Core Question 1: What Is The Current State Of My Assets?

Transcription

1 Core Question 1: What Is The Current State Of My Assets? AMPLE Asset Management Program Learning Environment

2 Bottom Line: Emergent Industry Profile Increasing aggregate demand water and wastewater Diminishing available water resources Leveling of production efficiencies Increasing output restrictions Aging infrastructure Result: Increasingly expensive treatment options Aging customer base more and more on fixed income Diminishing technical labor pool running larger and more sophisticated plants and facilities Outflow of knowledge with retiring labor base Increasing resistance to rate increases Result: Increasingly complex management environment 2

3 The Changing Utility Business Environment Demands to do more with what we have got Need to better focus our capital & recurrent budgets Move from reactive based activities to a greater planned and predictive work environment Transition from being really good at building and operating assets to being really good at managing assets: Extending asset life and achieving acceptable reliability Optimizing maintenance, non-asset solutions Developing accurate long term funding models 3

4 The Consequences of Asset Failures Can Be Severe 4

5 All Assets Deteriorate and Eventually Fail... Unless they are properly maintained and renewed or replaced Sediment build-up up increasingly restricts flow Cleaning & relining adds 50 years life 5

6 Advanced Asset Management helps make better acquisition, operations, maintenance, and renewal and replacement DECISIONS 6

7 The AAM Model Advanced Asset Management Capital Planning CIP Project Content CIP Financial Model Initial CIP Strategic Business Plan Workshops Final CIP Strategic Business Plan Capital Program Management CIP Execution Project Management Construction Management Permit Management Sustained lowest life-cycle cost Failure management: capacity, compliance, reliability, renewal, efficiency Best Appropriate AAM Practices CIP Control Metrics Cost control Reporting Outcomes management Corrections & adjustments AAM Techniques & Tools Enterprise Asset Management System (EAMS) Operations & Maintenance Program Management O&M Planning O&M Execution O&M Control Corrective - Planned - Unplanned Preventive Predictive O&M Tactical Plan Scheduling Procurement Materials mgt Skills teams Info & knowledge Continuous improvement Right work, right time, done right Recording Tracking Costing Monitoring Evaluating Continuous Learning/Knowledge Management AAM University 7

8 The AAM Paradigm The capacity to produce output of value to a customer is directly related to sustained performance of the system of capital assets. Failures in the asset base directly affect system performance. Sustained system performance is the result of successfully managing failure within the asset base. The management of failure in the asset base is highly constrained by cost; that is, customers are not typically willing to pay for zero likelihood of failure. Different assets have different likelihood of failure as determined largely by materials used, operating environment, usage and maintenance. Failures vary substantially in consequence to the organization, that is, in terms of the production of valued output to the customer. Investment in capital (acquisition, operation, maintenance and renewal), then, should be directed by the likelihood of failure and its consequence to the customer and regulator. 8

9 By the end of this workshop you should be able to address these five questions: What is AM? Why do AM? What deliverables do I get? How to do it? How do I move forward? 9

10 The Nine Fundamental Building Blocks of AAM 1. Definition 2. The asset life-cycle 3. How assets fail 4. Risk-consequence 5. Cost/valuation 6. Asset demand 7. Level of service 8. Business risk 9. Confidence in decisionmaking CIP Asset Mgt Plans Strategic Initiatives Budgets O&M 10

11 Our Definition of AAM Advanced Asset Management ( AAM ) is a management paradigm and a body of management practices that is applied to the entire portfolio of infrastructure assets at all levels of the organization that seeks to minimize the total cost of acquiring, operating, maintaining and renewing the assets within an environment of limited resources while continuously delivering the service levels customers desire and regulators require Lowest-cost sustainable performance at an acceptable level of business risk to the organization. 11

12 This Workshop Focuses on Three Fundamental Management Decisions: What are my work crews doing and where are they doing it AND WHY!!? What CIP projects should be done and when? When to repair, when to rehab and when to replace? These decisions typically account for at least 80% of a Utility s annual expenditures! 12

13 Lifecycle AM Functional Elements DISPOSE AUDIT & REVIEW PLANNING STRATEGIES DEMAND ANALYSIS REPLACE/ AUGMENT CREATION or ACQUIRE RENEW/ REHABILITATE ACCOUNTING & ECONOMICS COST OF SERVICE ASSESS RISKS & INVESTMENTS OPERATE LEVEL OF SERVICE MONITOR CONDITION & PERFORMANCE MAINTAIN 13

14 Total Cost of Ownership - A Dollar Spent is A Dollar Spent Maintain Acquire Operate Renew 14

15 Key to Sustainability Understanding How Our Assets Fail The yin-yang of asset failure Stress Resistance to Stress 15

16 Key to Sustainability Understanding How Our Assets Fail The yin-yang of asset failure Soil Characteristics Groundwater Physical Loads Galvanic Action Internal Corrosion Pipe Attributes Bedding Condition 16

17 Key to Sustainability Understanding How Our Assets Fail The yin-yang of asset failure Performance Initial Design Capability Managed Deterioration Curve Inherent Deterioration Curve Minimal Performance Level Management Zone Time Failure is defined as the inability of any asset to do what its users want it to do. John Moubray 17

18 Key to Sustainability Understanding How Our Assets Fail The yin-yang of asset failure Performance P1 P Vibration X X P2 Oil X P to F Interval Time P3 Audible Noise X Monitoring P4 Tactical Heat X F Failure X 18

19 Key to Sustainability Understanding Findings: Only a moderate relationship between preventive maintenance and failure 30 to 70% of equipment maintenance is misdirected! How Our Assets Fail Performance P1 P Vibration X X P2 Oil X P to F Interval Time P3 Audible Noise X Monitoring P4 Tactical Heat X F Failure X AM is all about managing the potentialto fail Failure Mode Analysis, Condition-based Monitoring, Predictive Maintenance & Reliability Centered Maintenance 19

20 Definitions Renewal: Repair normal periodic maintenance, minor in nature, anticipated in the normal operation of the asset; no enhancement of capabilities; typically funded by operating budget Refurbish/Rehabilitation replacement of a component part or parts or equivalent intervention sufficient to return the asset to level of performance above minimum acceptable level; may include minor enhancement of capabilities; typically funded out of capital budgets Replace Without enhancement substitution of an entire asset with a new or equivalent asset without enhancement of capabilities With enhancement - substitution of an entire asset with a new or equivalent asset with enhanced capabilities Non-Asset Solutions 20

21 Failure-mode Based Management Logic Some failures Are significant Are not significant Some of these Is preventive maintenance effective? Cannot be prevented by maintenance Can be prevented by maintenance Yes No Redesign, replace overhaul Run to failure, repair Program these for maintenance Repair failures & monitor 21

22 Determining Significant Failures: The High Risk/Likelihood Risk Consequence Trade-off What is the likelihood of failure? (risk) What is the cost of failure? (consequence) A B Risk/Consequence Relationships Drive Work Program (O&M & CIP) D C Low Consequence High 22

23 Strategic vs Tactical Levels Big picture view Longer time frame Aggregated data Operations view Day to day perspective Detailed asset unit (MMI) view Strategic Level Asset Management Plans LOS CapEx & OpEx Budgets Renewal annuities Treatment options Optimal renewal/replacement policies Decay curves Life cycle costs Asset Ops/Maintenance plans Failure analysis Asset functionality statements Condition-based monitoring Condition assessment Asset registry Tactical Level 23

24 The Big Picture Risk - Consequence LOS Growth (New Assets) Augmentation Customer Cost of Service Capital Needs O&M Needs System Renewal System Improvements Environmental Levels of Service Maintenance Program Operations & Admin 24

25 Customer Service Demands Performance = AMORe Acquire, Maintain, Operate & Repair AM Oriented Structure Executive Mgt Asset Management Executive Mgt Thinking Capital Acquisition Operations Maintenance Asset Management Tools 25

26 Better Decisions Produce Real Savings Assessment of Australia s advanced asset managements practices suggests: 20% to 30% Future Life Cycle Cost Savings for US Wastewater Utilities 26

27 OCSD s AAM Business Case 27

28 Real reduced life cycle costs - better focused (redirected) resources Best value per dollar spent Confidence in decision making AAM Payoffs Right work, right investment, at the Decay Curve right time, for the right reasons done right. Backlog in Millions Today Option Option Backlog Funding Model Poor Treatment options 20 M M RH RP RP Direct Cost FCI = 10% Indirect Cost Fair FCI = 5% Benefit Benefit/Cost Ratio Option Ranking Good Option Option Option % Level of Service Making a business case Minimum Level of Service Catastrophic Failure -20 Renewal Year Base Funding- $550,000 Funding Level 1-1,050,000 Funding Level 2-1,250,000 Funding Level 3-1,500,000 2% of Construction Cost- 2,516,000 28

29 Realistic Expectations 29 Will take several years of detailed, nitty-gritty work to fully deploy Will eventually require buy-in /commitment of the whole organization Requires upfront investment to get started, with hidden return for several years

30 The Five Core AM Questions Core Questions 1. What is the current state of my assets? What do I own? Where is it? What condition is it in? What is its remaining useful life? What is its economic value? 2. What is my required sustained Level Of Service? What is the demand for my services by my stakeholders? What do regulators require? What is my actual performance? 3. Given my system, which assets are critical to sustained performance? How does it fail? How can it fail? What is the likelihood of failure? What does it cost to repair? What are the consequences of failure? 4. What are my best minimum life-cycle-cost CIP and O&M strategies? What alternative management options exist? Which are most feasible for my organization? 5. Given the above, what is my best long-term funding strategy? 30