Technology Associates believes that “Best Practices” cross lines from industry to industry. Focusing only on what is considered “best practice” for your industry limits your exposure to a larger knowledge base of strategies and philosophies that could improve your business. For example, water/wastewater organizations can benefit from “best practices” in other verticals such as oil and gas, public transit, and electrical distribution. Technology Associates helps guide our clients through the application of best practices while striving for a state of “Future Perfect”.
Questions to ask yourself:
What is the current state of my system’s assets?
The first step in managing your assets is knowing their current state. Because some of this information may be difficult to find, you should use estimates when necessary. Over time, as assets are rehabilitated, repaired or replaced, your inventory will become more accurate. Best practices include:
- Preparing an asset inventory and system map.
- Developing a condition assessment and rating system.
- Assessing remaining useful life by consulting projected-useful-life tables or decay curves.
- Determining asset values and replacement costs.
What is my required “sustainable” level of service?
Knowing your required “sustainable” level of service will help you implement an asset management program and communicate to stakeholders what you are doing. Quality, quantity, reliability, and environmental standards are elements that can define level of service and associated system performance goals, both short- and long-term. You can use information about customer demand and information from other stakeholders to develop your level of service requirements. Your level of service requirements can be updated to account for changes due to growth, regulatory requirements, and technology improvements. Best practices include:
- Analyzing current and anticipated customer demand and satisfaction with the system.
- Understanding current and anticipated regulatory requirements.
- Writing and communicating a service level agreement that describes your system’s performance targets.
- Using level of service standards to track system performance over time.
Which assets are critical to sustained performance?
Because assets fail, how you manage the consequences of failure is vital. Not every asset presents the same failure risk, or is equally critical to your operations. Therefore, it is important to know which assets are required to sustain performance. Critical assets are those you decide have a high risk of failing (old, poor condition, etc.) and major consequences if they do fail (major expense, system failure, safety concerns, etc.). You can decide how critical each asset is and rank them accordingly. Many organizations may have already accomplished this type of analysis in vulnerability assessments. Best practices include:
- Listing assets according to how critical they are to system operations.
- Conducting a failure analysis (root cause analysis, failure mode analysis).
- Determining the probability of failure and listing assets by failure type.
- Analyzing failure risk and consequences.
- Reviewing and updating your system’s vulnerability assessment (if your system has one).
What are my minimum life cycle costs?
Operations and maintenance (O&M), personnel, and the capital budget account for an estimated 85 percent of a typical organization expenses. Asset management enables an organization to determine the lowest cost options for providing the highest level of service over time. You want to optimize the work O&M crews are doing, where they are doing it, and why. An asset management program helps make risk-based decisions by choosing the right project, at the right time, for the right reason. Best practices include:
- Moving from reactive maintenance to predictive maintenance.
- Knowing the costs and benefits of rehabilitation versus replacement.
- Looking at lifecycle costs, especially for critical assets.
- Deploying resources based on asset conditions.
- Analyzing the causes of asset failure to develop specific response plans.
What is my best long-term funding strategy?
Sound financial decisions and developing an effective long-term funding strategy are critical to the implementation of an asset management program. Knowing the full economic costs and revenues generated by your organization will enable you to determine your financial forecast. Your financial forecast can then help you decide what changes need to be made to your long-term funding strategy. Some strategies to consider:
- Revising the rate structure.
- Funding a dedicated reserve from current revenues (i.e., creating an asset annuity).
- Financing asset rehabilitation, repair, and replacement through borrowing or other financial assistance.
