TITANIC

THE UNSINKABLE SHIP

By ARNAB SEN (13PGP069)
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
Project management Term Paper
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CONTENTS

INTRODUCTION ....................................................................................................................................... 2
PROJECT BACKGROUND .......................................................................................................................... 3
PROJECT PHASES ..................................................................................................................................... 4
PROJECT INITIATION ....................................................................................................................... 4
PROJECT PLANNING ........................................................................................................................ 4
DESIGN ............................................................................................................................................ 9
CONSTRUCTION ............................................................................................................................ 10
TESTING (PLANNING & EXECUTION) ............................................................................................. 10
IMPLEMENTATION & OPERATIONS .............................................................................................. 11
LESSONS LEARNT ................................................................................................................................... 13
REFERENCES .......................................................................................................................................... 14
APPENDIX 1 ........................................................................................................................................... 15
APPENDIX 2 ........................................................................................................................................... 16

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INTRODUCTION

In the current economic environment, value-for-money is a priority. Many businesses have
drastically reduced their spending in recent times. In this scenario, an effective project
management practice works to control the added risks that project activity introduces to
normal business practice. Various reports in the past have shown that project failures have
been on the rise. A recent survey report The 2013 project management survey report by
KPMG indicates that while project activity is on the rise, so are the failure rates. It is thus
imperative that we discuss the lessons learnt from the blunders made in the past. The lessons
learnt can then be used to make project management more effective in the modern business.
Mark Kozak Holland, author of the Lessons from History series very rightly says that we
should focus on Lessons from the past that assist the projects of today to shape the World of
tomorrow.

The Titanic project was one of the biggest blunders to have been ever made in the field of
project management. In 1912 Titanic sank with a loss of 1328 lives, the greatest maritime
disaster in the 20th century. Weighing over 45000 tons, the Titanic was the largest vessel in
the World to sail on Sea in its time. The passenger facilities aboard Titanic were of the
highest standards of luxury. It was referred to as the Unsinkable ship. In this paper, we shall
dwell in understanding the various stages of the Titanic project.



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PROJECT BACKGROUND

In the early 1900s the transatlantic passenger trade was highly profitable and competitive.
White Star and Cunard were the major ship lines vying to transport wealthy travellers and
immigrants in this route. In 1907, White Star faced stiff competition when Cunard Lines
launched two of its vessels - Lusitania and the Mauretania. The two ships were poised to set
new speed records for crossing the Atlantic Ocean. White Star also needed to replace its
aging fleet. So it came up with an idea to invest in emerging technologies in gigantic ships.
The plan was to build three gigantic ships Olympic, Titanic and Britannic. Olympic and
Titanic projects would run in parallel. Britannic would be built with the profits of the first
two projects. Titanic was built by Harland & Wolff, one of the premier shipbuilders of the
World to add to the fleet of Cunard Lines. The project was financed by JP Moran, the richest
man in the World, during those times. The project started off on a very sound footing.

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PROJECT PHASES
The project is divided into the following phases-
1. Project Initiation
2. Project Planning
3. Design
4. Construction
5. Testing (Planning and Execution)
6. Implementation and Operations
PROJECT INITIATION

Looking to answer his rival, White Star chairman J. Bruce Ismay met with William Pirrie,
who controlled the Harland and Wolff, which constructed most of White Star's vessels. The
two men devised a plan to build a class of large liners that would be known for their comfort
instead of their speed. Project justification was based on unparalled luxury driving customers
back, rather than speed on crossing.
The main motive for White Star to take up this project was to stay competitive in the market
by transforming business and replacing the aging fleet. Huge size of the ship and luxury were
the prime focus, as the perception was that luxury attracts customers more than speed.


PROJECT PLANNING

The planning of the project was done taking into consideration the following parameters-
Integration management
Scope management
Time management
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Cost management
Quality management
Human resource management
Communications Management
Risk Management
Procurement Management
Integration management
The business model of the project had a very sound footing. The following is the business
model for the project:


Profitability analysis showed a 2 year breakeven and 75 % of revenue from was targeted from
1st class.

PROJECT OBJECTIVE
To deliver 3 ships over 7 years. Revenue from the first two ships will fund the third.
Considerations were to taken for safety, comfort and luxury and reasonable speed.
Increase Margin
Decrease costs
Decrease
operational cost
Fewer larger ships
More efficient
labor. Lower wage
bill
Economy of scale
More efficient
Decrease
marketing costs
PR around largest
ship
Lower
maintainence cost
& more media
Decrease
manufacturing
costs
Fewer larger Ships
Lower build costs
Increase Revenue
Increase customer
revenue
First class, Second
class, Third class
More space &
luxury in cabins
More frequent
service
More superior
classes
More passenger
classes
Increase cargo
revenue
Greater capacity
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Scope Management
The scope of the project was based on scale up of previous ships and considerations were
made for use of emerging technologies.
The work breakdown structure for the project was as follows:

For all 3 ships
o Design < 6 months
For each ship
o Construction ~ 3 years
Launch fitting out < 12months
o Sea trials < 2months
o Maiden Voyage = 1 week
o Total effort ~ 4 years
Time management-
The project has been classified as a Waterfall project. The first two ships were to be built in
parallel, with delivery 9 months apart. The following is the schedule of the project:
1 Project to build
Titanic
1.1 Design
1.1.1 External
Structure
1.1.2 Systems
(Docking
structure)
1.1.3 Internal
Structure
(Fitting)
1.2 Construction
1.2.1 External
Structure
1.2.2 Systems
(Docking
structure)
1.2.3 Internal
Structure
(Fitting)
1.3 Sea trials
1.3.1 External
Structure
1.3.2 Systems
(Docking
structure)
1.3.3 Internal
Structure
(Fitting)
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Cost management
Costs were scaled up based past project experiences Final cost of the project arrived at $ 15
million for a pair.
Quality management
Harland & Wolff had the best reputation for quality & craftsmanship, perfect quality
standards were used in procurement of materials.
Human Resources management
The large workforce consisted of sponsors, operations team - captain, officers, and crew from
White Star and the design team & remaining workforce of around 3000 workers from
Harland & Wolff.
Communications management-
The following are the stakeholders of the project and their respective roles in the project:
Project Sponsor Bruce Ismay
Experience in projects and operations, marketing

Project Integrator- Lord Pirrie
Experience in projects, expert in ship building and emergent technologies


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Project Financier/ Chief Executive JP Morgan
Experience in financing projects

Project Manager Chief Architect Thomas Andrew
Experience in projects expert in integration of emerging technologies

Chief of operations- Captain EJ Smith
Experience in operations, accepts the deliverables.
Risk management-
The risk planning was done under the following areas:
Technical quality or
performance risks
External outside
of the project
Organizational
unreasonable
cost, time and
scope
Project Management
faults in managing project
Use of unproven and
complex emerging
technology
Select wrong
integrator to meet
contractual
obligations
Inadequate
funding or
disruption of
funding
Inaccurate scope
Ability to integrate
technologies to a single
unit
Legal issues-
regulations
Unreasonable
cost, time and
scope
expectations
Inaccurate financials
Expectations for
impractical levels of
quality and
performance
Weather Force
majeure risk in
Atlantic storms
traversing iceberg
Alley
Poor project
prioritization
Inaccurate schedule
Changes to industry
standards
Certain months like
April worst months
for iceberg
Competitions
with other
projects for
resources and
material
Lower quality work
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Not meeting
Government
regulations
Poor external
communication
Operational
readiness and
preparedness of
officers and crew
Not transferring lessons
learnt between ships

Long construction
project (6 yrs).
Changes in business
model, technology

Failure to test and
inadequate sea trials

Labor issues
(unions)


Procurement management
The planning for procurement of materials for two Olympic Class Liners was as follows:
Based on a cost plus fixed fee (CPFF)
o Bill of Materials & Labour were passed onto White Star
o Harland & Wolff guaranteed 5% profit on the contract
This was the standard practice followed in the shipbuilding industry.
Project was signed in April 1907 and construction started with huge project investments
reconfiguring the shipyards for the next 50 years. The project was a great opportunity for
Harland & Wolff to modernize.
DESIGN

Thomas Andrew led the design team. The ship was designed taking into account the non -
functional requirement of safety. Ship builder's model was used to test the worst case failure
scenarios - like groundings and collisions
A double skin hull was selected for groundings and for collisions 15 vertical bulkheads were
designed. There were increased numbers of look-outs in the forepeak and bridge wings.
Triple stacked lifeboats, a total of 48 numbers were used in the design. (Appendix 1) The
best of the emergent technologies were incorporated in the ship. Andrews included all
technologies (new and proven) to MAXIMIZE safety. With so many precautions taken for
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the safety of the passengers, there grew a perception within the team that the ship was
unsinkable.

But the design was compromised by-
Changing from 48 to 16 single lifeboats. This was done due to the perception that
having such a large number of lifeboats on the ship would make it less luxurious.
Lifeboat regulation was outstripped as the ship needed to have a minimum of 20
lifeboats as per the increased size of the ship. Also, 1178 instead of 3600 lifeboat
places were accommodated on board with the assumption that the ship would
remain afloat for long enough for rescue of the passengers.
To accommodate the dinning salon, largest room ever to go to sea, height of 2 of
the 15 feet bulkheads ( every 60 feet) was compromised
CONSTRUCTION

The construction consisted of 3 phases:
Building of the external structure
Launch of the ship
Fitting out
Construction went on without any hassles and Olympic was successfully launched.
Newspapers spread the word that the ship was 'Practically Unsinkable'.
The ship was launched in 62 seconds in front of a crowd of 100,000. Ismay added safety to
size, luxury and comfort in his promotions during the launch.
Even the fitting out of the Olympic was carried out without any flaws.
TESTING (PLANNING & EXECUTION)

Olympic had completed 8 weeks of trial, and it was then ready for its maiden voyage. Titanic
was also launched on the same day. Two spectacular events coincided on the same day.
Through maximum publicity the perception of unsinkable ship was passed on from the core
team to the public.
During Titanics fitting out Ismay suggested 3 major changes in the ship:
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- increased class accommodation by 100
- created cafe parisian
- Open promenade deck 'A' to stop sea spray
All the above changes were blindly accepted, even though it was affecting project deadlines.
3 major incidents happened with the Olympic:
Tug Hallenback was pulled under Olympic's propeller during docking
There was collision between Olympic and Hawke in the Isle of Wight due to
Bernoulli effect. Both the ships were severely damaged. Olympics 2 aft
compartments were flooded, starboard engine stopped working. Propeller blades
got damaged, internal frames twisted, propeller shaft got damaged and it could not
be repaired (had to be replaced). Cost of repair was 17 % of the original cost of
the project. Lead time for new orders would take months. This meant cost and
time implications for the project. To catch up on the lagging project schedule,
Titanics workforce was shifted on Olympic. Project Titanic was cannibalized
Olympic hit a floating wreck in Grand Banks, under the surface and lost a
propeller blade. The propeller blade had to be repaired. Work on titanic was
stopped. While Olympic was being pulled out of dry dock, its port side got
grounded. This further delayed Titanic's schedule, also not much cash was
left.(Appendix 2)

As a result of this delay in the project Olympic, Titanics sea trials were cut from 8 weeks to
half a day. She went for her maiden voyage as soon as she got her 1 year certificate.
IMPLEMENTATION & OPERATIONS

There were 100 articles on Olympic, only 30 for Titanic. To revive public interest, Ismay
planned the strategy to beat Olympics best crossing time. Strategy was to race towards
Iceberg Alley, navigate slowly and then speed up again. Officers were aware of French liner
Niagara's collision in Iceberg Alley.
Titanic left harbour in haste; it pulled New York Liner towards her and broke her moorings.
But fortunately the collision was avoided. Lessons from Olympic had not been learned.
Officer's still carried on compromised testing to meet the new crossing time record. Lifeboat
drill was performed with only one lifeboat. This gave it a certificate to sail.
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3 feedback mechanisms were used to alert the proximity of field ice.
Lookouts - Lookouts in the crow's nest were missing their binoculars from day1.
Officers refused to share theirs, because of rank.
I ce bucket test - Rope was too short to collect sea water for temperature
measurement. Mariner took tap water and fudged the test.
Wireless Marconigram- It received iceberg warnings from other ships but operators
were overloaded by commercial traffic. Around 250 messages were sent and received.
At 7: 30 pm in the evening last ice warnings were passed to the bridge, Captain at dinner. 37
seconds after the lookouts gave a warning, there was a collision but not severe. Two damage
assessment teams were sent for inspection. No damage was reported by the first group. Ismay
got impatient, and did not wait for the reports from the second assessment team. He assumed
that Titanic was safe to sail again. Engine was started and Titanic sailed again. This caused
the plates to further get ruptured and increased flooding.
Had it not been so at 8 knots the Titanic would have arrived at Halifax port within a few
days time.
Second damage assessment group reported that pumps were not keeping up with flooding.
The compromised design of bulkhead heights increased flooding and after more than an hour
the captain ordered that lifeboats be filled.

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LESSONS LEARNT

The Titanic project had a very good business model, with the breakeven point being achieved
in 2 years and 75 % of the revenue being generated from first class. But the perception of the
core team about Titanic being an Unsinkable Ship led them to make the following blunders

Compromises in design and testing.
Elevation of expectations of end deliverable allowed business pressure to override
operational procedures.
Lack of stakeholder management.
Further compromises in the implementation.

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REFERENCES

1. KPMG Project Management Survey 2013.
2. Project Management Blunders Lessons from the Project that Built, Launched and
Sank Titanic by Mark Kozak Holland.

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APPENDIX 1

The figures below show the initial design of the gigantic ships Olympic and Titanic which
were later on compromised.


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APPENDIX 2

The effect of the 3 incidents that happened with Olympic due to which the Titanic project
was hampered is shown below in the S-shaped cost curve.