The document summarizes Bob Prieto's perspective on impediments to implementing a sound asset management system. Some key impediments discussed include an inadequate definition of asset management, lack of executive support and vision setting, challenges establishing an asset management organization, and tactical issues such as cost and customization of asset management software and agreeing on metrics and condition assessments. Tactical challenges also include integrating systems, user training, and ensuring quality data entry. Private sector best practices highlighted include proactive maintenance, coordination across asset classes, and training those making asset management decisions.
Atos, one of the leading outsourcing companies, announces a new approach to transform the traditional outsourcing approach.
How do I decrease costs, yet increase innovation? The specialist knowledge we have built up as the Worldwide Partner of the IOC mirrors the intensive, industry-specific knowledge that we will bring to every outsourcing relationship.
What Atos has been doing for the Olympic and Paralympic Games, we can do for your organization, bringing the same winning spirit. This knowledge, coupled with Atos’ vision of the firm of the future, can give you an unsurpassed advantage as you focus on your core competitive activities
Candidate Strategies to Reduce Risks in Large Engineering & Construction Prog...Bob Prieto
Every large engineering and construction program is different as are the risks it faces. There are no silver bullets for managing and reducing risks in these large programs but there are some recurrent strategies. This paper lays out some candidate strategies organized from a “Triple Bottom Line” or sustainability perspective.
I have chosen this sustainability framework in recognition that a more holistic, life-cycle approach is characteristic in these emerging “giga” programs and consistent with the strategic program management approach I have written about previously.
Not every candidate strategy is viable, necessary or desirable on every large engineering and construction program. Nor is the list of such strategies complete. The purpose of this article is to get the reader started on the process of identify strategic options and tactics to reduce the risks that a major program faces.
Atos, one of the leading outsourcing companies, announces a new approach to transform the traditional outsourcing approach.
How do I decrease costs, yet increase innovation? The specialist knowledge we have built up as the Worldwide Partner of the IOC mirrors the intensive, industry-specific knowledge that we will bring to every outsourcing relationship.
What Atos has been doing for the Olympic and Paralympic Games, we can do for your organization, bringing the same winning spirit. This knowledge, coupled with Atos’ vision of the firm of the future, can give you an unsurpassed advantage as you focus on your core competitive activities
Candidate Strategies to Reduce Risks in Large Engineering & Construction Prog...Bob Prieto
Every large engineering and construction program is different as are the risks it faces. There are no silver bullets for managing and reducing risks in these large programs but there are some recurrent strategies. This paper lays out some candidate strategies organized from a “Triple Bottom Line” or sustainability perspective.
I have chosen this sustainability framework in recognition that a more holistic, life-cycle approach is characteristic in these emerging “giga” programs and consistent with the strategic program management approach I have written about previously.
Not every candidate strategy is viable, necessary or desirable on every large engineering and construction program. Nor is the list of such strategies complete. The purpose of this article is to get the reader started on the process of identify strategic options and tactics to reduce the risks that a major program faces.
Performance Based Regulation, Implementing an Asset Management Standards and ...HIMADRI BANERJI
Performance Based Rate structure forelectric utilities is imminent and implementing an Asset Management standard PAS II is discussed and a case study developed for electrical utilities.
Understanding the impact of Enterprise Asset ManagementAlok Chander
Collect, consolidate and analyze essential information on all types of assets
Improve operations through better asset availability, reliability and asset utilization
Significantly extend the value of assets and increase flexibility
Extend the useful life of all assets or equipment, improve
return on investment and defer new purchases
Unify processes for wide-ranging asset management functions across multiple sites
Enterprise Governance in Web 2.0 World OverviewMichael Ruiz
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Understanding the impact and value of enterprise asset managementIrsan Suryadi Saputra
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What kind of Governance is appropriate to the distributed collaborations across ULS systems?
How are the changing services provided by the operational components of ULS systems to be enabled to achieve levels of cooperation and collaboration that can satisfy requirements for fast system evolution?
How are we to enable the distributed collaborations across ULS systems to be edge-driven?
How are the processes of orchestration and synchronisation to work in ULS systems?
How are people to be taken into consideration as first-class components of ULS systems?
Facilities or Facility Management or just FM as many refer to it is an industry that supports an organization to achieve its objectives and goals through optimizing cost savings and efficiencies within the non-core areas of the business. Although this multi billion-dollar global industry has been established, as we know it today, for over 30 years, it is still misunderstood by many and is unknown to others. The purpose of this article is to define FM and identify its purpose and role, including how it supports organizations in meeting their goals.
O Centro de Excelência em BRT Across Latitudes and Cultures (ALC-BRT CoE) promoveu o Bus Rapid Transit (BRT) Workshop: Experiences and Challenges (Workshop BRT: Experiências e Desafios) dia 12/07/2013, no Rio de Janeiro. O curso foi organizado pela EMBARQ Brasil, com patrocínio da Fetranspor e da VREF (Volvo Research and Education Foundations).
Efficient Infrastructure Maintenance at Universities - Rick Craig & Robert Mo...marcus evans Network
Rick Craig and Robert Moore of AKIMA Facilities Management, LLC, a solution provider at the marcus evans University CXO Summit 2013, on why outsourcing may be the best solution for efficient university infrastructure maintenance and repair work.
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Application of system life cycle processes to large complex engineering and c...Bob Prieto
The complexity of megaprojects and programs continues to grow and with it the challenges of delivering ever larger and more complex programs. These large complex programs open the door to many new opportunities but also to increased challenges in delivery and sustainment throughout their lifecycle. Prior articles have described the open nature of this large complex program system and compared its attributes to many we find in the world of relativistic physics. These challenges must be addressed recognizing that they arise from a combination of physical, fiscal and human attributes in a realm of complexity which challenges the very foundations of project management theory.
This paper looks at hard systems aspects as contrasted with the soft system aspects more characteristic of an open system. Its purpose is to adapt a systems engineering framework associated with the hard closed elements of these large complex project systems without losing site of the overall open systems nature of large complex programs.
The systems life cycle process codified in ISO 15288 lends itself to application in large complex engineering and construction programs.
Engineering and construction project startupBob Prieto
This paper looks at engineering and construction project startup for three different project execution approaches. While specific to this industry, project professionals in other industries may find it is a good analog for their own efforts.
The paper underscores that:
• Large complex projects require strong foundations
• A day at the beginning of a project is just as valuable as a day at the end
• Strong project foundations are built during project startup
• Vertical startup is enabled by the use of a dedicated startup team
• Project startup should consider lessons learned on other projects
This paper addresses project startup for three general types of contracts:
• Pure design or engineering contracts typically performed for the Owner
• Design/build contracts performed for the Owner but recognizes that engineering may be undertaken by an engineering subcontractor within the D/B team
• Pure construction contract
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Performance Based Rate structure forelectric utilities is imminent and implementing an Asset Management standard PAS II is discussed and a case study developed for electrical utilities.
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Improve operations through better asset availability, reliability and asset utilization
Significantly extend the value of assets and increase flexibility
Extend the useful life of all assets or equipment, improve
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The complexity of megaprojects and programs continues to grow and with it the challenges of delivering ever larger and more complex programs. These large complex programs open the door to many new opportunities but also to increased challenges in delivery and sustainment throughout their lifecycle. Prior articles have described the open nature of this large complex program system and compared its attributes to many we find in the world of relativistic physics. These challenges must be addressed recognizing that they arise from a combination of physical, fiscal and human attributes in a realm of complexity which challenges the very foundations of project management theory.
This paper looks at hard systems aspects as contrasted with the soft system aspects more characteristic of an open system. Its purpose is to adapt a systems engineering framework associated with the hard closed elements of these large complex project systems without losing site of the overall open systems nature of large complex programs.
The systems life cycle process codified in ISO 15288 lends itself to application in large complex engineering and construction programs.
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This paper looks at engineering and construction project startup for three different project execution approaches. While specific to this industry, project professionals in other industries may find it is a good analog for their own efforts.
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• Strong project foundations are built during project startup
• Vertical startup is enabled by the use of a dedicated startup team
• Project startup should consider lessons learned on other projects
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This paper explores the system characteristics and behaviors of large engineering and construction programs with a particular focus on those that would be characterized as complex. It recognizes the interrelated and interacting elements of both programs and projects as they strive to form a complex whole. Large complex programs and projects are not well bounded as classical project management theory as espoused by Taylor, Gantt and Fayol would have us believe but rather behave in both independent and interconnected ways in a dynamic systems environment.
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• Categorize rework factors into four broad categories – project, human, organizational and complexity
• Identify rework impacts not just on cost and schedule but importantly morale and trust.
• Recognize that strategies exist to reduce the potential for required rework
• Suggest four dozen control points.
In this paper I will attempt to:
• Outline some of the systems of systems challenges that we will likely face.
• Discuss the emergent nature of both the challenges as well as the potential resultant outcomes.
• Draw attention to some of the driving forces acting both on this system of systems as well as the national and sectoral programs that may emerge to respond to this challenge.
• Highlight some of the feedback loops which may exist or emerge from both apparent and hidden coupling.
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• Outline some particular challenges for program managers as they are engaged in addressing this challenge.
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This paper builds on my beliefs that the prevailing theory of project management has failed us with respect to large complex projects. I have written extensively on this including highlighting that the assumptions of Gantt and Fayol fall short at scale and complexity. In this paper I examine the successes that underpin modern project management theory and seek to understand how the resulting approach to project management has failed to deliver comparable successes with regularity. As I explored these questions, I sought to understand the unique characteristics of the Atlas and Polaris missile programs; the subsequent institutionalization of the perceived success factors; and importantly, did perception and reality align. In other words, have we made an incomplete set of assumptions and institutionalized them?
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One of the most under considered elements of cost and schedule risk is the correlation that exists within various WBS elements of a project or across projects comprising a program. Failure to adequately consider correlation between various activities and projects compounds the impact of other factors present in large complex projects.
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I had the opportunity to watch the first debate between AI powered IBM Debater and a recognized human expert debater. I will not spoil the outcome for those who have not yet watched the debate but I will underscore one key aspect - all learned more about both sides of the position as a result of the debate.
We have seen a construct for the management of large
complex projects laid out in the earlier chapters. In these chapters we will simply lay out some of the main concepts and
considerations for a practitioner. Each of these can be more
extensively developed.
In the world of physics, classical theory breaks down at
scale. Conventional project management theory similarly
seems to break down at scale. The theoretical construct I
have been building to in this book is very much focused on this
project realm where scale and complexity rule.
In developing this theoretical construct I have essentially
considered three simple hypotheses, the first of which is:
Large complex projects are not well served by
conventional project management theory and
practice.
This hypothesis was demonstrated at the outset of this
book and the differential behavior between large and
traditionally scaled projects has been previously noted.
The second hypothesis considered relates to the Theory of
Management as applied to the management of projects. In
simplest terms this hypothesis says:
- The Theory of Project Management does not draw
fully on the richness of the Theory of Management
This hypothesis is demonstrated as we explored the
extensions of the Theory of Management to address chaos and
complexity and the more limited extensions of project
management theory.
The third and final hypothesis we considered focused on
the Theory of Projects, positing:
Large complex projects have significantly different
attributes than the more traditional projects which
comprise the basis for classical project management
theory
This chapter summarizes various aspects of large
projects and provides a foundation to consider what a new
Theory of Project Management for large complex projects may
look like.
In this chapter we will look at a few of the project attributes
that we observe in large complex projects and suggest they
may serve as a basis for a neo-classical Theory of Large
Complex Projects.
Theory of Management of Large Complex Projects - Chapter 7Bob Prieto
The world of large complex projects is challenging to say the least with a majority of these projects significantly under performing. It is this weak performance regime that underpins the key premise of "Theory of Management of Large Complex Projects" – project management theory as it currently exists and is applied to large complex projects falls short, significantly short, of what these projects require.
I have decided to serialize this book for the benefit of those interested in better understanding and improving project performance. If you are interested in purchasing a copy of the 400 page paperback you may click on http://www.lulu.com/us/en/shop/bob-prieto/theory-of-management-of-large-complex-projects/paperback/product-22342232.html
Theory of Management of Large Complex Projects - Chapter 7
Impediments for implementing a sound asset management system rev 2
1. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
Impediments for Implementing a Sound Asset Management System
Bob Prieto
Senior Vice President
Fluor
The State of Good Repair Summit being hosted by Rutgers’ Center for Advanced Infrastructure
and Transportation provides an opportunity for the exchange of “perspectives” by advocates
and practitioners of asset management. These “perspectives” include professional society,
federal, regional and state perspectives as well as various asset perspectives and an
international perspective.
My remarks are intended to add one more perspective, namely that of a provider of a
comprehensive range of asset management services
to a broad cross section of industries including most
recently a growing focus on infrastructure asset
In the contract between management driven by, among other things, our
the government and role in planning, designing, building, financing,
operating and maintaining road and rail systems
Infraspeed, as delivered under a Public Private Partnership model.
infrastructure provider, Under PPP’s we assume many of the life cycle roles
Infraspeed guarantees and responsibilities traditionally solely within the
purview of the public sector.
99.46 percent
availability of the line While our asset management experience is much
more extensive in various federal government and
during 25 years. The industrial facilities, we are seeing a convergence
fees earned depended across all the markets we serve towards a more
on the actual holistic, life cycle approach to capital asset portfolio
design, initial delivery and the balance of a cradle to
availability of the grave life cycle. Importantly, we see this perspective
system. encompassing all three of the bottom lines
comprising the Triple Bottom Line we associate with
sustainability. The introduction of this broadened
perspective is starting to shift life cycle
considerations from a good business practice to a significant business imperative.
Let me mention one other dimension that is increasingly coming into play and that is totally
reliant on strong asset management practices. This is a system performance dimension that
manifests itself as business continuity in the private sector but is more closely akin to resilience
in public, and for that matter, privately owned infrastructure.
Bob Prieto, Fluor Page 1
2. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
In the time I have I will focus on five questions:
• What is asset management?
• What are the characteristics of a sound asset management system?
• What impediments or obstacles exist with respect to achieving its strategic intent?
• What are the tactical challenges that exist?
• How do we define and achieve success?
What is asset management?
The classical definition of asset management is the management of fixed capital assets to
minimize the total cost of owning and operating them, while providing the desired level of
service at an acceptable level of risk. Typically risk is calculated as a cost and often not managed
separately.
I will suggest that increasingly this definition will prove inadequate or at the very least
incomplete. We are seeing a shift towards what I would call “life cycle analysis” where:
1. Not only risk but also uncertainty associated with long project delivery durations and
increasingly longer asset lifetimes must be recognized and reflected in the analysis and
management of our capital assets whether they are a mining operation at 13,000 feet in
Peru, a manufacturing facility producing the nuts and bolts of construction or a new
bridge spanning the Hudson. Are the assumption we make today assured of continued
validity throughout a 100 year lifetime? How do we provide and importantly preserve
optionality for our capital assets in the face of an unknowable future?
2. Life cycle performance, often measured by life cycle cost, is not a sufficiently adequate
measure of an assets performance but increasingly must consider its environmental and
social performance attributes over its full lifetime. Nowhere may this be more important
than in public infrastructure where we must find a sweet spot on financial,
environmental and social performance. This change alone suggests an expanded and
increasingly important role for proactive management of our infrastructure assets.
3. The true measure of a well managed asset is not just one configured to provide the
lowest life cycle cost but rather the highest life cycle returns. This means delivering an
asset that is positioned to serve an evolving “market” and capture maximum value from
that market. This is important as we consider delivery models such as Public Private
Partnerships. Related to maximizing returns is the selection and structuring of optimal
project finance models. As we move beyond exclusive use of municipal finance models
to finance our infrastructure this will grow in importance.
4. System level performance characteristics, in particular resilience of our infrastructure
assets, will be achieved not only through good design but most importantly how they
are operated and maintained. This sustained resilience is an essential objective of asset
management systems in the near future.
Bob Prieto, Fluor Page 2
3. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
Consider now these two descriptions of an asset management system:
• AASHTO Transportation Subcommittee’s vision for Asset Management - “… a standard for
State DOTs and others for making investment decisions and managing the nation’s
transportation system. Asset Management should be applied/considered as part of the
decision making process at all levels of an organization.”
• FHWA’s Office of Asset Management - “Asset management reflects and supports FHWA's
vital few priority areas of Safety, Congestion Mitigation, and Environmental Stewardship and
Streamlining. It addresses these areas by identifying capacity expansion or system
management alternatives to alleviate congestion and improve mobility, by incorporating the
costs of crashes or incidents in evaluating transportation alternatives, and by considering the
impacts of projects on the environment.”
Let me suggest that the first impediment to a sound asset management system may be an
inadequate definition of what it is.
We must recognize true success to have any chance of achieving it.
Let’s turn now to our second question.
What are the characteristics of a sound asset management system?
The key elements of asset management are:
• A cradle to grave life-cycle approach.
• Developing and implementing cost-effective strategies recognizing the long-term
purpose and nature of these assets
• Defining, establishing and providing for a defined nature and level of service
• Monitoring, maintaining and where possible enhancing asset performance.
• Anticipating, mitigating and managing risks associated with asset degradation and
failures
• Implementing asset management to achieve these objectives on a financial,
environmental and societal basis.
• Sustaining and where possible enhancing system level characteristics of an asset such as
resiliency, flexibility and future optionality.
• Deploying the limited financial, physical and human resources of the asset owner in an
efficient, effective and sustainable manner. It is about making informed tradeoffs as
part of our decision making process.
• Continuously improving asset management practices.
One final thought is important. Asset management must be not only systematic but more
importantly systemic. Our asset management focus must consider total asset portfolio
performance not just individual elements. This is particularly true when we consider higher
level system characteristics such as resilience.
Bob Prieto, Fluor Page 3
4. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
Sound asset management systems exhibit several characteristics:
• Clearly defined and well communicated
strategic business objectives similar to what we see
• “In the past, it in all well managed programs.
• Executive recognition of the value asset
may have taken weeks
management brings and a commitment to making it
to determine the activity successful
related to a piece of • Focus on addressing the strategic level
impediments that may exist
equipment now it’s
• Clarity in identifying and removing the tactical
available immediately.” level impediments that such programs face.
• Recognition of what success looks like.
• “This system
Asset management, with its strategic focus across an
allows easy monitoring
entire asset portfolio and its use of quality
and modification of information, foster decision-making process that
equipment schedules encourage preventive strategies rather than the
reactive “worst-first” approaches including some
when needed.”
recently articulated in Washington DC.
• “This system has What impediments or obstacles exist with respect
the ability to schedule to achieving its strategic intent?
preventative Major impediments that a comprehensive asset
maintenance work to a management strategy faces can be categorized
simplistically into strategic and tactical. Of the
specific location rather
various strategic impediments faced, the first,
than scattered across articulated previously, is a lack of clarity on what is
the facility, reducing meant by asset management. It is not a maintenance
program on steroids!
travel time and
increasing productivity.” Rather it is much more, going to the strategic
business objectives of the asset owner. In considering
strategic impediments it is useful to consider “gaps”
often encountered in the asset owner’s approach
either when setting out on implementation or in
programs not delivering adequate results. Let’s look at some of the major gaps which impede
asset management success:
• Vision and executive level support. Importantly this includes establishing those strategic
business objectives for both the enterprise as well as the asset management program.
These must be supported by outcome type metrics as well as the more traditional range
of KPIs. In capital program delivery, just one phase of overall asset life cycle, we see that
Bob Prieto, Fluor Page 4
5. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
two thirds of all major programs that fail suffer from inadequate definition,
communication and management of strategic business objectives. While I am unaware
of a comparable study in the asset management area it would not surprise me to see
comparable findings.
• Creating and resourcing an asset
management organization to implement the asset
• “The ability to see management plan, provide timely and valuable
input to management decision processes and to
work orders for a learn and continuously improve the owner’s asset
process location reduces management practices. The establishment of a
work orders written and dedicated asset management organization
represents an insurance policy for dealing with
provides information to “off normal” events since they may best
operations that work is understand the inherent resiliency in the
progressing." “system”.
• Stakeholder management. This begins with
• “Planners can clear and comprehensive identification of all
stakeholder and stakeholder groups. This is a
provide better estimates growing challenge especially as asset management
on bigger jobs based on must consider not only financial life cycle
work order histories for performance but also environmental, social and a
new cast of financing stakeholders as new delivery
similar work, allowing models such as PPPs are utilized. Stakeholder
management to make communication must increasingly be synonymous
better informed with engagement at times having to educate
stakeholders as the complexity of infrastructure
decisions.” assets and infrastructure “portfolios” increases.
• SMART asset management plan
• “Various users development. Asset management plans must be
(engineers, craftsmen, Specific, Measurable, Achievable, Realistic and
managers) are able to Targeted. In other words they must be SMART.
They begin with understanding where you want to
easily query on get, knowing where you are now, performing an
information and tailor objective and comprehensive gap analysis, and
reports to their specific evaluating alternative strategies and tactics to
close the gaps. Continuously we must ask how we
requirements.” can change what we do not just how we do it. We
need to ensure we are doing the right things in the
best possible way. Recognition that change is
required is essential and understanding the
importance of deliberate and facilitated organizational change management are
important first steps. It is only then that we can finalize the new work processes
Bob Prieto, Fluor Page 5
6. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
required; define the new metrics that will matter most; and provide the essential
training that must go hand in hand with an organizational change management
program.
Let’s look now at the tactical challenges that are faced in implementing an asset management
system.
What are the tactical challenges that exist?
The asset management systems on the market as COTS (commercial off the shelf) are relatively
expensive. Even more so if you want to customize them to a particular group of assets and/or
integrate them with other systems. Most of them do not correspond to desired outcomes – the
performance metrics that we are seeing tied to long term infrastructure contracts.
In addition today’s systems do not include a provision for timeliness requirements or tracking
those items that will generate penalties. This is comparable to the regulatory or permit
compliance challenges faced in industrial asset management programs.
As infrastructure owners increase their focus on asset management we see first steps often
centered on putting in place a maintenance management system (MMS). While this is far short
of what is required for comprehensive asset management we find that owner’s implementing a
MMS or contacting out maintenance management for the first time are challenged to agreeing
on value adding metrics.
Even when an effective MMS has been identified and demonstrated it is capable of efficiently
managing and reporting (with outcome oriented metrics in addition to input styled metrics),
agreement with the owner on those metrics can be challenging.
On existing infrastructure, agreement on the current condition, remaining service life,
investment to attain service life versus analysis for early replacement, rehabilitation, or other
intervention can all be interesting conversations.
The demarcation between preventive, routine and major maintenance versus replacement and
rehabilitation is grey at best.
And when it comes to technology - this becomes even greyer. The MMS may indicate that the
technology in question is in perfect condition with remaining service life, but analysis of
emerging or next generation technology may demonstrate that replacement will be more cost
effective than the required preventive maintenance on the older technology while providing
more efficient operations.
The MMS you choose is only as good as the information you have. Brownfield projects have to
have the assets surveyed for location and condition for input into the system and often
maintenance history is not well documented making investment strategies and
maintenance/replacement plans less precise.
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Finally, tactical impediments exist in the use of the system. Unless there are protocols for data
entry and limited users, the data inputs can greatly affect the value of the data outcomes.
In a nutshell, when the system works - it can save time, money and enable good decisions.
When it doesn't, teams develop work arounds or simply ignore the data. Table 1 summarizes
some of the tactical impediments often encountered.
Table 1
Common Tactical Impediments to Asset Management System Implementation
Cost/value of COTS Mapping optimal work processes
Lack of outcomes based performance metrics User Training
Lack of timeliness provisions Integration with other systems
Lack of regulatory and permit compliance Selected system does not organize and allow
provisions easy visual access to all asset physical data (i.e.
identification, location, dimensions, material,
connectivity, construction method,
environment)
Agreement on current condition of an asset Selected system does not provides the ability
to forecast operations (and operations costs),
maintenance (and maintenance costs), repairs
(and repair costs), refurbishments
(and refurbishment costs), and replacements
(and replacement costs) and compare
predicted costs to realized costs for improved
decision making
Agreement on remaining service life Absence of standard procedure for approving
capital project spending
Demarcation between maintenance and Selected system does not contain and allow
replacement and rehabilitation (MMS easy visual access to the required cost data
perspective) necessary for making decisions regarding asset
spending
Technology philosophy and transition Personnel are not trained according to
documented procedures and the procedures
are not regularly audited
Inadequate asset surveys
Inadequate maintenance records
Weak data entry protocols
Data quality and transition
Limited system users
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Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
An analysis of private transportation company use of asset management principles and systems
highlights several best practices:
• Proactive maintenance is more efficient than “worst-first”
• Coordinating mechanisms between various asset classes must exist
• Workers responsible for making asset management trade-off decisions require proper
education and training in making those decisions
With this as context, let’s look now at how we define success and importantly, how do we
achieve it.
How do we define and achieve success?
There is a direct linkage between the principles of asset management and those of
sustainability as highlighted earlier. Sustainability can be defined as using, developing and
protecting resources to meet current needs while ensuring that future generations can meet
their needs. Asset management is a systematic process of tracking and managing assets and the
resources and activities required to construct,
operate and maintain them.
• “The person with Success is achieved by:
the best information • Linking Asset Management to the vision or
(craft worker) can enter mission of the agency
• Securing sustained political commitment and
it easily and in a timely
leadership from executive staff
manner. No more lost • Transforming data into useful information
or incorrectly translated for decision-makers
data.” • Facilitating the sharing of information
between agency divisions and a broader stakeholder
• “Safety work set
• Maintaining a customer focus
order tracking is
significantly easier.”
Asset management will add value if done well.
National and international best practices must be
adopted and processes and procedures developed
and refined to take advantage of proven methods
creating an asset management system that is responsive, adaptive, meeting changing business
needs brought about by new technologies or changed federal or legislative requirements.
It must build on existing good management systems and in their absence act as a catalyst for
their creation. Asset management systems must recognize that we are entering the world of Big
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Infrastructure and Transportation
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March 27, 2013
Data and our ability to handle unstructured as well as structured data opens up new insights
and new possibilities.
Asset management success is when asset management is part of an agency’s daily work
function and it is trusted and more importantly its data seen as reliable and importantly relied
upon for decision making and driving asset management. We see this today in availability type
PPP’s where we are compensated for being able to run a train within say a six minute window
or only paid for every lane-mile available to move traffic.
Asset management processes are regularly monitored as well as the data it produces. An
effective asset management system underpins not only day to day maintenance activities but
longer term strategic investment decisions. They support the case for funding requests in ways
not previously possible. As they demonstrate achievement and improvement in outcomes they
become fundamental to strategy development, operational management and reinvestment
case development.
Asset by asset reports complemented higher level assessments of system resiliency, a growing
concern and focus area not only for infrastructure asset owners but also for enterprises
concerned with business continuity.
Successful Asset Management Programs have:
• A system for ensuring programmed maintenance
• A system for obtaining condition information and programming capital asset
replacements to avoid capacity limitations or sub-optimal system financial,
environmental or societal performance.
They have undertaken the foundational work required with respect to:
• Vision and Support
o Obtained understanding of program objectives and support from Executive
Management and higher levels (board; commissions; political leadership –
executive and legislative)
o Establish relationships between levels of service and costs
• Program Organization
o Established Asset Manager and formally chartered the asset management
organization or team
o Obtained resources necessary to implement and sustain the asset management
program
• Program Communications
o Identified key asset management stakeholder groups and identified their
interests
• Program Planning
Near-term actions are well defined and address:
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10. Center for Advanced
Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
• Asset Knowledge
o Define the minimum level of detail for an asset (what assets to track)
o Establish a uniform asset enumeration scheme (asset organization)
o Identify existing assets and related attributes (asset data)
o Identify the probability and consequence of failure of an asset (asset risk)
o Establish the level of asset management performed (asset management
strategy)
• Asset Planning
o Asset planning is important for two reasons:
A key goal of is reducing asset ownership costs. Asset management
accomplishes this through the classical plan/act/measure/control cycle.
Asset management works by preparing plans for assets, carrying out the
plans, measuring the results, and updating the plans accordingly.
Having cost of ownership plans for all significant assets means that the
asset owner can accurately forecast aggregate ownership costs well into
the future, giving a solid foundation for long-range funding plans.
o Asset Planning has three objectives:
Establish short-interval portions of asset plans
Establish long-interval portions of asset plans
Develop procedures to update asset plans
• Asset Refurbishment and Replacement (R&R):
o Improved R&R planning arising from asset knowledge greatly improves the
quality of capital funding strategies and has three objectives:
Improve R&R Planning
Improve R&R Analysis
Ensure R&R Actions are properly reflected in financial reporting
Similar to near term actions, well founded asset management programs also ensure that long-
term actions are well founded including:
• Asset Development including achieving these objectives:
o Develop a systematic approach to creating assets
o Consider constructability, maintainability, and operability in the design process
o Require that enumeration schemes be followed by designers and contractors
o Maximize contractor contribution to asset development
o Prepare asset plans coincident with asset delivery
• Asset Operations and Maintenance
o Defining required preventative maintenance activities.
o Preventative maintenance scheduling
o Performing defined preventative maintenance activities at the prescribed
intervals.
o Using indirect condition assessment where cost-effective.
o Performing corrective maintenance on a timely basis.
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Infrastructure and Transportation
State of Good Repair Summit
March 27, 2013
o Management of maintenance using a balanced approach between preventative
and corrective maintenance
o Recording maintenance costs on an activity basis, by asset.
o Management of operational methods to minimize the combined costs of O&M.
o Key objectives of asset O&M:
Proactive safety management
Track asset failures consistently
Prioritize work order backlog by risk
• Asset Condition Monitoring has 3 goals:
o Define condition monitoring methods
o Define condition monitoring program
o Integrate condition monitoring with other management and work processes
• Asset Financing is facilitated by more readily identifying refurbishment and replacement
needs.
• Asset Financial Reporting has the following two objectives:
o Improve consistency of asset accounting database
o Improve change management procedures in fixed asset records
Successful asset management programs provide strategic and tactical benefits such as those
summarized if the following table.
Strategic Tactical
• Improved reliability • Reduced labor costs
• Empowered workforce • Reduced materials/spare parts costs
• Streamlined organizational structure • Increased productivity
• Achieved business case for the • Standardized maintenance
improvement investment
• Maximized use of existing assets • Integration of all software systems
• Best practices identified and made • More efficient scheduling and execution of
available across asset classes; shared with work
partners
• Improved asset availability • Eliminated worker complaints concerning
human factors
• Reduced time to market • Reduction in equipment breakdowns
• Reduced inventory costs and shortened • Accelerated program development of
inventory turnover maintenance craft training materials
• Raised plant capacity and production • Foundation of basic maintenance skills
availability
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• Made possible national accounts/ • Technology transfer of process specific
consolidated purchasing knowledge and skills
• Total quality improvement • Documentation of maintenance
improvement opportunities
• Reduced risk exposure • Integration of Lean principles into
operational and production work
processes.
• Reduced non-value activity • Shared maintenance expertise and spares
inventory among assets
• Preservation of assets through optimal • Accurate spare parts inventory
preventive maintenance program
• Reduction in costly equipment failures and • CMMS with accurate reorder and
replacements reporting capabilities
• Reduced operations costs by optimizing • Accurate equipment lists for each location
plant layout for O&M
• Improved resource allocation • Accurate P&IDs that meet all regulatory
requirements
• Developed maintenance philosophy • Improved safety and hazard prevention
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