The term “asset management” is much in vogue as a
management philosophy in the context of public infrastructure. This increased focused on the development of
a structured and systematic asset management program stems from a desire to
balance the tensions of fiscal constraints with the demands of increasing
collection system complexities in a world where “doing more with less” becomes
an unpleasant reality. Most utility operations are currently implementing some
portion of an asset management program; they just don’t call it asset
management.
Asset management is a management philosophy about
decision making, planning, and control over the acquisition, use, safeguarding
and disposal of collection system assets.
The goal is to maximize their service delivery potential and benefits,
and to minimize their related risks and costs over their entire life. Management is continuously focused on
improving the method of aligning service priorities with collection system
investment and maintenance decision making while implementing a strategic
funding strategy. In many respects, a
collection system asset management program is the linchpin that combines
operations and maintenance with capital planning and programming. The benefits of a formalized asset management
program are real and tangible; better communication, better coordination,
better cooperation, better decision making, better performance management, and
better use of public funds.
The increased focus on asset management is supported by
the changing landscape of most collection system utility operations. These changes include aging infrastructure
that needs more intensive repair and replacement; continuing regulatory
challenges, including the need to often balance priorities among multiple
compliance endpoints; workforce challenges, including aging workforce and
difficulties in recruiting and retaining qualified collection systems staff;
uncertainty about future federal and state funding; and completing local
priorities that can place collection system priorities near the bottom and the
dwindling resource base in many communities.
Addressing
the 7 ½ Questions of Asset Management
Any asset management program needs to have the
capabilities to address what we call the 7 ½ Questions of Asset
Management. The questions include:
1. What
do we own and where is it?
2. What
condition is it in?
3. What
is its remaining service life?
4. What
are these assets worth?
5. What
do we spend and what should we spend/invest?
6. What
is the gap?
7. How
do we get sustainable infrastructure?
7
½. How resilient is our infrastructure?
The benefits of knowing the answer to these questions
assists collection system operations and management with the avoidance of
premature asset failure; risk management associated with asset failures, and
mitigation of the consequence of the failure; and accurate prediction of future
expenditure requirements through understanding remaining service collection
system asset life and capital investment needs.
Any asset management system needs to effectively address a variety of
decision making inputs, outputs, governance, business systems, people,
processes, data, tools, and partners in the context of the collection system.The first three questions are driven by a “Bottom-Up” approach to asset management. Field operations are the primary source and facilitators of location, condition, and expected life questions. The remaining questions are “Top-Down” driven by engineering, financial, and managerial decision making. The seventh question is associated with fully developed and developing national sustainability concerns. The last question is a partial question reflecting our developing concerns regarding how fast infrastructure, especially collections systems and wastewater treatment plants, will be able to recover operationally from disasters and extreme weather events.
The Bottom-Up Approach
The
Bottom-Up approach provides a focus on collecting the right information, for
the right reasons, at the right time, with the goal of helping utility managers
make the right or correct decision during the life-cycle of an asset. A key step in this process is the development
of a reliable and accessible collection system inventory registry. The ability to maintain, repair, renew, and replace
collection system assets starts with accurate information. Consideration should be given to asset data
that includes unique asset identification, material, year installed,
anticipated useful life, replacement cost, and relative condition. Much of this data may currently exist in
legacy systems maintained by the utility.
The goal should be to validate the existing information, supplement it
with continuous day-to-day data collection, and finally to align the combined
information with the utility’s operations and planning initiatives.
What
condition is it in? This question should
be addressed in terms of the three types of condition assessments: physical,
demand, and functional. The physical
condition reflects the physical state of the collection system, which may or
may not affect its performance. Demand
condition assessments examine collection system asset capacity over the
long-term. Assets must be utilized
effectively in order to provide the maximum return on funds invested and to
deliver the required levels of service.
Functional assessments deal with the suitability or fitness of the
asset. Methodologies to determine which
collection system components require inspection and to establish frequency of
inspection should be given priority.
What
is the remaining collection system asset life?
Another important piece of information for utility managers to have when
making infrastructure maintenance and investment decisions is the remaining
asset within the collection system asset portfolio. This metric can help illustrate where and
when collection system upgrades and replacements may be required. It is important for utility managers to
understand that a long remaining useful life doesn’t necessarily mean that the
collection system asset is in good physical, demand, or functional
condition. On the other hand a segment
of sewer pipe with a negative useful life doesn’t always mean the asset
requires replacement. The sewer pipe
still may be meeting its required level of service or can continue with
maintenance and/or an enhanced inspection schedule. One of the key advantages of an asset
management approach is an understanding of where an asset is in its life-cycle,
allowing managers the preservation of optionality at critical “fork in the
road” junctions during the asset life-cycle.
The
remaining life question is a key question in which the “Bottom-Up” approach
meets the “Top-Down” approach. The
utility industry continues to research, develop, and refine a variety of models
and algorithms in the form of asset deterioration models and survival
curves. This “Top-Down” approach will be
an important contributing factor in successfully addressing the remaining life
question. It is also important not to
discount the experience, knowledge, and insightfulness of field operations
staff regarding a “Bottom-Up” approach to addressing the remaining life
question. Their day-to-day experiences
in condition assessments and deep understanding of failure modes should be
incorporated into addressing the remaining life question.
The Multi-Model Asset Management
Business Model
One
of the core advantages of an asset management approach to collection system
management is flexibility. Figure 1 –
Asset Management Business Model outlines the tools and applications that are
available. Depending on the goals and
objectives of the individual asset management program, the utility might have
some of the support applications or all of them.
As
reflected in Figure1, the goal should be to develop an integrated management
systems approach to collection systems asset management. Building on existing systems can reduce the
effort and expense involved in creating and maintaining an asset management
system. As previously mentioned, many
organizations are currently involved in the day-to-day activities that constitute
asset management. Asset management is
data intensive and new tools and processes are often necessary to collect,
assemble, manage, analyze, and assess data.
The ability to combine the existing with various new tools provides
quick wins in areas such as risk reduction, opportunity identification, and process
improvement, and can be identified early in the implementation process. This allows utility managers to demonstrate
returns and gain stronger stakeholder support.
GIS
will continue as the long-term platform and tool for asset management
information systems. Linking (GIS)
mapping images to the physical asset register; linking the asset register to
capital works system; and providing support for maintenance management
functions are all enhanced with GIS capabilities. It is important to remember that the
functionality and degree of sophistication of the information system needs to
be appropriate to the nature, size, and complexity of collection system assets,
and the capacity of the municipality or utility department. For small portfolios, a small spreadsheet
could be adequate, whereas sophisticated (and relatively expensive) information
systems are adopted by cities and communities with extensive collection system
portfolios and the resources to manage the system.
Moving From Reactive to Proactive
A
goal in addressing key management priorities within an asset management program
is an understanding of the impact of failure and risk reduction. Figure 2 – Typical Deterioration Curve
clarifies the operational advantages of an evidence-based approach to asset
management focused on proactive, preventative, and predictive decision making.
Identifying
critical collection systems assets is often the first step in managing asset
risk. It is necessary to have some form
of measurement of the consequence of failure, and therefore an indicator of the
“criticality” of the assets. Potential consequences
of failure include; public and municipal employees’ health and safety;
financial losses; service delivery performance; and environmental impacts. A better understanding of risks and impacts enable
the following: focusing of the level of detail and accuracy of data collection
exercise; crafting of focused maintenance responses; prioritization of asset
renewal; prioritization of collection system asset-level risk mitigations; and
measurement of the overall risk exposure.
The asset management program should allow managers the information
necessary for weighing the relative merits of various choices with potentially
risky outcomes.
Collection
system asset management provides managers with tools and platforms to monitor
the condition and performance of assets, especially those assets designated as
critical. Addressing the “what condition
is it in?” and remaining life questions throughout the life-cycle of a
collection system asset allows managers to engage in actions to monitor the
condition of an asset and predict the need for preventive action.
Conclusion
A
collection system asset management can help in gaining an understanding of
assets, their performance, the risks associated with managing assets,
investment needs, and asset value as an input to decision making and organization
strategic planning. Asset management is
much more a day-to-day management philosophy than the purchase of a new
software platform or report. Tools are
important and they can stimulate and improve organizational knowledge and
decision making. But collection system
asset management is much more about bringing new perspectives to the utility
organization and new ideas on value creation from the use of assets. The combination of legacy systems and
information with new asset management practices can fully support a long-term
and sustainable approach to collection system decision making.
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