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Holistic Asset Management _ It_ s Not an Isolated Function
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Holistic Asset Management _ It_ s Not an Isolated Function

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  • Asset Management - a thoughtful process of self-evaluation, development of strategy and objectives, and a phased implementation plan.
  • Asset Management - a thoughtful process of self-evaluation, development of strategy and objectives, and a phased implementation plan.
  • Asset Management - a thoughtful process of self-evaluation, development of strategy and objectives, and a phased implementation plan.
  • Asset Management - a thoughtful process of self-evaluation, development of strategy and objectives, and a phased implementation plan.
  • Asset Management - a thoughtful process of self-evaluation, development of strategy and objectives, and a phased implementation plan.
  • A good asset management program manages the life-cycle costs, use and reliability of a utility’s assets to optimize their value in support of utility operations.
  • A good asset management program manages the life-cycle costs, use and reliability of a utility’s assets to optimize their value in support of utility operations.
  • This is a good time to get your audience engaged. Ask them to outline their specific “business challenges” and write them down on a white board or piece of paper. Use their specific challenges (issues) to help focus your points in the presentation. Also, review them in the end to see if we were able to offer solutions to them.
  • We know how utilities work – it’s really a matter of managing five critical assets: knowledge base, information technology, people, infrastructure, and customers. And these are related in a very clear way – information technology provides utility management and staff with the knowledge necessary to create and manage the infrastructure through which services are provided to your customers. This is the SERVICE CYCLE. We also know that finance is an essential part utility management. Taking data generated through the Service Cycle, the process of financial measurement, analysis and planning feeds critical information back into the knowledge base for use in management decisions. In addition, running any business requires determining an acceptable price for the product or service. Then, and only then, are essential financial resources provided by customers to support the continuation of the Service Cycle. This process of obtaining and evaluating data, measuring the utility’s activities in financial terms, analyzing the results an planning the future, and pricing the services is the FINANCIAL CYCLE.
  • PATHWAY EXAMPLE: CUSTOMERS ARE UNHAPPY BECAUSE OF SERVICE INTERRUPTIONS AND CONSTANT CONSTRUCTION …DUE TO DETERIORATING BURIED INFRASTRUCTURE …WHICH OVERLOADS AND FRUSTRATES UTILITY STAFF, WHO MUST ALWAYS BE IN REACTIVE MODE …BECAUSE THEY CAN’T GET ACCESS TO AVAILABLE INFORMATION ABOUT WHAT NEEDS TO BE FIXED AND WHERE IT IS …AND BECAUSE VERY LITTLE OF THAT INFORMATION EXISTS TO BEGIN WITH THEREFORE THE PATHWAY RUNS: …ACCUMULATE THE NECESSARY KNOWLEDGE ….MAKE IT ACCESSIBLE TO PEOPLE IN THE ORGANIZATION WHO CAN USE IT TO …IDENTIFY AND REHAB DETERIORATED BURIED INFRASTRUCTURE IN A SYSTEMATIC, INTELLIGENT WAY …WHICH MAKES SERVICE MORE RELIABLE WITH A FRACTION OF THE DISRUPTION AND LESS COST OF A “DIG AND REPLACE” APPROACH
  • Self explanatory
  • Transcript

    • 1. Holistic Asset Management – It’s Not an Isolated Function 2004 Urban Water Council US. Conference of Mayors
    • 2. What is “Asset Management”
      • To the Accounting and Finance staff – AM means:
        • Ensuring that assets are booked on the organization’s 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.
    • 3. What is “Asset Management”
      • To the O&M staff, AM consists of:
        • Providing appropriate maintenance support to ensure continued reliable operation of assets
        • Minimizing responses to emergency calls when assets fail
    • 4. What is “Asset Management” To the IT Engineers, AM concerns tracking and monitoring the asset maintenance and replacement activities. To the Engineering Department, AM centers around the planning for and designing of the replacement and major rehabilitation of system assets.
    • 5. 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
    • 6. What is “Asset Management”
      • A way to think about an organization’s 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 O&M), use and reliability of utility’s assets
      • Tailoring each organization’s needs using a systematic, proactive, scalable approach
      • As opposed to a reactive focus on:
        • Problems
        • Politics
        • Technology
        • Costs
        • Budget Constraints
      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.
    • 7. 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 Organization’s Knowledge of its Assets
      • Understand Financial Implications of Expenditures (Scarce resources assigned to proper investments!)
    • 8. Goals of Asset Management:
      • Reduce Risk
      • Increase Asset Life & Minimized Asset Life Cycle Costs
      • Optimize Maintenance and Capital Improvement Programs
      • Reliably Plan Expenditures (Few Surprises!)
      • Maximize Organization’s Knowledge of its Assets
      • Understand Financial Implications of Expenditures (Scarce resources assigned to proper investments!)
      Managers want and need to understand the consequences of making and not making difficult decisions
    • 9. Asset Management on Two Levels
      • The “Big Picture” –
        • Five Major Asset Categories
          • Knowledge Base
          • Information Technology
          • People
          • Infrastructure
          • Customers
        • Financial Resources
    • 10. Asset Management on Two Levels
      • The Detailed Look –
        • Optimal O&M of individual assets, such as:
          • Pumps
          • Equipment
          • Plants
          • Buried Infrastructure
          • Hardware
          • Etc ...
    • 11.
      • What to do ? (What tasks?)
      • When to do it ? (What intervals and when to start?)
      • Where to do it ? (Which Assets?)
      At the Detailed Level, the important questions are: Let’s simplify this…..
    • 12. Asset Management Strategies Overhaul $$ Proactive Maintenance (PM / PdM) Predictive Maintenance & Performance Monitoring Asset Replacement Strategy Time Asset Performance User Defined Failure Asset wears over time Extended useful life through overhauls / maintenance Avg O&M Costs over time O&M Costs Required Performance User Defined Lower Limit Initial Useful Life Goal #3 is to determine when it pays to replace rather than overhaul / maintain (for reducing cost and/or risk) Goal #2 is to predict failure and plan overhaul / maintenance in advance of asset failure Goal #1 is to extend the interval between overhauls to as long as practical
    • 13.
      • 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!
      Asset Management Strategies
    • 14. Critical Asset Categories Knowledge Base Customers Financial Measurement, Analysis & Planning People Infrastructure Information Technology Services Pricing Financial Resources Service Cycle Financial Cycle Data Financial Information
    • 15. Using an efficient, scalable approach ... Initial assessment of the assets’ conditions and criticality as well as the estimated, associated costs to address the proper management of those assets. 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. Buried Infrastructure Plant & Pump Station Assets Step 1 Provides basic planning, budgeting & forecasting Step 2 Refines priorities based on specific data and criticality analysis Additional Steps are defined based on the results of your utility’s specific circumstances. Improved Customer Satisfaction Financial Impact Analysis Diagnose Results O&M Plan/Procedures O&M Risk Assessment IT Master Plan OD/OE Plan Stakeholder Consensus IM Fitness Evaluation Staff Training Public Education Campaign CIP Master Plan Prioritize CIP Criticality Assessment Review Asset Inventory
    • 16. 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
    • 17. Asset Management Approach is Not “Business as Usual”
      • It will require changes in:
      • Philosophy
      • Procedures
      • Staff roles
      • Staff skills
      • Others?
    • 18. Think Differently ...
      • Annual Planning Process = Last Year’s Budget plus inflation ...
      • (if that!)
      What are the right systems, staff and maintenance activities to manage the organization from an asset management perspective?
    • 19. Systematically Approach Asset Management
      • Evaluate the strengths and weaknesses of your organization’s 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
    • 20. Staff Willingness To Embrace Change Is Necessary To Improving Effectiveness Barriers to Change: - Insufficient Technology - Lack of Skill-Based Training - Organizational Inertia - Union/Civil Service - Past Disappointments Existing Norms, Practices & Procedures Acceptance of New Approaches & Methods
    • 21. Getting Staff Buy-In Will Promote Implementation Success
      • General awareness
      Communication Feedback Follow up
    • 22.
      • The Goals
      • Extension of Assets’ Lives
      • Optimal Maintenance Program
      • Optimal CIP
      • Reliable, Planned Expenditures
      • Maximize Organization’s 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
      Adopt “Best Fit” Program to Support Your Needs and Priorities…
    • 23. The Results ... Additional Refinement Tools and Processes AM Program Refine & Calibrate Staff Activities Sustainable Assets Precise CIP Minimized Cost Organizational Alignment High Quality Customer Service Maximized Performance Knowledge, Confidence, Precision
    • 24.  

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