Full version Denver Case Study

Denver Case Study

This print version free essay Denver Case Study.

Category: Business

Autor: reviewessays 10 April 2011

Words: 939 | Pages: 4

I. View Point

I will be assuming the Management Consultant expert in production’s view point.

II. Definition of the Problem

The opening of the Denver International Airport had to be delayed four times due to problems in the baggage handling system. The enormous increase in complexity of the baggage handling system is the root of the problem. The total delay was 16 months. The total costs were $4.5 billion.

III. Statement of Objectives

 To improve ground efficiency

 To reduce close-out times for hub operations

 To minimize time – consuming manual sorting and handling

IV. Areas of Consideration

A. Strengths

New Denver Airport

 Represents a model of the airport of the future

 Planned to be the second largest hub.

 huge local commitment

 DIA was financed by a lot of different sources

Baggage Handling System

 Uniqueness of the technology being integrated and automated

BAE Automated systems

 Had enjoyed the reputation of being among the best and, on the strength of it good work, has been responsible for most of the major baggage systems recently installed in the United States.

B. Weaknesses

Baggage Handling System

 Poor scheduling

 New and untested technology

 complexity of the system and changing requirements

 Highly visible mechanical problems

 does not deliver productivity and efficiency

 lower cost-effectiveness of the system.

Denver Airport

 Did not open as scheduled

 Enormous costs on the part of the owners due to delays

 Costs of maintaining the new airport

Management System

 Resignation of the head of the DIA project assigned

 Death of Chief Airport Engineer Walter Slinger who was the key player in the negotiations.

 Communication was a problem from the beginning channels between: (a) The City, (b)The Project Management Team and (c) Consultants, were never well defined

 The City did not get airlines together to ask them what they wanted or needed to operate.

 The management team had no experience of baggage handling systems and treated it as being similar to pouring in concrete or fitting air-conditioning ducts.

 Poor management relationships

BAE

 BAE had to change its working structure to conform to DIA’s project management team structure.

 BAE felt restricted with the breaking over their agreement on unrestricted access which occurred everywhere. Other contractors’ work was impeding BAE progress. (key point in original negotiation).

C. Opportunities

 The City of Denver’s 1983 mayoral race precipitated initiatives to improve the airfield infrastructure.

 Mayor of Denver put a very high emphasis on jobs and trade for the city

 Denver’s geographic location and the growing size of its population and commerce made it and attractive location for airline hubbing operations.

 The growth of the determination of the “ pro New Airport”

D. Threats

 Expensive for the airlines due to delays

 Economic free-fall in 1987

 Airlines are likely to limit operations below the level for which the airport was designed. Fewer flights and passengers increase the cost per passenger, thus encouraging airlines to route connecting traffic through alternative, competitive hubs.

 The new mayor was elected who inherited the project with no commitment to it by the major airlines.

 City of Denver invited reporters to observe the first test of the baggage system without notifying BAE.

V. Alternative Courses of Action

1. Denver Airport considering automated baggage systems should start out by assessing their design and performance of these devices cautiously and far in advance of their use.

Advantages:

 Upgrades Airport performance

 When done properly and cautiously, this will improve ground efficiency

 Airport competitiveness

Disadvantages:

 Costs time and more money

2. Airlines building their own baggage systems.

Advantages:

 Baggage systems will depend on the airline’s budget and needs.

Disadvantages:

 Affects Airport competitiveness

 Different design layout for each airline.

VI. Recommendation

Based on the 3 Alternative Courses of Action, Denver Airport considering automated baggage systems should start out by assessing their design and performance of these devices cautiously and far in advance of their use. They should certainly do this before they allow architects to fix the layout of the airport passenger buildings. This is because a realistically conservative estimate of what automated systems can achieve should influence the design of these facilities. Though this may take time and money, the benefits of a good and reliable baggage system will be reaped at the end.

VII. Plan of Action

To be able to implement the said recommendation BAE should do the following activities:

• Have the research and development team do an extensive research and testing on integrated automated baggage systems. This includes computer simulations and the like.

• Have the production manager develop an efficient control system. An efficient control system for any automated baggage system is likely to take a long time to develop successfully. Rapid efforts seem bound to fail.

• BAE should work with people who understand the technology and its needs.

• Form a team in which everybody has the same goal.

• Have the Projects Controls Staff develop a proper schedule.

VIII. Potential Problem Analysis

Since automated baggage systems are run by computers, there might be a number of potential problems. Since computer simulations will be done, R&D will have to do hundreds if not thousands of scenarios. Doing this properly requires a simulation of essentially every bag over an extended period. Another potential problem may be on the operating stage. If an error may occur on the computers, bags may move slower. The airport will have frustrated travelers waiting for bags failing to make connecting flights on time. If the bags move too fast, the airport may have bags making connecting flights that passengers miss.

IX. Fallback Analysis

If the recommendation will not push through because of lack of funds and time, relying on their back up system is another option. The Airport will not have to spend a lot of time and money on research and development of a complex baggage system. But this will greatly affect the airport’s ability to attract or keep a major airline hub. Unlike BAE’s automated baggage system, bags move from point to point as fast as the travelers can.