Water Infrastructure : Asset Management, Adopting Best Practices to Enable Better Investments

As mentioned in a previous post, McGraw-Hill and CH2M-Hill and its associate research partners--APWA, NAWC, WEF, AWWA, and NACWA--published its full report in March after circulating an executive summary that I reported on earlier. The full report provided a section that compares the business-oriented model utilized by the Australians and the regulation-oriented U.S. focus, resulting in slower asset management adoption in the U.S. Compared to the Canadians, U.S. utilities concentrate less on strategy and performance measurements, U. S. utilities rank risk assessment a higher priority that their Canadian counterparts, 79% vs. 60%; and 93% of Canadians vs. 74% of U. S. respondents "report that reputation and perception of performance have a positive influence on their decisions to initiate. . . asset management" (p.51).

The McGraw-Hill authors began by acknowledging the establishment for this report a standard for asset management adoption. The authors measured the acceptance of asset management by water utilities in the United States and Canada. They identified 14 critical practices of asset management. Of the fourteen, 65% engage in four or more of these and only 18% perform 10 or more. More promising, utilities plan to develop by 2017 asset management policies, from 46% to 84% for practitioners and from 5% to 59% for non-practitioners. The need to justify asset costs and improve poor asset condition  and the ability to prioritize programs and expenditures account for this initiative.

The CH2M-Hill contributors reiterated the challenges of aging water and wastewater systems and their need for repair and replacement and the resistance of rate payers to higher rates. Additionally, they uncovered from their finding the "the role that culture plays in the implementation of an effective program" (p.2).  They divided the data collected for the report into the following categories: Use of Asset Management Practices, Benefits, Making Decisions on Asset Investment, Drivers and Barriers, Implementing Asset Management, and Canadian Water Utilities. The remainder of the report contained case studies of these utilities, Cincinnati and Columbus Ohio, City of Regina, Saskatchewan, Canada, and Portland Water Bureau, Portland Oregon.

The fourteen practices ranged from fundamental computerized maintenance management system to reliability-centered maintenance. In between the foundational and very specialized practices were

•  Asset-condition assessment for renewal/replacement planning,
• Business cases for operations and maintenance (O&M) and CIP Investment
•  Asset register to facilitate analysis and planning,
• Optimization of the balance between O&M and CIS,
• Staff training and development,
• Consideration of Risks and Consequences of Alternative Investment/Budget Decisions
• Consideration of Environmental, Social and Economic Costs and Benefits
• Strategic Asset Management Plans
• Development of an Asset Management Policy
• Benchmarking and/or Needs Assessment to Establish an AM Implementation Plan
• Customer and Asset Service-Level Development
• Reliability-Centered Maintenance

The benefits of asset management included the two mentioned above which accounted for the initiative to implement asset management, the need to justify asset costs and improve poor asset condition and the ability to prioritize programs and expenditures. Other benefits entailed

• A better understanding of risks/consequences of alternative investment decisions,
• Non-cost savings business benefits,
• Increased ability to balance between capital and operating expenditures,
• Reduced costs without sacrificing service levels, and
• Better understanding of environmental, social and economic costs of investment/budget decisions.  

The most commonly used metrics to realize these benefits: asset failure metrics, maintenance cost metrics by facility, service-level metrics, and unit cost metrics.

Regarding the topic of culture, 33% of the respondents stated that education about asset management at all levels of the organization counteracted resistance and facilitated the acceptance of and commitment to the program. Benchmarking played a role in program success. For example, the Cincinnati utilities employed the benchmarking program of Water Services Association of Australia, they compared the MSD "against the best practitioners around the globe, so we know where we stand, we know the best practitioner in every process, we know our gaps and what we need to work towards" (p. 16).

To view how the survey respondents scored in their utilization of the 14 best practices, go to

http://analyticsstore.construction.com/index.php/water-infrastructure-asset-management-smartmarket-report.html