Best Practice Asset Management

Transcription

1 Best Practice Asset Management Julie Muir Roading Manager Central Otago District Council Alexandra, New Zealand Dawn Inglis Project Director Waikato RATA (Road Asset Technical Accord) New Zealand Abstract The Road Efficiency Group (REG) is a collaborative initiative between the road controlling authorities (RCAs) of New Zealand. Its goals are to drive value for money and improve performance in maintenance, operations and renewals throughout New Zealand. The REG Best Practice Asset Management Group is made up of representatives from a number of road controlling authorities across New Zealand. Members of the group rotate to promote the sharing of learning across the country. The group is working to identify and encourage best practice asset management planning among all RCAs. The group s aim is to improve overall national performance by: identifying existing best practices within the industry promoting adoption of these practices throughout the sector through sharing of case study learnings highlighting gaps in best practice guidance to existing industry bodies supporting organisations in the implementation of One Network Road Classification over the next three years disseminating information regarding delivery models and collaboration identifying and understanding appropriate mitigations to risk averse behaviour promoting the value for money concept RCAs as smart buyers This presentation will illustrate a number of examples of best practice across New Zealand and will discuss the successes we ve had and the lessons learned about successfully embedding sustainable change. Key Words Asset Management, activity management, best practise, value for money Background In 2011 the New Zealand Government established the Road Maintenance Task Force to identify opportunities to increase the effectiveness of road maintenance. The Task Force reviewed significant costs to the sector and existing business practise. In particular, they reviewed asset management, risk management and procurement methods. The Task Force identified four general areas for improvement. Adapting the business models used to deliver maintenance, renewals and operations.

2 Improved procurement practises, also in support of new business models, Improved prioritisation and optimisation through level of service differentiation. Consistent introduction of enhanced asset management practises. This paper discusses the formation of the Road Efficiency Group - Best Practise Asset Management Group, to address the need for consistent introduction of enhanced asset management practises. Mandate of the Group The mandate of the Asset Management Group is generated from the Road Maintenance Taskforce report, and crosses a number of different recommendations relating to cost drivers, asset management, and innovative services and products. The mandate is: That the sector works together to develop policies, guidelines, processes, management and governance structures, and incentive mechanisms as necessary to: use existing tools and guidance to support sound investment decision making that balances whole of life cost, level of service and risk, as an element of the national asset management framework. New tools and guidance may need to be developed where appropriate. (Recommendation 4) provide and promote ongoing access for all RCA s to high quality asset management advice and mechanisms for continuously improving practise. (Recommendation 6) Pursue the use of new materials, technology and methods where appropriate, including alternative procurement methods and delivery models. (Recommendation 17) Purpose of the Group The Asset Management Group s role is to identify, apply and refine existing asset management guidance and practices which lead to better holistic asset management performance by: drawing on the guidance documents available to the industry, trialling these and then refining their use through subsequent lessons learnt feedback promote the adoption of these practices throughout the sector through sharing of real life case study learning s highlighting gaps in available best practice guidance to existing industry bodies Using existing best practice guidance members of the group will develop real world examples of best practice Asset Management Plans and deliver these in a manner that will foster consistency of application across New Zealand. These best practice AMP s will: Assist Asset Management Planners operating in urban, provincial and rural environments. Build on the best practice guidance currently being provided by the industry i.e. RIMS, Austroads, NAMS Be demonstrated through the asset management approaches and plans of the organisations that have members participating in this working group. Members are also able to improve asset management practices within their own organisations. Formation of the Best Practise Asset Management Group

3 The Group was formed in April 2012 and is comprised of six to eight local authority and the NZ Transport Agency s Road Controlling Authority (RCA) representatives along with supporting New Zealand Transport Agency (NZTA) technical staff. The expectation is that membership of the group will be dynamic with RCA membership for a two year period, and annual rotation of three members, providing opportunities for wide participation. The introduction of the One Network Road Classification (ONRC), and the associated performance framework is resulting in a significant change process occurring within the sector. With change comes an initial increase in workload, and one of the challenges encountered is the ability to resource the group with enthusiastic members who have the capacity to adopt change and share their learnings. This has been recognised by the Governance Group, and additional funding has now been allocated to enable ghost writing of case studies to ease the workload, as well as promoting the benefits of membership on the group at a political level. The benefits to Councils of being represented on this group are the ability to provide local input into national planning and policy, being at the forefront of learning and applying new practises and innovation, extra support in applying best practises within their Council, recognition as an industry leader, and professional development for staff. Initial membership included RCA staff from both second and third tier management levels. Second tier management staff have had greater difficulty committing to meeting and deliverable dates due to the wider range of demands on their time. Typically third tier management staff who are specifically involved in Transportation Management have generally been able to provide a greater level of commitment to the group. Highlighting Gaps in Best Practice Guidance to Existing Industry Bodies The AMP Group has a mandate to promote best practise that is in use, but it does not have a mandate to compete with existing industry groups to develop new guidelines. Where the group identifies that guidance is currently missing then this is passed on to groups such as RIMS or NAMS for further development. Each of these groups have existing programs of work, and share the challenges of insufficient capacity and budget to address further opportunities. As a result progress can be slower than desired. However the benefits of this work is that those groups actively generating or promoting best practice have a group of passionate technical staff to assist with promulgating the information and this achieves wider involvement and buy in.

4 Strategic Plan The initial strategic plan for the group was derived from improvement opportunities feedback from three sources: The 2010 Audit New Zealand report Asset Management for Public Entities: Learning from Local Government Examples The Transport Agencies Planning and Investment team feedback Analysis of the Road Maintenance Task Force 2012 report Review of road maintenance regime and the associated papers NAMS International Infrastructure Management Manual to categorise work streams The common threads were identified and then prioritised to develop strategic priorities. Risk Demand Performance management (the feedback loop) Asset Data (reliable) Level of service External scrutiny / share experience Integrated Funding / affordability life cycle strategies/optimised decision making The development of the ONRC and the ONRC performance framework are key stepping stones for the industry to deliver consistent levels of service, improve performance management and provide a focus for development of the data work stream.

5 The strategic focus of the group has been reviewed again in 2015 with the current approach confirmed with the following being considered the main areas of focus for case studies throughout 2015 and 2016: support in the implementation of ONRC over the next 3 years working towards embedding of ONRC for 2018 Delivery models and collaboration Managing risk averse behaviour Value for Money concept RCAs as a smart buyer Early Wins Auckland Transport Street Lighting The initial case studies were developed to provide some early wins, where road controlling authorities could use the experience of members of the Group to achieve cost savings. The first case study presented was the Auckland Transport Street Lighting Case Study, which demonstrated significant savings as a result of replacing existing high pressure sodium luminaires with LED lamps, due to reduced energy and whole of life costs. The case study also discusses the savings that can be achieved from bulk purchasing of electricity. A large number of RCA s have taken steps to implement this case study into their programs. NZTA have issued guidance for funding applications to support this initiative. Sealed Road Maintenance and Renewals Sealed road maintenance and renewals makes up approximately 60% of the total maintenance and renewal costs within New Zealand. The costs for delivery of this varies significantly across the country, with a wide range of risk approaches adopted by different organisations. NZTA have been put on the spot with the need to deliver $165 million of cost savings on the State Highway network within the National Land Transport Plan period. This has resulted in the Agency needing to take radical steps to review their organisational practises regarding program delivery. A further three case studies have been prepared by the Agency which document the changes that have been made by the Highway Network Operations team to ensure more robust, consistent and justifiable renewals programs are delivered on the sealed highway network. The issues that were identified with the previous processes are common across all RCA s in New Zealand and provide a valuable learning opportunity for local authorities. The three case studies cover the spectrum from renewal and maintenance program preparation and optimisation, options analysis, and site review. The Agency has achieving savings of around 10% on their historic programs as a result of implementation of each of these case studies. The Agency has reduced expenditure on sealed roads by 15% as a result of more consistent application of these three processes. Implementation of the case study on forward works program optimisation in a small rural authority has resulted in a 13% saving.

6 Trialling Existing Guidance Documents and Providing Feedback Two case studies share the experience of applying guidance document prepared by the Roading Infrastructure Management Support Group (RIMS). The implementation of robust traffic counting practises is essential to be able to achieve improved asset management and successfully implement the ONRC. The initial case study shared the experience of a small RCA with limited internal capability and capacity in applying the RIMS Traffic Counting Guideline. This case study resulted in a number of recommendations being made back to RIMS requesting more comprehensive guidance to assist other RCA s with implementation.. An automated process for uploading traffic count information was also found to be wanting, and instructions to guide RCA s through this process were developed as a result. The second case study successfully implemented the RIMS Risk Guideline. This trial identified that there were benefits to following this guideline which has been developed to specifically address risk management on road networks. This included understanding and articulating the risk appetite within the organisation for sweating the asset, identifying risks associated with innovative opportunities and having a robust process for effective and efficient management of core activities. The guideline was easy to follow, and the recommendation is that this be promoted nationally as best practise. Bridge Management Managing Risk and Ensuring Value for Money Many Councils in New Zealand are faced with a bow wave of bridge renewals and replacements in the next 30 years. For many of the lower volume networks maintaining the existing asset base and levels of service will be unaffordable for the communities involved. The case study covers enhancements to two key elements of bridge asset management that have greatly assisted a provincial Council in delivering an optimised outcome but does not attempt to cover all aspects of successful and effective bridge asset management. The aspects of bridge asset management that are covered are: [1] condition, risk and maintenance assessments to inform understanding of vulnerabilities and cost; and [2] asset criticality assessment to inform prioritisation and service level discussions. The case study describes how knowledge at an individual bridge level has been translated into an overall network understanding that is necessary for good asset management and budget optimisation and is useful for discussions with senior decision makers and the community. This newer way of assessing the criticality of bridges as part of a comprehensive transport network is proving useful for developing strengthening and posting strategies in a climate of tightening fiscal budgets. This will result in better investment decisions for the economic performance of the region and therefore more efficient outcomes. It is also expected to ease the processing of funding applications due to the transparent investment methodology. Management Strategies for Assets Along With Sealed Carriageways

7 While the initial focus for case studies has been on sealed carriageways due to the high proportion of expenditure in this area, further work has been undertaken looking at a wider spectrum of asset groups. Auckland Transport have developed a tool which uses asset condition and deterioration profiles to predict the impact of reducing funding for different renewals activities. This tool enables testing of the trade-offs across a range of assets between funding availability, condition based level of service required, and acceptability of different risk criteria such as criticality, movement, and public perception considerations. This model is currently maintained as an excel spreadsheet, but Auckland Transport intend to develop it as a stand- alone application on another platform. Promoting Adoption of Best Practise Case Studies Case studies are promoted through regular Road Efficiency Group newsletters, presentations at conferences and forums, and through regional networking. The case studies are available at: The reality however is that without external pressures, there can be a reluctance for network managers who are already stretched to willingly seek out change. Currently the need to balance increasing network demands within an environment of constrained funding is a key motivator for those who adopt the recommended practises. For that reason case studies which show demonstrable cost savings are likely to have greater uptake than those which promote improved planning without clear a link to cost savings. A key factor in successful uptake is the use of regional champions who are able to encourage neighbouring Councils to use the case studies to address common issues. For this reason consideration of members who provide a wider regional coverage is valuable. The benefits of various case studies are also presented at Mayoral Forums to encourage political support for change. The Local Government NZ Centre of Excellence group Equip are working alongside and supporting the work of the REG BPAMG. At this stage the adoption of best practise case studies is not a condition of NZTA funding, or reviewed by auditors. There is currently limited ability to robustly benchmark different RCA s cost effectiveness. The expectation is that as the ONRC performance framework becomes embedded then differences in Asset Management practises will become more apparent through the performance outcomes of roads of the same classification in different areas. These differences may then lead to a stepped change in adoption of best practise by more organisations. Sharing of Asset Management Plans New Zealand has a 3 yearly planning cycle with the next release of the National Land Transport Plan and the Councils Long Term Plans on 1 July in 2015.

8 Land Transport Asset or Activity Management Plans (AMP) are prepared as an input into these plans. A key deliverable of RCA members on the group is the provision of their Activity Management Plan for sharing with the industry. Previously plans have not been made publically available, and there is no legislative requirement to do so. As a result staff in many authorities will have never seen any plan other than the organisation they belong to. Consideration was given to approaching those organisations who had been identified within the 2010 Audit report as best case examples. It was recognised however that the next version of plans had been released in 2012 and the 2009 status was no longer current. It has become apparent that Activity Management Planning is an evolving process in any organisation, and the Plan which is developed in any three year period is only a snapshot in time which should be improved upon with the following Plan. As a result it can be argued that there is no such thing as a best practise Activity Management Plan, and that practise is more important than the Plan. While this may be true, it is accepted good practise to rigorously review the Plan every three years. The organisations on the group therefore provide their Plans in good faith, with the understanding that each plan will have areas of strength, and other areas which have been identified for further improvement. The plans are accompanied by a covering report which discusses the organisations view on the strengths of the plan, and the focus for improvement for the next version. Two of the member organisations have provided their 2012 versions of their AMP s. A further three will be releasing their 2015 versions by July Other Workstreams The Asset Management Group is one of seven REG work streams. The Collaboration work stream reports directly to the REG Governance Group, with the remaining 5 reporting to the AMP group for feedback and validation before presenting final recommendations to the Governance Group. Development of the ONRC performance framework was been a key work task during The Group will now support implementation of the ONRC with case studies and a communications plan which can be used by RCA s for communicating with elected members and the wider community. The investment guidance work stream has been closed out with finalisation of the review into allocation of subsidies for transport activities. A key focus area in the next 18 months will be the Data Management work stream. The ONRC performance framework will increase the use of data for determining current performance and future investment needs. Increased use of this data and reliance on it will bring to a head current issues regarding inconsistent collection and recording which will need to be addressed. Inconsistencies in performance will also provide improved understanding of where the focus on training will provide the greatest benefits. A review on the current procurement rules is currently underway. The AMP group will be delivering case studies on different deliverable models over the next 12 months to increase

9 awareness of the different options available, and the experience of different organisations in using these. Further case studies will be developed presenting the different collaboration arrangements that have been implemented in the past two years, lessons learnt during the collaboration process, and outcomes achieved. Influencing Change by Leading by Example There are often many reasons why change which will result in cost and workload efficiency are not adopted. One significant reason is the ability of staff who are already stretched to capacity be able to pause and consider another way. Real life examples of organisations who have made change and are reaping the benefits of this is a powerful tool for influencing others. It is important that a range of organisations are represented on the group which cover the spectrum of the different types of RCA;s. These members then need to be willing to apply the case studies where appropriate, and share their experiences first hand. A number of the objectives of the group such as managing risk averse behaviour, and encouraging RCAs to be smart buyers can most effectively be achieved by leading by example rather than preaching. The change required to meet the challenge of constrained funding cannot be carried by the NZ Transport Agency alone. The Planning and Investment team within the Agency are charged with responding to these challenges but if attempting to lead these initiatives, they could have met some resistance. Working with their local government partners in a collaborative environment is the key to supporting the industry in moving towards good practice. Challenges to the Group Moving Forward The New Zealand Transportation management industry is like many others where an aging demographic is beginning to impact on available resources. This means that the workload is spread across fewer, who operate in an environment of constant change. The ability of the RCA s to release staff to participate in this group is critical for its success.

10 Conclusion The Best Practice Asset Management Group is committed to supporting the improvements in asset management practices required to ensure the delivery of robust, fit for purpose economically sustainable, renewal and maintenance programmes in New Zealand. The group is making good progress due to the commitment of the group members and the case studies and work done by the group is being well received within the sector. There are good levels of participation and interest in the work done with tangible savings being achieved. Implementation of the ONRC is resulting in changing attitudes to a one network approach across the Transport Agency, Local Government and suppliers. The group s outputs are becoming a good source of information for asset managers. The work is very well supported but new group member opportunities are available. Acknowledgements The current members of the group are Julie Muir, Dawn Inglis, Siri Rangamuwa, Gene Ollerenshaw, Jag Pannu, Rui Leitao, Dave Darwin, Gordon Hart, Tony Lange, Janice Brass, Matt Grant and Bernie Cuttance. They have contributed hugely to the work achieved to date. References Appendices Author Biography & Photograph Julie has been the Central Otago District Council Roading Manager for 13 years. Prior to working in Local Government she worked as a part of the Consultants team. Julie was the chair of the Road Efficiency Group Best Practise Asset Management Plan Group in its second year, and has handed over the reins in April Julie.muir@codc.govt.nz P.O Box 122, Alexandra 9340, New Zealand

11 Dawn Inglis was the Manager Road Corridor at Waipa District Council until April 2014, when she moved into a secondment to a regional role as the Project Director for Waikato RATA (Road Asset Technical Alliance). Waikato RATA was established to support increased capacity and capability in strategic asset management in the Waikato. Prior to these roles Dawn was the Roading Manager at Franklin District Council. Dawn takes over the chair of the Best Practice Asset Management Group from Julie. Dawn.Inglis@waikatorata.org.nz