Getting Started with Asset Management

On 21 January 2020, Ross Waugh and Heather Himmelberger held another Ask-the-Experts webinar titled,  “Infrastructure Asset Management – How to Start.” Inframanage.com presents the webinar topics through a series of blog posts.

Introduction to the asset management webinar

Heather:

Thank you so much. And thanks to everyone for being here today. We appreciate your participating in this webinar, and I wanted to give just a little bit of intro before we get started.

 Again, my name is Heather and with me today is my very good friend and colleague Ross, and we’re so delighted to have him here in New Mexico today.

He’s from a long journey from New Zealand, where he does lots and lots of asset management related work there.  And he’s involved in the cutting edge of all kinds of things asset management. So we’re super excited that he can be with us today.

Many of you have submitted questions before the webinar. So, when you registered, you put some queries in, that’s what we are going to use to start our discussion today.

So again, thanks to Ross for being here today. And our first discussion topic is getting started with asset management because we have lots and lots of folks who have submitted questions that related in various ways, how do I get going?

If I’m not doing asset management, haven’t done it before, don’t know where to start, how do I get started?

So, Ross, why don’t you start us off talking about things you see or ideas you have for getting started with asset management.

Ross:

Thank you, Heather. And this slide we’re looking at here (see above image) is one that I produced for a paper for a conference back in New Zealand about three years ago. It was very nice because the paper issue won the best asset management paper for that conference, which was good.

But what I found at that time was, we’ve got an enormous number of manuals and guides and other information standards around asset management, and it was starting just to feel like it was too complicated, and it’s quite simple. So the paper was about simplifying asset management, and this was the key diagram for that.

I thought I would just talk briefly through this diagram as to how do you get started and sitting underneath the diagram at the bar it says, “Asset Inventory.” Some countries call it “Asset Register.”

But, underpinning all asset management is an asset inventory. So it’s a listing of what you own, where it is, what condition it’s in, how old it is, and how it is performing perhaps as well, is it delivering what it needed to?

Because that information, that just a little subset of information there can allow you to make a vast number of decisions and just spend your money wisely in the right place.

Levels of Service, Future Demand, and Risk

On the left-hand side of the diagram are the three boxes, “Levels of Service,” “Future Demand,” and “Risk.”

We are having a debate at the moment as to whether we would add a fourth box around Climate Adaptation/Sustainability and there’s another conversation what it all means.

With the level of service, and I think the level of service is one of the things that everybody thinks, ah, what’s that?

When we started more than 20 years ago in New Zealand, we have the same question. And the first thing you do with levels of service is you write down what you are doing now.

So if it’s a particular operation or a specific set of maintenance that you’re doing or, some capitals that you do now and again, just write those down and there’ll be a reason why you’re doing all of those, and that starts the basis of your levels of service.

And then you can start looking at, we’ve got some stuff, from permits or from regulations or EPA or whatever it is, that might be some extra levels of service you may or may not be reaching at the moment or you might do some more work to get to them.

“Future demand” is an interesting one because it can be, “increases” in demand or if you’re a rapidly or a growing area. It can be, “decreases” in demand if you’re in the area that’s shrinking.

And so, it’s about what’s happening with, have you got some new big industries coming or some leaving and is the demand changing. 

It is how much is it going to change and why it’s changing? That’s that question you’re trying to ask there.

And “Risk” is just about, a whole lot of risks. You could have natural hazard risk or catastrophe type risk, or you can have organizational risk around, can we keep the right qualified staff and experienced, down to the concept of asset criticalities.

So which assets are the most important to us? Which hurt us the most if they fail? What would cause, if it fails, the most damage to other assets or the environment?

And it can also be around your treatment processes, the risks to not producing water well or water to the right standard. And all of those sort of things and I will break down the risks.

Lifecycle management

Once you know all of those, then you can start having to look at how you manage the total lifecycle of the assets.

And that’s your operations, your maintenance, your asset renewal or replacement, or rehabilitation. Any new assets that you need and then sometimes you need to dispose of assets.

And an example would be a treatment facility that’s at its end of life. You might need to dispose of that and build a new one or something like that.

And then you’re talking at, well okay, what can we do differently to spend that money more wisely in the right sequence.

Is there some things we’re doing that we don’t need to do anymore or things that we are not doing that we need to do? So, that’s your lifecycle management.

Financials

And out of that drops, “Financials.” When I was a young engineer, I used to only think about expenditure. People would give me money, and I would build things, and that was great fun.

But there’s a bit more to operating a network or a system than that. You do have to operate and maintain. You do have to replace, rehabilitate, renew assets. You do have to build new stuff from time to time, and you might have to depreciate.

In New Zealand, we have to fund the asset depreciation which a bit unusual, that’s not many countries do that. But the other side of that is somebody is going to pay for it.

And it might be through fees, charges, tariffs, loans, grants, funding, bonds, state revolving fund, all of those sorts of things. And what you want to spend, where are you getting the money for it some stage has to line up, and that can be quite a discussion.