AN INTRODUCTION TO ASSET MANAGEMENT. Katie Erickson, City of Wyoming
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1 AN INTRODUCTION TO ASSET MANAGEMENT Katie Erickson, City of Wyoming
2 An Introduction to Asset Management What is an asset management program? What are the benefits? How do I begin to develop an asset management program?
3 Problems with Buried Assets 2013: America scores a D+ for infrastructure with the American Society of Civil Engineers Wastewater- D Drinking water- D Costs are accumulating: Wastewater needs an estimated investment of $298 Billion over the next 20 years Drinking water pipe replacements costs could top $1 Trillion over the next few decades
4 Problems with Buried Assets Buried assets are unseen by the public so awareness of need is low Costs can be more difficult to explain and justify to the public that is not aware of the problem The long life of the assets make it difficult to track lifecycle information
5 Asset Management Coordinated activity of an organization to realize value from assets - ISO55000
6 What is an Asset Management Program? International Infrastructure Management Manual: meeting a required level of service in the most cost effective way through the creation, acquisition, operation, maintenance, rehabilitation and disposal of assets to provide for present and future customers.
7 What is an Asset Management Program? Level of Service Criticality of Assets Asset Inventory Revenue Structure Capital Improvement Projects A comprehensive plan for long-term sustainability Connects level of service with the condition of the system, managing risk, improvement plans, and funding
8 Level of Service (LOS) Set requirements and goals for the utility Direct link to cost to the customer, Higher LOS=Higher Costs Communication with stakeholders is critical in setting LOS
9 Level of Service Examples No assets in high risk level Address customer complaints within 24 hours Meet all regulatory requirements
10 Asset Inventory A registry of the assets owned and/or maintained by the organization Entries should include: location condition rating consequence of failure rating value and lifecycle data
11 Criticality A rating system that combines the probability of failure (or condition rating) with the consequence of failure rating Probability of Failure: 1= Improbable, 5=Imminent Consequence of Failure: 1=Insignificant disruption, 5=Catastrophic disruption Business Risk Evaluation (BRE)- Probability of Failure X Consequence of Failure
12 Criticality-BRE Lift Station Consequence Rating=4 Probability Rating=1 BRE= 4 x 1=4 Pump Consequence Rating=3 Probability Rating =4 BRE= 3 x 4=12
13 Probability of Failure Criticality-Risk Framework Consequence of Failure
14 Probability of Failure Criticality-Risk Framework Consequence of Failure Lift station BRE-4 Pump BRE-12
15 Probability of Failure Criticality-Risk Framework Consequence of Failure ICP Consequence= 3 Probability= 2 BRE=6 Chlorine Meter Consequence= 5 Probability= 2 BRE=10
16 Limiting Risk Redundancy Maintenance Rehabilitation Replacement
17 Capital Improvement Plans (CIP) A long-term plan that looks at the organization s future needs, usually 20 years Should be adjusted as conditions change It should take into consideration: Future/upcoming regulations Major asset replacement System expansion Improved technology
18 Revenue Structure Rate methodology should include level of service, BRE of assets, and CIP to reflect true costs Must make progress toward filling future gaps in funding so sudden rate increases are not required
19 What are the benefits? Data driven decisions about repairing or replacing equipment Transfer institutional knowledge during employee succession Communication tool with stakeholders
20 Decisions Can only be as good as the data that supports them.
21 Data Needs to Be Complete Standardized Accurate Accessible
22 Gap Analysis Determines current position Clarifies future vision Develops a plan to fill the gap
23 Gap Analysis Determining current position Examine present policy and procedure Gather existing data Examine current IT capabilities Assess current skills, knowledge and culture
24 Gap Analysis Clarify future vision Review and integrate regulations Examine standards or best practices Discuss desired expectations and outcomes Determine what data would be useful
25 Gap Analysis Develop a plan to fill the gap Identify gaps between current practices and future needs Research possible skills, tools, and systems that can close the gaps Decide what processes will work best for YOUR organization Develop an implementation plan and timetable
26 Questions?
27 Resources American Society of Civil Engineers Report Card for America s Infrastructure Asset Management Guidance for Wastewater and Stormwater Systems. July 2013 ISO 55000: 2014(E)
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