ACI NA Economics and Human Capital Conference

Transcription

1 ACI NA Economics and Human Capital Conference Strategic Capital and Asset Management Decisions Asset Management - Identifying the Future Capital Investment Needs Colin Chung, Ph.D. March 13, 2013

2 ASCE 2013 Report Card - Aviation

3 Business Drivers Increasing Demand Increasing Levels of Service Asset Diversity & Complexity Technology Advancement Aging Workforce Aging Infrastructure Increasing Cost of Service Siloed Decision-Making Need for Managed Solutions

4 Asset Management Definition Draft ISO55000 Asset Management is the set of coordinated activities that an organisation uses to realise value from assets in the delivery of its outcomes or objectives. Realization of value requires the achievement of a balance of costs, risks and benefits, often over different time scales.

5 Five Core Questions of Asset Management US EPA Asset Management Framework 1. What is the current state of my assets? How does it fail? What is its failure mode? What is the likelihood of failure? What What is is the the consequence demand for of my failure? services? What What How does does customers it it cost fail? What repair? require? is its failure mode? 2. What is my required levels of service? 3. Which assets are critical to sustained performance? 4. What are my best O&M and CIP investment strategies? Minimize What do is the regulators life-cycle likelihood cost require? of failure? Minimize What is the my risk current consequence performance? of failure? Ensure What is does that my it future the cost right to committed repair? decision performance? is made, at the right time, for 5. What is my best long-term funding strategy? the right reason, at the right cost!

6 What Triggers Asset Renewal Decision? Asset failure mode drives the remaining useful life 1. Mortality Condition assessment 2. Capacity Demand analysis Capacity assessment 3. Levels of Service Committed service standards Established performance targets 4. Financial Efficiency Life-cycle cost Business case evaluations

7 Condition vs. Timing of Failure

8 Risk / Condition Asset Life-Cycle Investment Logic Max Risk Risk Con PoF CoF Risk Min Risk Min Con Mn$ Op$ Cum$ CoF Cumulated Cost Condition Maintenance PoF Operation Min Cond Investment Time

9 Long-Range Capital Modeling Asset Register (GIS/CMMS) - List of ALL Assets - Asset Hierarchy Asset Attributes -eg, Size,Material CIP (Existing & Planned Projects) - Capacity (Other Model Outputs) - Levels of Service (Increase) - Planned Renewal (Existing) Renewal Management Strategies Modeling Create Reports / Scenarios Future Investment Outputs Prioritized CIP List Renewal Strategies - O&M Cost Strategies - Asset Replacement Valuation Probability of Failure Model -Condition -Performance -Reliability -Maintenance History Consequence of Failure Model - Loss of Income - Physical Location - Public Safety etc.

10 Asset Management Tool

11 Single Asset Example Decay curve in 100 years Installed in 2014 Replaced in 2113 (after 100 years) Rehab every 10 years O&M

12 Projected Long-Range Renewal Needs Current Budget

13 Work Backlog Analysis Scenario 2: 6: 1: Fixed Ramp Do Nothing for up 5 $2.25M yrs, ramp per yr up for $3M next for 16 next yrs 10 yrs

14 Scenario Comparison

15 Prioritize by Risk

16 Risk-Based Decisions

17 Goal of Asset Management

18 The Asset Management Model Customer Expectations Cost of Service Level of Service Risk You