Asset Management Aspects Asset management Each local authority

Asset Management Aspects

Asset management • Each local authority must act in accordance with the principle that it: … should ensure prudent stewardship and the efficient and effective use of its resources in the interests of its district or region, including by planning effectively for the future management of its assets – Not prescribed — flexibility given to councils to follow asset management planning in a manner appropriate to their circumstances

AMPs – Tactical Plans

What comes first – the corporate / long term plan or AMP? The AMP or the AM Strategy / infrastructure strategy?

Five things to consider when developing 30 year AM plans • • • Strategic Issues and Options Performance Based Renewal Forecasting Risk and Resilience Optimised Decision Making Asset Management Leadership 5

1. The Strategic Direction What sort of external, internal and customer factors might influence how the organisation manages its asset, now and over the next 30 years?

Strategic Issues and Opportunities • • Population Growth / Decline Population aging Demand Management Aging Infrastructure Environmental Standards Raw water availability Natural Hazards Climate Change

Strategic Goals • Key levels of service and performance targets – extend to 30 years. • Challenge to think beyond the ‘continuation of status quo’ service level assumptions in a ten year horizon. • What have been the step changes in infrastructure services in the last 30 years? • What might be the step changes in the next 30 years?

2. Performance based renewal forecasting • Condition based renewals, lead us to deliver what we have now • The only thing that is certain, is how much things are changing • Asset renewal needs to be tied to strategic choices, based on the ability of the assets to deliver the changing levels of service • Asset performance monitoring is key 9

Performance versus Condition Performance • Performance relates to the ability of the asset to provide the required level of service to the customer Condition • Condition relates to the structural integrity of an asset • At present we tend to forecast long term renewals in based on asset condition not performance

Performance Based Asset Renewals 11

The Aim is To Balance Risk, Cost and Performance over the AM lifecycle Affordable costs Desired Level of Service Risk management

3. Risk vs Resilience • Risk management approach may overlook unpredictable or rare, high consequence events (High Impact, Low Probability) • Resilience approach asks “what happens if …? ” Resilience • Risk. Some assets are just too important to fail Assess failure risk through probability and consequence analysis of known hazards or events. Minimise the consequences of failure no matter what the cause or extent or likelihood of the hazard or event may be. Consider multiple interdependencies and failure modes and how to manage them. Adapt to changing conditions, allowing controlled failure (‘safe-to-fail’) to reduce the possibility of broader loss. Prioritise responses to high risk exposure hazards and events. Focus on measuring the attributes of resilient systems.

Measuring Resilience • Qualitative (conceptual) and quantitative approaches • Two key dimensions – Technical / Asset and Organisational – see Table 3. 2. 8 for typical measures • Use these measures to determine “current” and “desired” levels of resilience DIMENSION DESCRIPTION The ability of the physical system(s) to Technical / Asset perform to an acceptable/desired level Resilience of service when subject to a hazard event. Organisational Resilience The capacity of an organisation to make decisions & take actions to plan, manage & respond to a hazard event. ELEMENTS Robustness Redundancy Modularity/Flexibility Safe-to-fail Change readiness Networks Leadership & Culture

4. System Optimisation • What is the least cost required to operate the system? What level of service and risk can be expected? • For a given budget, where should money be allocated to give the best benefit? • How much budget is required to maintain a given level of service? Where should this budget be spent? 15

Lifecycle Decision Techniques Define the problem or goal Identify potential options/solutions Determine the method of evaluation Assess the costs and impacts in dollars or criteria for each option. • Evaluate and rank. • Decide and implement solution. • Evaluate effectiveness of outcome. • •

5. AM Leadership • Establish AM purpose and direction through the AM policy, infrastructure strategy and AM objectives • Ensure AM is established and integrated into the organisation’s business • Ensure AM resources are available • Communicate the importance of effective AM • Direct and support persons contributing to the effectiveness of AM • Promote cross-functional collaboration within organisation and continual improvement.

Clear direction is needed • The principles by which the organisation intends applying asset management to achieve its organisational objectives should be set out in an asset management policy. • The approach to implementing these principles should be documented in the infrastructure strategy • The strategy should document the relationship between the organisational objectives and the asset management objectives, and should define the framework required to achieve the asset management objectives.

People requirements • To function well our “engine room” needs: – Appropriate skills to do the job required (Capability) – Sufficient people to apply these skills (Capacity)

Other key success factors in AM improvement • • An integrated organisational approach Taking a step by step approach Monitoring, auditing and reporting progress Recording and celebrating the benefits achieved

Asset Management is a Journey