Harvard Case - Berlin Brandenburg International Airport
"Berlin Brandenburg International Airport" Harvard business case study is written by Victoria Teworte, Victor Martinez de Albeniz Margalef. It deals with the challenges in the field of Operations Management. The case study is 20 page(s) long and it was first published on : Jul 1, 2015
At Fern Fort University, we recommend a comprehensive overhaul of Berlin Brandenburg International Airport's (BER) operations strategy, prioritizing a robust supply chain management framework, lean manufacturing principles, and digital transformation to address the root causes of delays and inefficiencies. This approach will involve a multi-pronged strategy encompassing process improvement, technology implementation, and organizational change, ultimately leading to a more efficient, resilient, and sustainable airport operation.
2. Background
The Berlin Brandenburg International Airport (BER) project has been plagued by delays and cost overruns, culminating in a highly publicized failure to open on schedule in 2012. The case study highlights the complex interplay of factors contributing to the airport's woes, including:
- Poor planning and execution: Inadequate communication, unclear responsibilities, and a lack of a unified vision led to project delays and cost overruns.
- Complex construction: The airport's intricate design, including a unique baggage handling system, presented significant challenges for construction and integration.
- Political and bureaucratic hurdles: The project faced numerous regulatory and political obstacles, further delaying its progress.
- Lack of operational readiness: Insufficient testing and training for airport personnel contributed to operational inefficiencies upon the eventual opening.
The key protagonists in this case are the project managers, government officials, and airport staff who were responsible for planning, constructing, and ultimately operating BER.
3. Analysis of the Case Study
The case study reveals a complex web of interconnected problems, best analyzed through the lens of operations strategy, supply chain management, and organizational change.
Operations Strategy:
- Lack of a clear vision: The absence of a well-defined operations strategy, coupled with inadequate communication and collaboration, resulted in misaligned goals and ineffective execution.
- Inefficient process design: The complex baggage handling system, while innovative, was poorly designed and lacked sufficient testing, leading to operational bottlenecks and delays.
- Inadequate capacity planning: The airport's initial design underestimated passenger demand, resulting in insufficient capacity and operational challenges.
Supply Chain Management:
- Fragmented supply chain: The project involved numerous suppliers and contractors, leading to coordination challenges and delays in material delivery.
- Lack of inventory control: Inefficient inventory management practices resulted in overstocking of some materials and shortages of others, further disrupting the construction process.
- Limited visibility: Poor communication and data sharing within the supply chain hampered real-time monitoring and decision-making.
Organizational Change:
- Resistance to change: The complex project required significant organizational change, which was met with resistance from stakeholders due to concerns about job security and the disruption of established practices.
- Lack of leadership: The absence of strong leadership, particularly during the critical early stages of the project, contributed to poor communication, decision-making, and execution.
- Culture of blame: A culture of blame and finger-pointing hampered collaboration and problem-solving, further exacerbating the project's challenges.
4. Recommendations
To address these challenges, we propose the following recommendations:
1. Establish a Robust Operations Strategy:
- Define clear objectives: Develop a comprehensive operations strategy with clear objectives, performance metrics, and a roadmap for achieving desired outcomes.
- Optimize process design: Conduct a thorough process analysis to identify bottlenecks and inefficiencies in the baggage handling system and other critical processes. Implement lean manufacturing principles to streamline operations and eliminate waste.
- Implement capacity planning: Conduct thorough demand forecasting to accurately estimate future passenger volumes and ensure adequate capacity for handling peak periods.
- Embrace digital transformation: Leverage technology and analytics to improve operational efficiency, enhance communication, and facilitate data-driven decision-making.
2. Strengthen Supply Chain Management:
- Centralize procurement: Establish a centralized procurement function to streamline sourcing, negotiate better prices, and improve inventory management.
- Implement inventory control: Adopt Just-in-Time (JIT) production principles to optimize inventory levels, reduce storage costs, and minimize waste.
- Enhance visibility: Utilize Enterprise Resource Planning (ERP) systems to improve supply chain visibility, track materials, and facilitate real-time communication.
- Develop strong supplier relationships: Foster long-term relationships with reliable suppliers, ensuring timely delivery and quality materials.
3. Foster Organizational Change:
- Promote collaboration: Create a culture of collaboration and open communication among all stakeholders, fostering a shared sense of responsibility and accountability.
- Develop leadership skills: Invest in leadership training and development programs to equip managers with the skills necessary to navigate complex projects and drive change effectively.
- Embrace continuous improvement: Implement Kaizen principles to encourage a culture of continuous improvement, fostering a proactive approach to identifying and addressing operational challenges.
- Implement change management strategies: Develop and implement a comprehensive change management plan to address employee concerns, provide support, and facilitate a smooth transition to new processes and technologies.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of the case study, considering the following factors:
- Core competencies and consistency with mission: The recommendations align with the airport's mission to provide efficient and reliable service to passengers, while also considering the need for cost-effectiveness and sustainability.
- External customers and internal clients: The recommendations prioritize the needs of both passengers and airport staff, aiming to improve the overall experience for all stakeholders.
- Competitors: The recommendations consider the competitive landscape of the aviation industry, aiming to position BER as a leading airport in terms of efficiency, service quality, and passenger satisfaction.
- Attractiveness ' quantitative measures: The recommendations are expected to deliver tangible benefits, including cost savings, increased efficiency, and improved passenger satisfaction, which can be measured through key performance indicators (KPIs).
6. Conclusion
By implementing these recommendations, BER can transform from a symbol of failure to a model of operational excellence. A robust operations strategy, strengthened supply chain management, and a culture of continuous improvement will enable the airport to overcome its past challenges and achieve its full potential.
7. Discussion
While the proposed recommendations offer a comprehensive solution, alternative approaches could be considered:
- Outsourcing operations: Outsourcing certain operations, such as baggage handling or security, could provide expertise and efficiency, but it also raises concerns about control and potential cost increases.
- Delaying further expansion: Instead of focusing on immediate expansion, the airport could prioritize optimizing existing operations and ensuring operational stability before pursuing further growth.
Key assumptions:
- Commitment to change: The success of these recommendations hinges on the commitment of all stakeholders to embrace change and implement the proposed strategies.
- Availability of resources: Sufficient financial and human resources are required to implement the necessary changes, including technology upgrades, training programs, and process improvements.
- Effective communication: Clear and consistent communication is crucial for ensuring stakeholder buy-in and facilitating a smooth transition to new processes and technologies.
8. Next Steps
To implement these recommendations, the following steps should be taken:
- Form a task force: Establish a dedicated task force to oversee the implementation of the recommendations, ensuring coordination and accountability.
- Develop a detailed implementation plan: Create a comprehensive implementation plan outlining specific actions, timelines, and responsible parties.
- Secure funding: Obtain the necessary funding to support the implementation of the recommendations, including technology upgrades, training programs, and process improvements.
- Monitor progress and adjust as needed: Regularly monitor progress against key performance indicators (KPIs) and make adjustments to the implementation plan as needed.
By taking these steps, BER can transform into a world-class airport, achieving operational excellence and becoming a source of pride for Berlin and Germany.
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Case Description
Just after German reunification in 1990, plans were made for a single, new airport to concentrate all the traffic of the new capital Berlin. Twenty-five years later, Berlin Brandenburg International Airport (BER) was still not operational. The project was amassing mistakes and had already seen four delays, due mainly to the fire detection system. At the end of December 2014, the Supervisory Board announced that the airport would finally open in the second half of 2017 - more than six years after the initially planned date. The new plan would be implemented by the airport operator's new CEO, Karsten Muhlenfeld. Everybody wondered whether he could finally get the airport operational and save its image. Or, like his predecessors, would he too be unable to control the project's chaos and complexity?
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