Infrastructure Asset Management: Beyond the Techniques, Tools and Technologies

1
Infrastructure Asset ManagementBeyond the
Techniques, Tools and Technologies

• Mayors Water CouncilThe United States Conference
  of Mayors

May 1, 2015
2
Managing infrastructure assets is nothing new

• 8th and 9th Century - Romes abandoned aqueducts
  were rehabilitated and reused

14th Century Constitution of Siena, Italy
required maintenance the Citys fountains and
other public works
3
In past however, management of infrastructure
assets has been limited to

• Individual and isolated focus
• Stand-alone actions
• Unverified information and decentralized
  management of data
• Un-integrated tools
• Ad-hoc meetings
• Decisions based on perception rather than fact

4
Evolution of modern Asset Management
Comprehensive International Guidance
Comprehensive U.S.Guidance
Restructuring of water sector in Australia and
the UK
UK Asset Management Specification (PAS 55)
New International Standard for Asset
Management (ISO 55000)
The Risk-Based Approach
5
Asset Management has also become more strategic
over the last several years
1st Generation AMAsset Information
2nd Generation AMAsset Strategies
3rd Generation AMTotal Integration
What do we have? Where is it? What condition is
it in? How does it perform? Maintenance Management
Optimization Risk-based System controls Failure
mode analysis RCM
Coordinated strategy Service standards IT
integration Financial analysis Organizational
alignment

• Collecting asset data
• Entering data into Computerized Maintenance
  Management Systems (CMMS)

• Focus on the risk of asset failure for
  infrastructure investment decisions
• Optimize maintenance by eliminating non-value
  activities

• Asset management is not just about assets
• Successful and sustainable asset management
  requires leadership, organizational alignment,
  and coordination

6
Asset Management has also become more strategic
over the last several years
1st Generation AMAsset Information
2nd Generation AMAsset Strategies
3rd Generation AMTotal Integration
What do we have? Where is it? What condition is
it in? How does it perform? Maintenance Management
Optimization Risk-based System controls Failure
mode analysis RCM
Coordinated strategy Service standards IT
integration Financial analysis Organizational
alignment
Asset Management tools and technologies may be
helpful, but the engagement of the workforce, the
clarity of leadership, and the collaboration
between different departments and functions are
the real differentiators of a leading asset
management organization. The Institute of Asset
Management
7
Today, Asset Management focuses on integrated
processes and tools to facilitate better decisions

• Minimizing lifecycle costs
• Establishing service levels
• Evaluating, understanding and managing risk
• Fact-based decision-making for maintenance,
  rehabilitation and replacement
• Optimization of operations and maintenance
• Involving collaboration among staff and
  multi-disciplinary activities
• Consistency across the enterprise

Asset Management An integrated set of processes
to minimize the lifecycle costs of infrastructure
assets, at an acceptable level of risk, while
continuously delivering established levels of
service
8
Implementing Asset Management provides benefits
to both internal and external stakeholders
Benefits

• Informed and defensible asset investment
  decisions
• Better managed risk
• Improved asset reliability
• Improved efficiency and effectiveness
• Improved service delivery

• Improved customer satisfaction
• Improved regulatory compliance
• Improved bond rating
• Possible higher priority ranking for SRF
• Improved internal coordination and communication

9
Improved ability to explain and defend
investments is ranked the highest benefit among
utilities
Top Five Benefits From Asset Management Approach
Improved Ability to Explain and
DefendBudgets/Investments to Governing Bodies
88
79
76
Better Focus on Priorities
70
73
60
Better Understanding of Risks/Consequences
ofAlternative Investment Decisions
65
54
34
Non-Cost Savings Business Benefits
63
51
34
Increased Ability to BalanceBetween Capital and
Operating Expenditures
52
451 responding utilities
High Involvement Medium Involvement Low
Involvement
46
36
10
Techniques, tools, and technology are all
important elements of modern Asset Management

• Modern Asset Management incorporates techniques
  and business processes such as
• Preventive maintenance optimization
• Failure modes and effect analysis
• Multi-attribute utility analysis (MUA)
• Business case evaluations
• Assessment of asset condition and performance is
  made more effective by tools such as
• Thermography
• Ultrasound (ultrasonography)
• Machine-to-Machine (M2M) wireless monitoring and
  control
• Electromagnetic testing
• Technology makes managing assets more efficient
• Computerized maintenance management systems
  (CMMS)
• Geographic information systems (GIS)
• Mobile devices and other hardware
• Modeling and other software

11
Best practice for Asset Management is as much
about the organization as it is about the
infrastructure assets

• The new international Asset Management standard
  emphasizes
• Organizational understanding
• Needs and expectations of stakeholders
• Leadership and commitment
• Organizational roles, responsibilities and
  authorities
• Resources
• Competence
• Awareness
• Communication
• Managing change
• 10 of the 24 requirements of the Asset
  Management standard address the above
  people-focused elements

12
Successful and sustainable Asset Management
requires staff to adopt to a new way of doing
business

• Integrated approach to assessing issues and
  making decisions
• Consistent use of methodologies
• Collaboration across functions
• Acceptance and adoption of new processes and
  practices
• Willingness to acquire new skills
• Proactive communication
• Changes in the way employees relate to each
  other and their work

13
Changes in work processes and staff capability
must be carefully planned and implemented
Most transformational programs fail to be fully
operationalized
Change program failure rate
Reasons for failure
14
Other obstacles
Inadequate resources or budget
14
Management behavior does not support change
33
Employee resistance to change
39
Source McKinsey Quarterly Transformation
Executive Survey, 2008, Next Generation PMO KIP
Team
14
Change mechanisms must be customized to meet the
utilitys goals and challenges

• Begin with an assessment of the organizations
  readiness for change
• Identify the possible barriers/opportunities that
  will impact the transition
• Use a change readiness survey to align program
  implementation to staff change capabilities and
  to leverage stakeholder implementation support
• Identify change sponsors who will be instrumental
  to helping colleagues interpret and navigate
  through the new rules of business.
• Enable employees to actively participate in
  program development and implementation

Decrease staff resistance Prevent dips in
performance Preclude negative regulatory or
customer attention
15
Measure the seven traits of change readiness to
identify capabilities of staff and identify
champions
Target Range
28
Passion/Drive
Adventurousness
Adaptability
26
24
Change Readiness
Optimism
Confidence
22
Tolerance forAmbiguity
20
Resourcefulness
18
16
14
12
10
Jones
Smith
Hill
Green
16
Knowing an organizations culture can suggest the
most effective ways to bring about positive
changes
Flexibility Discretion

• Culture has been shown to impact
• Effectiveness efficiency of work
• Morale engagement
• Physical emotional health
• Success of programs
• Customer satisfaction
• Return on investment

Internal Focus Integration
External Focus Differentiation
Stability Control
The Competing Values Framework
17
Changes needed for successful and sustainable
Asset Management are more easily facilitated in
some cultures
Change initiatives may emphasize continuous
improvement opportunities and individual
recognition for contributing to the whole
Change initiatives may leverage collaborative
efforts and grassroots communications
Typical organizational culture profile of a
municipal public utility
Change Initiatives may emphasize customer
engagement and clear dashboards that track
results to performance
Change initiatives may leverage visible
leadership and management mentoring
18
A structured approach will provide staff with the
impetus and means to adopt change
I understand and believe what the organization
is trying to do and it makes sense to me on a
personal level
I see others conducting themselves differently
and getting rewarded for it
Reinforcement Recognition
Awareness Conviction
I will change the way I work if I have
Desire Encouragement
Ability
I have the skills to act in the manner that is
required of me
I am provided with the proper incentives to
make the change
Knowledge
I know specifically what is being asked of me
in my daily work
19
Most importantly, achieving success depends on
moving the staff away from traditional approaches
IN
OUT
Capital cost Renew assets based ontheir poor
condition Maintenance preserves assets Most
equipment is morelikely to fail as it gets
older Designed to build Collecting data Best
practices from the water industry Asset-centric
Lifecycle cost Renew assets based ontheir high
risk of failure Maintenance preserves asset
function Most failures are not related
toequipment age Designed to operate and
maintain Collecting data which leads
tomeaningful decision-making Best practices from
all industries Customer-centric
20
Consider the lifecycle of assets to identify
opportunities for reducing costs

• Consider alternate project delivery
• Standardize equipment
• Capture asset data

• Apply uniform prioritization criteria
• Involve operations maintenance
• Perform value engineering

Acquire/Install/Construct
Plan/Design

• Sell
• Reuse
• Recycle

• Involve operations and maintenance staff
• Ensure compliance with design, specs and codes
• Manage warranties

The Asset Lifecycle
Decommission/Salvage
Commission
Operate Maintain
Rehabilitate

• Evaluate alternatives
• Perform business case evaluation
• Ensure risk is sufficiently reduced at lowest
  lifecycle cost

• Optimize planned maintenance
• Focus on failure modes
• Monitor, report and adjust

21
Optimize maintenance activities to increased
asset reliability
Maintenance Level f (consequence of failure)
by understanding consequences of asset failure
and implementing appropriate maintenance
processes to reduce likelihood of asset failure
22
Manage assets to keep the risk of failure at an
acceptable level

• Understand the consequences of asset failure
• Forecast the likelihood of asset failure
• Consider multiple options for mitigating risk
• Rehabilitation and replacement
• Enhanced maintenance
• Improved response and recovery
• Demand management

by understanding consequences of asset failure
and implementing appropriate maintenance
processes to reduce likelihood of asset failure
23
For success Take the time to create the right
strategies and choose the right people for the
key roles
Strategies
Role
Asset Management Champions

• Create shared AM vision and understanding across
  the utility
• Increase staff willingness to participate in AM
• Ensure staff are able to enact their role within
  AM
• Provide recognition for desired AM behaviors

• Change Readiness Assessment
• Tactical Message Development
• Information dissemination
• Visible Leadership
• Mentoring
• Feedback

Goals to enacting this approach
Key Sponsor Role and Activities
24
Thank You

• Alan B. Ispass, PE, BCEE901 New York Avenue,
  NWWashington, DC 20001202-513-2426alan.ispass_at_c
  h2m.com