing portions of the airport that had just been constructed. The project faced inherent management problems, especially duplicity of functions and responsibilities. This compounds confusion and reduces communication. The different stakeholders should have met and charted a proper course of action. It was a consortium of power and the communication system was a top down approach. High level management who had little or no knowledge made key decisions without involving the technical experts. Lack of communication between the different stakeholders like the DIA and BEA led to confusion and was ultimately responsible for delays. The replacement for the chief airport engineer was not suitable to the demands of the project. She followed a hands-off approach and believed in allowing different parties to work out differences among themselves. As far as technology is concerned, this was a big technology leap, which should be avoided in such large projects. It was not just a change from a third to a fourth generation of technology; it was a jump from the third to the fifth or sixth generation of automated baggage system. BEA was barely given time to test and run the projects. On the contrary, designs kept changing despite freezing of the software and mechanical designs. BEA had even warned that they needed at least one full year to complete the project but this was ignored even though the City had received the same advice from other sources. The deal was closed in three intense working days. Airports should recognize the inherent risks and be prepared with a backup plan to support the system. Airlines and airports should not progress with such ambitious projects unless researchers have worked with prototypes and conducted demonstrations. Lessons should have been drawn from prior cargo automations failures in London, Amsterdam and Paris over the past twenty years. Managers of automated systems know that they face start-up problems that can last years. Recommendation/conclusion An analysis thus suggests that it was an ill-conceived and an over ambitious project. The CBHS should have been a part of the initial planning and designing. Besides, such projects should be undertaken after lengthy deliberations and drawing lessons from past projects of this nature. A project requires better cohesion and communication between the different stakeholders and the key personnel have to be drawn from different fields. Vested and personal interests cannot be given importance and the technical advices cannot be ignored. IT projects of this nature need software experts and such projects require several trial runs and demonstrations. Large projects are more complex and promise long-term benefits but the benefits have to be considered in the context of the risks and costs that increase with the size of the project. If software designs change mid-way it has an effect on all processes involved. The designs have to be sealed and the suggestions of the technicians should be paid heed to. At the helm of affairs a strong, autocratic person is needed. Experience demonstrates that allowing free hand to many only creates confusion and delays. Finance for any project may come diverse sources but this should not affect the management of the project. The responsibilities and accountability have to be specified and the line of authority clarified. Project overruns, both in terms of cost and time reflect badly on the project management team. When the chief airport officer died, there was no discussion to reconsider the CBHS even though he was the backbone of the project. Flexibility in any project is essential which allows for change in the project. References: Bainum, J., Ji. H., & Kheny, P., (2005), The Denver International Airport Automated Baggage Handling System, 24 Aug 2007 Ma¨hring, M., Holmstro¨m, J., Keil, M., & Montealegre, R., (2004), Trojan actor-networks and swift translation, Information Technology & People Vol. 17 No. 2, 2004 pp. 210-238 Neufville, R., (1994), “The Baggage System at Denver: Prospects and Lessons,” Journal of Air Transport Management, Vol. 1, No. 4, Dec., pp. 229-236, 1994. Read More