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2017 The Utility Management Conference

TUE02 – Sustaining Asset Management

– The Leadership View

February 7, 2017 Tampa, Florida

Workshop Agenda Facilitators and Presenters

Esteban Azagra, Vice President, Arcadis Darrell Beason, Director, Operations, Tarrant Regional Water District Linda Blankenship, Senior Advisor, Arcadis Rachel Ickert, Director, Water Resources Engineering, Tarrant Regional Water District Kevin Slaven, Associate Vice President, Arcadis Mike Sweeney, Deputy Executive Director, Toho Water Authority Gert van der Walt, Planning Supervisor, DC Water

The format will be presentations by the facilitators and presenters for each topic, followed by plenary questions and answers. For each topic, it will be followed by small group breakout discussions with the presenters to exchange ideas and lessons learned.

8:30 – 9:15 Welcome, Objectives for the Session, Introductions, Asset Management and Utility Participant Overviews

9:15 – 10:00 Topic 1 – Getting a Program Started: What are the Key Components to Get the Program Started? How and when do you secure stakeholder support based on your drivers?

10:00 – 10:15 BREAK

10:15 – 11:00 Topic 2 – Leadership: Is the Best Approach to Developing the Program from the Top Down or Bottom Up? How do you ensure organizational buy-in by key groups?

11:00 – 11:40 Topic 3 – Communication: Communication is Everything and Challenging – How can effective communication be achieved?

11:40 – 12:00 Closing Remarks and Wrap Up: Ensuring a Sustainable Program - How do you identifying value and enable continuous improvement to keep making progress?

Presenter Information

Esteban Azagra, Arcadis [email protected] Bio: Esteban Azagra is Vice President and Global Leader, Business Advisory, Water with Arcadis US. Esteban focuses on delivering asset management, technology, and business optimization services to the water industry. He has worked with major utilities and local municipalities to identify their unique business challenges, craft lasting solutions and facilitate the successful transition of the solutions into the organization. Esteban holds a MEng degree from the University of Texas at Austin and a BS from the Polytechnic University of Madrid.

Darrell Beason, Tarrant Regional Water District [email protected] Bio: Darrel Beason is Director of Operations at the Tarrant Regional Water District. The Operations Division is tasked with management, permitting, law enforcement, operation and maintenance of the District’s flood control, water transmission, reservoir, and fleet systems. Darrell has been an employee of the Water District for 22 years. He is an active member of the District’s Asset Management project team, as well as the MAXIMO implementation team. Darrell received his BAAS in Management from Texas A&M University - Commerce.

Linda Blankenship, Arcadis [email protected] Bio: Linda Blankenship is Senior Utility and Asset Management Advisor with Arcadis US, Inc. where she works with clients on a wide range of utility management initiatives including asset management. Linda has over 30 years of experience and has authored over 40 papers and presentations on water utility management topics. She has held senior positions in consulting and local government as well as managing regulatory affairs, technical programs and research support in major water industry associations. Linda has a B.A.Sc. in Civil Engineering from the University of Waterloo (Canada), an MBA and is a licensed professional engineer in Ontario. She is a Board Certified Environmental Engineer specialist. She is an active member of WEF and AWWA.

Rachel Ickert, Tarrant Region Water District [email protected] Bio: Rachel Ickert serves as the Water Resource Engineering Director and the Asset Management Project Manager for Tarrant Regional Water District. The Water Resource Engineering Division is responsible for water operations planning, energy management, water supply management and modeling, system hydraulics modeling, Envision project management, GIS, surveying, and flood monitoring and modeling. Prior to joining TRWD, Rachel worked as a water resources engineer for Freese and Nichols, Inc., doing pipeline and pump station design, construction management, system operations studies, and water supply planning and permitting. Rachel received her BS in Civil Engineering from Texas Tech University and MS in Civil Engineering from the University of Texas at Arlington.

mailto:[email protected]




Michael W. Sweeney, Toho Water Authority [email protected] Bio: Michael Sweeney, Ph.D. is currently the Deputy Executive Director of the Toho Water Authority, a full service utility in central Florida. His management and leadership capabilities include strategic planning and performance monitoring, management and optimization. He has over 30 years of experience in the water industry serving the cities of Indianapolis, Cincinnati and Louisville in various leadership positions as well as private consulting experience serving clients across North America. He is active in several professional associations including WEF, AWWA, FWEA and ISA. He holds a B.S. degree in Public Health and Environmental Health Science from Indiana University and M.S. and Ph.D. degrees in Environmental Engineering from Purdue University and is a registered professional engineer in Indiana, Ohio and Kentucky.

Kevin Slaven, Arcadis [email protected] Bio: Kevin Slaven is an Associate Vice President with ARCADIS. Mr. Slaven specializes in asset management services and brings over twelve years of experience across the water, wastewater, and electric utility industries. Kevin has assisted clients with the development of asset management programs that include initiatives, including service levels, performance management, business case evaluations, CMMS development, maintenance management, and capital improvement planning. He is a member of WEF’s Utility Management and Plant Operations and Maintenance Committees. He is the chair for AWWA’s Asset Management Young Professionals Subcommittee and Ohio AWWA’s Asset Management Committee. Additionally, Mr. Slaven is a Certified Reliability Leader and RCM Analyst Level I.

Gert van der Walt, DC Water [email protected] Bio: Gert van der Walt is Planning Supervisor for DC Water. In this position, he manages staff and contractors working on planning for the maintenance and replacement of the DC Water’s water and wastewater system. Gert is part of the DC Water team responsible for implementing asset management at the utility. Prior to joining DC Water in 2013, he worked as a project engineer with Hatch Mott McDonald for over 5 years to support DC Water in this work including water system facilities plan updates; coordinating the assessment and selection of small diameter water mains for replacement; project managing the design of internal joint repairs projects and preparing contract documents for various projects. He previously worked for Mott McDonald in the UK and PD Naidoo in South Africa as design engineer on a wide variety of water and wastewater system projects. Gert has a Bachelor of Engineering (BEng), Civil Engineering from the University of Stellenbosch and a Bachelor of Commerce from the University of South Africa.




WORKSHOP FACILITATORS

KEVIN SLAVEN (AKRON, OH) Associate Vice President, Senior Management Consultant

o. 330.515.5687 c. 330.990.2726 e. [email protected]

© Arcadis 2017 7 February 2017 3

WORKSHOP FACILITATORS

LINDA BLANKENSHIP (WASHINGTON, DC) Senior Utility and Asset Management Advisor

o. 703.465.4230 c. 571.292.7021 e. [email protected]

ESTEBAN AZAGRA (PHOENIX, AZ) Vice President, Global Leader Business Advisory, W ater

o. c. e.

602.797.4678 602.405.7858 [email protected]

© Arcadis 2017 7 February 2017 2

SUSTAINING ASSET MANAGEMENT – THE LEADERSHIP VIEW ON BEST PRACTICES

Utility Management Conference 2017, Tampa, FL February 7, 2017




AGENDA 8:30 – 9:15 Welcome, Overview and Objectives for the Session,

Introductions, Utility Participant Overviews

9:15 – 10:00 Topic 1 – Getting a Program Started: What are the Key Components to Get the Program Started? How and when do you secure stakeholder support based on your drivers?

10:00 – 10:15 BREAK

10:15 – 11:00 Topic 2 – Leadership: Is the Best Approach to Developing the Program from the Top Down or Bottom Up? How do you ensure organizational buy-in by key groups?

11:00 – 11:40 Topic 3: Communication is Everything and Challenging –

How can effective communication be achieved?

11:40 – 12:00 Closing and Wrap Up: Ensuring a Sustainable Program: How do you identify value and enable continuous improvement to keep making progress?

© Arcadis 2017

Learning Objectives

After attending this workshop, you should be able to:

• Understand the key components necessary for developing an asset management program

• Learn about potential obstacles, challenges and lessons learned for successful implementation from an organizational perspective

• Achieve a greater understanding of the benefits of asset management

© Arcadis 2017 18 January 2017 5

Objectives, Agenda and Introductions

Overview of Asset Management Frameworks

WORLD CAFÉ FORMAT FOR EACH TOPIC

• Initial observations will be made by the panel members.

• Small group tables will discuss their

experiences, opinions and ideas and report out.

• Questions have been developed to

build on one another as presented in the agenda to address organizational elements of a successful asset management program.

• The workshop will end with a wrap-

up session to present a summary of the results.

– Possible AWWA Journal article.

© Arcadis 2017

British Standard

PAS55-1 to be withdrawn

British Standard PAS55-1

FHWA TAMP Guide

IIMM International

Infrastructure Management

Manual

WERF SIMPLE Tools

IIMM International Infrastructure Management

Manual Update

IIMM International Infrastructure Management

Manual Update

IWA Aquamark Benchmark

Update

British Standard

PAS55-1 Update

Asset Management Evolution: Two Widely Recognized Frameworks

ISO 55000 AM Standard WERF/

WaterRF AM Framework

International Org. for Standardization

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USEPA Best Practice Guide

IWA Aquamark Benchmark

Institute for Sustainable Infrastructure EnvisionTM

© Arcadis 2017

Gui

delin

es/B

ench

mar

king

Fr

amew

orks

SIMPLE Tools Address Breadth of Asset Management Topics

© Arcadis 2017

WERF’s SIMPLE Knowledge Base Provides Extensive Tools

© Arcadis 2017

WERF Convened International Research Agenda Setting Meeting in 2002 UK, Australia, NZ, Canada presentations

• New elements of risk, levels of

service, business cases

Laid out a recommended research agenda

• Protocols for condition

assessment and asset life • Life cycle models and methods • Plan guidance and templates • Case studies • Asset value methodologies

© Arcadis 2017

There are 7 SAM-GAP Elements

1 Processes and

Practices

2 Information Systems

3 Data and

Knowledge

4 Service Delivery

5 Organization

al Issues

6 People Issues

7 Asset

Management Plans

© Arcadis 2017

SAM-GAP Has 150 Statements The SAM-GAP assessment tool takes the form of a detailed and comprehensive multiple-choice questionnaire.

© Arcadis 2017

Develop

Asset Registry

Assess

Performance, Failure Modes

Determine

Residual Effective Life

Determine Life Cycle & Replacement

Costs

Set Target Levels of

Service (LOS)

Determine

Business Risk (“Criticality”)

Optimize

O&M Investment

Optimize Capital

Investment

Determine Funding Strategy

Build AM Plan

WERF Tools Follows the EPA 10 Step Process to Develop Asset Management

Asset Hierarchy Tool CA Selection Tool, CA Scoring Tool

Remaining Effective Life

Tool

Life Cycle Cost Tool

Level of Service Tool

Business Risk Tool Maintenance KPI Survey Tool

CIP Validation & Prioritization Tool

Benefit Cost Tool, Reinvestment Tool AM Plan Tool

© Arcadis 2017

Background on ISO 55000

• Published Jan 2014 by the British Standards Institute

• Similar to other ISO Plan, Do, Check, Act continuous improvement processes

• Applies to the management of any type of physical asset

© Arcadis 2017

WERF Research Identifies Leading Practices Using SAM GAP Tool WERF 2012 report identified best practices in six key areas: • Accounting and Costing • Strategic Asset Planning and

Asset Management Plans • Maintenance • Organization and People • Secondary Data and Knowledge • Business Risk Management

© Arcadis 2017

SAM-GAP Scores Against Leading Practice

© Arcadis 2017

ISO 55000 Maturity Assessment Has 39 Questions

© Arcadis 2017 Note that Clauses 1 through 3, namely Clause 1 – Scope, Clause 2 –Normative references and Clause 3 – Terms and Definitions are not used for an ISO 55000 gap assessment.)

ISO 55000 Elements Clause 4 – Context of the Organization

Clause 5 – Leadership

Clause 6 – Planning

Clause 7 – Support

Clause 8 – Operation

Clause 9 – Performance Evaluation

Clause 10 – Improvement

© Arcadis 2017

ISO 55000 Series Structure

ISO 55000: Overview, Principles and Terminology

ISO 55001: Requirements

ISO 55002: Guidelines

© Arcadis 2017

Our Focus is on the “Soft” Elements 1

Processes and Practices

2 Information Systems

3 Data and

Knowledge

4 Service Delivery

5 Organization

al Issues

6 People Issues

7 Asset

Management Plans

© Arcadis 2017

Use a Blended Approach from Both Programs

ISO 55000 The Organization Leadership Plans

Support Operation

Performance Evaluation

Improvement

AM Success

WERF SAM GAP Processes & Practices Information Systems Data & Knowledge

Service Delivery Organization Issues

People Issues Asset Mgmt. Plans

© Arcadis 2017

Leading Practice Concepts of Asset Management

+ + = Leading Practice

Asset Management

Levels of Service

Based on Customer

and Stakeholder Expectations

Risk Management

Based on Likelihood and Consequence

of Failure

$ CIP Using Life Cycle

Cost, Business

Cases and Prioritization

Change is Required – Leadership is Critical © Arcadis 2017

Toho Water Authority -Assets Owned & Managed

Toho Water Authority - provider of water and reclaim water services

• Established in 2003 by special act of the Florida Legislature • 97,000 water, 91,000 wastewater and 15,000 reclaimed

water customers • 14 water (35 mgd) and 8 water reclamation (25 mgd)

facilities • 1,295 miles of water mains; 1,188 miles of sewers; 333

miles of reclaimed water distribution mains • 300+ workforce • $800 million in assets

Growth through system expansion and acquisition and insourcing of some supporting functions

© Arcadis 2017

Asset Management Overview

Michael Sweeney, PhD Deputy Executive Director Toho Water Authority

DC Water Gert van der Walt

TRWD Darrell Beason Rachel Ickert

Toho Water Authority

Michael Sweeney

Utility Participant Presentations

© Arcadis 2017

gram alignment

Business Case Templates Collect Information to Score/Prioritize Projects Full Business Case Includes • Funding Sources • Project Summary and Description • Strategic Plan Alignment • Project Alternatives Evaluated • Condition, Consequence of Failure and Risk

Analysis • Project Cost Estimates • Project Scoring • Mapping to Triple Bottom Line Criterion • Use Consequence of Failure and Condition

(Probability of Failure ) Scores to Prioritize R&R Projects

• Use Project Impact and Financial and Strategic Alignment to Prioritize Expansion Projects

© Arcadis 2017 30

Overview of Inventory & Condition Assessment Program Vertical Assets – Tier I Visual Assessment for Plants and Lift Station Condition

• Includes performance condition and consequence of failure scoring based on IIMM

Gravity Pipes & Manholes – Cues CCTV Equipment

• Structural and O&M condition using PACP and MACP

• Integrating use of new technologies – RedZone Robotic Cameras – SL-RAT

Pressure Pipes- field pilots for high risk lines to evaluate remaining useful life

• Program in initial stages

© Arcadis 2017 29

Current Asset Management Systems CMMS – InforEAM

• Data conversion from MP2 • Built in GIS interface GIS - ESRI

• Created from paper maps CIS – CIS Infinity

• Insourced Customer Handling Applications Managed by IT

Asset Management Section – ensures pro

• Part of Engineering Division • Provides strategic alliances and guidance • Reviews proposed changes

© Arcadis 2017


Rachel Ickert Darrell Beason Tarrant Regional Water District

Next Steps for Asset Management at TWA • Continue to integrate LOS and KPI metrics into staff

performance evaluations

• Continue to Evolve CIP Prioritization Process across Divisions

• Implement program that address risk with pressure pipes

• Increase and improve the data collected as a result of maintenance activities

• Increase effort to “analyze” the operational data collected in the AM Systems

• Formalize/standardize process necessary to support the AM Program

© Arcadis 2017 31

TRWD’s Asset Management

Implementation Journey

Board of Directors

Victor W. Henderson President

Jack Marty Stevens Leonard Vice-President Secretary

Jim Lane

Mary Kelleher

Secretary Pro-Tem

TRWD Basics

Deliver a reliable, resilient supply of water to the public at the lowest cost and highest quality possible.

• Efficiently meet 100% of customer water supply needs during normal

operations with the most treatable water possible.

• Ensure the public is well informed about the TRWD mission and activities

• Provide the best public service by coordinating with other government agencies and stakeholders that together provide quality drinking water to the public

• Maintain cost effective business practices that maximize system operating capability and reliability

• Incorporate environmental stewardship, conservation, and sustainability into all District practices

MISSION Deliver a reliable, resilient supply of water to the public at the lowest cost and highest quality possible.

Reduce the risk of flooding in our communities with dependable flood damage reduction infrastructure and operations.

Enhance the quality of life in North Texas communities by creating recreations opportunities around TRWD infrastructure to enable active lifestyles.

Project Plan

Assessment & Roadmap

Pilot Program

Implementation ISO 55000 Certification

Phase 1 Phase 2 Phases 3 and 4

Asset Management and SCADA Decision Support Tools

Formal Asset Management Program

for Water Delivery System

SCADA Decision Support Tools for

Energy Management

Maintain cost effective business practices that maximize system operating capability and reliability


Gert van der Walt DC Water

Proje

ct Co

mmun

icatio

ns

Collection System Overview

• 1,800 miles of sanitary, combined and storm sewers

– Median age: 90 years

• 9 wastewater pumping stations

• 16 stormwater pumping stations

• Most Combined Sewers built prior to 1900’s

49

Water System Overview

1,300 miles of transmission and distribution mains • Median age: 78 years

8 finished water storage facilities 4 water pumping stations Nearly 44,000 valves Over 9,500 fire hydrants Nearly 130,000 service

connections

48

Overview of DC Water

DC Water & Sewer Authority

• Public agency • Created in 1996 • Independent authority of the DC government • Operate and maintain the water, sewer and storm water

systems in Washington, DC • Operate Blue Plains Advanced Wastewater Treatment Plant • Purchase water from the Washington Aqueduct

47

Initial Phase – Laying the Foundation Asset Management Policy

Levels of Service

Enterprise Risk Framework • Consequence of Failure (COF) Matrix

• Likelihood of Failure (LOF) Matrix

• Risk = COF x LOF

Governance Structure • Asset Management Steering Team

• Asset Management “Work” Team

Strategic Asset Management Plan

52

Asset Management addresses costs, risks and service delivery of the entire asset lifecycle An integrated set of processes to minimize the lifecycle costs of infrastructure assets, at an acceptable level of risk, while continuously delivering established levels of service.

Acceptable Risk

Lifecycle Costs Service Levels

Balance conflicting goals by managing risk

5511

Blue Plains Advanced Wastewater Treatment Plant

Largest advanced wastewater treatment plant in the world Serves over 2 million people

• District of Columbia • Montgomery County, Maryland • Prince George’s County Maryland • Fairfax County Virginia • Loudon County Virginia

Nominal treatment capacity of 370 mgd

50

DC Water Asset Management Approach Decision Making:

Goal is consensus; reality is that 100% consensus not always possible

Make decisions, move on & not backtrack

Focus time, effort & discussion on critical irreversible decisions; minimize time spent on other decisions

55

DC Water Asset Management Approach Data and Tools:

Recognize that data & tools not perfect

Leverage available data & tools to expedite results

Interpret results accordingly

Plan to improve data quality & tools and acquire necessary training to continuously improve Asset Management

54

DC Water Asset Management Approach General:

Build upon key deliverables to date:

• Asset Management Policy

• Levels of Service

• Risk Framework

Maintain vision of world-class Asset Management but focus concurrently on producing results and “quick wins”

Key Objective – inform CIP and Operations budget

53

Consequence of Asset Failure

Assets with an Unacceptable Level of Risk

Risk Calculation

Asset Risk Ranking

Capital Project

O&M Enhancement

Total

Benefit

Project

Efficiency

Capital Project

O&M Enhancement

Likelihood of Asset Failure

Extent of Risk

Reduction

Benefits other than

Risk Reduction

Lifecycle Cost of Option

Growth

New Regulations

Coordination with Others

Service Quality

Energy

Efficiency Climate Change

Safety/Security Innovation

Two Tools for Improved Capital Planning

Business Case Evaluations (BCE) • To identify optimal “project” to address a specific need

Project Prioritization Process

• To prioritize capital projects versus available funding

Ident ify Risk Mit ig at ion

R isk of Failur e An alys is Opt ions

Business Cas e Ev aluatio n

Pr oject Pr iorit izat ion

S e l e c t ed

Non- R isk Dr ivers

( fr om Fac i l ities P lans ) Ident ify

Alt er natives to Meet Non- R isk

Need s

58

Capital Program Improvements - Key Components

Development of Asset Management Plans • Sewer

• Water

• Blue Plains

• Enterprise

Business Case Evaluation Process

Capital Project Prioritization Process

57

DC Water Asset Management Approach DC Water Staff vs Consultants:

DC Water staff to assume more leadership of program

Goal is to internalize Asset Management and transition from a consultant lead effort to DC Water lead effort

Employ “Train the Trainer” as much as possible

56

Four Broad “Challenge” Topics 1. What are the Key Components to Get the Program Started?

How and when do you secure stakeholder support?

2. Is the Best Approach to Developing the Program from the Top Down or Bottom Up? How do ensure organizational buy- in by key groups?

3. Communication is Everything and Challenging: How can

effective communication be achieved?

4. Ensuring a Sustainable Program: How do you identify value and enable continuous improvement to keep making progress?

© Arcadis 2017

Let’s Get into the Asset Management Topics

Assets with an Unacceptable Level of Risk

Risk Calculation Asset Risk Ranking Extent of

Risk Reduction

Capital Project O&M

Enhancement

Total

Benefit Benefits

other than Risk

Reduction Project

Efficiency Lifecycle Cost of Option

Capital Project O&M

Enhancement

Consequence of Asset Failure

Likelihood of Asset Failure

Growth New

Regulations Coordination with Others

Service Quality

Energy

Efficiency Climate Change Safety/Security

Innovation

The Link from Risk Assessment to Business Case Evaluations to Capital Project Prioritization

Ide nt ify Ri sk Mit ig at i on

Ri sk of Fai lur e An alys i s Opt i ons

Busine ss Cas e Ev aluatio n

Pr oje ct Pr i orit i zat i on

S e l e c t ed

Non-R i sk Dr i vers

(f r om Fac i l itie s P lans ) Ide nt ify

Alt er native s to Me et N on- R isk

Need s

59

ISO 55000 – Focus on Clause 4 (Context)

#3 - Stakeholders have an influence in shaping the organizational plan and hence also its asset management system. Relevant stakeholders should therefore be identified, their requirements captured and considered in the design of the asset management system.

Level 3 - The organization identifies stakeholders that are relevant to the asset management system, and captures their requirements and expectations.

#4 - Internal and external stakeholders will be interested in certain key financial

and non-financial information about assets and asset management as this can have a significant impact on both the organization's overall business performance and their own activities.

Level 3 - Relevant stakeholder requirements are determined for recording of financial and non-financial information relevant for asset management, and for their reporting internally and externally.

© Arcadis 2017

Getting Started and Stakeholder Support

• What are the key components to

get the program started?

• How and when do you secure stakeholder support?

In Each Breakout Session • Panelists will participate at each table and rotate among

the tables

• Facilitators will facilitate knowledge sharing, dialogue and capture a few key points

• Workshop participants will share their own observations, questions and experience

© Arcadis 2017

Leadership

• Is the best approach to developing the program from the top down or the bottom up?

• How do you ensure organizational buy-in by key groups?

Panel Examples Utility Ideas • Asset Management Team

meetings are key

• Work with upper management and Steering Committee

• Transition from consultant support to utility-lead

© Arcadis 2017

WERF SAM-GAP

7.01.11 AMP's should include reference to customer or stakeholders for consultation clearly showing them the future sustainable cost and levels of service over a period of at least 30 years. (eg. Are customer / stakeholders consulted with this information and is their feedback taken into account? Are full cost service projections provided that extend well into the future?)

© Arcadis 2017

WERF SAM-GAP 5.01.02 Organizational commitment to Asset Management. (eg. Is this documented in corporate policy / business plans, organizational objectives and mission statements in such a way as to show its importance to the business?) 5.1.2 Single executive manager with defined Asset Management responsibility.(eg. Is it clearly documented who has the responsibility for asset decisions in the organization? Are the roles and responsibilities clearly defined throughout the structure?) 5.1.3 Asset Management roles and responsibilities. (eg. Are roles and responsibilities clearly defined right across and down the organization? Are they linked to job specifications?) 5.1.4 Asset Management Coordinating Group or Steering Committee. (eg. Is there an Asset Management steering committee with links into the board and executive management?) 5.1.5 Asset Management team or coordination group. (eg. Does this group exist within the business?) 5.1.6 Asset Management manager or coordinator whose major role is to build organizational AM capabilities and provide staff support to the Asset Management Steering Committee. 5.1.7 The corporate vision reflects a commitment to best practice in Asset Management. (eg. Does the organization display a documented vision for Asset Management?

© Arcadis 2017

ISO 55000 – Focus on Clause 5 (Leadership) – continued

#11 - How has top management ensured that the responsibilities and

authorities for relevant roles are assigned and communicated within the organization.

Level 3 - Top management have assigned responsibility and authority for:

• Establishment and update of the SAMP, asset management

objectives and asset management plan(s);

• Ensuring the adequacy, ongoing suitability and effectiveness of the asset management system and ensuring that it supports delivery of the SAMP and conforms to the requirements of ISO 55001;

• Reporting to op management on the performance of the AM system.

© Arcadis 2017

ISO 55000 – Focus on Clause 5 (Leadership)

#9 - Ownership and accountability for asset management remains at the

top management level. However, leadership and commitment is required at all managerial levels of the organization to support the development, implementation and continual improvement of asset management.

Level 3 - Top management ensures that the asset management policy, the SAMP and asset management objectives are all in place and are consistent with the organizational objectives

© Arcadis 2017

Communication

• How can effective communication be achieved?

DC Water Asset Management Program Governance Structure

72

Panel Examples Utility Ideas • Focus on what you have,

not what’s missing

• Leverage and build on existing “asset management” practices

• Engage a “Core Team” of key staff – see DC Water structure

© Arcadis 2017

© Arcadis 2017

WERF SIMPLE United Utilities “Road to Wembly” example in handout

ISO 55000 – Focus on Clause 7.4 (Communication) - continued

#20 - How has the organization determined internal and external

communication requirements related to assets and asset management system? To ensure the appropriate awareness, asset management activities carried out by the organization need to be communicated to relevant stakeholders periodically, in a coordinated way, as an integral part of the organization’s asset management activity and asset management system.

Level 3 - The organization has determined the need for communication internally and externally relevant to assets, asset management and the asset management system. This includes what is communicated, when, with whom and how. The organization has effective formal and informal communication systems in place for this purpose.

© Arcadis 2017

ISO 55000 – Focus on Clause 7.4 (Communication)

#10 - What has top management done to establish, communicate, implement,

periodically review and, if required, update an asset management policy? Level 3 - The organization has established and documented asset management policy, which is authorized by top management and communicated within the organization and is available to relevant stakeholders. The asset management policy is appropriate to the purpose of the organization; provides a framework for setting objectives; includes commitment to satisfy applicable requirements and to continuously improve the asset management system. The asset management policy is documented, communicated, available and visible to all who are responsible for asset management activities, and reviewed regularly. The asset management policy references the organizational plan and how asset management will be used to enable it, and clearly states its relation and alignment with other organizational policies. © Arcadis 2017

United Utilities “Road to Wembly” example in handout © Arcadis 2017

Ensuring a Sustainable Program

• How do you identify value and enable continuous improvement to keep making progress?

Panel Examples Utility Ideas • Closing the loop on

feedback/comments received is key to maintaining buy-in, requires strong project management

• Getting and keeping everyone on

the “same page” and managing expectations

• Determining exactly how we are

going to apply some of the tools we are developing

• Getting and keeping staff

engaged • Addressing operation and

maintenance improvements © Arcadis 2017

WERF SIMPLE

Panel Examples Utility Ideas Example from business cases to eliminate unneeded capital investment as an early win (DC Water, similar to Columbus DPU)

© Arcadis 2017

WERF SAM-GAP

1.12.5 Processes followed for identifying cost reduction opportunities. (eg. Does the organization have a process by which new ideas and suggestions are reviewed?)

1.12.6 Processes for implementing and reporting on the progress achieved with approved Asset Management improvement programs. (eg. Does the organization measure and track the progress of these programs?)

6.01.03 Processes to manage and implement change through the business. (eg. How does the organization respond to change? What mechanisms have been put in place to assist the change process and organizational learning in asset management and make it part of the culture?)

© Arcadis 2017

ISO 55000 – Clause 10 Continuous Improvement

#39 - How does the organization demonstrate that it continuously

improves the suitability, adequacy and effectiveness of its asset management and asset management system?

Level 3 - The organization can demonstrate that the suitability, adequacy and effectiveness of its AM system is being continually improved through its processes for monitoring and evaluation, reviews by top management, and the existence of AM objectives and actions designed to improve the system.

© Arcadis 2017

THANK YOU!!


Learning Objectives

After attending this workshop, you should be able to:

• Understand the key components necessary for developing an asset management program

• Learn about potential obstacles and challenges and lessons learned for successful implementation from an organizational perspective

• Achieve a greater understanding of the benefits of asset management


SAM1R06h

LEADING PRACTICES FOR

STRATEGIC ASSET MANAGEMENT

STRATEGIC ASSET MANAGEMENT, COMMUNICATION, AND IMPLEMENTATION

by:

Linda Blankenship

Frank Godin Terry Brueck

EMA, Inc.

2012

Leading Practices for Strategic Asset Management iii

The research team would like to acknowledge the kind assistance of those who contributed extensively of their time and practices.

Terry McGhee, DuPage Water Commission, Illinois Terry Martin, Seattle Public Utilities, Washington Kevin Hadden, Orange County Sanitation District, California Simon Watson, Orange County Sanitation District, California Greg Kane, Sydney Water, Australia Steve Whipp, United Utilities, United Kingdom Susan Ancel and Doug Seargeant, EPCOR, Canada

Research Team

Principal Investigators: Linda Blankenship, P.E., DEE, BCEE, EMA, Inc.

Terry Brueck, P.E., EMA, Inc. Project Team: Frank Godin, EMA, Inc. Penny Brink, EMA, Inc. Matt Volna, EMA, Inc.

Issue Area Team Kevin Hadden, Orange County Sanitation District, California Ken Jacobs, Cobb County Water System, Georgia

Teddy Regan, Massachusetts Water Resources Authority, Massachusetts Wayne Green, York Region, Canada Greg Kane, Sydney Water, Australia Steve Krai, Sanitation Districts of Los Angeles County, California Manju Sharma, Metropolitan Water Reclamation District of Greater Chicago, Illinois Terry Martin, Seattle Public Utilities

Water Environment Research Foundation Staff Director of Research: Daniel M. Woltering, Ph.D. Program Director: Walter L. Graf, Jr.

ACKNOWLEDGMENTS

Leading Practices for Strategic Asset Management v

Acknowledgments.......................................................................................................................... iii Abstract and Benefits ..................................................................................................................... iv List of Figures ................................................................................................................................ vi List of Acronyms .......................................................................................................................... vii Executive Summary ...................................................................................................................ES-1

1.0 Introduction .................................................................................................................... 1-1 1.1 Background .......................................................................................................... 1-1

2.0 Results from Initial Survey ........................................................................................... 2-1

3.0 Benchmarking Results ................................................................................................... 3-1 3.1 Organization and People ...................................................................................... 3-3 3.2 Strategic Asset Planning ...................................................................................... 3-5 3.3 Business Risk Exposure ....................................................................................... 3-7 3.4 Maintenance ......................................................................................................... 3-9 3.5 Secondary Data and Knowledge ........................................................................ 3-11 3.6 Accounting and Costing ..................................................................................... 3-12

4.0 How Utilities Can Use These Results ........................................................................... 4-1

Appendix A: Organization and People ....................................................................................... A-1 Appendix B: Strategic Asset Planning .........................................................................................B-1 Appendix C: Business Risk Exposure .........................................................................................C-1 Appendix D: Maintenance .......................................................................................................... D-1 Appendix E: Secondary Data and Knowledge ............................................................................. E-1 Appendix F: Accounting and Costing.......................................................................................... F-1

TABLE OF CONTENTS

Leading Practices for Strategic Asset Management ES-1

EXECUTIVE SUMMARY

Utilities throughout the world are faced with the challenge of how best to manage their existing water and wastewater system assets to meet stakeholder and customer levels of service with limited funds. In the United States, the U.S. Environmental Protection Agency released the Clean Water and Drinking Water Gap Analysis Report in 2002. This report estimated that if investment in water and wastewater infrastructure doesn’t increase, the funding gap between actual and needed investment over the next 20 years would be substantial – $122 billion for clean water capital costs and $102 billion for drinking water capital costs. The report also determined that if utilities undertake the work that needs to be done to address infrastructure and if the public supports them, then the problem should be manageable. Effective asset management could help utilities, but decision-maker support and understanding will also be important to help them meet this challenge.

In response to the need identified by its utility members, the Water Environment Research Foundation (WERF) issued a Request for Proposals in 2006 to develop guidance and decision support tools for implementing a Strategic Asset Management program (SAM) for wastewater and water utilities. One objective of the research program was to improve economic life and realize cost savings, more specifically to understand how to identify and document leading strategic asset management practices used by utilities.

Thirty-six utilities used a tool developed in the research program called SAM GAP (Strategic Asset Management Gap Analysis for Practices Tool). SAM GAP is a tool for utilities to conduct a self-assessment of their strategic asset management practices. Gaps in practice levels were identified as potential areas for utilities to improve. For those areas in which some utilities identified leading practices, further validation was conducted by telephone interviews. Detailed on-site research of their practices was then conducted. The practice areas included:

♦ Organization and People ♦ Strategic Asset Planning (and related Asset Management Plans) ♦ Business Risk Management ♦ Maintenance ♦ Secondary Data and Knowledge ♦ Accounting and Costing

Leading practices were researched, identified, documented, and validated through site visits. A leading practices research forum was conducted in June 2010 with learning and leading utility representatives participating.

The Organization and People practice area includes vision, roles, and responsibility for strategic asset management in the organization, development of a supporting culture, continuous improvement to improve business processes, and training and knowledge for the workforce. A vision, mission, and goals are developed, and a regular program of communication exists. Asset management is championed at the highest levels. A program was developed to assess and build the skills and knowledge for the workforce to undertake asset management at multiple levels.

The Strategic Asset Planning practice area includes predicting likely failure modes, life cycle cost, optimized decision making (repair, rehab, replace), and state-of-the-asset portfolio reporting. Strategic Asset Planning focuses on planning for the long term to maintain the

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viability and sustainability of the utility’s assets. Customers and stakeholders help to identify desired service levels. Clearly defined business goals drive budget planning for both O&M and capital budgets. Performance is tracked using quality processes and risk is managed. Asset plans are clearly linked to and drive operation plans and tactical response for their maintenance strategy.

The Business Risk Management practice area includes business risk exposure, probability and consequence of failure, and risk analysis and reduction. Leading practice utilities assess risk on a periodic and regular (e.g., annual/biannual) basis and look broadly at all types of risks. Multiple levels of risk are defined and reviewed including strategic (longer term) and operational (shorter term) risks. Areas of unacceptable risk are identified for further evaluation and corrective action. A standard risk assessment methodology is used to analyze potential capital investments. Audits are conducted to ensure that the desired results are being obtained.

The Maintenance practice area includes maintenance policies, maintenance planning, scheduling, and control. Leading practice utilities have a maintenance strategy in place for their key asset classes based on an understanding of failure modes, failure analysis, and risk. Reliability-centered maintenance is used to focus maintenance resources and to select the appropriate maintenance tactics. Information on the condition of assets is collected during routine preventive maintenance work. Work flow management is supported by maintenance management software interfaced with other systems as required. Planned maintenance is analyzed regularly and optimized to meet the needs of the assets.

The Secondary Data and Knowledge practice area includes asset condition and performance data. Leading utilities focus on defining the data that is truly necessary to make informed decisions. They assure quality data by periodic review for completeness. The data collected includes capital, operating and maintenance costs including labor, contracts, rentals, and travel time (if significant) as needed. Condition-based assessments are performed based on an analysis of asset risk (likelihood/probability and consequence of failure) as well as cost.

The Accounting and Costing practice area includes asset valuation, tracking, and reporting, residual life, and future renewal liabilities. Leading utilities use multiple valuation methods depending on the purpose and intended audience for the information. Business case analysis is used to make decisions on capital improvements, as well as operations and maintenance budget improvements. This analysis incorporates all relevant cost categories including capital, labor for operations and maintenance, materials, contract and rental services. It may include consideration of non-financial benefits and costs such as environmental and social benefits, for so-called triple bottom line analysis for larger investment decisions.

All utility staff involved in asset management, from the general manager to the maintenance planner, can benefit from adopting practices that are directly applicable to the utility’s unique drivers and management philosophy. The utility’s asset management team should assess its level of practice using the SAM GAP tool to understand their level of practice. They should then review the leading practices and related examples to identify the practices to adopt or adapt for their own utility. Using these leading practices can help utilities optimize their asset life-cycle cost.

Leading Practices for Strategic Asset Management ES-3

The following table lists the six leading practice areas and associated leading practice topics:

LEADING

PRACTICE AREA LEADING PRACTICE TOPICS

Organization and People

♦ Mission/Vision/Policy and Drivers

♦ Roles and Responsibilities (Including Organizational Structure)

♦ Workforce Planning/Education and Training

♦ Culture and Change Management

Strategic Asset Planning

♦ Drivers

♦ Business Goals

♦ Asset Management Plan Development

Business Risk Exposure

♦ Assessing Risk

♦ Managing/Optimizing Risk

Maintenance ♦ Strategy and Tactics Selection

♦ Work Flow Management (Including Planning and Schedule)

♦ Managing and Monitoring

Secondary Data and Knowledge

♦ General Practices

♦ Physical Attribute Data

♦ Maintenance and Operations Data

♦ Condition and Performance Data

Accounting and Costing

♦ Valuing Assets

♦ Tracking Actual (Historical) Costs

♦ Projecting/Forecasting Costs

♦ Funding Strategy

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Following are the leading practice statements for Organization and People.

MISSION/VISION/POLICY AND DRIVERS 1. The utility has established a mission/vision/policy that demonstrates the commitment to

Asset Management. AM is recognized as a way to carry out their mission and meet business goals and drivers. This practice means that the utility has implemented asset management as a core process inside their organization and has made express written statements about how asset management will be carried out.

2. The utility has established an organization-wide steering team that achieves cross-business unit alignment with asset management principles.

3. Broad education is used by the utility leadership to understand the strategic asset management from a common perspective. Gap analysis assessment is used to identify the opportunity for asset management based on the utility’s drivers.

4. A picture of asset management (AM) is clearly defined and widely communicated in a way that is meaningful to all staff and consistent to stay “on message.”

5. A sense of urgency exists within the organization to continue to establish and improve its level of practice around AM.

ROLES AND RESPONSIBILITIES (INCLUDING ORGANIZATIONAL STRUCTURE) 6. There is alignment and understanding at the senior level and agreement of

roles/responsibilities and how they support each other.

7. AM functions and responsibilities have been identified in all organizational units where appropriate.

WORKFORCE PLANNING/EDUCATION AND TRAINING 8. A workforce development program and specific training to support AM within the

organization have been developed.

9. Knowledge sharing and exchange of personnel is used to foster AM principles and practices.

CULTURE AND CHANGE MANAGEMENT 10. A mindset of sustainability supports an AM culture.

11. There is an organization-wide understanding of asset management principles.

12. The utility undertakes routine self-assessment and formalized benchmarking to compare and continually improve its practice and performance.

The complete practices and utility examples are presented in Appendix A.

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Following are the leading practice statements for Strategic Asset Planning.

DRIVERS 1. Resources required to maintain the viability (sustainability) of the utility are analyzed,

planned and managed.

2. Engaging customers and other stakeholders (as appropriate based upon legislative/ statutory operating environment) is important to understand service level requirements.

3. Governance of the utility directs and adopts short, medium, and long-term plans and associated resources based on asset management principles including concepts such as ability to pay, business risk, level of service, etc.

BUSINESS GOALS 4. Strategic planning leads to clearly defined business goals that drives budget planning to

integrate both operations and maintenance and capital improvement project budgets to maintain financial viability.

5. Performance must be measured and tracked against the established goals on a regular and specific frequency.

ASSET MANAGEMENT PLAN DEVELOPMENT 6. Asset management plans link up to the corporate strategy/policy and down to the tactical

operational plans.

7. Maintenance and renewal decision making is optimized according to the cost to maintain/ repair as compared to the cost of replacement of the asset.

8. A confidence index is used for evaluating and making decisions to manage assets.

9. Prediction of remaining asset life is based on multiple methods and data sources which are updated on a regular basis.

10. Different kinds of asset management plans are used for different purposes/users.

11. Long-term plans are prepared for a 30 year or more timeframe, but are reviewed and adjusted to optimize asset use in the near future.

The complete practices and utility examples are presented in Appendix B.

APPENDIXALEADING PRACTICES FOR ORGANIZATION AND PEOPLE

Following are the leading practices for Organization and People. Sections include:

Mission/Vision/Policy and Drivers

Roles and Responsibilities (Including Organizational Structure)

Workforce Planning/Education and Training

Culture and Change Management

Leading Practice Individual Evaluation Form

Leading Practice Team Evaluation Form

Leading Practices for Strategic Asset Management A-1

WERF Strategic Asset Management Leading Practice: Organization and People Page 1

ORGANIZATION AND PEOPLE: Mission/Vision/Policy and Drivers

1. Leading Practice Statement:

The utility has established a mission/vision/policy that demonstrates the commitment to AssetManagement. AM is recognized as a way to carry out their mission and meet business goals anddrivers. This practice means that the utility has implemented asset management as a core processinside their organization and has made express written statements about how asset managementwill be carried out.

Explanation:

The utility’s mission/vision/policy regarding asset management is known by employees andexternally by stakeholders and customers.

After defining the utility’s mission/vision/policy, the utility puts an AM program in place and thereare clear methodologies defined to carry out the utility’s business goals. Business goals include highlevel objectives such as: providing clean drinking water, treating wastewater, providing storm waterdrainage, and meeting customer service level agreements.

Examples

United Utilities (UK)

The “Road to Wembly” concept (see attachment) is a vision of how United Utilities can become bestin class at asset management using a sports competition analogy.

Seattle Public Utilities (SPU)

SPU has created a comprehensive vision document for their AM program (see attachment). While inthe early stages, their asset management program effort was perceived to be the “flavor of themonth”, it quickly became apparent that SPU would be following through. The program is discusseda lot internally as well as in communication with customers.


The utility has established an organization-wide steering team that achieves cross-business unitalignment with asset management principles.

Explanation:

The leading practice utility has implemented asset management practices on an enterprise leveland uses a management team to implement strategies as well as specific tactics/methods in eachdivision. The steering team is made up of managers from all relevant divisions (Engineering, O&M,Administration, Technical Services, etc). The steering team could be a cross-functional team or anactual organizational unit. The steering team ensures communication across divisional boundaries


that facilitates AM practices and promotes links between assets, human resources, IT and finance.

Examples

Orange County Sanitation District (OCSD)

OCSD developed a Steering Committee that represented all business units at the mid to seniormanagement level. It is important to note that the Mission/Vision were developed as part of thegap analysis that was conducted initially by a consultant. Education and site visits were also keyparts of the process to understand the direction that the Asset Management program could takeand achieve alignment. The mission and vision stemmed in part from the overall utility mission andvision, which ensured that the AM vision and mission aligned with the agency’s overall vision andmission. The steering team was instrumental at the launch of the program to develop education,tools and direction to business units. Training sessions revealed asset deficiencies and areasrequiring more focus. OCSD did not create a separate division to launch their program – they havechanged the way that they do business and incorporated asset management directly into thebusiness units.


Broad education is used by the utility leadership to understand strategic asset management from acommon perspective. Gap analysis assessment is used to identify the opportunity for assetmanagement based on the utility’s drivers.

Explanation:

Driven by upper management, assessments/gap analysis are performed to determine current stateversus future state of the practice of asset management, which will help identify the methods andtools needed to improve the AM program. Development of this program can be created in-houseor through the use of outside resources to obtain the necessary expertise.

Examples


The senior management and directors realize that, in order to maintain a world class role in assetmanagement, everyone needs to be involved. Regular employee and customer surveys areconducted with high expectations as to completion of the surveys which also creates customerbuy-in to the AM vision of UU. There are plans to further expand the reach of asset management.By having everyone involved using an AM approach, it ensures the people managing the assets seethe value of the work they put in and make their workplace better.

EPCOR (Canada)

EPCOR uses their Water Capital Steering Committee to drive their asset management program toanalyze and determine asset management investments in capital projects. The Water CapitalSteering Committee analyzes funding needs and ensures that the plan is meeting the requirementsof their Performance Based Regulations (PBR). The Water Capital Steering Committee consists of


the Directors of each of the major operating areas, representatives from Finance and the SeniorManager of the Project Management Office. The program is focused on providing financial stabilityand avoiding rate shocks.

In addition, there is a Project Management Task Force (PMTF) consisting of senior projectmanagers from the different operations areas that reviews and provides recommendations on allthe templates (including project charters, risk assessment tools, cost estimating guidelines, projectchange requests, status reports and close out documentation requirements.) This group meetsmonthly with the Senior manager of the Project Management Office and also identifies anddelivers training to all the project managers across the water utility.


Senior management initiated their asset management program to deal with a large impendingcapital program that would make the level of debt service unsustainable. They obtained expertisefrom another utility, Hunter Water, to better understand the potential application of assetmanagement.


A picture of asset management (AM) is clearly defined and widely communicated in a way that ismeaningful to all staff and consistent to stay “on message”.

Explanation:

The utility strives to inform staff about the AM program goals and objectives. New staff areeducated about AM processes. Existing staff understand that AM is a driver for the organization.The utility has created a “curriculum” that relates AM to real world processes that can be morereadily understood by the utility’s various audiences.

Examples



SPU has developed a philosophy of AM that is communicated to staff. It can be summarized asfollows: “Asset Management at SPU has been developed around a core philosophy that focuses onthe delivery of cost-effective services to customers – today and into the future. Asset managementrequires making deliberate decisions regarding allocation of resources. And we intend for thesedecisions to be made in a transparent manner, fully informed by knowledge of life cycle triplebottom line costs and benefits. Asset management penetrates nearly every facet of our capital andoperational resource allocation decision making, including risk management, customer andenvironmental service levels, tradeoffs between capital and O&M dollars, efficiency in our deliveryof services, and the tracking and reporting of results. At SPU, we now think of asset managementas nearly analogous to utility management.” SPU even created a fun cartoon video for employeesto explain SPU’s concepts of triple bottom line, sustainability and being customer-driven.


United Utilities is focused on the “Road to Wembly”, a brochure that describes AM principleswithin a framework of a soccer championship. The brochure highlights UU’s centralized assetmanagement processes so employees and stakeholders can access performance information suchas scorecards, charts, flowcharts, role profiles, key processes, and business policies.


A sense of urgency exists within the organization to continue to establish and improve its level ofpractice around AM.

Explanation:

This statement reflects the driver(s) and/or event(s) that caused AM to be adopted by a leadingpractice utility. The cause of change is typically driven top down, and urgency for change can comefrom internal or external sources.

Examples


Sydney Water (Australia)

In the 1990’s, Australia was aiming to promote microeconomic reform. The result was a set ofpolicies called the “National Competition Policy” commonly referred to as the “The Hillmer report”.Since that time, the national focus on asset management has continued to drive utilities and otherinfrastructure sectors to achieve excellence in their practices and for asset management to becomethe way that they do business


Privatization of utilities as a result of the Water Industry Act of 1991 and subsequent rateregulation with five year cycles for rate approvals have continued to drive their AM program.


Seattle Public Utilities had a new general manager that recognized that the proposed level ofcapital improvement was not sustainable for the organization. This focus continues to drive theirprogram, even after five years.


In the 1990s, a privatization threat as well as a consent decree requiring secondary treatmentcaused OCSD to focus on streamlining and improving its operating costs focusing them on theirO&M division. OCSD then used AM to more closely examine its capital improvement programprocesses to improve the rigor of decision-making for this budget, focusing them on engineeringand other business support divisions


ROLES AND RESPONSIBILITIES: (Including Organizational Structure)


There is alignment and understanding at the senior level and agreement of roles/responsibilitiesand how they support each other.

Explanation:

The Management Team at a leading practice utility will have assigned roles and resources toensure AM practices alignment from the top down and across all divisions. This could beaccomplished in a variety of ways including creating key positions in the organization, which arelinked to senior level management/board of directors, or by creating a dedicated AM unit.

Examples


OCSD had initially established an AM coordinator position within their Operations andMaintenance Department with clear responsibility for being a champion of AM but with theoversight of their AM Steering Team. This organization structure existed for many years as theydeveloped their AM program. More recently, they have reorganized to have the AM coordinatorwithin the Engineering department.


Sydney Water has evolved to have an Asset Management Division with a lead role in assetmanagement over the 10 year period since they were corporatized. They also have assetmanagement functions within other divisions for which AMD provides a coordination role.


AM functions and responsibilities have been identified in all organizational units whereappropriate.

Explanation:

This practice means that the utility has well-defined responsibilities for all aspects of AM asrelevant in each division/line of business. By incorporating these AM functions into thedivisions/line of business, resources are no longer managed in silos and all components of the AMprogram have been assigned somewhere in the organization. The utility is able to address AM atthe strategic, operational and tactical levels as appropriate.


Examples


Sydney Water has an organization-wide asset management structure distributed among variousbusiness unit areas. Asset management is treated as a process (not a function) which makes iteasier to cross divisional boundaries. About four years ago, they formed a relatively small centralstrategic management office with a staff of about 30, in an organization of about 3,000. This officeis responsible for strategic-level asset management functions.


United Utilities has a policy and strategy team, with staff in their Water Asset Planning area. Thepeople that are responsible for the different regions are all located in the office with a North andSouth Manager. Only operations people are located in the region. Core teams are a “virtual” teamthat is based on area.


WORKFORCE PLANNING/EDUCATION AND TRAINING


A workforce development program and specific training to support AM within the organizationhave been developed.

Explanation:

A broad based formalized education program for employees to understand and implement AMprinciples, concepts and their application has been developed. Knowledge gaps have beenidentified and various types of training have been developed including classroom, computer-based,on-the-job, and outsourced programs. Specific training programs exist for various aspects of AMincluding life cycle cost analysis, RCM training, capital prioritization, etc. Utilities recognize thesespecific areas to be a constant work-in-progress and work to continually refine them.

Examples


The “Road to Wembly” included setting up an “academy” for professional development of staffincluding formal education through local colleges with a specific curriculum. The academyrecognizes that some development needs can be made through secondments and on-the-jobtraining. Executive level promotes staff participation in the academy. UU also offers informaleducation through weekly open forum meetings to include Q&A sessions which are open to any toattend. Issues are white boarded that need to be discussed. Leadership understands that they areto be models for others to follow. By constantly reinforcing the people at the top and middle, theyrecognize that those below them in the organization will follow the examples set. UU understandsthat they have a large service area in which they operate. This naturally dictates a difference incultures that are brought to bear. The “Road to Wembly” concept brings a sense of team worktowards a goal that everyone can appreciate.


Skills and knowledge that pertain to Asset Management have been implemented selectively in theorganization. For example, economists have been hired to help with the development of thebusiness cases. Additionally, skills and knowledge have been transferred working with the stafffrom Hunter Water, a utility in Australia with an advanced asset management program.


OCSD provides training and resources for staff that perform RCM analysis on assets and processes.They created an RCM technician classification to demonstrate the commitment to reliability. Someeducation was provided by networking with another utility.



Sydney Water provides an extensive on-board training program for new customer servicerepresentatives (CSRs.) The training emphasizes understanding customer issues and gathering thecorrect information, when to send work orders to schedulers, and how to use their IT systems.Their goal is to minimize truck rolls while balancing good customer service with the customer.CSRs are rated on how accurately they diagnose and prioritize “fault” calls over the phone ascompared to the actual field diagnosis.


Knowledge sharing and exchange of personnel is used to foster AM principles and practices.

Explanation:

This practice means the utility’s staff takes part in knowledge sharing through various mechanisms(i.e. conferences, rotation of experienced staff within the utility, benchmarking programs withother utilities). In some cases, a leading utility may utilize staff from a utility with a more matureAM program in order to develop a better AM program.

Examples


Seattle Public Utilities has exchanged staff from Hunter Water in Australia over a period of years innumerous areas related to their asset management program. In addition, SPU has mid-levelproject managers work in their asset management office for a six month period. They then rotateout into other parts of the organization to bring the asset management concepts and application toSPU to their work there.


ORGANIZATION AND PEOPLE: Culture and Change Management


A mindset of sustainability supports an AM culture.

Explanation:

The long-term well-being of the utility and the physical environment means that there must be aresponsible use of resources and how they are managed. Instilling this “sustainable” mindset intothe culture of the organization should be a part of any AM program. Managing a sustainable utilitymeans optimizing assets, human capital, and information technology systems in order to meet theutility’s business goals.

Examples

Sydney Water (Australia) and Seattle Public Utilities (SPU)

Sydney Water and Seattle Public Utilities recognize that, if they don’t do asset management well,they won’t be successful as utilities, as a business, as organizations that protect human health andthe environment, nor will they be financially sustainable.


There is an organization-wide understanding of asset management principles.

Explanation:

This statement means that the AM practices have been disseminated through the ranks and are partof the utility’s culture. Each division understands their role in the AM process and seeks tocontinually refine the methodologies used.

Leading Practice Statement:

Quality assurance and quality control processes exist to monitor, manage and continuously improvethe asset management function.

Explanation:

The utility has a feedback mechanism in place to audit or review AM practices/processes. Qualityprocesses are a continuous improvement function and should be part of each AM tactic deployed.


Examples


Decision frameworks are in place for many asset categories. They conduct quarterly audits of assetdecisions, conduct implementation and benefits realization reviews, communicate learnings, andobtain feedback to improve asset strategies. Audits of the asset decisions are undertaken by thestrategic asset management team and reported to program leadership team. Review of progress andbudgets is conducted in conjunction with the audits.

In addition many business processes in asset management are performed under a qualitymanagement system – accredited to international standards (ISO).


The utility undertakes routine self-assessment and formalized benchmarking to compare andcontinually improve its practice and performance.

Explanation:

The leading practice utility will seek to rate itself, and then compare their performance to othersimilar utilities. Routine self-assessments and benchmarking are quality processes that are part ofthe utility’s feedback loop necessary for continuous improvement practices.

Examples


Sydney Water has compared itself in self-assessments and benchmarking efforts such as the NewSouth Wales Treasury Total Asset Management (TAM) guidelines 1992, and the InternationalInfrastructure Management Manual. They have participated in benchmarking with the WaterServices Association of Australia for asset management practices, and for specific asset managementprocesses such as maintenance and customer service.


Seattle Public Utilities has participated in the benchmarking with the Water Services Association ofAustralia for asset management practices and customer service.


United Utilities has used the Asset Management Planning Assessment Process (AMPAP) developedoriginally by UKWIR and used by Ofwat to measure and compare the water companies. Two AMPAPscores are used to rank themselves with the rest of the world’s utilities. This evaluation has helpedto meet the needs of customers and demonstrate good performance to their regulators.


Attachments (see attachments at the end of this appendix)

Seattle Public Utilities. Draft Asset Management Framework. October 2008.

United Utilities Strategic Direction Statement (2010-2035).

United Utilities “Road to Wembly” Poster.

Documents

2017 The Utility Management Conference TUE02 – Sustaining ... · PDF file2017 The Utility Management Conference . TUE02 – Sustaining Asset Management ... (Canada), an MBA and is