Executive Overview
This website has an intuitive and user-friendly set of on-line process and practice guidelines, templates and decision support tools that will:
- Simplify the development of consistent Asset Management Strategic Plans (AMSP)
- Provide effective Implementation Guidelines for agencies to assess and drive meaningful improvements in asset management.
The users of this website will be:
- Asset managers and operators
- State and federal regulators
- Appointed and elected officials
- Engineering consultants
- Managers and owners of contract operation firms.
Trends for Asset Management
The trend is for organizations to be required to do more with less. Since a large slice of an organization's expenditure relates to assets that deliver core services, it is essential to manage this expenditure more effectively by using Best Appropriate Practice (BAP) in portfolio asset management. This will ensure that customers and stakeholders are getting the level of service required, at the lowest sustainable life cycle cost or "best value".
What will AMPLE achieve?
The objective of AMPLE is to provide a web based asset management learning environment that will assist organizations to implement best appropriate practice life-cycle asset management programs.
These programs will assist in addressing the various external drivers for change including:
- Increasing regulatory requirements
- Population growth
- Aging assets requiring substantial maintenance and renewal attention
- A more technically sophisticated asset base
- Increasingly limited resources.
By changing the way we think about how to manage assets to provide cost effective, sustainable service delivery, we can achieve a significant difference in the way in which we invest in operations, maintenance and use of capital.
By providing staff with best appropriate practice tools like AMPLE, we can derive significant benefits in the way in which businesses operate and, more importantly, the way organizational units will work together as a total enterprise.
How will this project benefit the Asset Management Industry?
AMPLE is intended to drive a broad range of benefits to the industry by:
- Providing a systematic rationalization for determining where the most cost effective investment (acquisition, maintenance, renewal) in the asset portfolio is, over the life cycle of the asset portfolio (that is, directing limited dollars toward the optimal application in any given budget cycle)
- Extending the life of existing assets through optimal maintenance practices and optimal rehabilitation interventions, thereby deferring major capital expenditure
- Improving the analysis of asset investments to ensure we are acquiring new or rehabilitating old assets by identifying and understanding the whole of business risk exposure
- Enabling gains in productivity and managerial effectiveness through the use of sophisticated asset management and maintenance management systems and long-term strategy and funding plans
- Improving operational efficiency in work practices
- Benchmarking our activities to drive efficiencies where justified.
By understanding our assets more clearly:
- The future demand from our customers and regulators can be forecast more accurately
- We can determine how and when our assets are likely to fail
- We will understand better the consequence of those failures to our customers and community.
Organizations can better direct limited budget resources toward the sustained performance of those assets. Likewise, by improving asset management practices and work processes and improving the quality and timeliness of the flow of data, we raise the confidence of staff, our elected officials and our stakeholders that the investment decisions we make are indeed the very best that can be made.
In short, the more we understand about our assets, the better the decisions we make about them will be.
How do we sustain system performance year after year at the lowest cost to the stakeholder and at a level of business risk acceptable to the community?
This is the essence of asset management - and the focus of AMPLE.
The key elements of AMPLE are:
- A framework for organizing and applying AM material, called Total Enterprise Asset Management Quality Framework (TEAMQF)
- Guidelines outlining Best Appropriate Practices to match the quality framework elements
- Case studies
- A basic implementation case study and training program based on the US EPA training program "Tom's Bad Day".
The vision for Best Appropriate Practice
The AMPLE tool has been developed around the "Quality Framework" that:
- Follows an established business "Value Chain" process
- Uses key quality processes based on seven primary elements of life cycle asset management.
The seven quality elements are:
TEAMQF is built around "best practice asset management".
When applied in a systematic and integrated manner and effectively linked together, these practices lead to:
- The lowest possible life cycle costs for sustained performance of the asset base, at the level of risk set by the organization
- Sustainable world class outcomes in quality and customer service, flexibility, timeliness, innovation, cost and competitiveness.
Not all "world's best practices" are relevant to every organization - an organization may not be culturally ready for certain practices, or the cost to deploy the practices may exceed the return.
The difference between "worlds best practice" and "best appropriate practice" is important.
Best appropriate practices are those world's best practices that are relevant to an organization at a given point in time. If best appropriate practices are followed, while still not perfect, the very best decisions about the asset base that can be made at that time, will be. We should, therefore, have high confidence that the anticipated outcomes will actually materialize.
Organizations need to decide what is appropriate to deliver the outcomes and confidence levels for their own circumstances.
To accommodate increasing system demand and associated community needs and expectations, an AM program needs to be developed gradually. TEAMQF is built around a "balanced scorecard". It takes a highly effective, step-by-step approach to identifying which of the best practices and techniques are appropriate- providing an implementation strategy for the organization.
The graphic below indicates how an organization can improve its performance rating by following a step-by-step process, moving from "innocence" about the core concepts and techniques to best appropriate practice.
Asset management is built around a modest number of core "building block" techniques or "practices and processes". These include:
- Asset registry hierarchies and data standards
- Levels of service, condition and residual life assessments
- Valuation and life cycle costing
- Risk-consequence determination
- Optimal renewal decision-making
- Business risk exposure
- Confidence level metrics
- "Whole portfolio" financial planning.
Each of these can be deployed at different levels of sophistication. The organization needs to determine what steps are required to provide the improvements and undertake only those that are warranted now.
The Principles of Sustainable Best Practice Asset Management
An organization that is delivering best appropriate practice in asset management should be able to make the following claims, as these are the principles of sustainable asset management:
- It knows what assets it has responsibility or legal liability for.
- It records these assets in a register down to a "maintenance managed item" (MMI) level.
- It monitors the condition, performance, utilization and costs of assets down to the MMI component level (as justified). It aggregates this data to give outputs of cost and performance.
- It stores data and knowledge about its assets in suitable corporate information systems that support asset management responsibilities.
- It understands and records the current levels of service in terms of quantity and quality of service including:
- Condition
- Function/size/type (fit for use)
- Regulatory requirements
- Reliability
- Repair or outage response times.
- It thoroughly understands the critical assets necessary for sustained service levels and either monitors its assets to ensure they don't fail or mitigates the failure.
- It understands the likely future levels of service required including regulatory requirements such as:
- Environmental discharge standards
- Occupational health and safety regulations
- Building regulations.
- It understands customers' "non-regulatory" expectations such as:
- Image of facilities
- Number of complaints
- Response times to complaints.
- It understands the full and minimum (no "return" on assets) economic cost of service delivery.
- It understands the long-term capital and recurrent funding needs (20 - 30 year) to meet these regulatory and customer expectations
- It has pricing and funding strategies that match the needs of the business and ensure sustainability
- It reports annually in triple bottom line terms, that is, economic, environmental and social
- It understands the real growth of its business and the way in which the demands for service alter in the future including changes in:
- Population, both users and community
- Unit demand for services
- Demographics of customers and users.
- It monitors and reports on the condition, performance and functionality of assets against prescribed service levels and regulatory requirements.
- It links the asset condition index with service levels at a cost that its customers are willing to pay. If the costs are too high for customers, the organization engages in a stakeholder consultation program to identify trade offs and strategies to better meet customer expectations and service constraints.
- It is able to understand the future level of service options available and their associated costs.
- It publishes the options for future service level publicly through its asset management plans, associated long term funding strategies and stakeholder consultation programs.
- It has uniform processes across the whole organization for the evaluation / validation / approval of any investment in:
- Capital works
- Maintenance
- Operations
- Asset disposal.
- It prioritizes the renewals program that sustains existing levels of service before other discretionary works, providing the program is justified through the previous process.
- It approves capital for new assets and services once the commitment of necessary recurrent expenditure and other non-asset solutions is met.
- It refurbishes and builds new assets for the future needs of its customers to potential future standards rather than current (past) standards.
- It assesses the indirect or ancillary cost impacts of inadequate asset condition or performance on its customers, in terms of the economic, environmental and social costs of the consequences of failing to meet its agreed standards or service levels.
- It uses a variety of practices to drive its Asset Management Improvement Program including the improvement of:
- Effectiveness through input or process benchmarking
- Efficiency through output/outcomes benchmarking
- A business value chain to prioritize business drivers
- A confidence level rating process to identify where the agency should direct its current resources
- Critical assets identified through the Asset Management Planning process
- The AM Improvement program and its success at complying with it, is published as part of the annual reporting process.
Only when an organization can confidently claim that all of the above facets of asset management are being practiced, will best appropriate practice in sustainable asset management be achieved for the benefit of the broader community and the customers being served.
A major driving force is the need for asset owners to adopt modern, business-like practices that lead to efficiency and cost-effectiveness.
Scarce capital resources can be allocated on a needs or risk (cost/benefit) basis, between opportunities for investment in new assets, or renewal of old assets. The allocation of these resources will become a critical part of the investment policies of all organizations. Depending on the organization's current financial status, investments are often substantially reduced, often to the detriment of the asset's life cycle costs.
In general, the overall objectives will be to deliver an acceptable level of service, at the lowest sustainable life cycle cost, at a level of risk acceptable to the community.