Aviation Project Management

Triant G. Flouris, Dennis Lock

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317176619
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Industria del transporte

Combining the considerable respective expertise of Triant Flouris and Dennis Lock, this unique book highlights the ways that successful businesses are managed in the aviation industry through the identification and application of proven project management methods. Theoretical concepts are defined, clarified and shown how they can be valuable to business managers and students of the aviation business sector. Aviation Project Management builds on the successful and popular work of Dennis Lock but is considerably enhanced by applications, examples, illustrations and case examples pertaining to projects exclusively from the aviation industry. Theory in the project management field is already well evolved, so the purpose of this book is not to review that theory but rather to demonstrate how the lessons of theory can be of practical use to aviation students and business managers. It provides a practical guide to those interested in how projects are managed and the common mistakes that aviation project managers should avoid.

1
Introduction to Aviation Project Management

All projects share one common characteristic—the projection of ideas and activities into new endeavors. The ever-present element of risk and uncertainty means that the events and tasks leading to completion can never be accurately foretold. Examples abound of projects that have exceeded their costs by enormous amounts, finishing late or even being abandoned before completion. Such failures are far too common, seen in all kinds of projects in industry, commerce, and the public sector. The aviation industry (both at its core and throughout all its constituent industries) is by no means exempt. The consequences of such project failures can extend well beyond time and cost excesses, and can lead to expensive litigation, contractual penalties, and cancelled orders.

The purpose of project management is to predict, plan, organize, and control activities and resources so that projects are completed successfully in spite of all the difficulties and risks. This process should start before any resource is committed, and must continue until all work is finished. The primary aim of the project manager is for the result to satisfy the project sponsor or purchaser and all the other principal stakeholders, within the promised timescale and without using more money and other resources than those that were originally set aside or budgeted.

DIFFERENT TYPES OF PROJECTS

The principal characteristic of a project is its novelty. It is a step into the unknown, fraught with risk and uncertainty. No two projects are ever exactly alike: even a repeated project will differ from its predecessor in one or more commercial, administrative, or physical aspects. However, we find it convenient to identify four different types of projects.

Type 1 Projects: Civil Engineering And Construction

Projects in this category spring to mind whenever industrial projects are mentioned. One common feature is that work must be conducted on a site that is exposed to the elements, and usually remote from the contractor’s head office. These projects are thus open to public gaze. They incur special risks and problems of organization. They may require massive capital investment, and they deserve rigorous management of progress, finance, and quality. Operations are often hazardous so that health and safety aspects demand special attention, particularly in work such as heavy construction, tunneling, and mining.

For very large industrial projects the funding and resources needed can be too great for one contractor to risk or even find. The organization and communications are therefore likely to be complicated by the participation of many different specialists and contractors, possibly with the main players acting together through a consortium or joint venture company established specifically for the project.

Type 2 Projects: Manufacturing

Manufacturing projects result in a piece of mechanical or electronic equipment, a machine, ship, aircraft, land vehicle, or some other product or item of specially designed hardware. The finished product might be purpose-built for a single customer but internal research and development projects for products to be sold in all market sectors also fall into this manufacturing category. Manufacturing projects are usually conducted in a laboratory, factory, shipyard, hangar, or other home-based environment, where the company should be able to exercise on-the-spot management and provide an optimum environment in which to do and manage the work.

Of course, these ideal conditions do not always apply. Some manufacturing projects involve work away from the home base, for example in installing and commissioning a machine or equipment on a customer’s premises, flight testing an aircraft in different climates, customer training, and post-project service and maintenance.

International manufacturing projects are prone to higher risk and difficulties in control and coordination arising through organizational complexity, national rivalries, contracts, long-distance communications, multiple languages, and conflicting technical standards. Particularly difficult is the case of a complex product that is developed and manufactured by a number of collaborating organizations, sometimes with members based in different countries. An example is aircraft production, where the engines might be developed and manufactured in one country, the wings in another, and the final assembly taking place in a third country. The Airbus A380 project was a case in point, running 2 years late and well over budget. A contributory cause for the A380 problems was software incompatibility between different companies, so that when different sections of the aircraft were brought together for final assembly the wiring did not match and had to be reworked at great cost.

Type 3 Projects: IT Projects And Projects Associated With Management Change

This class of project proves the point that every company, whatever its size, can expect to need project management expertise at least once in its lifetime. These are the projects that arise when companies relocate their headquarters, develop and introduce a new computer system, launch a marketing campaign, prepare for a trade exhibition, produce a feasibility or other study report, restructure the organization, mount a stage show, or generally engage in any operation that involves the management and coordination of activities to produce an end result that is not identifiable principally as an item of hardware or construction.

Although management projects do not usually result in a visible, tangible creation such as a piece of hardware, much often depends on their successful outcome and they can require enormous investment. There are several well-known cases where, for instance, failure to implement a new computer system correctly has caused serious operational breakdown, exposing the managers responsible to public discredit. There have been several serious well-reported IT failures in air traffic control and air communications systems. Effective project management is clearly at least as important for these projects as it is for the largest aircraft design project.

Type 3 projects may be associated with, or even depend upon, Type 1 or Type 2 projects. For example, if a company decides to relocate to a new purpose-built office, the overall relocation project is itself a Type 3 management project but its success will depend also on the Type 1 project needed to construct the new building. Thus projects of different types may be associated with each other in a company’s project programme or project portfolio.

Type 4 Projects: Projects For Pure Scientific Research

Pure scientific research projects (not to be confused with research and development projects) are a special case. They occasionally result in dramatically profitable discoveries. Conversely, they can consume vast amounts of money over many years, yet yield no practical or economic result.

These projects might be carried out for a company for its own eventual exploitation (such as the constant search for new drugs). However, successful pure research often has spin-offs in industries quite alien to those that sponsored the research. For example, the discovery of new materials with a high strength to weight ratio might originally have been sponsored by an automotive company, but the materials could be invaluable in new airframe design.

Research projects carry the highest risk because they attempt to extend the boundaries of human knowledge. The project objectives are usually difficult or impossible to define and there may be no awareness of the possible outcome. Therefore, pure research projects are not usually amenable to the project management methods that can be applied to industrial, manufacturing, or management projects.

Some form of control over pure research projects must, however, be attempted. Money and other resources cannot be spent without any form of monitoring or restraint. Budgets have to be set in line with available funding. A sensible method for controlling a pure scientific research project is to conduct regular management reviews and reassessments of the potential value of the project. At each review, a decision can be taken to stop the project (known colloquially as ‘pulling the plug’) or release new funding to allow it to continue at least until the next review. Although this can be unsettling for the scientists involved, the project sponsor is not expected to pour money forever into a vast hole. This procedure, where continued project funding is dependent upon regular reviews, is known as stage-gate control.

Although the research activities might themselves lie outside the scope of familiar project management methods, the provision of accommodation, communications, equipment, and research materials can constitute Type 1, 2, or 3 capital investment projects to which proper project management can and must be applied.

Project Types Within The Aviation Industry

Any one or any mix of the four above-named project types might be found within an aviation project. For example, a project to build a new runway, terminal building, or even an entire airport is primarily a Type 1 (construction) project, But that project will undoubtedly be associated with Type 2 (manufacturing) and Type 3 (IT and management change projects). The navigational system case example described at the end of this chapter is primarily a management change and IT project (Type 3) but it also has an important manufacturing element at the works of the principal equipment supplier.

PROJECT LIFE CYCLES AND LIFE HISTORIES

Most authorities and writers, when they talk about the life cycle of a project, refer to the period that begins with the authorization of work on the project (or signing of a customer-contractor contract) and ends with the handover of the desired product or service to the customer. Although that view can be too simplistic, it is the part of projects that is of most concern to project managers (and which is covered in this book). Figure 1.1 shows that the activities which take place during this period form a true cycle, because they begin and end with the customer.

Travelling clockwise round the cycle reveals a number of steps or phases. In practice, these phases often overlap each other, so that the boundaries between them are blurred. For example, some project purchasing and fulfilment work can usually start well before the design phase is complete.

Figure 1.1 The active part of a project life cycle

The view of a project life cycle shown in Figure 1.1 is too simplistic for most projects because it ignores everything that happens before the start of actual work and takes no account of what happens to the project after its delivery to the customer. For a more complete picture we have to consider not only the project life cycle as seen by the project manager, but also the entire life history of the project from its initial conception to final death and disposal. Figure 1.2 shows this more complete view of a project life history.

Many writers limit their account of the project life cycle or life history to phases 6 to 13, because these are the phases that usually come under the control of the project manager. They constitute the most active period of the project life history (sometimes called the fulfilment period). This period corresponds in most respects to the life cycle in Figure 1.1. The chapters in this book are arranged as far as possible in this life cycle sequence.

FACTORS FOR ASSESSING PROJECT SUCCESS OR FAILURE

The success of the contractor and the project manager will usually be judged according to how well they achieve the three primary objectives, which are:

1. project completion within the cost budget;

2. the project delivered or handed over to the customer on time;

3. good performance, which requires that all aspects of the project are finished in accordance with the project specification.

Figure 1.2 The project life cycle (life history) of a larger project

Factors necessary for achieving these three objectives include the following:

• good project definition and a sound business case;

• appropriate choice of project strategy;

• strong support for the project and its manager from higher management;

• availability of sufficient funds and other resources;

• firm control of changes to the authorized project;

• technical competence;

• a sound quality culture throughout the organization;

• a suitable organization structure;

• appropriate regard for the health and safety of everyone connected with the project;

• good project communications;

• well motivated staff;

• quick and fair resolution of conflict.

These issues are all important for good project management.

RELATIONSHIP BETWEEN THE THREE PRIMARY OBJECTIVES

It is occasionally necessary to identify one of the three primary objectives as being of special importance. This emphasis can affect the priority given to the allocation of scarce resources and the way in which management attention is concentrated. It can also influence the choice of project organization structure (discussed in Chapter 5).

A management decision to place greater emphasis on achieving one or two of these objectives must sometimes be made at the expense of the remaining objectives. The outcome of such a trade-off decision can be indicated by placing a spot or blob within a triangle which has one primary objective placed at each of its corners (shown in Figure 1.3).

For example, if cost is the greatest consideration, the blob will be placed in the cost corner of the triangle. Completing the project within budget or even at the lowest possible cost will become the main focus of management attention. A project for a charitable organization with limited funds would have to be controlled very much with budgets in mind, so that costs must be the project manager’s chief concern. Cost is usually a very important factor in aviation projects and the aviation industry is well-known for working with ‘razor-thin’ profit margins.

If all the objectives are regarded as equal (balanced), the blob will be put in the middle of the triangle.

In our opinion, this balanced approach could work even in the case of low-cost carrier (LCC) airlines with limited funds, provided that the strategic objectives are pursued through financial optimization.

Industries such as nuclear power generation, aerospace, and aviation have to place such high emphasis on safety and reliability that performance to specification should be the overriding objective.

Figure 1.3 The triangle of objectives

Strict contractual terms can place a high emphasis on the time objective. A project to put on any event that has been announced to the public or to VIPs must deliver its promised performance at the appointed tim...