This faster turnaround could be meant competitive advantage over other airports. This master plan rapidly turned into the biggest problems in history because the City of Denver underestimated the scale and complexity of project. Because mainly problems with the baggage system, the airport’s opening was delayed by 16 months, 4 times of change dates. Late project initiation played a big part of failure also. Excessive schedule pressure, significant design change, failure of risk management (e. G. Unstable power supply) could have been prevented if ajar airlines participated and automated baggage handling system was planned at very early stage of project. There were many facts that caused debacle of automated baggage system but the key fact that led the project to disaster is a change of strategy in the middle of construction. The risk of change was too big to justify benefits that DID may have had or fear that manual trolley based system would be too slow to handle its demand of luggage delivery. The automated baggage system project should have been cancelled when there was no bidder that met airport’s requirement and the
City should have focused on how implement proven and less complicated manual baggage handling system. More detail will be discussed in the rest of the report. Issues Summary: Insufficient project time and late decision MET decided to build integrated automated baggage system two years prior to airport’s opening date. BEE and other expert say it required at least four years to complete the project. Airport construction began in November 1 989 and decision of new automated baggage handling system was made in the summer of 1991.
It required significant change of building structure and automated baggage system had to accommodate unsuitable able layouts of building. Lack of experience and underestimation The area manager had no experience in airport construction, baggage system technologies or construction project control management. Complexity of baggage system had been underestimated. The city ignored several warnings. BEE told them from the beginning that they were going to need at least one more year to get the system up and running, but no one wanted to hear that 16 companies had been contacted for bidding and only 3 companies responded.
None of submission met what airport’s needs Expert from Munich airport advised that much simpler Munich automated baggage system had taken 2 years to build and it had run 24/7 for 6 months prior to opening. BEE executives and city officials hammered Out a deal in JUST three intense working sessions. Lack of centralized project management oversight It took three years to implement the centralized change tracking system. Up to 400 companies involved in construction. The project had to be chopped up into many small projects.
Existing law stated 30% minority-owned, 6% women-owned firms had to be participated. It generated 1 10 construction entrants Inconsistent strategy and subsequent changes Originally individual airlines would make their own baggage system but the city had decided to implement MM,’n integrated automated baggage handling system after the construction had started already. Despite design change lock-down, airlines had requested changes such as adding of ski equipment racks, additional maintenance track and oversized baggage handling etc.
Leadership change The main force of automated baggage system, airport’s chief engineer Walter Slinger died at the beginning of the project. His successor, Gail Edmond had to have same unrestricted access, strong leadership nor work experience Lack of cooperation Babe’s unrestricted access to the site had been compromised. Babe’s access had been blocked intentionally sometimes and construction site status had not been suitable for BEE baggage system installation often. The City of Denver had tried to demonstrate new automated baggage system without notifying BEE and it had turned out disaster.
After the demonstration, the City and many major airlines hired legal firms to assist with negotiations and future litigation Environmental and Root Cause Analysis: Strategy change The initial project design did not incorporate an integrated airport-wide baggage system. DAIS Concourse A is for Continental Airlines, Concourse B is United Airlines and Concourse C is for other carriers. DID expected the individual airlines to build their own systems as in most other American airports. United Airlines, which in June 1991 signed on to use DID as its second-largest hub airport, proceeded to build their own with BEE.
At same time, MET decided to build airport-wide integrated baggage system because other than United, no other airlines were not coming forward with plans to develop their own baggage system. Despite a change in strategy, MET didn’t change organizational responsibilities as new technology required. This type of complicated and advanced technology had to be decided in the beginning of a project and implementation is more critical to success. MET saw the benefit from the new technology but didn’t realize what new integrated system requires and who is responsible for development of the system. Underestimate the scope and complexity of project There were several prominent indicates that there isn’t sufficient time left and it is too late to change manual system to automated baggage System as below. The City of Denver and BEE ignored indicates which may have correct their direction and underestimated the complexity of the project 1 . No bidders were qualified for airport’s requirement. 2. Expert from Munich airport advised that much simpler system took 2 years with 6 month 2417 running test before the opening. 3.
BEE didn’t participate in original bids and estimated at least one more year to get the system up and running. Frequent changes and lack of commitment There was tremendous amount of pressure in schedule from the beginning of project, airlines started to ask several significant changes in six months prior o the opening the airport despite that BEE had made a condition that there wouldn’t a change in mechanical design, software design, permanent power requirements and the like. Real problem was the City approved those changes and BEE accepted.
Accepting these changes raises further troubles in a project that were already deep in trouble. The City guaranteed that BEE will have unrestricted access to site because of the tight deadlines. When BEE started the project, they weren’t getting the unrestricted access that was agreed upon, even didn’t have reasonable access. They were blocked out by there building contractors from their job site. Dusty and chemically contaminated environment was suitable for installation of delicate equipment and even BEE crews had to flee.
Leadership change Airport’s chief engineer Walter Slinger was the main force of BEE automated baggage system. His death at the beginning of the project left team without leadership who had in-depth engineering knowledge, unrestricted access and real problem solving skill. Risk management failure The project encountered a number of major technical problems. One of the most significant was caused by electrical system. The City couldn’t supply table power to the automated baggage system and power fluctuations crashed the system.
The resolution to the problem required filters to be built into the electrical power system to eliminate surges. Because the City worker cancelled the order without knowing that it included the filter, delivery and installation of the filters took several months, during which time testing was severely constrained. The filter arrived in March 1994 after third target for opening. Alternatives or Options 1) Extended the construction schedule. Pros Cons Sufficient time to test and debug automated baggage system
More fund required to support longer project time using old congested airport longer Doesn’t solve fundamental issues 2) Scaled down the scope – United and Continental built their own baggage system in Concourse A and B. The City built automated baggage system in Concourse C Pros Decrease the complexity of automated system significantly Affect less significantly to airport opening as the system covers small portion of baggage handling Allows to build the secondary backup manual baggage handling Reinvestment required when DID expands the system 3) Scrapped the plan and build integrated manual baggage system Pros
Bigger scale but no complicated technology, simple design More competitive companies to choose from Less cost to build Minimum architectural design change Longer baggage handling process time More airport works to handle baggage Recommendations It is understandable that DID wanted integrated, automated and efficient baggage handling system due to the size of airport and the number airlines. But the City and BEE should have had to analyze the situation rationally not by politically or emotionally and decided what system would fit their needs the most within realistic accomplishment.
There were several contributors to he failure such as no bidders that met airport’s requirement, such a large scale and extremely complicated automated system never had been done, BEE didn’t participate in the initial bid, project time is only 2 year left, airport construction was already started, chief engineer who support new system died at the beginning of project and loss of leadership and Babe’s unrestricted access to site was compromised.
Option #1 would be the worst choice as the project was doomed to fail from the beginning, just extending project time could have not solved issues and leaded it to the success. Option #2 would be the typical choice as normally each airline builds their own baggage handling system usually. In DID case, united was the only airline that came with own baggage system plan. The City of Denver needed to solve this issue.
BEE had already commenced work on United baggage system and experience of automated system (but much smaller scale than DID project). It could have been the best choice if Continental wasn’t under bankruptcy law protection and had a plan to build own baggage system in DID. And also having 2 different systems which are manual and fully automated baggage handling yester increases costs and complexity of maintenance. Option #3 would be the best choice in DID case.
It is tested and proven baggage handling system. It didn’t require special condition such as extremely stable power supply, less complicated and fitted for initial architectural design which could have saved $50 million due to modification. Implementation Option #3 Implementation Phases Time Line (2 year) The City of Denver Rapist Edema Re-assess current projects and prioritize them to minimize modification of architectural design. Work on non or less related jobs to baggage handling system
Negotiate new plane with airlines and get them participate Assess current construction progress and requirement for integrated man all baggage handling system 4 month Reorganize construction schedule to accommodate baggage system and adopt it to total project plan 2 month Reorganize project organization for new plan Control building construction and baggage installation to minimize interference Construction of manual baggage system 15 month Create change control management plan Hand over the project to maintenance team from MET Run simulation and review handling capacity Create capacity schedule plan 3 months Monitor and Control
This procedure establishes the process to monitor and control: the initiating, planning, executing and closing implementation; so that potential problems can be identified in a timely manner and corrective action can be taken when needed. The monitor and control process is performed throughout the implementation. Project team performs: 1 . Scope verification and control of implementation that influence the scope beyond the required Or defined needs of the original. 2.
Schedule control to ensure that changes are beneficial, determining that the schedule has changed and managing the actual changes when and as they occur. . Cost control of the factors that create changes to the cost baseline to ensure that changes are beneficial, determining that the cost baseline has changed and managing the actual changes. 4. Quality control to ensure whether specific project results comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory results. . Performance reporting that collects and distributes performance information continuously. 6. Risk control to track identified risks, monitor residual risk and evaluate its effectiveness. Manual baggage handling system have been proofed. The most fear that DID ad was the system would be too slow to service the size of DID airport. The second would the accuracy as system used human manual handling. Applying proper KIP would have helped to measure the level of service and improve it. . What is the percentage of arrival accuracy in DID manual baggage handling system? 95% yield in terms of baggage arriving at destination with passenger is industry standard. 2. What is the average turnaround time? Average aircraft turnaround time is 45 minutes. 3. What is operational cost of manual baggage handling system a month? United spent SSL million to maintain automated baggage system a month.