Fwd: How were the integration issues identified ? 2 pages . strategic Information System

have a project for this course: strategic Information System ( Info 563)the required : Read the case which is attached below and answer this question but must relate the answer with a book which is also attached below. The chapters what we took ch1 to ch10 . the answer should be 2 pages .this the question : How were the integration issues identified ?
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Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
Case Study â?? Denver International Airport Baggage Handling System â?? An
illustration of ineffectual decision making
Calleam Consulting Ltd â?? Why Technology Projects Fail
Synopsis
Dysfunctional decision making is the poison that kills technology projects and the Denver Airport
Baggage System project in the 1990â??s is a classic example. Although several case studies have been
written about the Denver project, the following paper re-examines the case by looking at the key
decisions that set the project on the path to disaster and the forces behind those decisions.
Background
What was to be the worldâ??s largest automated airport baggage handling system, became a classic story
in how technology projects can go wrong. Faced with the need for greater airport capacity, the city of
Denver elected to construct a new state of the art airport that would cement Denverâ??s position as an air
transportation hub. Covering a land area of 140 Km2, the airport was to be the largest in the United
States and have the capacity to handle more than 50m passengers annually [1,2].
The airport’s baggage handling system was a critical component in the plan. By automating baggage
handling, aircraft turnaround time was to be reduced to as little as 30 minutes [1]. Faster turnaround
meant more efficient operations and was a cornerstone of the airports competitive advantage.
Despite the good intentions the plan rapidly dissolved as
underestimation of the projectâ??s complexity resulted in
snowballing problems and public humiliation for everyone
involved. Thanks mainly to problems with the baggage system,
the airportâ??s opening was delayed by a full 16 months.
Expenditure to maintain the empty airport and interest charges
on construction loans cost the city of Denver $1.1M per day
throughout the delay [3].
System at a glance:
1.
2.
3.
4.
88 airport gates in 3
concourses
17 miles of track and 5 miles of
conveyor belts
3,100 standard carts 450
oversized carts
14 million feet of wiring
Network of more than 100 PCâ??s
to control flow of carts
5,000 electric motors
2,700 photo cells, 400 radio
receivers and 59 laser arrays
The embarrassing missteps along the way included an impromptu
5.
demonstration of the system to the media which illustrated how
the system crushed bags, disgorged content and how two carts
6.
moving at high speed reacted when they crashed into each other
7.
[4]. When opening day finally arrived, the system was just a
shadow of the original plan. Rather than automating all 3
concourses into one integrated system, the system was used in a
single concourse, by a single airline and only for outbound flights [5]. All other baggage handling was
performed using simple conveyor belts plus a manual tug and trolley system that was hurriedly built
when it became clear that the automated system would never achieve its goals.
Although the remnants of the system soldiered on for 10 years, the system never worked well and in
August 2005, United Airlines announced that they would abandon the system completely [6]. The $1
million per month maintenance costs exceeded the monthly cost of a manual tug and trolley system.
© Copyright 2008 Calleam Consulting Ltd, all rights reserved
Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
Chronology of events:
Denver International Airport (DIA) Baggage System Development Timeline [1, 2, 3, 4, 5, 6]
Nov 1989
Oct 1990
Feb 1991
Jun 1991
Jun 1991
Summer 1991
Fall 1991
Early 1992
Apr 1992
Aug 1992
Sep 1992
Oct 1992
Jan 1993
Feb 1993
Sep 1993
31 Oct 1993
19 Dec 1993
Jan 1994
9 Mar 1994
Mar 1994
Apr 1994
Apr 1994
May 1994
15 May 1994
May 1994
Aug 1994
Aug 1994
28 Feb 1995
Aug 2005
Work starts on the construction of the airport
City of Denver engages Breier Neidle Patrone Associates to analyse feasibility of building an
integrated baggage system. Reports advises that complexity makes the proposition unfeasible
Continental Airlines signs on and plans on using Denver as a hub
United Airlines signs on and plans on using Concourse A as a hub
United Airlines engages BAE Systems to build an automated baggage system for Concourse A.
BAE was a world leader in the supply, installation and operation of baggage handling equipment
Airportâ??s Project Management team recognizes that a baggage handling solution for the complete
airport was required. Bids for an airport wide solution are requested
Of the 16 companies included in the bidding process only 3 respond and review of proposals
indicate none could be ready in time for the Oct 1993 opening. The 3 bids are all rejected
Denver Airport Project Management team approach BAE directly requesting a bid for the project
Denver Airport contracts with BAE to expand the United Airlines baggage handling system into an
integrated system handling all 3 concourses, all airlines, departing as well as arriving flights. In
addition system is to handle transfer baggage automatically. Contract is hammered out in 3
intense working sessions
United Airlines changes their plans and cuts out plans for the system to transfer bags between
aircraft. Resulting changes save $20m, but result in a major redesign of the United Airlines
portion of the system. Change requests are raised to add automated handling of oversized
baggage and for the creation of a dedicated ski equipment handling area
Continental requests ski equipment handling facilities be added to their concourse as well
Chief Airport Engineer, Walter Singer dies. Mr Singer had been one of the driving forces behind
the creation of the automated baggage system
Change orders raised altering size of ski equipment claim area and adding maintenance tracks so
carts could be serviced without having to be removed from the rails
Target opening date shifted from 31 Oct 93 to 19 Dec 93 and soon thereafter to 9 Mar 94
Target opening date is shifted again, new target date is 15 May 1994
Original target for opening
Second target for opening
United Airlines requests further changes to the oversize baggage input area
Third target for opening
Problems establishing a clean electrical supply results in continual power outages that disrupt
testing and development. Solution requires installation of industrial filters into the electrical
system. Ordering and installation of the filters takes several months
Airport authorities arrange a demonstration for the system for the media (without first informing
BAE). Demonstration is a disaster as clothes are disgorged from crushed bags
Denver Mayor cancels 15 May target date and announces an indefinite delay in opening
Logplan Consulting engaged to evaluate the project
Fourth target for opening
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
System testing continues to flounder. Scope of work is radically trimmed back and based on
Logplanâ??s recommendation airport builds a manual tug and trolley system instead
City of Denver starts fining BAE $12K per day for further delays
Actual opening
In order to save costs the system is scrapped in favour of a fully manual system. Maintenance
costs were running at $1M per month at the time.
© Copyright 2008 Calleam Consulting Ltd, all rights reserved
Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
Basic Mode of Failure
As with all failures the problems can be viewed from a number of levels. In its simplest form, the Denver
International Airport (DIA) project failed because those making key decision underestimated the
complexity involved. As planned, the system was the most complex baggage system ever attempted.
Ten times larger than any other automated system, the increased size resulted in an exponential growth
in complexity. At the heart of the complexity lay an issue know as â??line balancingâ? [1]. To optimize
system performance, empty carts had to be distributed around the airport ready to pick up new bags.
With more than 100 pickup points (check in rows and arrival gates) each pickup needed to be fed with
enough empty carts to meet its needs. The algorithms necessary to anticipate where empty carts
should wait for new bags represented a nightmare in the mathematic modeling of queue behaviours.
Failure to anticipate the number of carts correctly would result in delays in picking up bags that would
undermine the systemâ??s performance goals.
Failure to recognise the complexity and the risk involved contributed to the project being initiated too
late. The process of requesting bids for the design and construction of the system was not initiated until
summer of 1991 [7]. Based on the original project schedule, this left a little over two years for the
contracts to be signed and for the system to be designed, built, tested and commissioned. The closest
analogous projects were the San Francisco system and one installed in Munich. Although much smaller
and simpler, those systems took two years to implement [7]. Given the quantum leap in terms of size
and complexity, completing the Denver system in two years was an impossible task.
The underestimation of complexity led to a corresponding underestimation of the effort involved. That
underestimation meant that without realising it, the Project Management team had allowed the
baggage system to become the airportâ??s critical path. In order to meet the airportâ??s planned opening
date, the project needed to be completed in just two years. This clearly was insufficient time and that
misjudgement resulted in the project being exposed to massive levels of schedule pressure. Many of
the projectâ??s subsequent problems were likely a result of (or exacerbated by) shortcuts the team took
and the mistakes they made as they tried to meet an impossible schedule.
Key Decisions that Led to Disaster
Although the basic mode of failure is fairly clear, to understand the root cause and what should have
been done differently we need to examine how the critical decisions that triggered the failure were
made. Project failures usually involve numerous flawed decisions, but within those many missteps,
certain key decisions are the triggers that set in motion the sequence of events that lead to disaster.
Key Decision 1 â?? A change in strategy
At the start of a project strategic decisions are made that set the projectâ??s direction. In the DIA case, a
strategic error was made that resulted in â??flip-flopâ? being made part way through the project.
Prior to requesting bids for an integrated system in the summer of 1991, the airportâ??s Project
Management team had assumed that individual airlines would make their own baggage handling
arrangements [5]. United Airlines had indeed proceeded with their own plan by engaging BAE (Boeing
Airport Equipment Automated Systems Incorporated) directly. Continental Airlines had however not
© Copyright 2008 Calleam Consulting Ltd, all rights reserved
Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
made any arrangements and given that the airport was not yet fully leased out, other sections of the
airport were not being addressed.
In the summer of 1991, the airportâ??s Project Management team changed their strategy and realised that
if an integrated system was to be built, they needed to take responsibility back from the individual
airlines and run the project themselves. This change in strategy came a little more than two years prior
to the airportâ??s planned opening date and the timing of the decision was in large part the trigger behind
the excessive schedule pressure the project was exposed to.
In one way the change in strategy made sense because an integrated system required centralized
control and the airportâ??s Project Management team was the only central group that could run the
project. Clearly the timing of the decision was however extremely poor. Had the correct strategy been
set at the outset, there would have been two additional years in which to develop the system. Those
two years may well have been enough to allow designers to understand the complexity issue more
deeply and to find ways to either overcome it or agree with the stakeholders on a simpler design.
The delay in setting the correct strategy is likely rooted in the history of how prior airport construction
projects had been run. Because earlier generation baggage facilities were dedicated to individual
airlines, airlines had historically built their own systems when a new airport was built [5]. The advent of
the integrated airport wide system required a change in mindset. The integrated nature of the new
systems meant that instead of airlines looking after their own facilities, airportâ??s needed to take control.
The key point the airportâ??s Project Management team failed to see was that the shift in technology
required a corresponding shift in organizational responsibilities. The failure to recognise that shift
represents a planning failure that dated back to the very start of the construction project. The public
record does not detail how the original strategy was set or even if the topic had been directly
considered. However, people typically see the world through the eyes of their prior experiences and
given that almost all prior airport projects had left this responsibility to the airline, it is very likely that
the question was simply never discussed.
In broader terms, the mistake made was a failure to link the airportâ??s overall strategy (the goal of having
one of the worldâ??s most efficient airports) with the sub-strategy of how to build the baggage system.
The mode in which that failure occurred may well simply have been a failure to ask the critical question
of where responsibility for development of the baggage system needed to be.
Key Decision 2 â?? The decision to proceed
Although the change in strategy is somewhat understandable, what is less understandable is why both
the airport Project Management team and BAE decided to proceed with the full scale project despite
clear indications that there was insufficient time left for the project to be completed successfully.
Prior to entering into the BAE contract, there were at least three indications that the project required
more than two years or was simply not feasible;
1. The 1990 Breier Neidle Patrone Associates report indicated the complexity was too high for the
system to be built successfully [1],
© Copyright 2008 Calleam Consulting Ltd, all rights reserved
Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
2. Analysis of the three bids received indicated that none of the vendors could build the system in time
for the Oct 1993 opening [4],
3. Experts from Munich airport advised that the much simpler Munich system had taken 2 full years to
build and that it had run 24 / 7 for 6 months prior to opening to allow bugs to be ironed out [5].
Reports indicate that the decision to proceed was based on the communications between the airportâ??s
Chief Engineer (Walter Slinger) and BAEâ??s Senior Management team. While BAE had initially chosen not
to bid for the airport wide contract, the rejection of the three official bids resulted in the airport team
speaking directly to BAE about the possibility of expanding the United Airlines system that was already
under development. Those discussions resulted in the preparation of a specification and the creation of
a large scale prototype (reported to have filled up a 50,000 sq ft warehouse) [7]. Demonstration of the
prototype to is said to have been the factor that convinced Slinger that the system was feasible.
Despite the fact that BAE was talking directly to Slinger about the possibility of building the system,
some reports indicate that within BAE several managers were voicing concern. Again the issues related
to whether or not it was feasible to build such a large system in such a short period of time. Reports
indicate that several managers advised the BAE Senior Management team that the project was at
minimum a four year project, not a two year project [5].
The failure by both Slinger and BAEâ??s Senior Management team to heed the advice they were receiving
and the failure of the airportâ??s Project Management team to have the BAE proposal and prototype
independently reviewed is the epicentre of the disaster.
Although published reports do not indicate why the expert advice was ignored, it is clear that both
Slinger and BAEâ??s Senior Management team underestimated the complexity of the project and ignored
information that may have corrected their positions. Many factors may have led them into that trap
and likely issues that may have influenced the decision making include;
1. From Slingerâ??s perspective
a. Denver was to be a state of the art airport and as such the desire to have the most advanced
baggage system would likely have been a factor behind Slingerâ??s willingness to proceed,
b. Slingerâ??s prior experiences with baggage handling will have been based on simple conveyor
belts combined with manual tug and trolley systems. Those prior experiences may have led
Slinger to underestimate the complexity of moving to a fully automated system,
c. As a Civil Engineer, Slinger was used to the development of physical buildings and structures
rather than complex technology systems, this may have predisposed him to underestimate
the mathematical complexity associated with an issue such as â??line balancingâ?,
d. Slinger is reported to have been a hands-on leader who liked to solve problems himself. As
such Slinger may have been inclined to make decisions on his own rather than seeking
independent advise,
e. Slinger dealt with the discussions with BAE personally, given that he was responsible for the
complete airport, he will have had considerable other duties that would have limited the
amount of time he had to focus on the baggage system,
f. On the surface the prototype may well have made it look as if BAE had overcome the
technical challenges involved in building the system and as such Slinger may have been
lured into a false sense of security.
2. From BAEâ??s perspective
a. The project was a big revenue opportunity and represented a chance to grow the business,
© Copyright 2008 Calleam Consulting Ltd, all rights reserved
Denver Airport Baggage Handling System Case Study â?? Calleam Consulting
b. The prestige of securing the DIA contract would position BAE to secure other large contracts
around the world. New airports or terminals were planned for Bangkok, Hong Kong,
Singapore, London and Kuala Lumpur and BAE would be a strong contender if they could
win the DIA project.
3. Other factors
a. Both BAE and Slinger will have recognized that they were working within a tight timeframe
and the pressure to move quickly may have caused them to put due diligence to one side.
b. The belief that due to the airportâ??s size, a manual system would not be fast enough to meet
aircraft turnaround requirements. Note however that this belief was unfounded as the
airport functions happily today using a manual system.
Key Decision 3 â?? Schedule, scope and budget commitments
The schedule, budget and scope commitments a team enter into are amongst the most critical decisions
they will make. The seeds of project success or failure often lie in the analysis that goes into making
those decisions and the way such commitments are structured.
In the DIA case, BAE committed to deliver the complete system under a fixed scope, schedule and
budget arrangement. The decision to give a firm commitment to scope, schedule and budget
transferred considerable risk onto BAEâ??s shoulders. This move indicates strongly that those in the
highest level of BAEâ??s management structure had completely failed to recognize the level of risk they
were entering into. Had they been more aware, they almost certainly would have taken steps to limit
the risk and to find ways to limit t …
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