BAE Automated Systems (A): Harvard Case Solution & Analysis

Question 1

Evaluation of Implementation:

The airport-wide baggage handling project was the result of recognizing the benefits of airport wide baggage handling system the PMT.As there was no airline coming forward to make its own baggage system, the authorities decided to create an airport wide system itself, and sending out the specifications of the project to the possible contractors for bids. However,out of 16 contractors contacted, only three responded. One of the contractors responded that there was a possibility of decline in the project due to the complexity. The time left to complete the airport project was insufficient for the baggage project to be completed, which was also confirmed by different sources contacted for the advice.

The implementation of Baggage system was more costly than the manual but had several other benefits, like no man power was needed, fast and effective delivery of baggage to and from passengers.

BAE was provided with an already made full plan of the specs of the project, which was the reason big error by DIA authorities. The DIA authorities did not consider many important issues in the project. The contract was given to BAE to build the entire airport system with plenty of conditions placed by BAE to accept the contract. The conditions include the design not to be changed after certain dates, and freezing dates for other jobs.

Airlines were not asked for the specific designs by DIA authorities and due to no assurance of revenue streams the inputs and outputs were very crude. BAE changed its working structure to align it with the DIA project management structure. All four concourses had senior managers and each terminal had one manager, how ever there was no system to communicate with each other except personally reaching out to the managers.

The project was divided into three main areas of expertise and was managed by Di Fonso in the first two years.The changes were required for the infrastructure of the airport to install the airport wide system, which included removing walls, and installing new floors.

The project took a major turn when the Chief Engineer died, who was strongly involved in all the negotiations with BAE. The new engineer did not have as much autonomy as the first one and that caused real problems.

Another issue that arose was the changes in systems design by the airlines.The system was not designed for particular airlines, and the contract was signed to not allow the changes in the original design after certain time. However, the changes requested caused a real problem in completing the work on time.

Unable to supply the clean electricity to the baggage system delayed the product and to solve the problem the ordered filters arrived late, which was the result of a mistake by city worker of BAE.

The relationship between the management team was poor and everyone was blaming each other for the failure of BAE Automated baggage system.

The schedule to open airport was delayed several times and the last date that was given was May 15, 1994.A month before the opening date the City invited the reporters without informing BAE in the testing of machine, in which there were so many faults that the system had been stopped. Major errors were in the system’s computer software, but other mechanical problems were also involved in the failure of the system.

The opening of airport was delayed once again for an indefinite period and the penalty of $330000 per month was imposed on BAE.The backup Baggage system with the cost of $50 million was also asked to pay be BAE, with other airlines also hired legal firms to take possible actions.

Top Three Factors

The top three factors that contributed to the failure of projects were


The timetable for the opening of airport with the automated system installed was never realistic, it did not take the problems into account, and the original date planned to open airport did not include involving automated baggage system. The time needed for the completion and testing was not given and BAE had to complete the job in less than half the time required.BAE Automated Systems (A) Case Solution

Required Modifications and Other changes:

While accepting the job, BAE included in the contract that no changes will be made to the system design, but after the death of Chief Airport Engineer, most airlines requested for customized designs. The changes in one part of the system affected the whole system. In order to reduce the construction costs, United Airlines decided to remove an entire loop for its own design, which saved it$20 million but caused many problems for BAE. Changes in design increased the difficulties and stalled progress......................

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