AN INTRODUCTION

TO ASSET

MANAGEMENT

Katie Erickson, City of Wyoming

An Introduction to Asset Management

What is an asset management program?

What are the benefits?

How do I begin to develop an asset

management program?

Problems with Buried Assets

2013: America scores a D+ for infrastructure

with the American Society of Civil Engineers

Wastewater- D

Drinking water- D

Costs are accumulating:

Wastewater needs an estimated investment of

$298 Billion over the next 20 years

Drinking water pipe replacements costs could top

$1 Trillion over the next few decades

Problems with Buried Assets

Buried assets are unseen by the public so

awareness of need is low

Costs can be more difficult to explain and

justify to the public that is not aware of

the problem

The long life of the assets make it difficult

to track lifecycle information

“Coordinated activity of an organization to realize

value from assets”- ISO55000

Asset Management

What is an Asset Management Program?

International Infrastructure Management Manual:

“…meeting a required level of service

in the most cost effective way through the creation, acquisition, operation, maintenance, rehabilitation and disposal of assets to provide for present and future customers.”

What is an Asset Management Program?

A comprehensive

plan for long-term

sustainability

Connects level of

service with the

condition of the

system, managing

risk, improvement

plans, and funding

Capital

Improvement

Projects

Level of

Service

Criticality

of Assets

Asset

Inventory

Revenue

Structure

Level of Service (LOS)

Set requirements and goals for the utility

Direct link to cost to the customer, Higher

LOS=Higher Costs

Communication with stakeholders is critical

in setting LOS

Level of Service

Examples

No assets in high risk level

Address customer complaints within 24

hours

Meet all regulatory requirements

Asset Inventory

A registry of the assets owned and/or

maintained by the organization

Entries should include:

location

condition rating

consequence of failure rating

value and lifecycle data

Criticality

A rating system that combines the probability

of failure (or condition rating) with the

consequence of failure rating

Probability of Failure: 1= Improbable, 5=Imminent

Consequence of Failure: 1=Insignificant disruption,

5=Catastrophic disruption

Business Risk Evaluation (BRE)-

Probability of Failure X Consequence of Failure

Criticality-BRE

Lift Station

Consequence Rating=4

Probability Rating=1

BRE= 4 x 1=4

Pump

Consequence Rating=3

Probability Rating =4

BRE= 3 x 4=12

Criticality-Risk Framework

1 2 3 4 5

1 1 2 3 4 5

2 2 4 6 8 10

3 3 6 9 12 15

4 4 8 12 16 20

5 5 10 15 20 25

Consequence of Failure

Pro

ba

bili

ty o

f Fa

ilure

Criticality-Risk Framework

1 2 3 4 5

1 1 2 3 4 5

2 2 4 6 8 10

3 3 6 9 12 15

4 4 8 12 16 20

5 5 10 15 20 25

Consequence of Failure

Pro

ba

bili

ty o

f Fa

ilure

Lift station

BRE-4

Pump

BRE-12

Criticality-Risk Framework

1 2 3 4 5

1 1 2 3 4 5

2 2 4 6 8 10

3 3 6 9 12 15

4 4 8 12 16 20

5 5 10 15 20 25

Consequence of Failure

Pro

ba

bili

ty o

f Fa

ilure

ICP

Consequence= 3

Probability= 2

BRE=6

Chlorine Meter

Consequence= 5

Probability= 2

BRE=10

Limiting Risk

Redundancy

Maintenance

Rehabilitation

Replacement

Capital Improvement Plans (CIP)

A long-term plan that looks at the

organization’s future needs, usually 20 years

Should be adjusted as conditions change

It should take into consideration:

Future/upcoming regulations

Major asset replacement

System expansion

Improved technology

Revenue Structure

Rate methodology should include level of

service, BRE of assets, and CIP to reflect

true costs

Must make progress toward filling future

gaps in funding so sudden rate increases

are not required

What are the benefits?

Data driven decisions about repairing or

replacing equipment

Transfer institutional knowledge during

employee succession

Communication tool with stakeholders

Decisions…

Can only be as good as the data that supports them.

Data Needs to Be

Complete

Standardized

Accurate

Accessible

Gap Analysis

Determines current position

Clarifies future vision

Develops a plan to fill the

gap

Gap Analysis

Determining current position

Examine present policy and procedure

Gather existing data

Examine current IT capabilities

Assess current skills, knowledge and culture

Gap Analysis

Clarify future vision

Review and integrate regulations

Examine standards or best practices

Discuss desired expectations and outcomes

Determine what data would be useful

Gap Analysis

Develop a plan to fill the gap

Identify gaps between current practices and future needs

Research possible skills, tools, and systems that can close the gaps

Decide what processes will work best for YOUR organization

Develop an implementation plan and timetable

Questions?

Resources

American Society of Civil Engineers. 2013 Report

Card for America’s Infrastructure

“Asset Management Guidance for Wastewater and

Stormwater Systems.” July 2013

ISO 55000: 2014(E)