RI GFOA: Winter Training
Objectives
• Why Asset Management?
• What is Asset Management?
• Developing an Asset Management Program
• Tools Required for Asset Management
– Computerized Maintenance Management System
– Specialized Modeling
– Condition Protocols
Asset Management Creates a Risk Register to Improve
Management Decision Making
• Develops and leverages
existing asset Information and tools
– Data & Systems
– Institutional Knowledge
– Staff & Procedures • Focused on improving
decision making and
budgeting for maintenance and capital replacement
$1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000
Two Fundamental Questions Drive
Asset Management
• What assets/equipment are most
likely to fail? (“Likelihood of Failure”)
• And if they fail, what
damage/problems will that create? (“Consequence of Failure”)
Need to Assess Risk Across all Assets
Using Consistent Methodology
Risk
= f(
COF
,
LOF
,
Redundancy
)• COF—Consequence of Failure
If it fails, how are employees/customers/services impacted
• Safety/Health
• Loss of service—duration/severity
• Costs—repair, replacement, consequential
• LOF—Probability of Failure
How likely is an asset to fail to provide appropriate Level of Service
• Condition/Age
Typical Asset Management Outputs
$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 Maintenance Replacement Rehabilitation $-$500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 20062007200820092010201120122013201420152016201720182019202020212022202320242025 $-$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000CDM Smiths’s Philosophy on Asset Management
• Need to start with the end in mind — Vision
• Have to crawl before you walk and walk before you run —
Phased Approach
• AM is not new; utilities have been managing assets since the start of time — Build on Existing Practices
• AM is not a software package — Integrate People, Processes and Technology
• Mid-level managers and supervisors are the keys to success —
What Needs to Be Done?
• Determine asset management vision
• Collect necessary asset data and create asset registry
• Establish asset management architecture – Likelihood of Failure
– Consequence of Failure
– Redundancy
• Determine and implement information management requirements and system
Inspection of Major Assets Develops Baseline
Condition Assessment
Implement Full Condition Assessment Program
Implement Full Condition Assessment Program
Design Workplan for Field Inspection Design Workplan for Field Inspection
Establish Condition Assessment Protocols
Establish Condition Assessment Protocols
(Pilot Test Methodology)
S ta ff I n v o lv em en t S ta ff I n v o lv em en t
Need to Inventory and Organize Asset
Information
Establish a Protocol for Assessing Condition and
Relating to Remaining Useful Life
Likelihood of Failure Assessment
• Condition--is it operable, functioning
• Capacity—is it of sufficient size to meet demands/loads required
Simpler Criticality Assessment Process
DEP Criteria DEP Weight Assessment Level
Regulatory Compliance 35% Process
Level of Service 25% Process
Hazard Potential 20% Group
Financial (O&M) Impacts 10% Group
Redundancy 10% Group
Redundancy is a Risk Mitigation Strategy Consistent
with Utility Operations and Maintenance
• Looped distribution systems
– If have a break in one location, can restore service from another feed location
• Service and stand-by pumps in pump station
• Intersystem connections between utiities/municipalities
•
Redundancy reduces the impact of an asset
failure—customers will continue to provide
service, but problem must still be addressed
ESTABLISH RELATIVE RISK AND MAKE
DECISIONS
Asset Risk Index is Basis for Determining What
Assets to Focus on and What Actions are
Appropriate
Asset Risk Index Matrix
Asset
Inventory Asset Analysis & Prioritization StrategyAsset
Monitoring Frequent Monitorin Regular Monitoring Regular Monitoring Infrequent Monitoring Infrequent Monitoring 1 Frequent Cleaning / Monitoring Frequent Clean/ Monitoring Regular Monitoring Infrequent Monitoring Infrequent Monitoring 2 Short Term Rehab Mid Term Rehab Mid Term Rehab
Long Term Rehab Long Term Rehab 3 Immediate Rehab Immediate Rehab Mid Term Rehab Mid Term Rehab Long Term Rehab
4 Immediate Replace Immediate Replace Short Term Repl/Rehab Mid Term Repl/Rehab LT Rehab/ Replace 5 C o n d it io n (P ro b a b ili ty o f F a ilu re ) 5 4 3 2 1 Criticality (Consequences of Failure) Frequent Monitoring Regular Monitoring Regular Monitoring Infrequent Monitoring Infrequent Monitoring 1 Frequent Cleaning / Monitoring Frequent Clean/ Regular Monitoring Infrequent Monitoring Infrequent Monitoring 2 Short Term Rehab Mid Term Rehab Mid Term Rehab
Long Term Rehab Long Term Rehab 3 Immediate Rehab Immediate Rehab Mid Term Rehab Mid Term Rehab Long Term Rehab
4 Immediate Replace Immediate Replace Short Term Repl/Rehab Mid Term Repl/Rehab LT Rehab/ Replace 5 C o n d it io n (L ike lih o o d o f F a ilu re ) 5 4 3 2 1 Criticality (Consequences of Failure)
Efficient CIP Prioritization Process Ensures Best
Use of Available Funds
Efficient CIP Prioritization Process Ensures Best
Use of Available Funds
New York City DEP Prioritization and Risk Mitigation Program New York City DEP Prioritization and Risk Mitigation Program New York City DEP Prioritization and Risk Mitigation Program
Asset
Budget & Schedule Forecasts Enterprise-wide Communication Reports, Maps & Analyses Asset Management Accounting & Budgetary Data Crew/Employee Profiles & Resource
Data Customer Complaints
Maintenance
Specifications, Histories & Work Details
CMMS/GIS Are Central to Success and Sustainability
Asset
Inventory Asset Analysis & Prioritization StrategyAsset
CMMS/ GIS CMMS/ GIS CMMS/ GIS
Business Processes May Need to be Modified to
Maintain Information Accuracy
Realistic Expectations for AM
• Takes several years of detailed, nitty-gritty work to fully deploy
• Requires strong continued executive leadership eventual buy-in commitment of the whole organization
• Needs upfront investment to get started, with hidden
AM Streamlines Organization’s Operation
Building on an Existing AM System
(Narragansett Bay Commission, Providence, RI)
• Streamlined maintenance process which resulted in 20% or more maintenance production with same level of resources
• Modified asset information base so that the organization has a greater understanding of the condition and remaining useful life's of its assets
• Targeted maintenance and replacement activities to most critical assets; resulted in a material reduction in the number of failures
• Created long term renewal and replacement plan so that funding is now aligned to address critical asset needs
AM Builds a Framework for Success
Creating a Framework
(Northeast Ohio Reg. Sanitary District [NEORSD], Cleveland, OH)
• Detailed assessment of condition and renewal needs of key assets revealed large blowers, for example, did not need replacement if appropriate maintenance was done; this resulted in a significant capital savings
• Developed consistent hierarchy for all district facilities that
enabled NEORSD to report on maintenance activities and costs across divisions; management decisions now reflect a broader knowledge base and a consistent response to varied internal demands
• Established framework for comprehensive renewal and
replacement planning and funding to ensure integrity of system over time
Asset Assessment Saves Utility Money
Value of Condition Assessments For Critical Assets (Cape Fear Public Utilities Authority, North Carolina)
• Utility was uncertain about the condition of their critical 48-inch steel Burnt Mill Creek outfall sewer
• CDM performed visual and ultrasonic pipe-thickness condition assessment on line
• Critical repairs identified before a failure occurred; a cured in place (CIP) liner and several replacement structures were
installed
• Cost savings associated with the CIP liner versus replacement was approximately $600,000 to $700,000, and the potential damage related to a failure was mitigated
QUESTIONS?
JOSEPH RIDGE CDM SMITH 603—222-8330
