Perceived failures in the project Airbus A380 Idanye Kelvin Finapiri-2P PDF

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Perceived failures in the project Airbus A380...

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Universitty of Salfo S rd M Master r of Scciencee (MScc) - PM MLaS SPaC

P Project t Manaagemen nt Lead dership p and Skills: S Pla anningg and Control C l

Airbus A3380 Prrogram m “Perceiveed faillures””

Idan n ye Kelvin FFINAPIRI

Table of Contents 1.

Introduction ........................................................................................................................................... 2

2.

Purpose.................................................................................................................................................. 3 2.1

3.

4.

5.

Motivation for Airbus A380 Program ........................................................................................... 3

Airbus A380 Program ........................................................................................................................... 4 3.1

Airbus A380 Projects set-up ......................................................................................................... 4

3.2

Definition of Project Success or Failure ....................................................................................... 4

Airbus A380 projects “Perceived Failures” .......................................................................................... 5 4.1

Schedule Delay ............................................................................................................................. 5

4.2

Cost Overrun ................................................................................................................................. 5

4.3

Technical Challenge ...................................................................................................................... 5

4.4

Politics/Socio-cultural ................................................................................................................... 5

Analysis of the Perceived Failures ........................................................................................................ 6 5.1

Schedule and Cost ......................................................................................................................... 6

5.2

Project Quality Management ........................................................................................................ 6

5.3

Project Management: .................................................................................................................... 7

5.4

Technical Coordination ................................................................................................................. 7

5.5

Risk Management ......................................................................................................................... 8

5.6

Interface/Communication Management ........................................................................................ 8

5.7

Political/Socio Cultural ................................................................................................................. 8

6.

Conclusions ........................................................................................................................................... 9

7.

References ........................................................................................................................................... 11

[The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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1. Introduction Aircraft manufacturing is a dynamic industry. With new innovations in the last century, bigger, more complex aircrafts being built and more funding required for research and development, the industry has seen tremendous growth. In the late 60’s, the European government agreed on a joint development of the aviation industry by Britain, Germany and France. According to (Airbus.com) the reason for this merger was “For the purpose of strengthening European co-operation in the field of aviation technology and thereby promoting economic and technological progress in Europe, to take appropriate measures for the joint development and production of an airbus.” The European government also needed a modern aviation company that can compete effectively with their American counterparts like Lockheed, McDonnell and Boeing. It was this move by the EU government that gave birth to Airbus.

The European Aeronautic Defense and Space Company itself, is a merger of Aerospatiale-Matra of France, Daimler-Chrysler Aerospace of Germany, Construcciones Aeronauticas S.A. (CASA) of Spain. BAES later sold it shares in 2006 to EADS who in a bid to consolidate and dominate industry, created the subsidiary which is now known as Airbus now the sole owner of Airbus. (Alexander, H., 2007). Airbus quickly realized how viable the commercial aircraft industry became, the enormous increase in air travel, the tremendous growth, dynamic nature of the market and launched a subsidiary called Airbus SAS.

Airbus commitment as stated in their mission statement “is to meet the needs of airlines and operators by producing the most modern and comprehensive aircraft family on the market, complemented by the highest standard of product support” After major challenges due to funding, design and consumer demands, the first Airbus A300 was officially launched at the 1969 Paris air show. The first A300 commercial flight was from Paris to London.

The aircraft was seen as cost effective and had good fuel efficiency, so it gained economic edge over its rivals. Following the A300 were further modifications which gave birth to the A310 to the A380 models. To demonstrate this, they decided to design and construct modern technological jumbo jet with a double deck, long range, high capacity, subsonic/transonic civil transport aircraft with the capacity of 555 passengers. (Jon, R., Kevin, D., Tyler, M., May 2005). [The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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2. Purpose This academic work is aimed at discussing the perceived failures of the Airbus A380 program, discuss the motivation behind this project, define the criteria that will determine project success or failure, then critically highlight the A380 projects perceived failures, analyze the cause and effect, and then review the project management best practice obtainable, and how its application in the project would have a made a significant difference.

2.1 Motivation for Airbus A380 Program Airbus A380 project was born out of the need to improve efficiency in aircraft manufacturing industry through technological advancement, low fuel usage, low operational cost and environmental friendly large commercial aircraft. To achieve business dominance and Counter competitive threat from rival US Boeing Company. To strengthen regional ties in the European Union, and for financial benefit.(Sue, A., & Eileen, R. 2014)

[The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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3. Airbus A380 Program 3.1 Airbus A380 Projects set-up The Airbus A380 employed about 55,000 work-force, who spoke over 20 different languages from 16 project sites in Europe, with a center in Toulouse, where all other modules are sent for integration. (Alexander, H., 2007) The project operated over 160 international locations around the world where many construction works were going on. There was 4 locations in France which worked on the nose fabrication and center fuselage, 2 locations in UK working on the wings and electrical components, 7 locations in Germany working on the cargo and cabin components, FWD and AFT fuselage, vertical tail plane and the electrical components, and 3 locations in Spain where the horizontal tail plane and rear fuselage section and the belly faring was been constructed, with its 3 owned subsidiaries in China, Japan and North America.(George, N., and Brian, C. Aug. 2007).

3.2 Definition of Project Success or Failure “The simple definition of a successful project is the one that delivers the required outcome within the defined constraint of time, cost and quality. If any of these constraining parameters are significantly exceeded or compromised, or if the desired outcome is not achieved, then the project has to some extent, at least failed.(Garland, Ross.2009). Every project is unique in nature, and has its own issues. For a Project to be perceived to have failed or to have been successful; certain parameters has to be clearly defined during the Project initiation stage and in the Project Management Plan amongst others documents. Cost and benefit analysis should be carried out to determine if the project is commercially viable, who the stakeholders are, the roles and level of influence they wield, how the project team will be constituted. Accordingly, it should be able to define how success will be measured, what the critical success factors will be and the key performance indicator to measure intermediate milestones, as to periodically determine the status of the project; these are the necessary criteria through which the success will be measured. Finally get the buy-in of the project teams / sponsor. (Sue, A., & Eileen, R.2014).

[The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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4. Airbus A380 projects “Perceived Failures” The Airbus A380 project was unique, but not without complexities which made the news for different reasons, especially the delay in the scheduled delivery of aircrafts. The perceived failures were:

4.1 Schedule Delay Airbus A380 projects started in 2002, with first batch of aircraft delivery schedule for 2006. In June 2005 it announced a 6months delay, it ended up having almost 2years delays, before its first delivery in October 2007. The delay was a result of both technical and complex logistic framework. (Catalogue of Catastrophe April 2013). These difficulties led to project cost overrun.

4.2 Cost Overrun The project had a cost overrun of 2 billion euros delay due to complex logistics involved in transporting parts from the different sites, penalties on contract default, and order cancelations This was a result of the technical challenges, communication, and politics amongst other difficulties in the project. (UKESSAYS.COM)

4.3 Technical Challenge Airbus had technical challenges with the 530 km (330mi) wiring in each aircraft. This was a result of the complex cabin wiring with (98,000 wires and 40,000 connectors and this caused overall configuration management failures. Germany and Spain sites using version of 4 of the Computer Aided Three-dimensional Interactive Application (CITIA) while France the UK sites migrated to Version 5, this caused integration difficulties (Wikipedia).

4.4 Politics/Socio-cultural The project management was deeply engrossed in regional politics and control over the leadership of the consortium, typical example was the rivalry between France and Germany. The social and cultural aspect flowed along with the politics. (Appasaheb, N. 2009).

[The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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5. Analysis of the Perceived Failures Having looked at the facts about the perceive failures, we will analyze these failures against our defined criteria of project success or failure, visa-a-vis, Project Management best practice and compare if the project was a successful, or a failure, and to what extent.

5.1 Schedule and Cost Every project success depends on realistic schedule; an ambitious/unrealistic schedule will be the beginning of the end. The A380 schedule was unrealistic, worse still, management of the projects evidently failed to understand the criticality in the project logistics, the different software usuage, and should upgraded and used the same version across sites, and the project would have finished on schedule, cost and quality. The project locations caused logistics difficulties, as constructed modules from different sites were sent to France for integration. Also, resource leveling could have been done, by taking resources from where it surplus to where it was needed. When it obvious the schedule was behind schedule, there was no Project Management Office for integration of the schedule using the scheduling software like Primavera or Prince2, to identify the critical path, which will be followed by the management buy-in and

eventually a recovery

plan developed and implemented. These lapses made the teams work under pressure trying to do most activities in an overlapping sequence, giving room to quality compromise.

5.2 Project Quality Management Quality is defined as the degree to which a product or service fulfill requirements. It could also be defined as “Conformance to Requirements; (requirements meaning both the product and the

customer's requirements).”Quality must be defined in measurable clearly stated terms to help the organization take action based on tangible targets rather than on hunch, experience or opinion (Crosby, 1979) “Project quality management must address both the management of the project and the product of the project. …failure to meet the quality requirement in either dimension can have serious negative consequences for any or all the project stakeholders”. (PMBOK 4th Ed.). The Airbus A380 projects lacked a proper quality management, which is a prerequisite for a successful [The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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project management. All the steps of Quality Planning, Quality Assurance, Quality Control and most critically Quality Improvement (continual feedback process) were not applied or at best were done half-heartedly without proper coordination among the various remote sites, due to the fact that there was no Project Management Office. Another aspect to consider was the lack PMO to coordinate periodic Audit of the various sites. Feedback from this kind of Audit would have quickly given a signal of disaster and if taken seriously by the responsible persons may have drawn everybody back to the drawing board and probably could have saved the situation. The role of the PMO cannot be over-emphasized especially with coordination of multiple work locations which are far apart, both for proper schedule and project management. (Iyomi, M.J., 2012.)

5.3 Project Management: Airbus A30 as earlier stated operated in different geographical locations, which represented the national interest and ratio of their stake in the consortium, through economic benefit, like employment and procurements. This complex management structure hindered proper coordination of the project especially the logistics aspect. Also the difference in background, language, culture and time. This is typical of a virtual work environment contributed to the project perceived failures. The complexity of operating from different locations without a unifying Project Management Office (PMO) caused the overlook in key on critical issues which were not addressed at the right time; eventually, this lapse in coordination gave way to a more degenerated situation of significant higher cost, as a result of the technical challenges. A proper and well-structured project management system would have had the management get involved in the project more.

5.4 Technical Coordination This was as well a failure of the Quality Assurance set-up and demonstrates that this was missing from Airbus 380 project. For consistency and repeatability of the process, all locations were supposed to work using the same set of standards, drawings, and specifications. This should have been coordinated from the PMO. The result of this lack of coordination had impact on the project. And this should have been identified early risk analysis and followed up during interface.(Iyomi, MJ, 2012.) [The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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Special trainings should have been organized for the engineers on the operability of the design software, periodic team building to boost productivity and flow of information across the sites.

5.5 Risk Management “Risk management is the systematic process of identifying, analyzing, and responding to project risk. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives.”(PMBOK 4th edition) Risk management framework is divided into three main areas – risk identification, quantification and mitigation. Risk identification would have sent a danger signal on using different software versions for design. The mitigation cost of upgrading the software across the project would have been less harmful compared to cost of rework and delays. Accordingly a peer review also would have been organized across the project to review this decision early in the project life cycle. (Maylor, Harvery.4th Ed.) A risk periodic qualitative and quantitative risk assessment, to ascertain the bottleneck in the project and review of the risk register would have averted the technical issue and the delay, atleast to a bearable limit.

5.6 Interface/Communication Management This involves sharing information with stakeholders on each other’s roles and responsibilities. It ensures timely identification of critical interfaces early through a structured process. Identification of potential show-stopper that will impact schedule, cost and quality early and timely tackles them, as in the technical challenges and schedules delays. The Airbus A380 projects lacked a proper structured interface management system, which should have been proactively involved. This process is inevitable and a prerequisite for ultimate success of any project. (Josh, C., P.E and Mike, C. 2007). Project interface register with critical issues and the status would have kept all stakeholders on the alert on those issues and the status for immediate action when necessary.

5.7 Political/Socio Cultural The involvement of the leaders in regional politic, above the project, took its toll on the collective project goal.(Appasaheb, N.2009), By extension, the social cultural aspect was affected, the [The Airbus A380 Program] |[Idanye Kelvin FINAPIRI]

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politics of divide that was practiced in the projects made the different workforce loyal to their immediate project and not the overall project, “it is the collective programming of the mind that distinguishes the members of one group or category of people from others.(G.H. Hofstede., G.J. Hofstede., M.Minkov., 2010) Each government came to the rescue of their own, rather come together to find a unifying solution to the project as they earlier. An intercultural session across the sites would have given the team a sense of unity.

6. Conclusions “In the end, it was a fight between globalization and nationalism—and globalization won” (Jul. 2007, The Economist). Indeed, the Airbus A380 projects faced several challenges especially that of national politics over the overall project goal. France and Germany were in a battle over leadership and control, but in the end the project goal was achieved, based on the criteria defined earlier, it can be argued that the project failed to an extent in the following area: Schedule – the project target of aircraft delivery in 2006 was not achieved, there was delay of almost 2yrs, because the management was not really involved in the project. The project intermediate milestones should have shown the delay earlier and recovery measures implemented. Cost – the project cost overrun was as a result of software upgrade, redesigning of the electrical work, penalties for contract default, and order cancellation, project m...