Holistic Asset Management

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Holistic Asset Management Its Not an Isolated
Function
2004 Urban Water Council US. Conference of Mayors
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What is Asset Management

• To the Accounting and Finance staff AM means
• Ensuring that assets are booked on the
  organizations books when placed in service
• Assets are properly depreciated and removed from
  the books when retired
• Prudent maintenance practices minimize the
  necessary capital and operating expenditures
• Both capital and operating expenses are financed
  prudently to minimize the resulting rate and
  customer impact.

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What is Asset Management

• To the OM staff, AM consists of
• Providing appropriate maintenance support to
  ensure continued reliable operation of assets
• Minimizing responses to emergency calls when
  assets fail

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What is Asset Management
To the Engineering Department, AM centers around
the planning for and designing of the replacement
and major rehabilitation of system assets.

• To the IT Engineers, AM concerns tracking and
  monitoring the asset maintenance and replacement
  activities.

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What is Asset Management

• To Utility Management Staff and Customers and
  Constituents, AM means
• Reliable services at the lowest possible costs
• Prompt re-establishment of services after an
  emergency situation
• Redundant capability in the event of system
  failures
• Environmental protection
• Public health and safety
• Excellent customer service
• LOWEST POSSIBLE COSTS

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What is Asset Management
Asset Management - a thoughtful process of
self-evaluation, the development of strategy,
objectives and an action plan and a phased
implementation plan that coordinates the
knowledge and functions of the entire
organization.

• A way to think about an organizations management
  and the stewardship of its assets
• Understanding what your assets are and
  prioritizing maintenance and management
  activities
• Managing the life-cycle cost (both capital and
  OM), use and reliability of utilitys assets
• Tailoring each organizations needs using a
  systematic, proactive, scalable approach

• As opposed to a reactive focus on
• Problems
• Politics
• Technology
• Costs
• Budget Constraints

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Goals of Asset Management

• Reduce Risk
• Increase Asset Life Minimize Asset Life Cycle
  Costs
• Optimize Maintenance and Capital Improvement
  Programs
• Reliably Plan Expenditures (Few Surprises!)
• Maximize Organizations Knowledge of its Assets
• Understand Financial Implications of Expenditures
  
  (Scarce resources assigned to
  proper investments!)

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Goals of Asset Management
Managers want and need to understand the
consequences of making and not making difficult
decisions

• Reduce Risk
• Increase Asset Life Minimized Asset Life Cycle
  Costs
• Optimize Maintenance and Capital Improvement
  Programs
• Reliably Plan Expenditures (Few Surprises!)
• Maximize Organizations Knowledge of its Assets
• Understand Financial Implications of Expenditures
  
  (Scarce resources assigned to
  proper investments!)

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Asset Management on Two Levels

• The Big Picture
• Five Major Asset Categories
• Knowledge Base
• Information Technology
• People
• Infrastructure
• Customers
• Financial Resources

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Asset Management on Two Levels

• The Detailed Look
• Optimal OM of individual assets, such as
• Pumps
• Equipment
• Plants
• Buried Infrastructure
• Hardware
• Etc ...

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Lets simplify this..
At the Detailed Level, the important questions
are

• What to do ? (What tasks?)
• When to do it ? (What intervals and when to
  start?)
• Where to do it ? (Which Assets?)

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Asset Management Strategies
Overhaul

Proactive Maintenance (PM / PdM)
Predictive Maintenance Performance Monitoring
Asset Replacement Strategy
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Asset Management Strategies

• Balancing the costs associated with risk
  (emergency maintenance, loss of production,
  equipment damage, customer dissatisfaction,
  regulatory fines, etc.) against asset care costs.
  
• Focus on Critical Assets first!

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Critical Asset Categories
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Using an efficient, scalable approach ...
Additional Steps are defined based on the results
of your utilitys specific circumstances.
Step 1 Provides basic planning, budgeting
forecasting
Improved Customer Satisfaction
A systematic, step-by-step approach, directs
energy and resources to the prioritized tasks
that add significant value and precision to the
asset management process.
Initial assessment of the assets conditions and
criticality as well as the estimated, associated
costs to address the proper management of those
assets.
Plant Pump Station Assets
Buried Infrastructure
Step 2 Refines priorities based on specific data
and criticality analysis
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Reduce Risk
Reduce Probability of Failure
Reduce Impact of Failure

• Monitor
• Maintain
• Overhaul
• Replace

• Predict Plan
• Re-Design

Reduce Asset Care Investment
Do It Smarter
Do It Better

• Eliminate low value tasks
• Focus on high impact failure modes
• Predict rather than prevent (intrusive)
• Prevent rather than let fail (non-critical assets
  can be run to failure if it makes sense)

• Plan, Plan, Plan
• Better tools / technology
• Train personnel
• Document Procedures
• Integrate all staff functions

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Asset Management Approach is Not Business as
Usual

• It will require changes in
• Philosophy
• Procedures
• Staff roles
• Staff skills
• Others?

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Think Differently ...
What are the right systems, staff and maintenance
activities to manage the organization from an
asset management perspective?

• Annual Planning Process Last Years Budget plus
  inflation ...
• (if that!)

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Systematically Approach Asset Management

• Evaluate the strengths and weaknesses of your
  organizations systems
• CMMS, GIS, Financial Management Systems, etc.
• Define what your goals are
• What does your organization want to achieve with
  Asset Management?
• Prioritize your action plan and implementation
  program

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Staff Willingness To Embrace Change Is Necessary
To Improving Effectiveness
Existing Norms, Practices Procedures
Barriers to Change - Insufficient Technology -
Lack of Skill-Based Training - Organizational
Inertia - Union/Civil Service - Past
Disappointments
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Getting Staff Buy-In Will Promote Implementation
Success
Follow up
Feedback
Communication

• General awareness

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Adopt Best Fit Program to Support Your Needs
and Priorities

• The Goals
• Extension of Assets Lives
• Optimal Maintenance Program
• Optimal CIP
• Reliable, Planned Expenditures
• Maximize Organizations Knowledge of its Assets
• Full Knowledge of Financial Impact of
  Expenditures
• Risk Reduction

• The Steps
• Update Asset Inventory
• Extract Knowledge Management from Staff
• Criticality Assessment
• Condition Assessment
• Maintenance Evaluation
• Asset Replacement Evaluation
• Financial Planning
• Staff Training System Integration
• Public Education

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The Results ...
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