Changing Business Culture The Hardest Part of Implementing Asset Management

Changing Business Culture The Hardest Part of Implementing Asset Management Ray Yep Water Utility Operations Division Manager Santa Clara Valley Water District 5750 Almaden Expressway San Jose, CA 95118 ABSTRACT The Santa Clara Valley Water District began developing an Asset Management Program in 2002. While the program has been successful, getting the asset management culture established at the District has been the hardest part of the program. Some of the challenges have included the need to standardize terminology, the need to adhere to annual maintenance plans, clarifying decision making, and the on-going need to communicate with staff and stakeholders. Progress is being made and some of the lessons learned may be helpful to other agencies. KEYWORDS Asset management, preventive maintenance, corrective maintenance, annual maintenance work plan, asset management terminology. INTRODUCTION The Santa Clara Valley Water District (District), located in the greater San Francisco Bay Area, provides water supply and watershed stewardship/flood management for Santa Clara County. The District provides drinking water to 1.7 million people in the greater Santa Jose area. Facilities managed by the District include 10 local reservoirs, imported water sources (California s State Water Project and the Bureau of Reclamations Central Valley Project), a managed groundwater basin, 3 large water treatment plants (total of 220 mgd capacity), and associated pipelines and pump stations. The water utility is a wholesaler of treated water. Our treated water is delivered to five cities and two investor owned utilities. This paper is focused on the challenges of creating an asset management culture in an organization. The challenges have included: Confusing terminology As the District transitioned from performing maintenance to asset management, the asset management terminology started to be applied in widereaching and, sometimes, inappropriate ways. Adherence to annual maintenance plans Annual maintenance plans have been prepared, but annual budgeting has had competing priorities. 1

Difficulty with decision making We have organized an asset management committee, consisting of representatives from operations, maintenance, engineering, and planning. The members have difficulty making decisions that affect others. Need for communications Education and communications is an on-going effort. The challenges are being overcome, but we have found that changing the culture takes years and is the hardest part of implementing an asset management program. ESTABLISHING THE ASSET MANAGEMENT PROGRAM With increased water demand, more stringent regulations, and increased awareness of reliability, understanding your assets histories is critical not only to your organization but also to the population it serves, your customers. Water agencies use miles of pipelines, large water treatment plants, and sophisticated water treatment equipment to fulfill their missions. These assets need to be understood and this can best be accomplished through a well developed Asset Management Program (AMP). With aging infrastructure and increased needs to improve reliability, the District set out to create a comprehensive asset management program in 2002. The District has used a computerized maintenance management system since 1994. This system has been useful to generate work orders and to track preventative and corrective maintenance (PM/CM), however, the District wanted a program that could optimize maintenance over equipment s lifecycle. The program has been put in place and contains the following core components: hierarchy development, asset inventory, condition assessment, risk assessment, lifecycle management, and financial analysis and funding. The AMP was set up in 2004. A diagram of the District s program hierarchy follows. Results-Oriented Asset Management Program 8 Funding 7 Renewal & Replacement 3 Condition Assessment Risk Analysis 4 IT Plan & Std Procedures Website 5 Level of Service 6 Lifecycle Management 1 Asset Management Audit & Alignment 2 Asset Inventory Review 2

CLARIFYING TERMILOGY Historically, maintenance was defined as preventive (PM) or corrective maintenance (PM). The ratio of PM/CM was a common performance metric. As the AMP was developed, new terminology was used. This included: asset hierarchy, condition assessment, risk analysis, level of service, life cycle analysis, and other terms. This became confusing to staff, management, and the District s Board of Directors. For example, in the District s annual water rate setting and budgeting process, the terminology was further reduced to critical asset management and low priority asset management needs. Without clear definitions, this was confusing and also reduced the importance of the asset management program. In the current fiscal year, the following terminology has been standardized: Preventive maintenance (PM) scheduled work to keep equipment in an effective condition, automatically generated and scheduled in Maximo. Corrective maintenance (CM) work is required to either repair or restore malfunctioning equipment to an effective operating condition. Emergency maintenance (EM) work is required immediately in order to maintain level of service goals. Modification (MOD) work requested to improve or enhance existing equipment/systems, design changes, additions or deletions. Planned work (PW) overhaul, replacement, and inspection work planned in the Annual Maintenance work plan. Projects (PROJ) support required for capital projects (CIPs). Locates (LOC) support for Underground Service Alert Program. In addition, the priorities for asset management activities are standardized into the following framework. Activities that will protect the baseline -- Maintaining baseline for the Water Utility will include funding operations/maintenance that support the day-to-day business of supplying water to the District s customers. These include pipeline maintenance, treatment plant repairs and pump station maintenance needed for on-going operation. Projects that address health and safety of the employees are included in this category. This also includes maintenance work on the District s dams. Activities that will have no regrets -- The No-regrets category applies to operations/maintenance and projects that will work to ensure near-term reliability. This includes the work for business continuity, such as disaster planning and succession planning and master-planning studies. Activities that will have long term benefits -- Long-term work includes projects and operations/maintenance that are not critical for the day-to-day operations of the facilities, but will ensure future reliability of our facilities. The use of standardized terminology is starting to take hold, which will add to establishing an asset management culture. 3

ADHERING TO MAINTENANCE MANAGEMENT PLANS To integrate the components of the AMP into the daily business of the Water Utility, an approach of providing maintenance plans is being taken. Three basic plans are being used: an Annual Maintenance Work Plan, a Three Year Maintenance Work Plan, and a Fifteen Year Maintenance Work Plan. The Annual Maintenance Work Plan (AMWP) is a detailed document intended to support the Utility Maintenance Unit Manager during the annual budget development process and to aid in the implementation of identified overhaul and replacement activities. The AMWP identifies needed overhaul and replacement work, recommends work distribution between Operating and Capital budgets, identifies resource requirements at the project level as well as provides a degree of maintenance planning in the form of Work Packages for the overhaul and replacement activities (Planned Work). The AMWP is developed once every year. The AMWP development process commences prior to the budget cycle in order to be sufficiently developed prior to the budget development cycle. For reference, the work types and work flow is shown in the following process flow sheet. Work Request (All Sources) Work Type Definitions and Work Treatment Plant Supv / Raw Water Supv. Work Request review. Initial scope & cost OK Immediate impact to LOS? Emergency Maintenance (EM) Work is required immediately in order to maintain LOS goals. This work type Includes call outs as well as maintenance during normal working hours. Mod? Corrective Maintenance (CM) Work is required to either repair or restore malfunctioning equipment to an effective operating condition, but is not urgent. Typically applies to systems with installed redundancy. Work completed in several days to weeks. Lifecycle Plan Planned Work Preventative Maintenance (PW) (PM) Overhaul, replacement, and Work is performed on a inspection work planned regular schedule to keep ahead of time and carried equipment at an effective out as scheduled in operating condition. Work is ICAM/CARA and as automatically generated and presented in the Annual carried out as scheduled in Maintenance Work Plan. Maximo. Modification (MOD) Any work requested to improve or enhance existing equipment/systems. Changes to system design, additions or deletions of equipment, or changes in the type of equipment specified are examples of Modification work requests. Approval by TW, RW Supv / Mgr. Work request coded: Work Type MOD Status WAPPR (Waiting Approval) Craft Code EN, MT, CT, ET Supervisor Maint. Supv, or Eng. Unit Mgr. Drop Request Confirm details of MOD request i.e. skill available, technically sound (Yes/No). Preliminary fact finding, options, and requirements to be determined by assigned Engineer, or Maintenance Supervisor. Maint. Sup or Eng. Unit Mngr. Maint. Sup or Eng. Unit Mngr. See process flow chart attached for a detailed version of the EWR Process. Preliminary investigation findings Supervisor enters the appropriate task number and assigns the work for execution. Replace Equipment Asset Management Program See process flow chart attached. AM Committee Technically sound? Follow the Configuration change process. Supervisor enters the appropriate task number and assigns the work for execution. Annual Maintenance Work Plan development process. MOD work orders will be reviewed by the Asset Management Committee to determine execution method. Final decision may be referred to the AOO for O&M. Work may be assigned to Engineering (EWR), UMU, integrated into the upcoming AMWP, or recommended as a CIP. Annual Maintenance Work Plan Work to be integrated into the upcoming AMWP Modification work to be completed with the current budget. May be completed by Engineering, UMU staff, or out-sourced. Work to be added to the CIP. Output: Analysis / Reports AMP Work Request final review AMWP provided to UMU (555) for execution. Information is documented in Maximo for each Work Type discretely and is available for analysis, reporting, and decision making. MAXIMO Work Order History 1. Distribution of expended resources. 2. Work performance. 3. Future AMWP development. 4. Budget development. 5. KPI, Qualserve, and E.L. reporting. EM CM PW PM MOD CIP The cultural challenge has been to appropriately fund the AMWP, in light of competing priorities. The year end accomplishments for FY06 compared to the FY06 AMWP were: Actual staff hours used for mission critical work activities was 46,671 hours vs. a planned budget of 54,485 hours. 4

Actual staff hours used to support District operations and Capital Projects exceeded budget by 3,748 hours. Of the Planned Work for FY06, 56% was completed or was underway. This illustrates the cultural challenge of properly planning work, budgeting the resources to carryout the work, and to actually implement the work. CLARIFYING DECISION MAKING An Asset Management Committee (AMC) has been established to review, decide and prioritize Modification work requests, recommend submitted Modification requests for inclusion in the Capital Program, as well as resolve equipment replacement decisions if escalation to this level is warranted. The mission of the AMC is: Provide timely, strategic level infrastructure investment decisions, based on asset management concepts and methodologies, in order to promote consistency, focus, and effectiveness in resource allocation over a longer planning horizon. The purpose of the AMC is to strategically consider proposed infrastructure investments and make decisions regarding investment strategies. The AMC will consider: Appropriateness investment vs. added value. Coordinating with equipment lifecycle replacement plans. Global impact, institutional implementation, and plant standardization. Schedule and budget priority. The AMC is intended to function as a vehicle to institutionalize asset management concepts in decision making. A cultural challenge has been the difficulty of the AMC members to make decisions that affect others. Progress is being made, but to date, the AMC is not as effective as planned. COMMUNICATING THE PROGRAM To describe the paradigm shift in our approach to infrastructure management, afforded by the integration of the asset management framework, is summed up as a shift from individual experience based infrastructure investment decision making to a decision process that is formal, disciplined, and information based. In order to execute the change, integration of the information and the decision concepts into the District s daily business model is needed. Without doubt, the most difficult portion of the program is changing a well ingrained culture. The migration of the Water Utility Operations Division towards an organization whose decision making process is based on state of the art asset management principals will happen, over time, given strong leadership and persistence. A cultural challenge has been to expand the AMC framework from the Water Utility to the entire District. Communications efforts have included workshops to staff, reports to the retail customers, and inter-division meetings at the District. 5

CONCLUSIONS The Water Utility industry is moving towards advancements in asset management capabilities. Numerous studies over the past several years conducted by trade organizations and government bodies like the American Water Works Association Research Foundation (AwwaRF), the U.S. Environmental Protection Agency (EPA), and many others clearly indicate the need as well as the benefits of implementing advanced asset management techniques. The District was early in recognizing and embracing the concepts and moved quickly to implement improved asset management principles. By doing so the District has earned a position as one of the industry leaders in the field. District management and staff have participated in several asset management studies, presented papers at industry conferences, and are actively sought out for participation in ongoing and future asset management studies on a local and national level by trade and government organizations. Asset management is a term that broadly describes how an organization approaches the task of infrastructure management. Simply stated: Asset management is a business model that integrates information and processes in a way that supports infrastructure investment decision making with a focus on minimizing lifecycle costs while achieving an identified Level of Service. The WUOD began implementing an asset management program in 2002. The program has been successful for identifying, prioritizing, scheduling, and executing a wide variety of work activities in support of the District mission. In spite of the success, getting the asset management culture established at the District has been the hardest part of the program. Some of the challenges have included the need to standardize terminology, the need to adhere to annual maintenance plans, clarifying decision making, and the on-going need to communicate with staff and stakeholders. Progress is being made and some of the lessons learned may be helpful to other agencies. ACKLEDGEMENTS The development of the Asset Management Program was possible with the following participants: Walt Wadlow, Chief Operating Officer Water Utility Enterprise Ray Yep, Deputy Operating Officer Michael Hamer, Assistant Operating Officer Chris Elias, Assistant Operating Officer Sandy Oblonsky, Assistant Operating Officer Dave Smith, Maintenance Unit Manager Alan Zeisbrich, Senior Project Manager Asset Management Program Manager Gary Miller, Management Analyst Mike Panus, Field Operations Technician Donna Howe, Program Administrator 6