Water Utility Rx

‘Asset management’ (that’s right, we said it) doesn’t have to be a dirty word: The features of an AM program that works

"Asset management” is a term that inspires mixed reactions in the water profession. Almost everyone agrees that a systematic approach to understanding a facility’s equipment and infrastructure is a good idea. Most AM concepts are easy to understand, too: What condition is my equipment in? How long does it have before it needs to be replaced? What type of risk(s) are we assuming by waiting to replace our equipment?

It’s generally accepted that taking care of an asset is cheaper than running it into the ground and having to buy another. Planning for the replacement is much more cost-effective than being surprised. "Replace before failure” is a more environmentally responsible approach, as well as being more customer-minded.

We have a recognized need and a logical concept. So what’s the problem?

Problem 1: The big programmatic approach

A fundamental concept in AM is that you want to spend your time on the critical assets that represent the highest risk to your utility. But what is "critical”? The common measure for criticality is the importance of the asset multiplied by its condition. In other words, the most critical assets are those that are important (from a level of service perspective) and in the worst shape.

We should start with understanding the level of service, and then assess how each asset fits into that context. After the important assets are determined, the next step in the criticality calculation is to determine the condition of those assets. This can be as simple as an inspection that includes a look and listen, or as complicated as diagnostic measurement of key parameters.

The way that many utilities, often led by an army of consultants, attacked this problem was to initiate a process in which every asset needed to be rated for importance. Water utilities have thousands of assets in their collection and/or distribution systems, their pump stations and their treatment facilities. By treating all assets as equally important, their programs became bloated and overwhelmed the staff that was trying to implement a thorough assessment.

Problem 2: Programs can become bureaucratic

Not only can AM programs grow large in counting assets, they also become business-process intensive. That is, business processes — such as determining asset condition, assessing risk, prioritizing repair or replacement, and commissioning and decommissioning assets — can become overblown and unwieldy without due care.

In many programs, the business processes take on a life of their own and become burdensome to the operations and engineering staff charged with collecting and entering data. For example, one utility crafted an elaborate system for assessing the condition of a sewer collection manhole. This system turned out to be impractical in the real world, and was not adopted by the O&M crews that touch that asset.

Although it’s true that you can’t get something for nothing, the business practices around AM should be efficient and streamlined, supplying the necessary information and analysis without efforts that negate their utility. When business processes become too elaborate, they fail to be appropriately used and inevitably are circumvented by the utility staff.

Problem 3: Not everyone is invited to the party

Asset management has traditionally been an initiative furthered by one of the utility's silos. This creates a single perspective on a program that is multifaceted. Asset management has its roots in the equipment and structures operated by the O&M staff, and engineering usually has responsibility for projects that replace assets.

Together, these two groups are essential players in a successful AM program. Many utilities leave out the finance side of things, which is the third leg of the AM stool. A complete AM program provides for longevity of the operating assets, replacement at the proper time, and financial planning to achieve the appropriate revenue stream when needed.

Finance, operations and engineering have to work in concert to get the most from a proper and successful AM effort.

Problem 4: Trying to do too much

The standards on AM have hundreds of best practices that touch the business. But the breadth of work practices touched by programs can be overwhelming.

Many utilities view AM as a project, with a clear start and finish. In reality, AM is a program that has no end; it is a culture and way of doing business that becomes a part of your utility’s DNA. Assets will always be on various trajectories of their useful life, requiring attention and management.

With this in mind, it’s possible to keep the scale of an AM program manageable. Build the program first by focusing on a subset of the most critical assets, emphasize practical work practices and ensure that staff is trained in the right methods and tools.

With a forever mindset, the AM process then continues to scale up appropriately after the foundation is set.

Getting started

First, get the right players involved. Asset management should be an effort that is a combination of the O&M, Engineering and Financial staff of your utility. If these folks aren’t talking the same language, the AM program can yield poor results. To avoid a monster, out-of-control program, start small. Make sure you get the business processes right, foster success and then scale up.

It is possible to get help and not fall into the overblown AM program trap. Consulting assistance that is based on a scaled, practical approach is valuable to help you develop a vision of the mature system. This will allow you to take AM as far as is necessary to meet your needs without missteps that can become costly. This is particularly true if you are ultimately going for certification in some AM standard.

With a practical approach, asset management isn’t a dirty word. It is an essential part of running an asset-intensive water utility. But get started — it’s a long journey.

About the experts
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Jeff Theerman is Vice President and Senior Utility Consultant for Brown and Caldwell. Before joining BC, Theerman served as Metropolitan St. Louis Sewer District’s Executive Director and led one of the largest wastewater and stormwater management utilities in the country. A member of NACWA's board of directors since 2004, Theerman served as the organization's president, vice president, secretary, and treasurer.
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