De-mystifying Effective Asset Management Programs...De-mystifying Effective Asset Management Programs Bryan W. Dickerson Ohio Section AWWA Annual Conference 2017 25 October 2017 My

De-mystifying Effective Asset Management Programs

Bryan W. DickersonOhio Section AWWA Annual Conference 2017

25 October 2017

My Background…

• Practice Leader for Asset Management B&V Water• Lead for AM Information Solutions

• 20+ Years Experience

• Mixture of Private and Public

• Technical Background• Information Technology & GIS/CMMS/EAM System Implementations

• 15+ Years Focused on Water, Wastewater, & Stormwater Utility Organizations

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Topics

• Why Asset Management (AM) Projects Fail

• Elements of Effective AM Programs• Program Frameworks• CIP Planning & Optimization• Information Solutions• Performance Optimization• Condition Assessment

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Why Asset Management Projects Fail

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Reason #1 – AM Is Not a Project

• Philosophy for doing business

• Limited resources but increasing demands on those resources – how to balance?

• Being responsible stewards of the resources we are entrusted with requires careful, informed use of those resources

• Objective means to target resources for greatest benefit

Focus resources to provide quality service, at lowest possible rates, with acceptable risk, for greatest long-term benefits of community

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Reason #1 – AM Is Not a Project

• Never-ending program that builds on itself for continual improvement

• Set of practices to achieve desired service levels and maximize asset value and performance

• Coordinating finances, people, processes, and information

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Sustainable Service Delivery

Asset Management

Strategy & Framework

Asset Management

Plans

Finance & Lifecycle Planning

EstablishAsset

Management Practices

Develop Asset Data

Implement Practices & Tools

(Info Systems)

Monitor & Measure Results

Document Impacts on

Performance

Identify Areas for

Improvement

Evaluate Effectiveness

Apply Lessons Learned

Modify As Necessary

Reason #2 – It’s Not About Software or Technology

• More than just implementing a Computerized Maintenance Management System (CMMS)

• Doing new things or existing activities in a better way

• Engaging staff to understand why and the associated benefits

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People

Technology

Processes

Business needs should always drive technology decisions

Reason #3 – Proper Support

• Implementing an AM program is an organizational change – executive support is critical

• Clarify and communicate strategic objectives• Project funding• Securing project resources• Helping to manage expectations and risks• Making decisions

Comes down to the “3 Universal Constants” – Death, Taxes, & Resistance to Change8

Reason #3 – Proper Support

• Implementing an AM program is an organizational change – executive support is critical…but so is support frombelow!

• Change management and engagement need to be part of your program strategy

• You’re asking people to do differentthings or do more – need to identifybenefits to them and clearly communicate

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LOW MEDIUM HIGH

LOW

MEDIUM

HIGH

PRO

GRA

M IM

PACT

PROGRAM IMPORTANCE

Elements of Effective Asset Management Programs

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5 Elements of Effective Asset Management Programs

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PROGRAMFRAMEWORK

CIP PLANNING & OPTIMIZATION

INFORMATIONSOLUTIONS

OPERATIONALPERFORMANCE

CONDITIONASSESSMENT

Element #1 – AM Program Framework

• Set of documents, systems and processes that addresses an organization's asset management responsibilities

• What are your assets and how are they expected to perform (service levels)?

• What are your organizational priorities?• Roles and responsibilities• How will you communicate and manage change?• What tools will you use?• What processes will you follow?

Nothing more than a definition for success and a plan for getting there…12

PROGRAMFRAMEWORK


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PROGRAMFRAMEWORK

What is the current state of my assets?

What is my required

sustainable level of service?

Which assets are critical to

sustained performance?

What are my minimum

lifecycle costs?

What is my best long term

funding strategy?

Source: EPA Guidance on Asset Management Best Practices

Framework defines how you will go about answering the above questions


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Fundamental Question Indicators of Effectiveness

1. What is the current state of my assets?

• Full and accurate inventory of assets• Consistent, objective, and documented condition assessment

methodology• Identification of remaining effective useful life for assets• Determination of current asset replacement and major rehabilitation

costs

2. What is my required sustainable level of service?

• Use of level of service standards to track system performance over time

• Understanding of current and anticipated customer demand and satisfaction with system

• Evaluation of current and anticipated regulatory requirements and impacts on asset maintenance and lifecycle management

PROGRAMFRAMEWORK


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3. Which assets are critical to sustained performance?

• Structured and objective method for evaluating asset criticality utilizing risk, likelihood and consequence of failure

• Conducting failure analysis (root cause, utilization of failure codes, conducting failure modes effects analysis)

• Utilizing asset decay curves

4. What are my minimum lifecycle costs?

• Move from reactive to preventive maintenance in targeted, strategic manner

• Understanding costs/benefits of rehab vs replacement• Focusing resources based on asset condition• Analyzing causes of critical asset failure to develop specific response

and failure defense plans

PROGRAMFRAMEWORK


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5. What is my best long term funding strategy?

• Establishing long-term CIP programs• Developing CIP budgets utilizing structured, objective process to

evaluate cost, benefit, and risk mitigated• Analysis of rate structure to determine sustainability against system’s

long-term needs and service level expectations.

PROGRAMFRAMEWORK


• Case Study: Grand Rapids, MI

• Assessment to identify gaps in framework for AM program

• ISO 55001

• Key gap: org structure to support program –need for coordinated IT support

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PROGRAMFRAMEWORK

Addition of Asset Manager, IT System Manager, and Asset Management Committee aligned the functional roles and Asset Management Framework

IT Systems Work Group

Raw Water Supply

Water Treatment

Water Distri-bution

Sewer O&M

Water Pollution Control

Engineering Planning (CIP)

Engineering Construction

Other City Depts

Information Technology Human

Resources Finance

Water and Sewer

DepartmentEngineering

Services

Asset Management Committee

AM Framework, CIP, RCM

Element #2 – CIP Planning & Optimization

• Starts with Asset Risk• Probability (PoF) or Likelihood (LoF) of Failure Modeling• Consequence of Failure (CoF) and Criticality Modeling

• Asset Lifecycle Determination and Deterioration Modeling

• Asset Valuation and Rehabilitation/Replacement Costs

• Risk-Based Prioritization for Capital & Maintenance Programs

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• Grouping of assets into actionable projects

• Which projects to speed up or defer

• Coordination of projects across departments for increased cost savings (cut the street once)

Many approaches and tools to assist with these efforts…pick the right one for you!

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Which projects to delay or accelerate?

Which, if any, to cut?

How much risk

are we taking on?

Are we spending

capital where it is

most valuable?



Case Study: Tulsa Metropolitan Utility Authority

• Result – able to justify and objectively defer, without taking on unmanageable risk, $50M in capital projects

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Task 1IdentifyProjects

Task 2Project

Assumptions

Task 3Business Case Development

Task 4Project

Scheduling

Input Assumptions Planning Criteria Capital Costs O&M Impact Growth Assumptions Revenues Schedule Constraints Failure Probability

Key Results Financial Template NPV Benefit-Avoided

Case Financial Efficiency Balance Scorecard Project Ranking/ Prioritization

Optimization Model Financial Efficiency

• Risk Tolerance• Budget

Constraints Criteria Scoring

• Regulatory & Environmental

• Safety• Customer Service

Based on Condition Assessment

AMPs Other Investment

needs (growth, regulatory, safety, etc…)

Include Asset Operator recommendations

Genetic AlgorithmMonte Carlo SimulationAssumptions

Form

TMUA BUSINESS CASE DEVELOPMENT PROJECT FORMProject Number: User Input Required

Project Name:Project Type: Prepared By: B&V/ACR

Asset Type: Latest Date Submitted: 17-Jan-13Please review Ratings Section: Original Project Date: 1-Oct-13

Asset Description:Primary Investment Driver: Historical Project No. 179

Project Type:

Project Number:

Rating: Rating: Rating:

Score: Score: Score:

Northside

WPC_NS_0001Northside Interceptor Lift Station Screenin WastewaterFacilityWater Pollution Control

PLANNING CRITERIA SECTION

Replacement/Rehabilitation

PROJECT DESCRIPTION SECTION

Desc

riptio

n

Insert Project Description (3-4 sentences)Raw wastewater flows through bar screens before discharging to the wetwell at the Interceptor Lift Station. Trash and rags frequently pass through the screens and clog the lift station pumps. The pumps currently operate on constant speed motors. This project will replace the bar screens with mechanically cleaned fine screens and add variable frequency drives to improve the operating efficiency of the pumps. Cleaning the screens is also a dirty job and TMUA feels like it would be beneficial to eliminate the job for the employees.

Depe

nden

t Pr

ojects

Insert any projects that are dependent on or support this project and associated assumptions.

Inves

tmen

t Driv

er Insert Investment Driver justification assumptions (Text must justify the driver).

Trash and rags passing through the screens cause clogs in downstream pumps.Impact of deferral: Costly repairs and overflows.Reduce handling of screenings at Northside

Refer

ence

List any Technical Documents or reports where information came from.Comprehensive Study

Reg.

and E

nv. C

ompli

ance

Insert Regulatory and Environmental Compliance assumptions here (text must justify rating/score).

Potential overflows into a golf course. Minor potential for consent order in the long term.

Reg. and Env. Compliance Definition Scoring Results Regulatory Impact - WPC Environmental Impact

Model

Home

Logo

Element #3 – Use of Information Solutions

• Technology has not made our life easier…

• …but used effectively and in a focused manner it can help you make better decisions about managing your assets

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• Example – Computerized Maintenance Management System (CMMS)

• Used poorly:• Maintenance history, electronic file drawer

• Used effectively:• Registry of assets, criticality, and current condition• Supports better targeting of O&M resources for greatest benefit• Decision support tool for identifying how and preventing critical asset failure

If it’s just for electronic record keeping of work orders and maintenance history save your money and use paper…

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23


Process Air Blowers

(2,000 HP)

Main Raw Water Pumps

(700 HP)

Return Sludge Pumps

(100 HP)

Total Run Hours 3,552 3,552 3,552

Days of Data 148 148 148

High Cost per Hour $ 47.62 $ 17.97 $ 0.82

Low Cost per Hour $ 31.40 $ 11.67 $ 0.63

Cost per Hour Delta $ 16.22 $ 6.30 $ 0.19

Max Potential Savings $ 43,210.08 $ 16,783.20 $ 506.16

Annualized Savings $142,087.20 $ 55,188.00 $ 1,664.40

Element #4 – Condition Assessment

• Structured, regular, and ongoing program to understand asset condition

• Feeds into asset risk prioritization as part of PoF/LoF

• Condition is a point in time; ever changing

• Involves:• Field Inspections & Facility Condition

Assessments for Linear & Vertical Asset Types• Condition Assessment Technology Evaluation &

Selection• Condition Monitoring & Non-Destructive Testing

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CONDITIONASSESSMENT

Element #4 – Condition Assessment

• Desktop assessments (age, institutional knowledge) only take you so far

• Structured assessment approach allows you to “truth check” and verify

• Case Study: San Diego Public Utilities

Desktop risk assessment was good, but condition assessments revealed ways to make more efficient use of R&R funds – some conditions differed from desktop analysis (positive and negative)

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CONDITIONASSESSMENT

Likelihood of Failure0 1 2 3 4 5 Group

Cons

eque

nce

of F

ailu

re

5 A

B

4 C

D

3 E

F

2 G

H

1

InspectionResults Adjusted due

to Inspection

Confirmed by Inspection

Element #5 – Operational Performance

• Strategic Maintenance Planning

• O&M Efficiency

• Reliability Centered Maintenance (RCM)

• Failure Modes, Effects, and Criticality Analysis (FMECA)

• Preventive (PM) & Predictive (PdM) Maintenance Program Development & Implementation

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Element #5 – Operational Performance

• Remember understanding about asset risk and condition? It does more than just inform CIP decisions…

• Case Study: KC Water Services Dept• Use of risk to place assets into

“maintenance strategy groups”• Confirm with more detailed effort to

develop “failure defense plans”• Eliminated 20% of unnecessary or

ineffective PM’s

Focus staff, material and contractor resources on activities more effective at increasing reliability and lifespan of critical assets 27


Summary & Wrap-up

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Reasons Asset Management Initiatives Fail

1. Treated like a project instead of a program.

2. Too much of a focus on technology instead of recognizing it’s about people, processes and technology.

3. Lack of proper support – top down and bottom up.

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5 Elements of Effective Asset Management Programs

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PROGRAMFRAMEWORK




CONDITIONASSESSMENT

Bryan W. Dickerson+1 [email protected]

https://www.linkedin.com/in/bryandickerson/

25 October 2017

mailto:[email protected]

https://www.linkedin.com/in/bryandickerson/