3. What is the problem that Schiphol is trying to solve? Discuss the business impact of this problem. Conceptually, baggage handling is quite simple.

Baggage input is connected to merely two events:

an airplane lands or a person checks in. However, it’s risky business. Baggage handling is one of the most important factors in having a pleasant trip.

Moreover, mishandled baggage is a US$ 2.5 billion problem for industry every year. This problem may annually affect about 51 million passengers traveling through Schiphol alone.

In 2004, IBM Corporation, Vanderlande Industries, and later Grenzebach Automation Systems jointly took up the challenge of renewing the Baggage Control System for one of the biggest airport hubs in Europe, and one of the busiest in the world: Schiphol International Airport, in Amsterdam, The Netherlands. With an investment of around US$1 billion over a period of about 10 years, Schiphol’s goal was threefold:

(a) realize a monumental 1% maximum loss of transfer-bags

(against the initial 22 million lost baggage); (b)

increase capacity from 40 to 70 million bags; (c)

reduce cost per bag without increasing wait-times.