Asset Inventory – Ownership, Condition, Location, Replacement Cost

Heather:

Let’s move on to asset inventory questions. One of the core components of asset management is the current state of the asset, which gets into your asset inventory:

• What do you own?
• Where is it?
• What is it worth?
• What is it going to cost you to replace it?
• The condition, useful life,
• all those sorts of things going to your inventory.

So, a lot of people ask some questions about different aspects of the inventory.

And a fascinating couple of questions focused around what you put in your inventory. So, somebody asking, should we catalog every piece of hardware?

And somebody else asking the question differently to say, maybe we have too many assets in our inventory, how do we determine when it’s time to remove some of those assets because there’s more in the list than maybe there should be.

So that’s the right starting place to just talk about what belongs in your inventory.

Ross:

They’re excellent questions. And I think they are questions everybody (who is) building an inventory has to answer at some stage.

The answer to any particular authority is to back out of the question a little bit and say what we need? What information do we need to manage?

If you think about we are in the street going with microsensors and internet of things and all of that, so those trends, we’re going to get buried in the tsunami of very fine data.

So the data collection is getting quicker and more comfortable, but that still doesn’t help you with the question of what I need? What questions do I need to answer to manage this network or this system or the delivery of service well?

And once you start thinking that, okay, what do I need to answer that you need regulatory, or management or board or risk or permanent related questions or other things that the organization is committed to, then you can go, right, what level of information and detail.

And the question around cataloging every piece of hardware, over the years in New Zealand, we also have this debate, and you go, well I’ve got a flange. Do I collect information on every single bolt on that flange?

Well, hopefully, the answer is no, but maybe that’s the most critical flange in your system with a long history of trouble. Perhaps somebody feels that they need to. So, it’s essential to have that sort of discussion.

And there are three components.

1. One is, do I need this information to manage?
2. Do I need this information because of a particular risk? It’s the second thing. And then, and that risk might be how critical this component is to the whole system.
3. And then can I manage, once I put the information into an inventory, can I manage, update, and am I resourced to do that.

And that’s where it gets, if you collect one level of too much information, you will “die” because you can’t update and resource it; the resource, updating the condition, the mains history against it.

What I would say to people is start high. Start at a high level of information, and then if you need more detailed information, work your way down to that.

Work is the trickiest (on) treatment plants because sometimes you’ve critical components, and you want the detail.

So, there’s not a standard, “this is what you should do answer.” It’s more, what are your risks?  What do you need to manage?

And can I maintain the information in a way that supports confidence in it because you gave a board or a senior management group the information and they go, that’s wrong?

At that point, the whole program is in doubt because they know what’s wrong. And that can often happen if you get into too much detail.

Heather:

And you must think about what is it going to take to keep it up because you have to update your inventory over time, and if you have every little nut and bolt in your system, it’s going to be so time-consuming to keep it up that you won’t, you’ll give it up.

So, it’s almost like, if you don’t have any data, that isn’t good. If you have too much data, that isn’t good also. So, keeping it more manageable is better than having this overly detailed inventory.

And one of the questions we asked people is, how would you manage that asset? If it’s something that you don’t do anymore than it works until it doesn’t, and then we throw it away and put a new one in.

Do you need to have that asset inventory because you are not handling it as a maintenance item?  You are not treating it as a decision-making item. It’s inexpensive, or it’s not worth doing maintenance on it.

So, as you start thinking about how you handle the assets that can help you decide what to put in, what not to, but we are very much in line with Ross’ thinking that putting in less at the beginning is better than more.

Because most utilities that we end up working with after they’ve already started a plan is, you look at their inventory, and it’s way more detailed than they want. And that they’ve quit using it because it just got overwhelming.  And you end up having to do what this questioner said. You got to take some things out.

Let’s give up the data that we put in there, and then it becomes. I think it is a hard thing to do. Like wow, I spent this time putting this in here, and now you’re going to take it out. Sometimes the best thing to do is to take that out.

BACKGROUND PHOTO CREDIT: Sarasota Construction – Water Pipes by Roger W