In the previous post, Heather started talking about the distinction between “Asset Management” and “Managing Assets.”
She then asked Ross for his thoughts from the perspective of New Zealand.
Yes, and again, just for our attendees as well, if you put “Havelock North water incident New Zealand” into Google, you will find thousands and thousands of pages of reading.
If you’re really interested in running it down a little bit more and informing yourself, it’s been a big inquiry and it’s still ongoing.
And look, this topic is part of that as well because, I think, at the end of the day, they were quite light in operational stuff. They’ve been in a “we need to save money had been the message from the governance and the management”, and so, they were making do, and that’s managing assets.
And at the larger picture, the asset management, they were doing some of it well, but what’s happened now is you’ve gone from trying to save pennies. For a town that size (the wider community is like about 70,000 people), they’re going to be spending about $50 million to solve that problem in the space of two years.
Now the good news is the entire municipality has agreed that the money needs to be spent and they’re going to go away and borrow the money over the long period and paid off long, those sorts of things.
Effect of losing sight of asset management and managing assets
But losing sight of both either thing, either managing assets at an individual level, so in that case, managing those wells, or they were shy on resources and not keeping good enough records, all those sorts of things and alarm bells didn’t go off. That side of it can create huge issues if you don’t do it well and do it thoroughly.
But at the same time, if you don’t do your asset management, if you get the settings wrong, if you go everything screwed down too much and not spending enough money on pipe rehabilitation and replacement, or if you’re not spending enough money on growth areas or new tanks or well replacement, or even just planning that, you can end up in a situation where you create a whole heap of expense and problems just because you haven’t look forward far enough.
And you end up wasting a lot of money and also just responding to managing assets because your assets start breaking and problems. And you can end up with what we call in New Zealand firefighting, where you’re just rushing out and trucks with the sirens going and lights flashing.
You’re doing a great job of fixing the problem, but you are just burning money. You might as well get a pile of cash and burn it because that is basically what you are doing in maintaining the service.
As opposed to getting ahead of that by planning a little bit more thoroughly and going, hey we’ve got some really old pipe that’s going to break soon, let’s get on ahead. It’s in the last five or seven years of its life and let’s plan and do that. And at a time that we are going to get a reasonable price for it and in a way that we can do it.
That is kind of cost-effective, and we can still maintain the excellent service that we want to keep.
Seeing and analyzing the bigger picture
Heather shared her perspective on seeing and analyzing the bigger picture of one’s infrastructure system.
Because I think a lot of time as operators and managers, we just really got hang up on those tasks that we have to do because that’s what staring at our face day today.
You know, oh I got to go out, and you know, and exercise valves. I have to go out and flush hydrants.
You get focused on those individual assets and what has to happen with those and sometimes we forget to step back and take that bigger look of well, how’s that hydrant fit into the overall program?
Or how does the valve program fit into that?
Is there a way to look at that valve exercising program with a more strategic approach? Which valves are we exercising?
When are we exercising those valves? How are we doing it?
So that is a probe of the bigger picture rather than just the activities we do just during that day.