Chapter 12Question 3: What is the philosophy underlying resource loading? What does it do for our project? Why is it a critical element in effectively managing the project plan? Question 5: Discuss th

2. What are some types of project status information you could suggest the project team leaders begin to collect in order to assess the status of their projects?

3. How would you blend “hard data” and “mana- gerial or behavioral” information to create a com- prehensive view of the status of ongoing projects in the IT department at Kimble College?

CaSe STUDy 13.2 The Superconducting Supercollider Conceived in the 1980s as a device to accelerate particles in high-energy physics research, the Superconducting Supercollider (SSC) was a political and technical hot potato from the beginning. The technical challenges as- sociated with the SSC were daunting. Its purpose was to smash subatomic particles together at near the speed of light. That would require energy levels of 40 trillion elec- tron volts. Using the physics of quantum mechanics, the goal of the project was to shed light on some of the fun- damental questions about the formation of the universe.

The SSC was designed to be the largest particle accelera- tor ever constructed, far bigger than its counterpart at Fermi Laboratory. In order to achieve these energy levels, a set of 10,000 magnets was needed. Each of the magnets, cylindrical in shape (1 foot in diameter and 57 feet long), would need to operate at peak levels if the accelerator were to achieve the necessary energy levels for proton collision. The expected price tag just for the construction of the magnets was estimated at $1.5 billion.

The technical difficulties were only part of the over - all scope of the project. Construction of the SSC would be an undertaking of unique proportions. Scientists deter - mined that the accelerator required a racetrack-shaped form, buried underground for easier use. The overall circumference of the planned SSC required 54 miles of tunnel to be bored 165 to 200 feet underground. The ini- tial budget estimate for completing the project was $5 billion, and the estimated schedule would require eight years to finish the construction and technical assemblies. The SSC’s problems began almost immediately after President Reagan’s 1988 kickoff of the project. First, the public (including Congress) had little understand- ing of the purpose of the project. A goal as nebulous as “particle acceleration” for high-energy physics was not one easily embraced by a majority of citizens. The origi- nal operating consortium, URA, consisted of 80 public and private American research centers and universities, but it was expected that European and Asian scientists also would wish to conduct experiments with the SSC.

Consequently, the U.S. Department of Energy hoped to offset some of the cost through other countries. While initially receptive to the idea of participating in the project, these countries became vague about their levels of contribution and time frame for payment.

Another huge problem was finding a suitable loca- tion for the site of the SSC. At its peak, work on the SSC was expected to employ 4,500 workers. Further, once in full-time operation, the SSC would require a perma- nent staff of 2,500 employees and an annual operating budget of $270 million. Clearly, it was to almost every state’s interest to lure the SSC. The result was a political nightmare as the National Research Council appointed a site review committee to evaluate proposals from 43 states. After making their judgments based on a series of performance and capability criteria, the committee narrowed their list to eight states. Finally, in late 1988, the contract for the SSC was awarded to Waxahachie, Texas, on a 16,000-acre tract south of Dallas. While Texas was thrilled with the award, the decision meant ruffled feathers for a number of other states and their disappointed congressional representatives. The final problem with the SSC almost from the beginning was the mounting federal budget deficit, which caused more and more politicians to question the decision to allocate money at a time when Congress was looking for ways to cut more than $30 billion from the budget. This concern ended up being a long-term problem, as the SSC was allocated only $100 million for 1989, less than one third of its initial $348 million fund- ing request. Budget battles would be a constant refrain throughout the SSC’s short life. Work proceeded slowly on the Waxahachie site throughout the early 1990s. Meanwhile, European finan- cial support for the project was not forthcoming. The various governments privately suspected that the project would never be completed. Their fears were becoming increasingly justified as the cost of the project contin- ued to rise. By 1993, the original $5 billion estimate had ballooned to $11 billion. Meanwhile, less than 20% of the construction had been completed. The process was further slowed when Congress began investigating expenditures and determined that accounting proce- dures were inadequate. Clearly, control of the project’s budget and schedule had become a serious concern. Case Study 13.3 465 In a last desperate move to save SSC funding, Energy Secretary Hazel O’Leary fired URA as prime contractor for the construction project. There was talk of replacing URA with a proven contractor—Martin Marietta and Bechtel were the two leading candidates.

By then, however, it was a case of too little, too late.

Costs continued to climb and work proceeded at such a snail’s pace that when the 1994 federal budget was put together, funding for the SSC had been removed entirely. The project was dead. The nonrecoverable costs to the U.S. taxpayer from the aborted project have been estimated at anywhere between $1 billion and $2 billion. Few questioned the government’s capability to construct such a facility. The technology, though lead- ing-edge, had been used previously in other research laboratories. The problem was that the pro- and anti- SSC camps tended to split between proponents of pure research and those who argued (increasingly swaying political support their way) that multibil- lion-dollar research having no immediate discernible impact on society was a luxury we could not afford, particularly in an era of federal budget cuts and hard choices. The SSC position was further weakened by the activities of the research consortium super - vising the project, URA. Its behavior was termed increasingly arrogant by congressional oversight groups that began asking legitimate questions about expenditures and skyrocketing budget requests. In place of evidence of definable progress, the project offered only a sense of out-of-control costs and poor oversight—clearly not the message to send when American taxpayers were questioning their decision to foot a multibillion-dollar bill. 17 Questions 1. Suppose you were a consultant called into the project by the federal government in 1990, when it still seemed viable. Given the start to the project, what steps would you have taken to reintroduce some positive “spin” on the Superconducting Supercollider?

2. What were the warning signs of impending fail- ure as the project progressed? Could these signs have been recognized so that problems could have been foreseen and addressed or, in your opinion, was the project simply impossible to achieve? Take a position and argue its merits.

3. Search for “superconducting supercollider” on the Internet. How do the majority of stories about the project present it? Given the negative perspective, what are the top three lessons to be learned from this project? CaSe STUDy 13.3 Boeing’s 787 Dreamliner: Failure to Launch It was never supposed to be this difficult. When Boeing announced the development of its newest and most high-tech aircraft, the 787 Dreamliner, it seemed that it had made all the right decisions. By focusing on build- ing a more fuel-efficient aircraft, using lighter compos- ite materials that saved on overall weight and resulted in a 20% lower fuel consumption, outsourcing devel- opment work to a global network of suppliers, and pioneering new assembly techniques, it appeared that Boeing had taken a clear-eyed glimpse into the future of commercial air travel and designed the equivalent of a “home run”—a new aircraft that ticked all the boxes.

Airline customers seemed to agree. When Boeing announced the development of the 787 and opened its order book, it quickly became the best-selling aircraft in history, booking 847 advance orders for the airplane.

With list prices varying from $161 to $205 million each, depending on the model, the Dreamliner was worth billions in long-term revenue streams for the company.

The aircraft was designed for long-range flight and could seat up to 330 passengers. Most industry analysts agreed: With the introduction of the Dreamliner, the future had never seemed brighter for Boeing.

But when the first delivery dates slipped, yet again, into 2012, four years behind schedule, and the company’s stock price was battered in the mar - ketplace, Boeing and its industry backers began try- ing to unravel a maze of technical and supply chain problems that were threatening not just the good name of Boeing, but the viability of the Dreamliner.

Derisively nicknamed the “7-L-7” for “late,” the proj- ect had fallen victim to extensive cost overruns and continuous schedule slippages, and had recently encountered a number of worrisome structural and electrical faults that were alarming airlines awaiting delivery of their aircraft. These events combined to put Boeing squarely on the hot seat, as they sought to find a means to correct these problems and salvage both their reputation and the viability of their high- profile aircraft. (continued)