The City and County of Denver have a massive airport. The airport authorities decided to build an automated baggage system. Unfortunately the project failed to achieve its goal. We have been tasked with analysing the project, identifying the reasons for the failure, and suggesting alternative measures which may have helped in making the project a success. This exercise is conducted with a view to aiding similar projects in the future.
The city of Denver built its airport in 1994 at an approximate cost of 5 million. The authorities decided to build an ” Integrated Automated Baggage Handling System” (Henderson, 1994 in Neufville, 1994) that would automatically distribute all the baggage handled by the airport including pick-up, check-in and arrivals. This caused a delay in the opening of the new airport in 1993. The project sustained great losses because of this delay of 16 months. These losses were borne both by the city of Denver and the airport authorities (City and County of Denver, 1994b in Neufville, 1994). United Airlines sustained a loss of approximately 50 million in lost opportunities (United Airlines, 1993; US Government Accounting Office, 1994 in Neufville, 1994). What follows is a detailed study of the automated baggage system, its stake holders, method of development and planing, and suggestions for how the project could have been better managed.
The obvious stake holders in the ” Integrated Automated Baggage Handling System” are the airport authorities and the city of Denver. Some airlines such as United Airlines who invested in the project also have a stake. The citizens of Denver who pay revenue may also be deemed stake holders in ” Integrated Automated Baggage Handling System” project.
Chronology of Events
Let us first examine the order in which events occurred.
– Work began in November 1989.
– Breir Neidle Patrone conducted feasibility study and deemed the project complex.
– Airport authorities invite bids from 16 companies for a comprehensive system
– Three bidders report the project complex and unfeasible.
– BAE is awarded the contract in April 1992 in invitation by Airport Authorities.
– Walter Slinger, the man in charge of the project passes away in October 1992.
– In January 1993 Airport authorities request changes.
– Opening is moved from October 1993 to December 1993.
– Opening is further postponed to March 1994.
– In September 1993, opening date is postponed yet again to May 1994.
– United Airlines requests further changes to their system in January 1994.
– Some problems are encountered in the electrical supply.
– The solution requires several months.
– Airport authorities plan a demonstration of the system without consulting BAE.
– Demonstration results in disaster.
– In April 1994 Mayor of Denver announces indefinite delay.
– Logplan a new company is invited to bid on the project.
– A new target is set for the opening.
– In August 1994 a tug and trolley system is built based on suggestion by Logplan.
Key Decisions that went wrong
Based on the above chronology of events, we see that BAE was working on three different projects within the same airport. We list here some of the decisions that went wrong. Project management decisions are made at the beginning of the project. The bench marks are set and a plan for completion is devised (PMI, 2010). In the present case, the airport authorities first assumed that each airline arrange for baggage on its own. Later they decided to build a comprehensive system. This change led to unwarranted delays.
Another lapse in decision making was that there was a clear indication that the project required at least 2 years to complete. The Breier Neidle Patrone Associates report stated that the project was unfeasible. The three bids received prior to BAE’s appointment indicated that the project could not be completed by October 1993, the original target date for the project. There were reports suggesting that managers within BAE were concerned about the completion of the project on time (Schloh, 1996). These warnings went unheeded and Slinger along with BAE forged ahead. This was the second error in judgement.
The budget, scope, and schedule of the project are three of the key decisions to be made in the initiation phase of the project (Nathan & Jones, 2003). When BAE signed on to the project, they committed to build the baggage system within a predetermined scope, budget, and schedule. Apparently BAE and its top management failed to understand the enormity and complexity of the project.
When the airport authorities decided to build its own comprehensive system rather than let the airlines do so, BAE accepted this request for change. BAE failed to understand or anticipate the impact of the change and take into account the eventualities resulting from this change in decision. Had they done so, they would have informed the airport authorities that the project would be delayed (CDC, 2006).
Another key decision that BAE and the airport authorities failed to consider was the integration of two project, construction of the airport building, and construction of the baggage system. These two projects were undertaken independently. As a result, the building constructors did not take into account the requirements of the baggage system. The baggage system had to therefore negotiate sharp turns which were uneconomical to build (Neufville, 1994).
While bringing in Logplan as an external consultant was a good decision, it came after the disaster of 1994. This exposed the project to the public eye. Projects of this size and complexity should have periodic reviews and timely actions must be taken to alter the course if required. Following the decision to review, the Mayor’s decision to scrap the project and build a trolley system, also was a good decision, but came too late at a great cost (Webb, 2007).
These were some of the key decisions that went wrong in the Denver International Airport Baggage System project.
Let us now examine the project from the perspective of some of the key players, mainly Slinger and BAE.
Slinger’s willingness to proceed with the construction of the comprehensive baggage system was probably driven by the desire to have a state of the art airport. Although the dream was fantastic, Slinger lacked the experience for a project of this magnitude. As a result he underestimated the complexities of the project. Slinger was a civil engineer experienced in construction of buildings. He lacked the experience of building complex technological systems. One error of judgement made by Slinger was his failure to consult experts when taking major decisions. He had been given complete charge of not only the baggage system but the building of the new airport. Understandably he had little time to devote to the baggage system. His error was in his failure to delegate (Callem, 2008). From the perspective of the BAE, the Denver Airport Baggage system was a big project that would bring in large revenues as well as fame and prestige. Both Slinger and BAE assumed that a complex automated system was required given the size of the airport. In retrospect, one observes that the airport is now functioning well on a traditional tug and trolley system (Callem, 2008).
The failure of the Denver International Airport Baggage project is a lesson in project management. From the above analysis, we see that the key players Slinger, BAE and the Mayor of Denver. Other players like the managers within BAE and the airport management were also involved in the project and partly responsible for the failure. The failure was a result of certain key decisions that went wrong. The project was not unfeasible. It was just complex and required time and planning. Some of the actions that should have been taken were co-ordination between the building constructors and the baggage system constructors. This was the responsibility of Slinger who was in charge of the entire airport project. The BAE should have recognized the enormity and complexity of the project and set realistic deadlines. Failing this, Slinger and the airport authorities should have recognized the complexity based on reports by the earlier companies who bid on the project. Slinger failed to consult experts and took decisions in a matter in which he had little knowledge or experience. Team work is an important part of project management. Another wrong decision on Slinger’s part was micro management. He attempted to manage everything himself. Had he delegated his supervision to his subordinates, he would have had more time to consider all possibilities. In all likelihood he would have spotted the fallacies and rectified them in time. This probably was his biggest mistake. Delegation would have given Slinger the time to plan the project and set realistic deadlines. It is likely that he was pressurized by the top management of the airport and the Mayor of Denver to meet unrealistic deadlines. However had he had time to consider the consequences, it is likely he would have convinced the higher authorities that the project could not be completed within the time frame suggested.
In conclusion we may state that the lesson learnt from the Denver International Airport Baggage System failure, is that the planning stage is the most important part of project management. A well planned project is unlikely to fail. The second most important aspect is monitoring. Having planned the project and drawn up a schedule, periodic reviews to see if the set objectives have been met is just as important as planning. If a project manager can grasp the importance of these two aspects, his projects are unlikely to fail. Good leadership qualities, willingness to delegate, seeking opinions from experts and co-ordinating with the top management, keeping the goals of the organization in mind are some of the other aspects of good project management.
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