Total Asset Management Plans
This element draws together all of the other elements to assess the capability of the organization to produce Total Asset Management Plans (TAMPs), including an assessment of the quality or confidence level that could be applied to the plans.
The assessment process looks at the key parts of an asset management plan.
Current Levels of Service
Compares the organization's standards and levels of service with the demands of customers, regulators and other stakeholders.
It looks at the appropriateness of these standards and their relationship to industry practice and business goals.
Knowledge of Assets
The organization's knowledge of its assets and its ability to meet the current and projected levels or standards of service.
Projected Demands
The organization's ability to project the future needs or demands for assets and the levels of service that will be required.
Predicted Failure Modes
The organization's ability to identify the various failure modes in asset service delivery, and the accuracy of the timing with which these failures are predicted.
Consequences of Failure
The organization's ability to clearly identify the:
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Economic consequences of failures
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Risk exposure these failures present to the businesses and the customer.
Optimized Renewal Decision Making
How well the organization identifies the optimal renewal strategy for individual assets, facilities and systems.
It includes an assessment of asset and non-asset solutions, as well as capital, maintenance and operations options.
Capital Improvements Programs
The predicted need for new assets or augmentations of the existing systems and the economic evaluation process used to identify the type of asset and the time it will be required.
Operations and Maintenance Programs
This assesses the planned and unplanned maintenance programs proposed to match current requirements and CIP programs.
It also assesses the accuracy of the predicted cost elements of key expenditures for:
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Operations
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Maintenance
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Capital expenditure.
Alternative Options
The way in which the asset management plans identify alternative options other than the optimized or most appropriate capital and recurrent expenditure plans.
It assesses the way in which the organization can put up rationalized programs to suit its current economic viability and business goals.
Options include:
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Recurrent (maintenance/repair) versus capital expenditure
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Non asset solutions
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Deferred or reduced capital solutions
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Nominal risk reduction opportunities.
Customer / Stakeholders Acceptance Surveys
How the organization has presented this information to the key stakeholders:
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Customers
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Policy makers
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Regulator
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Community.
It assesses how the organization publicizes and argues the case for future asset management activities and how the program has been rationalized to suit these key stakeholder inputs.
Business Goals/TAMP Linkages
Whether of asset management plans are flexible enough to be varied to suit changing business goals or customer expectations.
It assesses how:
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The key business drivers are linked through service delivery programs to asset management activities
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The benefits derived by investment actually deliver the key business goals.
Best appropriate practice includes:
Asset management plans that meet the necessary confidence level for the following key areas:
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Capital investment
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Operational investment
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Maintenance investment
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Residual risk exposure
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Future costs for alternative strategies
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Future performance profiles for these alternatives
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Assessment of best value.
Case Studies Australia, New Zealand & UK
When asset management plans work
Asset Management Plans as protection against litigation
A woman tripped on a cracked footpath and her lawyer encouraged her to sue the local council. In its defence the council said that, yes, many of its footpaths were ageing and in need of repair. Many other assets were also in need of attention. Council was now facing the need to replace many assets constructed during growth times some 30-40 years ago.
In total, the costs of renewal were far more than the council could mange in any one year’s budget.
The community had been consulted and the council had carried out a condition audit on its footpaths. It had scheduled the worst areas for immediate attention and had a program to address the rest over a period of years. Each year, the capital works list was re-prioritised to ensure that council was allocating its scarce resources to the areas most in need. They demonstrated this by reference to the council’s asset management plans and condition audits.
The judge awarded the case to the council. In his summation, he said that the council was demonstrably not negligent in the way that it was tackling its repairs and maintenance. Not only did he find for the council but he also awarded costs against the complainant. The woman then sued her lawyer for poor advice!
Focusing our Scarce Resources
The CEO had endorsed the production of the agency's first asset management plan but he really didn’t know what to expect. As he read through the table of contents (based on the one in the AMPLE guideline), he began to realise what a powerful tool it could be. He saw how it projected future costs much more accurately than they had in the past and how he could communicate this with the Board and the ratepayers to make them understand why "holding our rates level for 13 years" was not a sustainable strategy.
But what excited him most was that he could identify assets that were likely to give them problems years before it would happen. He loved the idea of proactively deciding on an asset (or failure) management strategy and avoiding the failure, as opposed to going to the Board and saying, “On Wednesday night the station street sewer collapsed and you will all be aware of the problems that has caused. I estimate it will take 4 months to fix and cost us $2million”.
He was delighted with the result and put through a revised budget to further improve the plan in the next year.
Asset Management Plans as demonstration of competency
Following the Auckland CBD blackout in 1999, the New Zealand Government resisted the pressure to increase industry regulation but put the onus on lines companies to demonstrate to their customers and the general public that they are managing their assets both effectively and efficiently, to maintain the service levels that the public expect. It did this by mandating public reporting of Asset Management Plans and stipulated the form and minimum requirements of such plans.
Asset Management Plans win Board Support
British Waterways manage the canals and inland waterways of England and Scotland. They have assets which are 200 years old and which, for many years, were neglected and starved of funds.
Being on the board of a company managing 200 year old assets that have serious consequences for life, property and the environment if they fail is not the most enviable of positions.
That is perhaps why the Board of British Waterways thoroughly endorsed, and is the most enthusiastic supporter of, asset management plans in the company. It allows them to manage their risks and to demonstrate this management so that the charge of negligence cannot be laid at their door in the event of an accident.
When Asset Management Plans Don’t Work
Asset Management Plans as Simple Lists
The water authority had just completed its first asset management plan – it was several inches thick and consisted of a condition assessment and list of what the assessor deemed necessary to be done on each of the authority's many water schemes. The external assessor had been thorough and had listed the corrective activity needed for each asset he had reviewed.
However, there was no overview that prioritised the corrective action according to the goals and objectives – and the revenues - of the authority and no justification of any action in terms of the authority’s business outcomes.
It was just a list.
Asset Management Plans to Justify More Funding
The asset management team had lobbied hard for their Asset Information System. With it, they planned to demonstrate, once and for all, that their current maintenance funding was completely inadequate. To ensure that the "gap" between what was "needed" and what they had was significant, they had erred on the low side in all of the life estimates for assets and had "gold plated". The aim, after all, had not been to manage the assets better – simply to get an increase in funds.
However, the authority had approved the expenditure on the AIS because it anticipated that, with better management information, the funding could be reduced.
The asset management team had lost an opportunity to argue for better management because they focussed on the dollars and not on actions that could be shown to result in better business outcomes.
Asset Management Plans that are Static
A thorough, and expensive, condition assessment had been undertaken and a set of corrective actions had been put into the Asset Management Plan. But the Plan did not readily accommodate ruling council's changing priorities, and it could not be easily updated as work was carried out on the assets.
When expenditure programs had to be halted because of the weather, unforeseen administrative issues, etc, there was no way that the Plan allowed other projects to be easily slotted into place, since there had been no identification of what projects could effectively be brought forward if necessary, and no indication of the consequences to the business if the projects were delayed.
Before long the plan ceased to be useful as a guide to action. With no-one using it very much, it was difficult to argue for more funds to re-work and update it. Ad hoc activity ruled.