AssetManagementIntro 001 0

Asset Management Intro
Whole of Life Environmental, Economic, and Social Balance
Water Environmental School 2012

Oregon Water Education Foundation
Clackamas Community College
March 28, 2012
Presented by:
Barry Buchanan, P.E.
120328.01 Short School AM Intro. bjb
Agenda
What is Asset Management (AM)?

Why Do Asset Management?
AMs Components
AM Maturity
AM Processes & Tools
Acknowledgements:
This presentation is a compilation of ideas and concept collated from the following sources:
1.
International Infrastructure Maintenance Manual Governments of Australia & New Zealand
2.
An Anatomy of Asset Management & BSI PAS 55 Institute of Asset Management UK
3.
SIMPLE WERF/GHD USA
4.
CUPSS EPA USA
5.
Presentations by: EPA, IPWEA, NAMS, EMA, GHD, CH2MHill (OMI), MWH (TAG), Western Engineering,
URS (Red Oak), Brown & Caldwell, OCSD, Seattle PU, and others
6.
Strategic Asset Management by Clive Deadman UK
7.
My own experience at Thames Water Plc. UK

What is Asset Management?
Asset Management is:
The provision of customer agreed levels of service,

through the application of best available practices,
applied appropriately throughout an assets life, at the
right cost.
Finding the right solution, with the right people, at the

right time, for the right cost, within an acceptable risk.
The right time is Just In Time.
The right cost is the Least Life Cycle Cost.
Change in Focus:
Historic
Asset Management
Operation centric
Asset centric
Internal focus
Customer focus
Closed book
Open book
Short term
Whole of life
Risk adverse
Risk tolerant
Lowest capital cost
Least life cycle cost
Subjective
Objective
Using standardize processes informed by centralized:

reliable, repeatable, and accessible data.
holistic
sustainable
systematic
Asset
INTEGRATED
Manageme
nt
optimal
systemic
risk-based
Key Principals and attributes
of Asset Management
(PAS 55-2: 2008)

STRATEGIC
PLANNING:
RISK &
REVIEW:
Criticality, Risk Assessment &

Management, Contingency Planning
& Resilience Analysis, Sustainable
Development, Weather & Climate
Change, Asset & System Performance
& Health Monitoring, Assets &
Systems Change Management,
Management Review, Audit and
Assurance, Accounting Practices,
Stakeholder Relations
Asset Management Policy

Asset Management Strategy
Demand Analysis
Strategic Planning
Asset Management Plan
DECISION
MAKING:
Capital Investment Decision Making,

O&M Decision Making, Life Cycle
Cost & Value Optimization,
Resourcing Strategy & Optimization,
Shutdown & Outage Strategy &
Optimization
ASSET
Asset
MANAGEMENT
Management
SUBJECTS
PEOPLE &
ORGANIZATION
Contract & Supplier Management

Asset Management Leadership
Organizational Structure & Culture
Competence & Behavior
ASSET
ASSET
LIFECYCLE:
Technical Standards & Legislation,

Asset Condition & Acquisition,
System Engineering, Configuration
Management, Maintenance Delivery,
Reliability Engineering & Root Cause,
Analysis, Shutdown/Outage
Management, Incident Response,
Asset, Rationalization & Disposal
KNOWLEDGE
Asset Information Strategy

Asset Knowledge Standards
Asset Information Systems
Asset Data & Knowledge
Six subject group &

thirty-nine subject
of Asset Management
(PAS 55-2: 2008)
Why
To achieve more with less
To minimize the total cost of ownership
To maximize asset availability and utilization
To optimize decision making
Solutions defined through: risk based, least life cycle cost,

Business Case Evaluations and Benefit/Cost analysis.
Why
To promote education and learning
To enable continual improvement
To aid knowledge capture and transfer
Succession planning
To facilitate working smarter not harder

Improved work environment
Plan
Increase productivity
Do
Impart empowerment
Study
Act
Document what you want to do
Quality Assurance
Do what you document
Quality Action
Document what you did
Quality Control
Review and improve
Adaptive TQM
Why
To invest transparency and trust

Traceable, defendable actions and decision
Accessible, accurate, repeatability, reliability results
To improve customer satisfaction

To incite customer support
Customers
willingness to
pay or to be
compensated
Customers
preferences or
wants
Public accountability for asset condition and performance.

Why
To build confidence and credibility in:
Whole of life ownership

Result based management
Reliability centered maintenance
Triple bottom line sustainability
Economic
Economic
Prosperity
Environmental
Social Balance
Environmental
Quality
Economy
Society
Environment
Social
Equality
Why
To support regulatory requirements
Capacity Management Operation and Maintenance (CMOM)

Governmental Accounting Standards Board (GASB) 34
The reduction or removal of federal funding
Asset Management Plans (AMP) mandates
EPA predicts a 20-30%

cost saving may be realized.
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
PEOPLE
PROCESSES
TOOLS
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
Components of
ASSET MANAGEMENT
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
CLIMATE:
legalistic, socio-economic
environment, climatic
condition/change, other
external forces,
the wants and desires
of the customers
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
COMPLEXITY:
culture, size, numbers,

operational structure,
governance, management,
diversity of assets,
interdependency of
assets
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
STANDARDS
PEOPLE:
partnering with the right

people, in the right place, at the
right time, working on shared
SMART performance based
goals, with right competence
and right behaviors
ASSET &
BUSINESS
RISK
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
GOALS:
policies, regulations,
rules, directives,
strategic ambitions,
agreed levels of service,
demand, values, and
objectives guiding
output and outcomes
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
SUSTIANABILITY:
environmental, economic,
social balance
least life cycle cost
plan, finance, acquire,
transfer, operate,
maintain, dispose,
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
Operation & Maintenance

Project
Management
Customer Agreed
Levels of
Service
Commission,
Operational
Transfer
Monitor,
Account,
& Report
Optimized
Programmatic
Operation
Reliability
Centered
Maintenance
Data & System

Knowledge
Construct
and/or Acquire
Assets
Plan and Acquire Assets

(Capital Works)
Funding
(CIP & Budget)
Disposal
Strategic
Planning
Develop and
Validate
Asset Life Cycle
Financial
Planning, Cost
of Service
Planning
Sound Social, Environmental, and Fiscal
Result Oriented Management.
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
STANDARDS
DATA:
what, where, value,

criticality, conditionage, capability, capacity,
physical condition,
efficiency, effectiveness
ASSET &
BUSINESS
RISK
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
CONSEQUENCE x
LIKELIHOOD of failure,
failure mode, cause and

effect, Benefit/Cost,
& resilience analysis,
change management,
continual improvement,
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
OPTIMIZATION,
PRIORITIZATION,
VALIDATION:
capital projects,
operational programs,
redundancy, intervention,
emergency strategies
utilization, availability, reliability
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
PEOPLE
PROCESSES
TOOLS
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
Components of
ASSET MANAGEMENT
AM Maturity
AM Implementation:
Sustainability
compliant
From
the Top
Down
Culture
focused
Asset
centric
AM
Operation
centric
Up
Bottom
the
From
AM Maturity
Where do we fit?
AMP 4.
(some BSI PAS 55 (ISO 55000) Compliant)
AMP 3.
Strategic Asset Management
ISO 9000 Compliance

Program Management
AMP 2.
Result Oriented
System Integration
Enterprise Management
Quality Circles
QA/QC
TQM
Project Management
AMP 1.
Most UK, Au, NZ

Utility & Service industries
Adaptive TQM
ISO 14000 Compliance
Value Management
Some Privatized US
Spectrum of Public US
AMP 5.
: 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Yr
Diagram indicative not to be taken as absolute
AM Maturity
AM Maturity Scale:
0%
Innocent
5%
Learning
Aware
15%
Applying
- Scale developed by Asset

Management Consultant Ltd, UK.
Developing
30%
Competent
45%
Embedding
Aspiring
70%
Excellent
100%
BSI PAS 55 Compliant
Integrating
Optimizing
Limits of known AM
best practice
AM Maturity
Asset Management Maturity:

Low
- Assets acquired based on capacity studies. CIP primarily

managed by engineering with limited operations input.
LM
- Awareness of asset condition, life cycle cost, risk based

decision making and continual improvement.
Med
- Implementation of solution identification by

Business Case Evaluation and asset criticality.
MH
- Collaborative risk based decision making. Established

performance measures, monitoring, and reporting system.
High
- Customers agreed levels of service integrated with

performance measures and triple bottom line analysis.
AM Maturity
Asset maintenance maturity:

Low - 90% reactive maintenance.
LM
- 50% reactive maintenance Corrective maintenance
Med - 20% reactive maintenance Preventative maintenance.

MH
- 10% reactive maintenance Predictive maintenance.
High - <5% reactive maintenance Reliability Centered, Risk Based.
AM Maturity
People are the No: 1 Asset
Requires the right people in the right jobs, with

clearly define roles, responsibilities and authority,
that can be held accountable.
Most Likely
Failure Mode
Descriptor
Efficiency
Optimization
Physical
Structural
Reactive
Emergency
Maintenance
Level of Service
Regulations, Rules, Procedures,
Directives, Agreements, etc
Reliability Centered, Risk Based Maintenance

Preventative/Monitored/Condition Based Maintenance
Routine
Maintenance
Capacity
Demand
Strategic Plan 1, 2, 5, 10, 20, 50, 100

yrs
Just in time: Predictive Maintenance, and

Planned Interventions, O&M Plan -1 through 5 yrs
Just in time: Capital Work
Repair
Replenishment
Refurbishment
Replacement
Renewal/Upgrade
New
Urgency
Immediate
Daily, Weekly,
Monthly
4-12 weeks
3-12 months
1-5 yrs
5+ yrs
Type
Emergency
Operation
Work
Work
Maintenance
Work
Listed Asset
or $.00
Threshold
Capital
Work
AMs Processes & Tools
Financial
- Investment
- Benefit Cost
- Analysis
Tools
Decision Aiding
Tools for CAPEX
& OPEX
- Prioritization
- Validation
- Risk Analysis
Spatial Tools
- GIS
- CAD
Process Tools
- Optimization
- Modeling
- Mapping ..
iGrafx
Project,
Maintenance
Management Tools
- CMMS
- Project,
Primavera etc
Program
Management,
Operational
Optimization
- I or EAMS
- iGrafx
- LEAN
- Six Sigma (6)
Data Collection,
Management, and
Reporting Tools
- SCADA or
DSC
- Crystal
- F/LIMS
Helpful AM Tools
Business related tools
Adaptive Total Quality Management
Balanced Score Card
Vision, Mission, Goals, Objectives with Performance Measurement
Benchmarking
Practices, Processes & Systems Mapping and Optimization e.g. (6)
..
Asset (Data) related tools
GIS Global Information System
I/E/CM .. MS Integrated/Enterprise/Computer Maintenance ..
Management System
SCADA Site Control and Data Acquisition System
DCS Distributed data Control System
..
O&M Risk Tools
O&M Evaluation & Solution Selection tools
Opman - Operation Maintenance H&S at work analysis

Hazop Hazardous Operation what if analysis
Hazan Review analysis of HAZOP
FMEA Failure Mode & Effect Analysis
HACCP Hazard Analysis and Critical Control Points
SPRT Sequential Probability Ratio Testing
NATA New Approach to Appraisal
B/C Benefit Cost Ratio decision making
etc.
Asset
Management
Result based
Management
Plan & Acquire

Assets (or Not)
Financial
Management
Project
Management
Operation
Maintenance
Optimum output
Best outcomes
What do
we have?
Fiscal stability
Initiate, plan,
execute, transfer,
close
Maximize asset
utilization
What is the agreed

LOS?
S.M.A.R.T.
agreements
What is
required?
Top down
Performance
Measurement
Integrate, Monitor,
Control,
Communicate
Optimum quality,
lowest cost
What ways may the

asset fail?
Clear expectations,
authority, roles &
responsibility
What are the issues?
Bottom up Zero
Based Budgeting
Time, Cost, Quality
Motivated, high
morale, teaming
environment
What causes the

asset to fail?
Collaborative goals
and objectives
What is the priority?
Asset classification,
cap, valuation,
depreciation
Scope, Resources,
Procurement
Participative,
empowering
leadership
What effect does the

failure have?
Self determined
execution
What are the LLCC

solution strategy?
Optimized decision
making
Risk
Right: amount,
product, & place;
just in time
What consequence
does the failure have?
Continual
improvement,
education & R&D
What is the level of

confidence?
Centralized, reliable,
repeatable, accessible
data
Health & Safety
Systemic
standardized
processes
What is the best

proactive action to
maximize availability?
Feed back, known:

rewards, &
consequences
What is the best

implementation
strategy?
Funding, budgeting,
accounting,
monitoring, reporting
Visual Management
What is the default

strategy?
Master list, feed the; Utility System Master Plan, the

System Development Charges (SDC 309 list), Operation
Programs, Maintenance Projects, Capital Improvements
Projects, and the Cost of Service analysis)
11. Project/Program Documentation (The
most appropriate implementation strategy)
10. Solution Funding & Implementation

Strategy (Identify the potential funding sources and
9. Solution Validation (Step by step data and

evaluation review to establish the degree of confidence
that may be placed on the recommended solution)
solutions to fill any given gap. Determine the potential

Business Exposure associated with each option. For
each gap or collection of gaps identify the best solution
through Triple Bottom Line Business Case Evaluation
and Benefit Cost analysis)
8. Solution Identification (Identify all possible
issues with respect to location, similarity, and/or

relational dependency. Establish an issue(s) priority
number by determining the Work Priority (criticality x
condition), Risk of Failure (likelihood f(remaining life) x
consequence of failure), and consequence weighting
factors)
7. Issue Prioritization (Review and group the
standards to asset/system performance)
6. Issue Identification (compare service
5. Service Standards (demands, reliability,

quality, efficiency, Level of service (regulations,
agreements, codes, directives, plans, rules, guidelines
etc))
1. Asset register (what, where, when)

2. Asset performance (condition, capability)
3. Asset Criticality (breadth affect x redundancy)
4. Asset Value (Purchase, Residual, Replacement)
What are
the Least What is What is the best
What do What is What are What is the
Life Cycle the level of implementation
we have required the issues
priority
confidence
strategy
Cost
solutions
Plan & Acquire Assets (or not) Key Questions

What do
we have
What is
required
What is
What is the
critical to
best solution
sustain
Capital
performance
O&M
9. Determine funding Strategy

10. Formulate AMP
7. Optimize O&M Investment

8. Optimize Capital Investment
6. Determine business risk
5. Identify levels of service
1. Asset register
2. Asset performance
3. Residual life
4. Lifecycle replacement cost
What is the
best financial
strategy
WERFs SIMPLE Key Questions

What do
we have
What is
required
What is
What is the
critical to
best solution
sustain
Capital
performance
O&M
My Finances
My Financial Check Up
My CUPSS Plan
MY Finances
My O&M
My Financial Check Up
MY CUPSS Plan
My Inventory
My Asset Check Up
My CUPSS Plan
My CUPSS Plan
My Inventory
My O&M
My CUPSS Plan
What is the
best financial
strategy
EPAs Check Up for Small Systems Key Questions

Asset Management Intro

Whole of Life Environmental, Economic, and Social Balance
Thank you for listening.
Questions
Ideas
Thoughts
Comments
#+*@#!
Barry Buchanan, P.E.
360 910 1564
Barry_Lori@comcast.net
EXTRA SLIDES
holistic
sustainable
systematic
Asset
INTEGRATED
Manageme
nt
optimal
systemic
risk-based
Key Principals and attributes
of Asset Management
(PAS 55-2: 2008)
1:10 1:20 Overview
Asset Management a definition: 3 of 30+

asset management
A best practice business management philosophy, a culture (not just a program)
asset management
n.
n. Seattle Public Utilities
Meeting agreed customer and environmental service levels while minimizing the
life cycle cost
asset management
n. Washington Suburban Sanitary
Commission
Maximizing the investment through

Doing the right thing
With the right people
At the right time
For the right cost
Barry Buchanan Milwaukie Dec 2007
Asset Management is:
The provision of customer agreed levels of service

through the use of Best Available Practices
appropriately applied throughout an assets life.
Supported by Sustainable Result Oriented Management

(socially, environmentally, and fiscally right stewardship)
110425.05 AM Council intro. bjb
Asset Management:
Aim to:
Maximize Asset Utilization
Maximize Asset Availability
Minimize Whole of Life Cost
Choose the right solution, with the right people, just in time,
at the right cost, within a tolerable risk
Implement infrastructure sustainability:

Through:
Result oriented management levels of service
Plan & acquire assets (or not), planning
Project management project implementation
Optimized/Lean operations
Reliability centered maintenance
Sound infrastructure financial management
Using standardize processes informed by centralized: reliable,
repeatable, and accessible data
1:10 1:20 Overview
Asset Management the Basics

Make informed decisions when Acquiring,
Operating, and Maintaining Assets using:
Statistical analytical tools,
Risk methodologies,
Asset awareness:
Condition,
Criticality,
Failure Modes,
Reliability centered maintenance incorporating
Monitored/Predictive/Planned maintenance schedules, and long term
planned intervention strategies
with quantifiable levels of confidence
1:10 1:20 Overview
Instilling a Culture of Transparency

Make the organization transparent:
Clearly defined business objectives aligned with Customer
agreed levels of service:
Identify the business:
Core functions,
Support functions
Identify the roles:
Specifiers
Planning
Asset Owners
Service Providers
1:10 1:20 Overview
Prime Business Principles
Clearly Identify Core Business
Established Core
Principles
Mission
Values
Goals
Agreed Customer Focused Levels of Service

Acknowledged custodians of Assets for the long haul
Strong focus on Auditable result using
With well defined Planning and Service Provider Roles
Performance measurement, monitoring and reporting
An excellence based organization

1:10 1:20 Overview
Excellence based Organization
Build a foundation on:

1.
2.
3.
4.
5.
6.
7.
8.
9.
A customer focused attitude

Providing participative and empowering leadership
Cultivating a team environment
Using standardized systems and process approach
Promoting environmental, economical and social balance
Encouraging quality and excellence
Education and supporting continual improvement
Conveying a listen first posture
Instilling a partnering philosophy
ISO 9000, 14000 or similar
1:10 1:20 Overview
Asset Management is for the Long Haul
Custodians of Assets for the long haul,

A change from Short Term Operation Centered to Long Term Asset
Centric
Operate and Maintain all assets in a sustainable manner
Whole of Life Cost Evaluation
Customer Service Focused
High Focus on Auditable Results with

Continuous Improvement and Education and
Risk-based Decision Making
STAM is a Utility Management Philosophy

That needs Strong Leadership from the TOP!
And takes a champion that wont rest until it is implemented
1:20 1:40 Elements
People
Natural
Materials
Resource
Management
Environment
Plant
- Monitor
- Quality
- Control
- Conservation
Processes
Tools
Equipment
- Sustainable use
- Optimize
Buildings
Real estate
What is an asset?
Asset
Anything that
aids you to do your job
and/or makes, or costs,
you money
Natural
Resource
IT &
Comm.
Systems
Human
Resource
Utilities,
Facilities,
Amenities
Assets
Plant &
Equipment
Buildings &
Real-estate
AM Review EPA Pres March 05 - Barry Buchanan
1:20 1:40 Elements
The Key Elements of AM
Quality
Resource
Management
Financial
Stewardship
Standards
LEVEL of SERVICE
Communication
Data
Management
Operation &
Maintenance
Risk
Management
Plan &
Acquire
Assets (or Not)
More Dedicated
Committed Staff
High level of
Standardization
Less
Redundancy
High Customer
Satisfaction
Lower Cost
of Ownership
Few Customer
Complaints
2:50 - 3:00 Round-up
Achievable Results
Wrap Up!
What You Can Achieve!

Move From:
Cant do
Lead
Bureaucratic
Entitled
Depressed
Short term
Dysfunctional
Hierarchal
Individuals
Secretive
Mono skilled
Reactive
Insular
Status quo
To:
Can do
Leaders
Commercial
Performance oriented
Incentivized
Whole of life
United
Flat
Teaming
Transparent
Multi skilled
Strategic/Proactive
Highly aware
Continually Improving
111028.01 GIC- San Diego. bjb
2:50 - 3:00 Round-up
Closing Thoughts
People, teams, partnerships are the Number One Asset!
Decisions are made on Asset, Whole of Life, Risk Basis
Asset Management is about optimization, working

smarter not harder
An Asset Management Organization is Customer
focused
The Back Bone of Sustainable Total Asset Management
is:
Continuous Improvement through
Adaptive TBL-TQM
1:10 1:20 Overview
International Implementation Strategies
Asset Management
Implementation
New Zealand
Australia
United States
of America
Specialist
Outsourcing
Corporatization
Privatization
????
1:10 1:20 Overview
No. Yrs
Most UK, Au, NZ

Implement
Amp 3
Preparing
Amp 4
AMP 4
Some Privatized US
Implement
Amp 2
Preparing
Amp 3
AMP 3 - Adaptive TQ M
Implement
Amp 1
Preparing
Amp 2
AMP 2 - ISO 9000 compliant
QA/QC
TQM
AMP 1
Quality Circles
Spectrum of Public US
Where does the US fit?
Implement
Amp 4
Preparing
Amp 5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Diagram indicative not to be taken as absolute
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
PEOPLE
PROCESSES
TOOLS
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
Components of
ASSET MANAGEMENT
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
CLIMATE:
legalistic, socio-economic
environment, climatic
condition/change, other
external forces,
the wants and desires
of the customers
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
COMPLEXITY:
culture, size, numbers,

operational structure,
governance, management,
diversity of assets,
interdependency of
assets
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
1:20 1:40 Elements
Clearly defined Organization
Core Business
Op. Sciences
Maintenance
Construction
Design
Purchasing
Project Man.
Finance
H.R.
Systems
Standard Processes R&D
Roads/Bridges
Storm-water
Potable Water
Wastewater
Fleet
Information Technology
Buildings
Land
Amenities
Airport
Parks & Gardens
Transportation
Ambulance
Police
Fire
Libraries
Administration
Service Providers
Operations
Planning
Management
Utilities
Facilities
Services
Function Org.
Specifiers
Business Support
Holistic Management:
Business
Strategy
Organization
(Culture: Vision, Mission and Goals,

Alignment, Roles, Responsibility, Education,
Learning, Continual Improvement)
Business
Capabilities
Tactical
(Processes, Criticality, Condition,

Reliability)
Asset
Capabilities
Operation &
Maintenance
Technology
(Data Information, Systems

Integration and Decision Making)
(Risk Characterization, Customer Service,

Core Business Identification)
Standards,
Levels of Service
Practices
(Business & Financial Processes,

Work Practices, Performance measures)
Strategic
People, Process,
& Data
Asset
Acquisition
& Disposal
Adapted from: IIMM, TAG, OCSD & EMA slides
Asset
Intervention
Strategy
Operational
(Physical Assets)
AM Framework:
Reporting on Cumulative
Consequences of
Past Operations and Future Scenarios
Strategic Plan
Where are we
going?
Development Plan
What will we do in 5
years?
Annual Business
Plans
Strategic and Planning

Planning and Operating Infrastructure
AM Policy
AM Strategy
AM Plans
Finance Plan
Data and Systems Knowledge to understand the present

and plan for the future
Governance and management, skills and processes,
Service levels and cost, budgeting and reporting
Adapted from: IIMM, Jeff Roorda Assoc./PBS Con. slides
AM Maturity
Asset Management Maturity:

Low
- Assets acquired based on capacity studies. CIP primarily

managed by engineering with limited operations input.
LM
- Awareness of asset condition, life cycle cost, risk based

decision making and continual improvement.
Med
- Implementation of solution identification by

Business Case Evaluation and asset criticality.
MH
- Collaborative risk based decision making. Established

performance measures, monitoring, and reporting system.
High
- Customers agreed levels of service integrated with

performance measures and triple bottom line analysis.
AM Implementation:
Sustainable Total Asset Management
Triple Bottom Line Compliance taking care of the organization with

respect to its:
STAM
AAM
Total Asset Management
Organization Focus taking care of the organization through:
TAM
Defined Business Philosophy Based on Balanced, Adaptive Total Quality

Management
Clear Communication and Data Management
Full Transparency
Advanced Asset Management
Asset centric taking care of ALL the assets in a manner to support:
AM
Economy, Society, and Environment
Customer focused Levels of Service Agreements using

Risk management, Criticality, and failure mode decision making; and
Whole of Life Business Case evaluations for procurement & intervention strategies to
Minimize total cost of ownership; and
Maximize availability and utilization
Asset Management
Operations centric taking care of the assets with respect to:
Routine Operation and Maintenance
Functional style:
Traditional Support
Functions
Product
Leadership
- Standard setter
- Planning
- Engineering
- Operational Sciences
- Finance
Pace Setting
Traditional Core
Business
Operational
Excellence
- Directive
- Operations
- Maintenance
Adapted from:
Richard Gerstberger TAP Resource Development Group
(Original work - Tracy & Wiersema / Dr. W. Schneider)
& Nicki Pozos Brown & Caldwell
(Original work D Goleman, R Boyatzis & A Mckee Primal Leadership 2002)
Enrichment
- Charismatic/Innovative
- Human resources
- Natural resources
- R&D
Coaching
Customer
Intimacy
-Participative
-Customer Services
AM - Balanced
Collaborative Team
1:20 1:40 Elements
PUBLIC UTILITY CULTURE

The Current Paradigm for:
Gatsbys (1927-1945)/
Boomers (1946-1964)
is Hierarchical
The Future Paradigm for:
Busters (1965-1981),
Millennials (1982-pres.)
will be (??)
AM Implementation Complexity:
Transportation:
Streets, Bridges, Airport
Operational
Environment
Complex
Simplistic
Simple
Modeling
Sophisticated
Modeling
Difficult
Implementation
Difficult
Implementation
Simple
Modeling
Sophisticated
Modeling
Low key
Implementation
Low key
Implementation
Wet Utilities:
Potable, Waste, & Storm Water
Information Technology/
Communications
Parks
Complex
System
Intricacy
Fleet/Vehicles
Facilities
Adapted from: Clive Deadmans - Strategic Asset Management
Culture Types
ORGANIC PROCESSES
(Flexibility, Spontaneity, Discretion, Dynamism)
Human Relations
TYPE:
DOMINANT
ATRIBUTES:
BONDING:
STRATEGIC
EMPHASIS:
Open System
Clan
TYPE:
Cohesiveness, Participation,
Teamwork, Family
DOMINANT
ATRIBUTES:
Loyalty, Tradition, x
Interpersonal cohesion
BONDING:
Developing human resources,

Commitment, Morals
INTERNAL FOCUS
STRATEGIC
EMPHASIS:
Adhocracy - Innovation
Entrepreneurship, creativity
Adaptability, Flexibility, Risk
x
Experimentation,
Thinking differently,
Individual initiative and freedom
Growth, Unique products/services,
Industry leader
EXTERNAL POSITIONING
Ideal Cultural Pattern
(Integration, Unity, Smoothing)
TYPE:
DOMINANT
ATRIBUTES:
BONDING:
STRATEGIC
EMPHASIS:
(Competition, Differentiation, Rivalry)
TYPE:
Hierarchical
Highly structured, formal, Order,
Rules, Regulations, Uniformity
Rules, Formal policies, Security,

Predictability, Good coordination
Smooth-running, Stability, Timeliness
Operational efficiency, Low cost
DOMINANT
ATRIBUTES:
Market Customer Service

Competitiveness, Goals/results-driven,
Achievement/job completion
BONDING:
Goal-oriented, emphasis on winning,

Success
STRATEGIC
EMPHASIS:
Competitive action, Measured targets

Market share, Competitive pricing
Rational Goal
Internal Process
MECHANISTIC PROCESSES
(Stability, Order, Control)
Typical Local Government

Cultural Profile
ORGANIC PROCESSES
Clan
INTERNAL FOCUS
Hierarchical
Typical High Performing

AM Culture Profile
ORGANIC PROCESSES
Clan
INTERNAL FOCUS
Hierarchical
Culture:
ORGANIC PROCESSES
Typical
Asset Management Culture Profile
INTERNAL FOCUS
EXTERNAL
POSITIONING
(Competition, Differentiation, Service)
Typical
Local Government Cultural Profile
Result Oriented Management
Result oriented management:
Aims to achieve:
Based on S.M.A.R.T. upfront goals, objectives & agreements:
Optimum output (quantity, quality, cost) and Best outcome (effects)
Clear expectations, authority, responsibility & accountability

Collaborative goal and objective setting
Self determined execution methodologies
Continual opportunities for education, research, and improvement
Unlimited communication and feedback
Known reward for achievement & consequences for lack there of
S.M.A.R.T. Specific, Measurable, Accepted/Attainable/Achievable, Relevant/Realistic, Traceable/Timely
1:20 1:40 Elements
Asset Management - Leadership
Transformational Leadership must provide:

well defined:
Direction,
Mission,
Strategic focus, and
Mobilization to implement the same
Transformational Leadership:
Transformational
Leadership
Inspirational
Motivation
Idealized Influence
Intellectual
Stimulation
Individual
Consideration
Virtues and
Character
Wisdom &
Knowledge
Courage
Humanity
Justice
Temperance
Transcendence
Creativity
Bravery
Love
Citizenship
Forgiveness
Appreciation
Curiosity
Persistence
Kindness
Fairness
Prudence
Gratitude
Open Mindedness
Integrity
Social Intelligence
Self-Control
Hope
Love of Learning
Vitality
Humility
Humor
Perspective
Emotional
Personal
Adapted from: John J Sosik Leading with Character
Spirituality
Core practices of leadership:

Leader
Models the Way
Enables other to act
Encourages the heart
Inspires a shared vision
Challenges the Process
-Have in-depth Knowledge of a

range of processes
-Communicate across organizational

boundaries
-Attend to colleagues aspirations

for personal learning and development
-Formulate solutions to fit political

and organizational dynamics
-Communicate with customers

to learn what they think
-Run meetings and presentations

effectively
-Draw out others personal preferences

to search for common ground
-Engender the commitment of others

to common goals
-Show Honesty and forthrightness

in dealing with others
-Generate creative solutions in the

midst of chaos
-Demonstrate a caring attitude towards

Others
-Share a clear vision of how individuals

might work more closely together
-Not only take risks, but encourage

others to do so
-Seek representations of stakeholders -Exhibit a sense of humor

in discussions that affect them
-Promote recognition of others
-Consistently build on others ideas
contributions
in problem-solving discussions
-Steps in and redirect destructive

conflict
-Questions assumptions
-Direct financial resources to serve

organizational objectives
-Build consensus among stakeholders
on the direction of future operations
-Incorporate diverse perspectives

into decision making
-Address conflict before it becomes
serious
-Working norms include all cultures
and ethnic groups
-Demonstrate flexibility in
responding to tough issues
Manager
Adapted from - Kouzes & Posner leadership principles
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
STANDARDS
PEOPLE:
partnering with the right

people, in the right place, at the
right time, working on shared
SMART performance based
goals, with right competence
and right behaviors
ASSET &
BUSINESS
RISK
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
1:20 1:40 Elements
Functional
Resource
Management
Human
Job Description
Goals
Timescales
- Responsibility
- Authority
- Accountability
- Clear/Agreed
- Realistic
- Achievable
Assessments
Rewards
- Performance reviews
- Communication line
Consequences
1:20 1:40 Elements
People Empowerment
Asset Management provides:

Defined responsibility, authority, and accountability,
Agreed, SMART (Specific, Measurable, Achievable, Realistic, and Timely)
goals, and objectives,
Opportunity for lifestyle balance,
Fully open lines of communication,
Customer driven attitude,
360 degree review and appraisal systems,
Regular feedback,
Rewards - results/performance oriented,
Incentives to go the extra mile,
An environment for openness and honesty, and
The No. 1. Asset is the PEOPLE!

Finance
Policy
Revenue
Budget
Council Goals
Salem Revised Code
Services
Police
Fire
Parks
Water
Internal Controls
HR Rules
Design Standards
Purchasing Rules
Organizational
Knowledge
People - Organization Alignment
Star
Miss-fit
Values
Correlation
MAPPING CULTURAL ALLIGNMENT

Barry Buchanan ACE-AWWA June 2006
Organizational
Knowledge
The right people:
Renegade
Old
Professor
Consultant
Superstar
Foot
Solider
Foot
Solider
Miss-fit
Couch
Potato
Star
Miss-fit
Comedian
Old
Professor
New
Recruit
Values
Correlation
Terrorist
Barry Buchanan ACE-AWWA June 2006
Works Definitions
Operations Works:
Day to Day programs to maximize utilization,

Routine Maintenance,
Business/Process
reengineering, and
Optimization etc.
Maintenance Works
Projects to ensure asset availability

Projects to maintain asset reliability
Projects undertaken for emergency repair
Projects not listed as Capital Projects and/or below an agreed $ threshold
Implementation of the prescribe asset intervention strategy
Capital Works
Projects listed as Capital Projects and/or above an agreed $ threshold

Replacement/renewal projects that replace like with like and/or extend the asset life beyond the original
asset intervention strategy expectation without expanding capacity
New or expansion projects that result in a greater capacity.
AMs Components
People are the No: 1 Asset
Requires the right people in the right jobs, with

clearly define roles, responsibilities and
authority, that can be held accountable.
Most Likely
Failure Mode
Descriptor
Efficiency
Optimization
Physical
Structural
Reactive
Emergency
Maintenance
Level of Service
Regulations, Rules, Procedures,
Directives, Agreements, etc
Reliability Centered Maintenance

Preventative/Monitored/Condition Based Maintenance
Routine
Maintenance
Capacity
Demand
Strategic Plan 1, 2, 5, 10, 20, 50, 100

yrs
Just in time: Predictive Maintenance, and

Planned Interventions
Just in time: Capital Work
Repair
Replenishment
Refurbishment
Replacement
Renewal/Upgrade
New
Urgency
Immediate
Daily, Weekly,
Monthly
4-12 weeks
3-12 months
1-5 yrs
5+ yrs
Type
Emergency
Operation
Work
Work
Maintenance
Work
Listed Asset
or $.00
Threshold
Capital
Work
Project Management
Project management:
Aims to implement:
Projects: on time, within budget, and to the agreed quality

Develop the need: basis of design, user requirements specification
Develop the project plans: initiation, planning, execution, closure
Develop the design: 30, 60, 90, 100, 115%
Procure, construct, commission, and transfer to operations

Skills to manage, monitor and report on: scope, schedule, quality,
cost, development, integration, resource, communication, risk, H&S
Best Practice Project Management:

PROJECT MANAGEMENT
Monitor &
Control
Initiate
Planning
Continuous Improvement
Execution
Closure
Project Management
Disciplines
Integration
Scope
Time
Cost
Quality
Human Resources
Communication
Risk
Procurement
Health & Safety
Project
Plan devel..
Initiation
Activity
Definition
Resource
Planning
Planning
Organizational
Planning
Planning
Planning
Planning
Planning
Project
Plan Exec.
Planning
Activity
Sequencing
Estimating
Assurance
Staffing
Information
Distribution
Identification
Solicitation
Planning
Education
Integrate
Change Control
Definition
Activity
Duration
Budgeting
Continuous
Improvement
Teaming
Performance
Reporting
Qualitative
Analysis
Solicitation
Implementation
Verification
Schedule
Development
Monitoring &
Control
Monitoring &
Control
Development &
Education
Administrative
Closure
Quantitative
Analysis
Source
Selection
Reporting
Monitoring &
Control
Monitoring &
Control
Response
Planning
Contract
Administration
Monitoring &
Control
Monitoring &
Control
Contract
Closeouts
Monitoring &
Control
Operation &
Maintenance
Warranty
Period
Notice of Substantial Completion
PT
Project Life Cycle
Preliminary
Operation
OT
Operations
Transfer
OQ
OQ
IQ
IQ
Construction
CO
Procurement
Reviews
Planning
Submittal Review
Reviews
Planning
Bid & Secure

RFQ
Award
Tender
Design
Plan - RFP
Initiate - RFQ
Constructor
Operator
RFP
COLLABORATIVE IMPLEMENTATION
PT - Performance Testing
OT Operations Transfer
OQ - Operational Qualification
IQ - Installation Qualification
CO - Construction Observation
Design for:
Construction
Commissioning
Operations & Maintenance
Health & Safety
Construction Notice To Proceed

Procurement Notice To Proceed
Contract Awarded
- ility Reviews
- Constructability
- Produce ability
- Flexibility
- Availability
- Reliability
- Usability
- Operability
- Maintainability
- Sociability
- Sustainability
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
GOALS:
policies, regulations,
rules, directives,
strategic ambitions,
agreed levels of service,
demand, values, and
objectives guiding
output and outcomes
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
1:20 1:40 Elements
Regulations
Codes
Standards
Levels of
Service
Directives
Guidelines
Procedures
Plans
- Customer Agreements
- Administration
- Project Manager
-Design (modular)
-Construction
-Operation
-Maintenance
- Financial
Std Practice
Best Practice
1:20 1:40 Elements
Management:
Documentation
Quality
Assurance
Monitoring
Reporting
Control
ISO 9000 Principles

- Customer Focus
- Participative
- Process Philosophy
- System Approach
- Continuous Improvement
- Listening Culture
- Partnering Posture
Transparency
- Benchmarked
- Open-book
- Accessible records/reports
Stewardship
- Authority
- Responsibility
- Accountability
Service Level Agreement:
Balancing customer wants

against willingness to pay
Setting Performance Measurement:
Goals OUTPUT, quantity, quality,

financially oriented drives:
productivity, adaptability,
, cost efficiency
Note:
A performance measure
that tries to achieve both
effectiveness and efficiency
will likely be a compromise.
Output oriented:
First become Efficient,
then becomes Effective
Output
Optimum
Outcome oriented:
First become Effective,
then becomes Efficient
Low
Outcome
Best
Goals OUTCOME, customer service

oriented drives:
conscientiousness, responsiveness,
, effectiveness
Adapted from: Clive Deadmans - Strategic Asset Management
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
SUSTIANABILITY:
environmental, economic,
social balance
least life cycle cost
plan, finance, acquire,
transfer, operate,
maintain, dispose,
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
THE NATURAL STEPS
Balance abstraction with replenishment

Produce ONLY disposable products
Protect ALL ecosystems
Optimize resource use distributing equally to ALL
Asset Management
- keeping the balance
The Triple Bottom Line:

Sustainable Total Asset Management
Environmental
Quality
Economic
Prosperity
Economy
Social
Equality
Society
Quote
RIO de JANEIRO EARTH SUMMIT 1992
Improving human well-being while not

undermining the natural resource base on which
future generations will have to depend
Environment
091309.01 APWA bjb
1:20 1:40 Elements
Whole of Life Financial Stewardship

Acquiring, or not, assets through whole of life
business case evaluation:
Disposal
Utilization
and Performance
(Reuse, Recycle, Treatment

Disposal Expenditure)
(Operating Expenditure)
Asset
Business Value
LEAST
Life Cycle Cost
(Capital Expenditure)
Planning
Design
Procurement
Intervention
Strategy
(Maintenance Expenditure)
PROJECTIQ OQ
Construction
PT
Operation &
Maintenance
Life cycle cost:

100
80
Disposal 5-10% of
LCC
O&M 70-85% of
LCC
% Opportunity for Reduction

in Life Cycle Cost vs
Life Cycle Stage
40
20
20
0
80
60
60
40
Best
Return on Investment
100
Reduction
in Life Cycle Cost
Construction 1015% of LCC

Planning 0-5% of
LCC
0
Planning
% of Life Cycle Cost
Design Procurement
PROJECTConstruction IQ OQ OT PT O&M
15%
Schematic Design
100512.01 CIP Prior. bjb
Identify Issues, prioritize Gaps,

determine Needs with the lowest
Life cycle cost. Produce:
Master Plans, Ops Plan, and CIP
- Decommission, treat and dispose of

spent Asset
- Review and evaluate Asset Life Cycle
Dispose
Implement Best Practice:
- Operation
- Performance Monitoring
- Preventive Maintenance
- Condition Monitoring for
- Predictive &
- Reliability Centered Maintenance
- FMEA
- Planned Intervention Strategies
Plan
Design
Maintain
Procure
Operate
Commission
Construct
Implement Best Practice Commissioning:

- Installation Qualification
- Operation Qualification
- Operation Transfer
- Performance Testing
Planning
Design
Procurement
PROJECTIQ OQ
Construction
Design for:
- Constructability
-VE
- Commissioning
- Operability
- Maintainability
-OPMAN
- Serviceability
- Sustainability
- Availability
- Reliability
- H&S
-HAZOP
-HAZAN
-HACCP
Procure and Construct using best:

Integration, Scope, Time, Cost,
Quality, Resources, Communication,
Risk, Procurement, and H&S
Project Management techniques
PT
Operation &
Maintenance
Process enhancement:
Historic Process
Identify
Issue
Identify
Project
Fund (CIP)
Design
& Construct
Project
Budget
Operation
&
Maintenance
15, 30, 60, 100% Design
5% Design
Enhanced Process
Identify
Issue &
Prioritize
Identify
Solution
(BCE-LLCC-B/C)
(Criticality & Risk)
5% Design
Develop
Needs &
Fund (CIP)
10% Design
Develop
Project &
Fund Budget
15% Design
Develop
Design &
Implement
Project
Optimize
Operation &
Reliability
Centered
Maintenance
30, 60, 90, 100% Design
What is
required
Standards:
Demand forecast
Design/Physical
Efficiency:
(Environmental, Social,
Energy, Operation,
Maintenance)
Level of Service:
(Customer agreements,
Regulations, Codes, Plans,
Directives, Guidelines)
What is the
issue and its
priority
What do
we have
Condition analysis:
Asset Register:
Name/Number
What/Where
Capability
Age/Remaining Life
Economic Value
Asset Criticality
Failure mode
(Demand, Physical,
Efficiency, Level of service)
Prioritization:
Work Priority:
(Criticality x Condition)
Redundancy, Failure Affect
Risk of failure:
(Likelihood x Consequence)
What is the
What is the
implementation
solution
strategy
Business Case Eval.

Options identification
Options analysis
Whole of Life Costs
(Capital, Operating,
Maintenance, Intervention,
Risk, Disposal)
Least Life Cycle Cost

Benefit/Cost Analysis
(Triple bottom line)
Work Plans:
Operation optimization
Maintenance project
Capital project
Funding Sources:
(Loans, Funds, Grants,
SDCs, Rates, Fees)
Plan & Acquire Assets or not Key Questions

Adapted from: EPA/GHD slides
110801.01 2011 WSMP notes. bjb
Plan & Acquire Assets (or Not)
Asset/
Master
Plan
Where it fits
SNTP.1
Issues
Identify
Issue
Operate &
Maintain
(Service Gaps)
Gaps
Prioritization
Approved
Priority
(Agreed
Prioritization)
Develop
Needs
Asset
Register
Develop
Programs
(CMMS &
GIS)
CNTP
Approved
Procurement
Implement
Project
Annual
Budget
PNTP
Approved
Design
Procurement
DNTP.3
Approved
Budget
*NTP notice to proceed
100, 90, 60, 30%

Design
5 Year
O&M
Plan
Fund
10% Design
URS/BoD
Confirm
Funds
(User
Requirement
Spec.)
DNTP.2
Approved
CIP
Develop
Design
DNTP.1
Approved
Need
New Items
Approved
Construction
(Agreed
Solutions
Development
Plan)
(BCE-LLCC-B/C)
5% Design
O&M NTP
Needs
Identify
Solution
Develop
Project
(yr 1)
5 Year
CIP
(Projects
Funded Needs)
Fund
15% Design
091309.01 APWA bjb
project
management
101 PAA (or Not) Roles & Responsibilities
operation & maintenance
Asset
Condition &
Performance
Data
GIS
Document
Storage
Control
Maintenance
Data
Asset
Location &
Specification
Data
Maintenance
Projects
Refurbish,
Repair
Establish Stds &

Measurement
Criteria
Using C/B
Capital Project
Renew,
Expand
Budgeted
Operations
Projects
Budgeted
Capital
Projects
Capital
Improvement
Plan
finance
091309.01 APWA bjb
Intervention
Based
Work Orders
Define Finance
Strategy &
Sources
Apply Finance
& Confirm
Implementation
Strategy
Asset
Data/Register
EAMS/IAMS/CMMS
O&M $.c.
Efficiency
Standards &
Measurement
Criteria
Capacity
Physical
Condition
Asset Criticality
RCM
PMS
AM;
Facility; &
Master Plans
Prioritized
Needs List
Deferred
Needs
Human Resources
Administration
Routine
Work Order/
Programs
Level of
Service
Routine
O&M &
Replenish
Financial
Management
Billing
Accounting
Procurement
planning
Evaluate/Select
Least Life
Cycle Cost
Define Costs:
Capital, O&M,
Intervention,
Disposal &
Risk
Prioritized Issues
Gap List
Identify
Solution
Alternatives
Confirm Issues
Criticality,
Work Priority,
Risk
Issue List
Other
New Requirements
Planning/Engineering
O&M Lead Function
Assets
Condition
Assessment
Issues
Prioritization
Gaps
Project Management.
Finance
Business Case Evaluation

Least Life Cycle Cost
Needs
Funding
Design
Development
Criticality
Work Priority
Risk of Failure
Project
Assets Register Asset Criticality
Prioritize
Unfunded
Solution
Options
Assess
Capacity
Physical Condition
H&S
O&M Efficiency
Level of Service
3
X
Prioritized
CIP LIST
4
Defined Judgment
Criteria
- Standards/
Levels of Service
Funded
Defined Financial
Strategy:
Financing,
Accounting,
Monitoring &
Controlling
New Requirement
Parameter Scale
Issue ID:
Routine
O&M
Failure Mode Trigger level

Capacity
Plan and Acquire Assets
Physical Condition
(or Not)
Operating Efficiency
LOS
Issue
Solution ID:
BCE/LLCC/B-C
Asset Condition
Risk
of Failure
Consequence
Legal
Customer Impact
Political
Reliability
Environmental
Asset Criticality
H&S etc, etc, etc
Failure Affect
Commission
IQ OQ OT PT
Document Asset:
Class, Hierarchy, Register
Construct
Business Risk
Consequence
Select Least Life Cycle Cost/Acceptable Risk
ID contingencies
Prioritized
Need
Weighting
Redundancy
Asset Criticality
Prioritized
Gap
ID all possible solution Initial .. 5% Design

ID O&M & Intervention Strategies
Determine WoL cost, impacts and benefits
Define measurement criteria sensitivity
Likelihood
Work Priority X
Likelihood
Asset Condition
Prioritization
Procure
Project Implementation
Design
Funding & Design

Development
Budgeted
Project
Preliminary ..
15% Design
091309.01 APWA bjb
Supplier
Input
ALL
Assets Register
Plan.,
O&M, Eng.
Issues
Plan.,
O&M, Eng.
Gaps
PM, O&M,
Plan., Eng,
Purchasing
Needs
PM, Finance
10% Design
PM, O&M,
Plan., Eng.
Process/Transformation
Output
Customer
Issues Identification
Issues
Planning
Prioritization
Gaps
Planning
Solution Identification
Needs
Project
Management
Needs Development
10% Design
Project
Management
Funding
CIP Project
Project
Management
CIP Project
Project Development
15% Design
Project
Management
PM, Finance
15% Design
Funding
Budget Project
Project
Management
PM, O&M,
Plan., Eng.
Budget Project
Design Development
Project Design
Project
Management
PM, Purchasing,
Legal
Project Design
Procurement
Material Supply
Project
Management
PM, O&M
Material Supply
Construction
Physical Asset
Project
Management
PM, O&M
Physical Asset
Operational Asset
Operations,
Maintenance
O&M
Operational Asset
Failure mode & condition analysis
Criticality, remaining life, risk of failure, interdependency, work

priority
Business Case Evaluation, Least Life Cycle Cost, Benefit/Cost

Analysis
Purchasing strategy, Bases of Design,

User Requirement Specification
Strategy, Identification, Allocation
Initiation, planning, conceptual design
Confirmation
30, 60, 90, 100%
Commissioning:
Installation Qual., Operational Qual., Operational Transfer, Perf.

testing
Optimized Operation, RCM, & Disposal
Asset Register
091309.01 APWA bjb
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
STANDARDS
DATA:
what, where, value,

criticality, conditionage, capability, capacity,
physical condition,
efficiency, effectiveness
ASSET &
BUSINESS
RISK
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
1:20 1:40 Elements
Formal
Communication
& Data
Management
Informal
Monitoring
ICA
Data Storage
Reporting
- Accessibility
- Reliability
- Repeatability
- Right data
- Right people
- Right Time
- Right equipment
- Centralized data collection
- Single data Bases
- Uniformity
- Standardization
1:20 1:40 Elements
Data Management & Communication
Communication & Data Management:

Clear:
Lines of Communication
Open data management
Right data to the right people at the right time using the
right equipment
Accessibility
Reliability
Repeatability
Open systems communication

and information transfer
1:20 1:40 Elements
Data Storage
Take Down the Walls
Open, accessible
Centralize data management
FUNCTION
BASES data MANAGEMENT
PROCESS BASES data MANAGEMENT

1:50 2:00 Issues ID
Asset Hierarchy
Asset Hierarchy/Level
The Asset Hierarchy records the relationship
between assets in terms of parent, child,
grandchild etc. i.e. a family tree format.
Unique identification for each identified Asset defined
by the Naming and Numbering system
Structure for Financial & Condition Roll Up
1:50 2:00 Issues ID
Asset Inventory & Register
Asset Inventory
Contains:
Utility
Asset Class - An Asset Class is a group of assets that have similar characteristics, O&M and
intervention strategies
Asset Category An Asset Category is a sub group of Asset Class
Asset Make, Model, Type, Size and the number a count
Asset Register
Contains:
Utility
Asset Class - An Asset Class is a group of assets that have similar characteristics, O&M and
intervention strategies
Asset Category An Asset Category is a sub group of Asset Class
Asset Attributes (includes, but not limited to):
Unique ID
What
Make, Model, Type, Size, Material, Discipline
Where
Facility, Unit Process, Train, Device, Element, Item
When
Installed, maintenance, interventions, remaining life
Finances
Cost: installed, depreciated, replacement, O&M cost
IDs planned maintenance and long term intervention strategy
Records condition etc
1:50 2:00 Issues ID
As Register Built in
IWMS - Integrated Workplace Management System

EAMS - Enterprise Asset Management System
CMMS - Computerized Maintenance Management System:
Hanson
Amanda
Maximo
etc.
Basic Data Base:

Access
Excel spread sheets
1:50 2:00 Issues ID
Asset Register
ROUTINE
Failure Modes
Trigger Level
Standards
Remaining Life
Depreciated value
Asset
Unique ID
Name
Location
Utility
Facility
Train
Unit Process
Device
Element
Component
Discipline
Make
Model
Type
Size/Capacity
Installation Date
Life Expectancy
Installation Cost
Replacement Cost
etc.
Operation & Maintenance
Failure Modes
vs
Physical Condition
O&M Efficiency
Capability/Capacity
Level of Service
= Asset Condition
ISSUE
IDENTIFICATION
Establish Asset Criticality
Criticality
(of an asset failing)
Operational Redundancy x Breath of Affect
Resultant Scores Range:

1 100
Low High
Define Criteria to
Suit Application
Number given not to
be taken as absolute
Establish Asset Criticality

= Redundancy x Affect
Asset CRITICALITY
If Asset FAILS
60
70
80
90
100
18
27
36
45
54
63
72
81
90
16
24
32
40
48
56
64
72
80
14
21
28
35
42
49
56
63
70
12
18
24
30
36
42
48
54
60
10
15
20
25
30
35
40
45
50
12
16
20
24
28
32
36
40
12
15
18
21
24
27
30
10
12
14
16
18
20
10
Facility
Utility
>0.5% Comm.
>1% Comm.
5%> Comm.
Lower
50
Train
Full Operation
40
Unit Process
75% Operation
30
Device
50% Operation
20
Element
25% Operation
10
Component
OPERATIONAL REDUNDANCY
No Operation
Higher
BREADTH of FAILURE AFFECT

1:50 2:00 Issues ID
Issue Identification
- Condition Assessment
Failure Modes
Physical Condition
O&M Efficiency
Capability/Capacity
Level of Service
Codes, Rules, Standards

Mandatory and statutory regulations
Agreements and understandings
Political whims
Set Performance/Judgment Criteria
Condition Assessment
Failure Mode Evaluation
Asset
Register
Is the Capacity adequate?

What is the Physical Condition?
Is the Assets O&M efficient?
Are agreed Levels of Service being met?
Each Scored 0-10, highest score prevails

Failure Mode judgment
standards established
by Cost Benefit analysis
Issues
(Service Gaps)
1:50 2:00 Issues ID
Condition Scoring
Simple pass/fails
Yes, no meeting performance criteria or not
Objective (subjective) ranking eg.

0 Poor, 1 Fair, 2 Good, 3 Very good, 4 Excellent
Objective measurement
heat, vibration, energy consumption
sampling, evaluation and analysis
number of failures, repairs etc
Plot against target, trigger, and alarm limits
Condition Assessment
- Judgment Criteria
Scoring Scale:
0,
2,
8,
10
Failure Modes:
Capacity vs demand
Physical Condition
O&M efficiency gain
Level of Service
Regulations, Directives, Procedures,

Guidelines, Plans, Agreement, etc,etc
=>115%
113%
107%
<=105%
New
Insignificant
Deterioration
Significant
Deterioration
Failing
=<5%
7%
..
13%
=>15%
=105%
=106%
or
=104%
=109%
or
=101%
=>110%
or
=<100%
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
CONSEQUENCE x
LIKELIHOOD of failure,
failure modes, cause and

effect, B/C, & resilience
analysis,
change management,
continual improvement,
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
1:20 1:40 Elements
Likelihood
and
Consequence
Identification
Risk
Management
Qualitative
Quantitative
Response
Business & Image Risk

Financial Risk
Legal Risk
Quality Risk
Quantity Risk
Regulatory Risk
Security Risk
Health & Safety
Physical Risk
the -Iities studies
Operability, Maintainability,
Serviceability, Reliability,
Accessibility, Capability,
Availability, Security,
Vulnerability, Criticality,
Constructability, etc
1:20 1:40 Elements
Balancing the Risk

Modes of Failure:
- Capacity
- O&M Efficiency
- Physical condition
- Level of Service
Cost of Failure
Cost to Avert Failure
Continual improvement:
Emphasis on auditable results:
Enables knowledge transfer and capture of intellectual property
Plan
Document what you want to do

Quality Assurance
Do
Do what you document

Quality Action
Study Document what you did
(Monitor and Report)
Quality Control
Act
Review and improve
Adaptive Total Quality Management
1:20 1:40 Elements
Monitor & Improve Performance

Performance Measurement
State Core Activities
Define Goals
Determine Objectives
Identify Activities
Establish Performance
Measures
Measure - Statement
Measure Input - #
Measure Output - #
Measure Efficiency - #
Report Outcome
Acceptable
Tolerance
Unacceptable
Review &
Improve
> limit
> limit <
< limit
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
OPTIMIZATION,
PRIORITIZATION,
VALIDATION:
capital projects,
operational programs,
redundancy, intervention,
emergency strategies
utilization, availability, reliability
ASSET &
BUSINESS
RISK
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
ASSET
KNOWLEDGE
1:20 1:40 Elements
Identification
Issue
- Business Case Evaluation

- Optimize
- Alternate identification
- Whole of Life cost evaluation
-
Plan &
Acquire
Assets
(or not)
Gaps
Needs
Projects/Program
Design
Procurement
Implementation
Reviews
- Design, Construction, O&M, RRRR

- Economics, Environmental, Social
Prioritize (Just in time expenditure)
- Repair, Refurbishment,
Replacement, Renewal (RRRR),
New
- Initial Design 5%
- Conceptual Design 10%
- Preliminary Design 15%
- Schematic Design 30%
- Detail Design 60%
- Final Design 90%
- Bid Documents 100%
- Construction docs. 105%
- Construction
- Installation Qualification
- Operation Qualification
- Preliminary Operation
- Project Transfer
Plan & acquire assets or not:
Aims to identify:
Most appropriate least life cycle cost solutions

What is the required customer agreed level of service?
What is the current state of the assets? the issue
What is critical to sustain performance? the gap
What is the least life cycle cost solution? the need
What is the best whole of life funding strategy? the project
Solutions defined through: condition assessment, failure mode, and
risk (likelihood x consequence of failure) analysis
Determining Work Priority
Work Priority =
Criticality x Condition
Resultant Scores Range:

0 1000
Do Nothing Implement Monitoring Program Implement
Intervention Plan Urgent Work
Define Criteria to
Suit Application
Work Priority
= Criticality x Condition
Failed
Failing - 10
CONDITION/REMAINING LIFE
Urgent
Work
Significant Deterioration - 8
Implement an
Intervention Program
Moderate Deterioration - 6
Minor Deterioration - 4
Implement a
Monitoring Program
Insignificant Deterioration - 2
Do
Nothing
Excellent
As New - 0
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100
Lower
CRITICALITY
Higher
Risk of Failure
Risk =
Likelihood (of failure) x Consequence (of Failure) x Weighting
Score Range:
Likelihood
0 - Highly improbable, 10 - Imminent
Consequence
0 - No effect, 10 - Catastrophic
Weighting
% of 100% for each category, 1-5 for each Council Goal
Resultant Score x weighting
0 - Low Risk, Risk Adverse, 100 - High Risk, Risk Taker
Risk (of Failure)
-Likelihood x Consequence
RISK MATRIX
NOTE: Define Criteria
10 Imminent
HIGH RISK
(Risk Taker)
LIKELIHOOD
8 Highly probable
6 Probable
4 Occasionally
2 Improbable
0 Highly improbable
LOW RISK
(Risk Adverse)
0
No Effect
of FAILURE
Define your
Risk Tolerance
MODERATE RISK
2
Minor
4
Appreciable
6
Major
8
Severe
10
Catastrophic
CONSEQUENCE
Likelihood
(of Failure)
Expressed as:
A number 0-n
A probability 1/N
Determined by:
Mean time to failure;

A function of condition, or
Ratio: (Tot. Life Remaining life)/Total Life as % x 10
etc
2:00 2:10 Gaps
Define Criteria to
Suite Application
Number given not to
Likelihood
The probability of an event occurring
Descriptor
Probability
Rank
Imminent
1:1 months
10
Highly probable
1:6 months
Probable
1:1 year
Occasionally
1:5 years
Improbable
1:10 years
Highly improbable
>1:100 years
2:00 2:10 Gaps
Consequence Categories
Descriptor
None
Minor
Appreciable
0.01%
No Effect
Rank
Major
Severe
Catastrophic
Score Keys
Consequence
Customer Impact
Quality
Financial
Legal
Health & Safety
Utility/Authority
Image
Political Exped.
Reliability
Environmental
Regulatory
Inter-relationship
Security
EXAMPLES ONLY
Not to be taken as absolute
0.05%
0.1%
Fails Trigger Limits
Alarm not reportable
Customer Complaint
<$5K
Negotiation
< $50K
Minor Prosecution
< $0.5M
Major Prosecution
Minor Injury
Medical attn.
Permanent Injury
Element/Device Fails
Minor Comment
10% Public Request
Process Fails
Local Comment
20% Public Request
System/Train Fails
State Comment
30% Public Request
Customer damage
< $1.0M
Staff Imprisonment
Fatality
>1%
Alarm Reportable
> $1.0M
Council Imprisonment
Multi Fatality
Facility Fails
Regional Comment
Utility Fails
National Comment
40% Public Request
>50% Public request
< 4hr interruption
< 1 day
Clearable discharge
Harmful discharge
Hazardous discharge
Take
Dept. Order
Reg. Enforcement
Add. Mitigation
Notice
< 2 days
0.5%
< 1 wk
> 1 wk
Jeopardy
Criminal Action
Make over <0.5 WoL Make over <0.25 WoL Make over <0.17 WoL Make over <0.13 WoL Make over <0.1 WoL
Minor theft or
Unauthorized Access
Appreciable Theft
Coms. Inter <2hrs
Major Theft
Coms. Inter. >2hrs
Major Theft/Damage
Sever Damage
Coms. Inter <1 day
Coms. Inter. >1day
10
What is the Consequence of FAILURE?

Customer Impact
Social
Quality
Financial
Legal
Health & Safety
Image
Public response
Service/reliability
Environmental
Regulatory
Inter-relationship
Security
O&M
Rank
None
Minor
Catastrophic
Appreciable
Major
Severe
Score Keys
What is the Consequence of FAILURE?
Weighting
Asset Category Weighting
Descriptors
(of Failure)
Council Goal Multiplier
Consequence
10
Customer Impact
Quality
Financial
Legal
Health & Safety
Utility/Authority
Image
Political Exped.
Reliability
Environmental
Regulatory
Inter-relationship
Security
Parks
Land
Amenities
Facilities
Airport
IT
Security
Landscape
Storm Water
Wastewater
Asset Groups
Water
Emergency Equipment
Specialized Equipment
Vehicles
Transpiration
Consequence
Roads/Bridges
Consequence Weighting
EXAMPLES ONLY
Not to be taken as absolute
Each column summing to 100%
2:00 2:10 Gaps
Consequence Category Weighting
Categories
Customer Impact
Quality
Financial
Legal
Health & Safety
Utility/Authority
Image
Political Expediency
Reliability
Environmental
Regulatory
Inter-relationship/dependency
Security
Others etc etc
Define Criteria to
Suite Application
Number given not to
Each category may be weighted by a multiplier

to represent its importance to the Organization
Descriptor
eg.
Very High Importance

High Importance
Moderate Importance
Some Importance
Little Importance
No Importance
Multiplier Symbolized
10
8
6
4
2
0
HH
H
M
L
LL
NA
Condition
Likelihood
Work Priority
Consequence
Risk of Failure
Ranked Order
Prioritizing
Criticality
Scoring
Council Goals Weighting &

Consequence Criteria
Failure Mode Criteria
Criteria Setting
Prioritization:
081216.01 EDHM CIP Process bjb
ID Classes & Categories
Develop Consequence Criteria
Develop Failure Mode Criteria
Applied Council Goals &

Develop Consequence Weighting
Condition/Remaining life
Likelihood of Failure
Work Priority
Consequence of Failure
Scoring
Criticality
Redundancy
Risk of Failure
Strategic
Considerations
Physical
Considerations
Risk-based Priority
Ranked Order
Prioritizing
Breadth of Impact
Criteria Setting
Prioritization:
081216.01 EDHM CIP Process bjb
Gap Priority #:
- The Prioritized Issue Score
Priority # =
Work Priority x Weighted Risk #
Resultant Score Range:

0 500,000 then normalized ((x-)/).10+50)
0-33.3
0-333.3
0-333,333
=50, =10
Rank
#
1-10
Normalized #
Priority
#
0-1000
Risk
#
0-10
Consequence
0-100
Likelihood
0-10
Work Priority
0-10
Condition
Criticality
Potential Score
Affect
Title
Redundancy
- Ranking
1-n
2:10 2:20 Needs
Identify the Need

Having Identified the Gap, and
Defining its priority in relationship to others Gap Number
Now identify the Gap resolution (Need) utilizing .

Business Case Evaluation techniques:
Define problem, aims and objectives
Identify ALL alternate solutions
Evaluate each in terms of Whole of Life business cost,
impact, benefits and risk
Determine sensitivity of each evaluation parameter
Select solution on Business Risk basis
Identify contingencies
2:10 2:20 Needs
Identify the Need (contd)
an appropriate financial model
Net Present Value (NPV=FV0+(FV1 /(1+i)1)++(FVn/(1+i)n)) [$.c]

Internal Rate of Return (IRR= i rate that makes NPV=0) [%]
Total Cost (TC = ($1++$n) [$.c]
Return on Investment (ROI=($ Gain$ Invested)/$ Invested) [ratio]
Net Cash Flow (NCF = Benefits - Cost) [$.c]
Pay back period (PBP = time to recover cost) [time: mths, yrs etc]
Gaps
(Prioritized
Issue)
Prioritized
Issue # X
Develop the
Solution Options
Establish the
T.B.L. Cost
Calculate the
WoL Cost
Do Nothing
Capital
NPV 1
Planned Intervention Strategy
Operating
NPV 2
O&M optimization or modification
Maintenance
NPV 3
Fix with another issues solution
Intervention
NPV 4
Replace with like
Risk
NPV 5
Replace with Alternate 1-n
Disposal
etc
note:
T.B.L. Triple Bottom Line: Social, Economic & Environmental Cost

WoL Whole of Life cost
NPV Net Present Value
LLCC Least Life Cycle Cost
Business Case Evaluation

- Solution Identification
NPV n-1
Carbon foot print
NPV n
Least Life Cycle Cost Solution

= Need # X
Need
(Agreed
Solutions)
Validation
- Data Confidence
Repeatability
Accessibility
Timeliness
Score
No Data
No Data
No Data
Hear Say
Not recorded
>4 Yrs Old
Consensus
Others Personal
Storage
2-4 Yrs Old
Indirect
Meas. or Calc.
Personal Storage
12-24 Mths Old
Direct
Meas. or Calc.
Centralized Storage
Quality
Meas. or Calc.
Secure Quality
Storage
6-12 Mths Old
Others
Quality
Access.
Timeliness
xScore
24/125
Descriptor
No data
0-26%
Very Poor
26%-34%
Poor
34%-44%
Fair
44%-58%
Marginal
58%-72%
Good
72%-90%
Very Good
90%-100%
Excellent
4
5
<6 Mths Old
Register data (Example)
% Sum
Overall Score
% Sum
Descriptor
52%
Marginal
Confidence
Sol. ID
(+/-) % Estimate Accuracy
50
Budget
NOTE:
% Not to be taken as absolute
100
Planning
40
80
30
60
20
40
10
20
00
0 5
Scope Confidence %
CIP
10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 % Project Design
Sketch Design
Conceptual Design
Initial Design
Schematic Design
Final Design
Bid Documents
Preliminary Design
Construction Documents
Operations & Maintenance
2:30 2:40 O&M
Routine
- Monitoring
- Control
- Reporting &
- Maintenance
Operation &
Maintenance
Optimization
- Condition Evaluation
- Performance assessment
Optimized/Lean operations:
Aims to achieve:
Operational stability with maximum asset utilization

Optimum quality at the lowest production cost
Highly motivated people, high morale, teaming environment
Participative empowering leadership, a listen first posture
Right amount, right product, at the right place, just in time
Standardize programmed work, consistent production,
visual management
2:30 2:30 O&M
Operation and Maintenance
Prime AM O&M features:

Are the Core Business
Require Well Established Best Practice
Documented Submarine style O&M and procedure
manuals
Standardization of:
Procedures
Processes
Plant and Machinery
2:30 2:40 O&M
Operation and Maintenance (contd)

Cross Skilled
Clearly defined job descriptions stating: responsibilities, authority and
accountability
An ability to work smarter not harder
Performance Criteria based on functional reliability

Operations perform routine maintenance judged on minimizing
number of maintenance call outs.
Maintenance perform preventative maintenance judged on
maximizing operational up time.
2:30 2:40 O&M
Operation and Maintenance (contd)

Procurement:
Simplify procedures
Centralize/minimize stores and stores holdings implement:
Standardization,
Bulk purchase agreements, and
form Cooperatives/Partnerships and Alliances
Establish competitively bid:
5-10yr material supply Framework agreements
Contractors of record
2:30 2:40 O&M
Operation and Maintenance (cnt)

Continuing Individual Improvement and Education
Internal School of Excellence
Formal and Informal mentoring
Formal and informal: leadership, business, technical and other knowledge
transfer opportunities
Adequately funded yearly skills training program

2-5% of individuals salary/wages per year.
Encouragement to learn outside individuals field of application

Rewards for innovation and excellence
Funding for Research and Development
2:30 2:40 O&M
Preventative
Scheduled
- Condition monitored
- Predictive
- Reliability Centered
- Just-in-time
Operation &
Maintenance
Reactive
Failures
- Plant
- Equipment
- Communication
Accidents
- Contractors
- General Public
- Utilities
Increased Cost
Decreased Service
Increased Cost
Increased Service
Cost to Provide
Service Level
Cost of Failure
to provide
Service Level
Increased Failures
Decreased Service
ECONOMIC OPTIMUM
- MINIMUM COST
CONSTRUCTION $:oo
COMPENSATION $:oo
Optimum service level:
Reduced Failures
Increased Service
LEVEL OF SERVICE
SOCIO-ECONOMIC OPTIMUM
- BEST VALUE FOR MONEY
Funding
- Allocating available money
Title
Rank #
1-n
Project Title
$:00
Prioritized
Needs
Project $0.00
$ABC.00
Year Required
FS#1
FS#2
..
FS#n
Yes/No
2010-2015
Funding Sources
Funded
Cap.
Cost
Fund Source
Rates, SDCs etc
Balance
N#1
Phase 1
Phase 2
etc, etc
..
N#n
Total
Intervention strategy:
Run to Failure
Intervention benefit
Asset Condition
End of Economic Life

Intervention
improvement
Asset Renewal
Reference Condition
Strategy 2: Refurbishment Condition Improvement Intervention
Time
Strategy 1: Run to Failure
Reliability Centered Maintenance
Reliability centered maintenance:
Aims to:
Maintain reliability with maximum asset availability

What is the assets required function and performance level?
What ways may the asset fail?
What causes the asset to fail?
What effect does the asset failure have?
What is the risk (likelihood x consequence) of the assets failure?
What proactive action should be take to allow a tolerable risk?
What is the default action?
Reactive, interval planned, condition based, proactive maintenance
Asset maintenance maturity:

Low - 90% reactive maintenance.
LM
- 50% reactive maintenance Corrective maintenance
Med - 20% reactive maintenance Preventative maintenance.

MH
- 10% reactive maintenance Predictive maintenance.
High - <5% reactive maintenance Reliability Centered, Risk Based.
Financial Stewardship
1:20 1:40 Elements
Estimating
Financial
Stewardship
Budgeting
Financing
- Capital Expenditure
- Operations Expenditure
- Whole of Life Evaluation
- Lifecycle decision making
- Procurement
Monitoring
Controls
- Sourcing
- Servicing
- CIP documentation
- Budget documentation
Financial management:
Aim for:
Fiscal stability
Top down performance base budgeting
Bottom up zero based budgeting
Asset classification, capitalization, valuation and depreciation
Optimized decision making
Budgeting, accounting, funding, monitoring, reporting
1:20 1:40 Elements
Financial Budgeting
Traditional Incremental Budgeting:
Budget forecast breaks long term plan into periodic bites

At the end of each period compare forecast and actual cost, limited use, but for
knowing $:00 differential and adjusting for the next cycle.
From the Top down
Performance Based Budgeting: (What does it cost to provide a given level of service?)
Defines key metrics reflecting strategy based on policy alignment to core Mission,
Goals and Objectives
Evaluates and defines implementation strategies
Monitors and controls activities/tasks against KPIs; Result Oriented, measuring
output and outcome
Zero Based Budgeting:
Each review period requires justification of all anticipated expenditure from a zero
base
From the Bottom Up
1:20 1:40 Elements
Alternate Procurement Strategies
Project Construction
Concessions
DBB Design Bid Build

DB Design Build
CMGC Construction Manager/General Contractor
GMC General Managed Contract
EMGC Engineer Managed General Contract
DBO Design Build Operate
DBFO Design Build Finance Operate
DBOM Design Build Operate Maintain
BBO Buy Build Operate
BOO Build Own Operate
BOOT Build Own Operate Transfer
PPP Private Public Partnership

2:10 2:20 Needs
Funds allocation
Prioritized Conceptually Designed PROJECT/NEEDS list
Project 1
Project 2
Project ..
Project ..
Project ..
Project ..
Project ..
Project ..
Project ..
Project n-1
Project n
Year 1
Budget
Year 1
(O&M + Cap.)
Annual
Project
Budget
Year 3
Year 4
Year 5
Master
Plan with
Addendum
Year 1- 5
Capital Improvement
Program
Year 2
Asset
Management
Plan
Year 1- 20 +/Master Plans
Year 1
Year 1- WoL
Asset Plan
Sept
Oct
Nov
Money Source:
Funds
Grants
Loans
SDCs
Rates
Fees
Jan
Feb March April May
Annual
Budget
Develop
Funding
Strategy
SDCs List
Issues
Issues
Issues
Issues
Year 1
Needs
List
Annual
Project
Budget
Gaps
List
June
PAA(or not) Schedule
Operations
Projects
Year 1
Issues
List
Dec
Year 3
Year 4
Year 5
Aug
Year 2
July
Master
Plan with
Addendum
Issues
Issues
Issues
Issues
Issues
Issues
Issues
Issues
Funding Strategy
Allocated
Confirmed
Yr 1
CIP
Cap.
Annual
Budget
Needs
(Agree Solutions)
5 Year
CIP
=
+
Proposed
Funds Funding Sources:
- Rates
- Fees
- Bonds/Loans
- Funds
- SDCs
- Developers
- Grants
- etc, etc
Where, When What & How?
AMs Components
ORGANIZATION
COMMUNITY
DECISION
MAKING
TEAMS
PEOPLE
PROCESSES
TOOLS
ASSET &
BUSINESS
RISK
ASSET
KNOWLEDGE
STANDARDS
ASSET
LIFE CYCLE
STEWARDSHIP
Components of
ASSET MANAGEMENT

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Asset Management Intro

Whole of Life Environmental, Economic, and Social Balance

Water Environmental School 2012

Barry Buchanan, P.E.

120328.01 Short School AM Intro. bjb

What is Asset Management (AM)?

International Infrastructure Maintenance Manual Governments of Australia & New Zealand

An Anatomy of Asset Management & BSI PAS 55 Institute of Asset Management UK

SIMPLE WERF/GHD USA

CUPSS EPA USA

Strategic Asset Management by Clive Deadman UK

My own experience at Thames Water Plc. UK

What is Asset Management?

Asset Management is:

The provision of customer agreed levels of service,

Finding the right solution, with the right people, at the

120328.01 Short School AM Intro. bjb

What is Asset Management?

Lowest capital cost

Least life cycle cost

Using standardize processes informed by centralized:

What is Asset Management?

120328.01 Short School AM Intro. bjb

What is Asset Management?

Criticality, Risk Assessment &

Asset Management Policy

Capital Investment Decision Making,

Contract & Supplier Management

Technical Standards & Legislation,

Asset Information Strategy

Six subject group &

120328.01 Short School AM Intro. bjb

Why Do Asset Management?

Solutions defined through: risk based, least life cycle cost,

120328.01 Short School AM Intro. bjb

Why Do Asset Management?

To facilitate working smarter not harder

Document what you want to do

Do what you document

Document what you did

Review and improve

120328.01 Short School AM Intro. bjb

Why Do Asset Management?

To invest transparency and trust

To improve customer satisfaction

Public accountability for asset condition and performance.

Why Do Asset Management?

To build confidence and credibility in:

Whole of life ownership

120328.01 Short School AM Intro. bjb

Why Do Asset Management?

To support regulatory requirements

Capacity Management Operation and Maintenance (CMOM)

EPA predicts a 20-30%

120328.01 Short School AM Intro. bjb

120328.01 Short School AM Intro. bjb

culture, size, numbers,

partnering with the right

120328.01 Short School AM Intro. bjb

120328.01 Short School AM Intro. bjb

120328.01 Short School AM Intro. bjb

Operation & Maintenance