Asset Management Strategy – Integration and Vision

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Asset Management Strategy – Integration Steps

So the integration, as we’re saying before with the ISO 55000 diagram.

So you developed your 10-30 year asset management strategy, your tactical planning is your asset management plans, your renewal plans, and detailed individual analysis if need to be. And that sits in the continuum.

So, you start up here with your strategy, you come down to this technical stuff, more of say 3-10 years’ stuff. And then below that still, on that continuum, you would have business case development for individual business cases, project development.

And I think if you take nothing away from today apart from this particular statement, there is a continuum from top to bottom and the developed project is the continuum all the way back up to them, here’s my long-term strategy, particularly very large projects.

And they fit together in a hierarchy if you like so, it’s quite important not to lose sight of that.

Importance of Strategy Vision

Okay so, why is this stuff? Why are we even talking about? What’s important? I mean I started my engineering career as a project engineer, design a project, building roads and culverts and bridges and things like that.

And then as I’ve said there’s water supply treatment and reticulation, and the wastewater treatment and reticulation.

And if you’d said to me that at this stage of my career, you know you should be doing 10, 20, 30-year strategies, oh I’ll go, no, I build projects. This is important, you know I’m fixing problems here.

But the thing is, if you don’t put the planning framework around the project, one is the money might be there when you need it and the second thing is, are you building the right project.

Because when you start doing the big-picture analysis, sometimes you go, ah, there’s a different way of doing that. We could have a completely different alignment or route or a completely different type of solution.

I’ll just give a little example of this, and it comes from Helsinki Finland. I went up to a conference four years ago and it relates to Auckland.

So Auckland, we’ve got the container terminal right in the center city. It’s really really high-value land. And they have the same problem in Helsinki.

They’ve got a lot of cruise ships, all the boat cruising, coming and the container all terminals in similar sort of position to it is, just around from the main base and one and a half kilometers from there.

And what they decided to do, they looked at it strategically across the whole city and say hey, we need a whole lot more accommodation in central Helsinki.

What we’ll do is we’ll pick the old terminal and the container terminal up and we’ll shunt it 30 kilometers around the coast and build a new port around there.

And we’ll use pumps and we’ll pipe it all into where we need it and so they did that and they freed up something like about a hundred hectares of land for high value mixed apartment and offices with parks and all that.

And so from us, engineering point of you, it’s right on sea level just within the port so they vacuum all the sewers vacuum pumps to it because there’s no gravity. And so you know, but that was a project they were delivering over 15 years.

That if you had started and said, oh you need to upgrade the container terminals like what we’re doing here in Auckland at the moment with no wider view, you go, oh we’ll fix that. We’ll put together cranes and we’ll extend it.

The reality is, if you are to take the strategic view of Auckland, it is a really dumb idea having that port right in the center of our CBD. There’s no reason for it.

So you would shift it and you would use that land for housing. You know like Hong Kong and Singapore and others have done and Helsinki.

So the thing is, if you stick to quite tight, small, short-term project parameters, you can get quite different answers from taking a wider view.

In fact, Port of Auckland, if they are talking about two to three billion dollars to do the extension there, to future proof it, two billion dollars, but say, two-way expressway right way through to Tauranga and couple of 100 million put a railway line to North Port all the way down here.

And you go, well hang on, if we have two deepwater ports, the two big deepwater ports in New Zealand, both fully accessible to Auckland either way for the same money to extend water port here, what are we doing?

I’ve actually submitted to that on the national policy, that’s why I know about it. And so we’re probably going to do the wrong thing.

We probably spend the money on Auckland and then go, oh we shouldn’t have done that.

Flush two billion New Zealand dollars down the drain. It’s quite a bit of money, pays quite a bit of engineering by the way.

Anyway, that’s why you need the big picture stuff to make sure that you’re actually, your projects are the right projects in the right place at the right time.

And you need to envisage the future, but the thing is that it’s all future-looking. So the uncertainty of forecasts must be acknowledged and managed.

And in your forecast, you need to be able to deal with uncertainty because it’s all a guess. You can extract like trends but you still got a band of uncertainty on those trends.

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