Objectives
This topic covers:
Whilst organizations deliver service and earn income, their assets are a major cost driver. Effective asset management is therefore a critical success factor.
Total Asset Management Plans (TAMPs) provide a rational framework for documentation of the approach to the management of those assets, and should be integrated into the organization's business planning cycle.
The features of this are:
- Asset management and TAMPs are not ends in themselves
- Asset management policies, principles and guidelines will support the business in the provision of service to customers through assets (although it is recognized that assets are not the only mechanism of service delivery)
- The purpose of the TAMPs should be to achieve the objectives of the asset management policies
- The asset management policies and TAMP are essential components of a quality management system for delivery of service through assets.
The Asset Management and Total Asset Management Plan framework allow for the development and improvement of business practices to the best appropriate practice.
The key elements of this are:
- Processes, analysis and evaluation techniques needed for life cycle asset management and their outputs
- Support systems including information systems to store and manipulate the data required for the management processes
- Adequate reliable data for inputting to the information systems.
The formal implementation of best practice life cycle asset management involves the long-term commitment of the organization and a broad cross section of staff.
Policies, priorities and practices will change with time, however the assets must be continually managed so as to deliver the required levels of service at the lowest appropriate cost, for both present and future customers/stakeholders.
To provide a reference point for successive managers and staff, relevant key information on infrastructure systems and facilities should be available in a readily useable form.
The most appropriate means of providing this information is by the preparation of Total Asset Management Plans.
It can be difficult to see how one asset management decision may affect another because of:
- The volume of assets
- Their location or geographic dispersion
- The variety of activities
- The delineation of responsibilities
- The long duration of projects.
The TAMP may be used to document the basis for these decisions and communicate the long-term intentions of the decisions. When a new decision is required, the TAMP is useful for checking consistency with the overall plans and validating the assumptions of the previous decisions.
For example, long-lived infrastructure assets span many generations and the careers of successive asset managers. Knowledge acquired by current asset managers, if not properly managed, is unlikely to be passed on to future managers. The TAMP is a statement of what the current manager believes should be done with the assets, and provides a structured vehicle for transferring knowledge from one generation of managers to another.
The effects of asset decisions are long term. It is often difficult to tell, just from the assets' current performance, whether an organization is managing its assets effectively, especially if they are in the early stages of their life cycle. Good asset management is more likely to be demonstrated in the organization's plans for asset management. The TAMPs are the evidence for this, and rationally support future expenditure plans.
Total asset management plans are reference points in time. The TAMP becomes an important tool for the continuous learning and improving process, because it encourages:
- Past and current asset performance to be compared
- Information resources to be tracked
- Estimates and assumptions to be checked and improved
- Trends to be highlighted, and causes and effects identified.
Each subsequent TAMP produced represents an enhancement or development of the previous one. In particular, the key result or need issues identified in a particular TAMP are progressed and addressed in more detail in the next TAMP.
In striving to achieve appropriate best practice, organizations need to ensure that all activities are benefits-driven.
The preparation and periodic review of TAMPs should provide:
- Consolidated technical and financial information relevant to the assets providing a service to defined groups of customers
- A consolidated statement of current policies, strategies and programs adopted for the ongoing provision of these services
- An understanding of the present and future demands on the assets
- A current estimate of the long term financial commitments necessary to maintain both the assets and the services they provide
- A current evaluation of business risks associated with the failure of the assets
- A summary of appropriate strategies to address shorter term operations and maintenance and longer term strategic planning of the assets
- An information source capable of spanning organizational changes and the transfer of responsibilities between successive asset managers
- An ideal tool for the administration of contracts in relation to operations, maintenance and renewals
- A clearly established link between business objectives and asset management outputs
- An ability to model future costs and asset performance
- An ability to identify future work and staff needs.
One of the great advantages of completing total asset management plans of appropriate quality is that the organization gets a clear understanding of:
- Their future capital works program
- Their maintenance and operational requirements
- Business cost drivers
- Business risk exposures.
With this knowledge the organization can understand their future business more fully and can plan their future structure and staff requirements for effectively.
The TAMP will clearly identify broad scenarios for future workloads in both the capital and maintenance area and this should enable the organization to clearly identify the resources required for both in-house (core) staff, consultants and contractors.
It also enables them to clearly identify the overall resources required in terms of:
- Skills required
- Numbers of skilled staff
- Support plant and equipment
- Materials
- Contractors.
This will then allow the organization to:
- Clearly match their future needs against their existing resources and structures
- Decide on appropriate strategies for the organization and individual staff members.
The organization can then integrate this into its human resource management and consider:
- Maintaining existing key suitable staff
- Retraining suitable staff to future resource needs
- Acquiring new staff with required skills and experience
- Adopting a strategy for those staff whose skills and experience may no longer be required by the future organization.
Some staff will have their own career aspirations and expectations and, although they may be motivated and have the right attitude and knowledge of the organization, there may be no future work for them to match their expectations. Retraining or reorientation may not prove to be an option for these staff but with sufficient warning, they may recognize there is no long-term place for them and seek employment elsewhere, without the great conflicts or redundancy and right-sizing issues that have arisen in the past.
Organizations that are able to better justify their future resource needs undertake more efficient restructuring and right sizing programs than organizations that are unable to justify the situation to individual staff members, work teams and specialist units, unions, shareholders or other relevant stakeholders. The efficiency with which these organizations are able to undertake their restructuring and then derive productive output from the restructured organization, with reduced negativism and lost productivity, is a substantial benefit. It is considered that a two to three percent productivity benefit is a minimal gain that can be achieved through this logical approach to organizational restructure.
By understanding cost drivers and future business risk exposure, the organization can clearly identify:
- The benefits of contracting out work elements
- The types of skills and resources required for the internal core staff
- Contracted services or strategic alliances that need to be developed.