Hopeless decision making: An analysis from Denver International Airport Baggage Handling System

Abstract

Denver International Airport Baggage Handling System,elected to construct a new state of the art airport that would cement Denver’s position as an air transportation hub. By auimagestomating baggage turnaround meant more efficient operations. Underestimation of the project’s complexity. The airport’s opening was delayed by a full 16 months. The $1 million per month maintenance costs exceeded the monthly cost of a manual tug and trolley system. When opening day finally arrived, the system was just a shadow of the original plan. All other baggage handling was performed using simple conveyor belts plus a manual tug and trolley system.

  Case re-examination: Denver International Airport Baggage Handling System
Breakthrough description of the project:
  1. Concept: The world’s largest automated airport baggage handling system. Completing the Denver system in two years Aircraft turnaround time to reduce for more efficient operations.
  2. Process: construction of the airport on Nov 1989. United Airlines signs on and plans. Engages BAE Systems to build by approaching BAE directly requesting a bid for the project. United Airlines changes their plans and cuts out plans for the system to transfer bags between aircraft. Change orders raised altering size of ski equipment claim area and adding maintenance track. Target opening date is shifted. BAE Systems denies system is malfunctioning.
  3. Techniques: 10 times larger than any other automated system. Advance quality.  Requesting bids for the design and construction of the system. The system to be designed, built, tested and commissioned.  BAE directly requesting a bid for the project.

 5 process group of DIA projects:

DIA initialization
  • Unclear objectives: plan rapidly dissolved.
  • Underestimation of the documents: City of Denver engages Breier Neidle Patrone Associates to analyze feasibility of building an integrated baggage system. Reports advises that complexity makes the proposition unfeasible
  • Improper management: BAE directly requesting a bid for the project.
Project planning:
  • Problem on Scheduling: Target opening date shifted
  • Poor Quality Evaluation: Problems establishing a clean electrical supply
  • Evaluation of risk: Underestimation of the project’s complexity

Project execution:

  • Win- lose Negotiation:
  • 3 respond and review of proposals indicate none could be ready in time for the Oct 1993 opening.
  • Denver Airport Project Management team approach BAE directly requesting a bid for the project.
  • No co-ordination: Singer had been one of the driving forces behind the creation of the automated baggage system. , Walter Singer dies and project got mishandled.

Project monitoring and control:

  • No project tracking process used by American airlines
  • Comparing actual output to predict was a disaster: Demonstration was a disaster as clothes are ejected from crushed bags.
    Project closure:
  • Contractual closure was not possible: BAE Systems denies system is malfunctioning. Instead they say many of the issues reported to date had been caused by the airport staff using the system incorrectly
  • Financial closure: The $1 million per month maintenance costs exceeded the monthly cost of a manual tug and trolley system.
  • Verifying accomplishment: System testing continues to flounder.
  DIA failed 4 key consideration of project management:
  1. Cost:                City of Denver starts fining BAE $12K per day for further delays. In order to save costs the system is scrapped in favor of a fully manual system.  Maintenance costs were running at $1M per month at the time. The $1 million per month maintenance costs exceeded the monthly cost of a manual tug and trolley system. 
  2. Time:             By automating baggage handling, aircraft turnaround time was to be reduced to as little as 30 minutes but the cost was: the project needed to be completed in just two years.  The airport’s opening was delayed by a full 16 months. The remnants of the system soldiered on for 10 years, the system never worked well.images (1)
  3. Quality:          unfeasible project. Complexity led to a corresponding underestimation of the effort involved. System testing continues to smack.  Change orders raised altering size of ski equipment.
  4. Result:           Failure to anticipate the number of carts correctly would result in delays in picking up bags that would undermine the system’s performance goals. The system is scrapped in favor of a fully manual system. Snowballing problems and public humiliation for everyone involved.
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