A region gets wings
the new DHL air hub
When approaching Leipzig/Halle, Germany from the air, you can’t miss it: DHL’s hub is huge! The sorting center hall is as big as five football fields, and the hangar can hold two Airbus A380s. Turning a green field into an area for 60 aircraft, sorting 155,000 shipments a night, with an overall weight of 1,500 tons took only four years, and the project came in on time and within budget. This task was only possible because of the outstanding project management approach that was awarded with the IPMA Project Excellence Award in 2008. This paper illustrates the challenges of the international project team and how they responded to them and achieved success.
When DHL opened its new hub in Brussels in 1985 (Exhibit 1), it was without any doubt the best hub in its class in Europe. Twenty years later it looked quite different; it couldn’t handle the increasing amount of air freight. In addition, the political opinion about night flight rights started to change; therefore, in 2004, DHL decided to build a totally new hub with an investment of over 500 million Euros in the former Leipzig/Halle Airport in East Germany. DHL not only decided to move the hub, a major part of the decision was to ensure that the spot in Leipzig would be the state-of-the-art hub in Europe, including the newest technologies, keeping environmental concerns in mind, and strengthening DHL’s position in the European and international marketplaces
Exhibit 1 DHL Hub
To accomplish such a huge project was possible only with an outstanding project management approach. The project team used the best of A Guide to the Project Management Body of Knowledge (PMBOK® Guide) and combined it with tools and techniques from PRINCE2 and the IPMA (International Project Management Association) where applicable.
What the Project was All About
It started with a feasibility study and a decision, although this didn’t mean that the target and products of the project had been defined yet. So, the planned investment was broken down into the following goals: (Exhibit 2)
- A new aircraft hangar, at a height of 30 meters, with an area of 232 by 98 meters, providing a space for two A3 80s
- The heart of the hub, the new 413 by 97 meter warehouse, which is as large as five football fields
- The warehouse houses Germany’s largest and most modern sorting system
- Employment of more than 2,000 new employees
- Cross linking the IT with the worldwide activities of DHL
- Moving the business from Brussels and Cologne to Leipzig
And, last but not least: Getting the hub up and running without any interruptions in service and quality for the customers.
The Focus Areas of Project Management
Product Breakdown Structure
The main concern in such a huge project is that something is forgotten—an incorrect detail, a missing product, an undeveloped process—anything can lead to a hazardous situation in which the whole project can lose its reputation. To ensure this will not happen, the project team goes through an interactive process of breaking down each sub-project into more and more levels. Starting with the top level, it looked like there were only three parts to the project: the hub itself, the temporary installation of an air gateway, and the transition. (Exhibit 3)
Exhibit 3 – Top Level Processes
By going into detail, the project team developed product breakdown structures down to levels 9 and 10, and still with a huge amount of expected project results. (Exhibit 4)
Exhibit 4 – Product Breakdown Structures
The used product breakdown structure was an additional development to the recently used work breakdown structure. As the name “Product” says it is not the task; the work has been broken down but the products. An example will explain this: In the sub-project IT a scanner has to be erected to read the bar code labels from the shipments. In a work breakdown structure, it could be referred to as “installing a scanner.” Going into detail, the work for installation of the scanner would be described. In the product breakdown structure, the final parts of the scanner will be described, including the scanner itself in addition to the cabling, the manuals, the trained staff, and the approved checklist for acceptance. Everything that can be checked off as ready will be its own product, assembling the final product, which is a “scanner.” In the above product breakdown structure, all parts of a bigger product are stated as their own products.
One step further into the product breakdown structure, the project team used the approach of product-based planning. In the above scanner example, the smaller parts or products of the scanner have been stated in the structure; however, there needs to be a definition of what shape a product can be for it to be called a ready product. Therefore, the product-based planning came into the loop, which means that in advance of the real product, it goes through a theoretical development process. The result of this process is a product description containing all the characteristics the product needs to get checked off. This could be quality and quantity, necessary input, resources, correlating products, acceptance tests, and so forth. (Exhibit 5)
Exhibit 5 - Products
Keeping Environmental Concerns in Mind
Trains will travel from the adjacent train station to Frankfurt Airport. DHL aims to minimize noise levels for people living in the surrounding area and reduce C02 emissions from the outset. Furthermore, the group has replaced many old aircraft and engines for the same reasons. Environmental concerns were also taken into account for the hub itself. Photovoltaic cells, a power and heat supply station, and the use of rain water for cleaning aircraft will save 3,000 cubic meters of drinking water and 3,000 tons of C02 every year.
Fuel for the aircraft arrives by trains, as the picture to the right shows. (Exhbit 6)
Exhibit 6 Rail Lines Delivering Fuel
Project Team and Deployment
In 2004, the project started with a team of five people; in 2008, it consisted of 90 people. (Exhibit 7) Why was this necessary? The new hub included areas of knowledge that normally would have been their own projects. Each sub-project was so different from the others that experts for each sub-project had to be included. It is probably understandable, that a fuel farm for aircraft is quite unique. An aircraft hanger is definitely different than the standard European biggest sorting machines for shipments. Employing 2,000 new employees to operate such a hub is different than erecting a warehouse. One of the success factors of this project has been the human resource planning for the project staff. Experts from all around the world came together to contribute expertise and knowledge; some of the expertise grew throughout the project life cycle and sometimes it started with searching for experts in a field in which even the product itself was not defined yet. I came into the project in 2005 and was responsible for the sub-project transition from the first day. What expertise is needed for transition? This became clear by designing the sub-project transition using the technique product breakdown structure and product-based planning.
Exhibit 7 Project Team
In a region in which every tenth employable person lacks work, moving business into the area will bring a new economic stimulus to the region. Part of the project was the deployment of over 2,000 people. By 2014, 3,500 people will work at the hub, and an estimated additional 7,000 jobs will be created around the airport as a result of DHL’s air hub operations.
The task was to deploy and train more than 2,000 people who came without any knowledge about express business and aircraft handling. Because this was an airport, the government looked closely at safety and security issues when deploying and training these new people. The new middle management was sent to hubs and gateways all around the world to gather experience. The people on the shop floor learned in a simulated enviromnent how to handle shipments with care. The three-month test and trial period brought it all together to ensure a smooth start to operations.
Sub-project Transition — Turning a Caterpillar into a Butterfly
When I joined the project in 2005 I was asked to oversee the sub-project transition, and of course I agreed to do it. Then I checked Wikipedia for the term “transition”; Wikipedia said that transition is when a caterpillar turns into a butterfly. Well, this couldn’t apply to my new colleagues, so I searched further and found descriptions about business transfer. However, nowhere on the Internet could I find a description for the transition of a whole airport and there was a reason for this. I was not the only one who had searched for this and not found a definition, because the transition of an airport operation in the express sector is not a “business as usual” project.
What needed to be done? Bringing the experts together is always a good idea. We invited experts from inside and outside DHL for a mind-mapping workshop. Experts showed up with expertise in fields such as airport operations, network planning, human resources, and express business and, frankly, the first output was far from what we could consider a plan.
Nonetheless, each day it became clearer that there were two ways to get the new hub up and running. The first way was called “the big bang:” closing the business in Brussels and Cologne in one night and opening Leipzig in the other one. From a financial point of view this would be the best choice, but if one remembers what occurred with the opening of the Denver Airport or the opening of London’s Heathrow Airport—if something goes wrong, a chain reaction will shut down the air express business of DHL within a few days. DHL went through this bad experience with the move from Cincinnati to Wilmington in Ohio, USA.
So, we developed another way to handle this: a step-by-step approach. This is a much more expensive approach but ensures a smooth transition without any interruption to service for the customers. The transition plan started with five aircraft in 2006 in a temporary gateway and took over the business from Brussels and Cologne in two separate steps, and it worked! (Exhibit 8)
Exhibit 8 – Transition Plan
The best way to know things started without any major problems is when you do not read it in the newspaper.
Up and Running
The new central air hub has been up and running since 2008. It took four years from the start of the project to accomplish a 500-million Euro project, involving more than 90 people in the project team, on time and within budget. (Exhibits 9 and 10)
Exhibit 9 – Layout of New DHL Center
Exhibit 10 – Overhead View of New DHL Center
© 2011, Ingolf Speer, PMP
Originally published as a part of 2011 PMI Global Congress Proceedings – Dublin, Ireland