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Improving value by incorporating asset management into existing infrastructure planning processes - Version 2.0

This presentation is an introduction to Asset Management Planning, ISO 55001, Asset Management Plans, asset management data collection and Deterioration (RRR) Modeling

Craig Omundsen

on 14 September 2016

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Transcript of Improving value by incorporating asset management into existing infrastructure planning processes - Version 2.0

Infrastructure Asset Management Planning
Create templates for the Strategic AMP and AMPS
May 2014
Celebrate our
Asset Management
National Water Company
Head Quarters, Riyadh
Thank you all for your assistance.

Yasser, Yaser, Batal & Waleed
Asset Management Benefits
Completed Scope of Works
CAPEX (Capital)
OPEX (Operational)
Thank you for your time
Supports realization of asset value while balancing financial, social, & environmental costs; corporate risk; service quality, and; performance.
rules for assets
Asset Management
Plan (AMP)

Enables an organization to examine the need for, and performance of, assets and asset systems at different levels.
Asset management does not focus on the asset itself, but on the value that the asset can provide to the organization.
Strategies for Asset Lifecycle Management
Strategic Asset Management Plan
Asset Planning
Asset Creation/Augmentation Plans
Operations, Maintenance and Disposal Plans
City Business Unit Asset Management Plans
Thank you Jacco van der Kooij for your great work with the original Prezi template
Remember to call when you want help
Asset management will realize value from assets in the delivery of organizational objectives.
Supports the achievement of benefits while balancing cost, risk and performance related to assets.
Improved financial performance.
Managed risk.
Improved services and outputs.
Corporate/social responsibility.
Demonstrated compliance.
Enhanced reputation.
Improved sustainability and resiliency.
Achieve significant competitive and operational advantages by ensuring that assets are made available where they provide the most benefit.
References from: draft ISO55000
References from: ISO55000:2014
Document Asset Management Planning Manual (AMPM)
Improving value by incorporating asset management into existing planning processes
AM Planning Cycle for Data Analysis
Year 1 to 3 savings
Determining SMART Asset Management Planning Objectives
Issue identification and analysis
Need assessment and analysis
Planning investigation
Option identification and analysis
Options comparison and Project identification
Integrated Master Plan Prioritization and Programming
Funding Request & Budget Allocation
Asset management planning performance evaluation and continual improvement
Document Asset Management Plan (SAMP & AMPS) Templates
The structure of the SAMP and AMPS templates will be documented in accordance with ISO55001, once it is released.
The SAMP and AMPS templates will be aligned with the Asset Management Planning Manual & Project Management Manual.

“Understand service and value” rule
Assets deliver services, valued by our customers and stakeholders. Figure out the minimum level of service, below which a given service is not perceived as adding value.
“Acknowledge failure” rule
Using assets to deliver services will break all assets. Realize that certain asset failure is acceptable, yet failing the minimum level of service is never acceptable. To determine if failure of an asset is acceptable, apply rules 3 to 6.
“Study failure” rule
Different assets have different modes of failure - they fail in different ways. Learn how an asset will fail to learn the fundamentals of 'bottom-up' smart data analysis.
“Analyze consequences” rule
Failure of assets in their specific operational environment will have different effects to the network, which will lead to different consequences for the levels of service. Analyze the consequences of failure of specific assets.
“Learn probabilities” rule
The same type of asset will fail at different times, in different environments, for reasons known and unknown. Learn from history to learn the probability of failure for assets in similar environments. For assets with high consequences for the levels of service: Monitor for the known and likely. Manage the unknown and unlikely.
"Focus on priorities" rule
Focus your attention by prioritizing what is important. High risk issues, with quick win solutions are number 1 priority. By following Rules 1 – 5, you will understand the risks you will accept, and learn the risks you have.
“Understand life-cycles” rule
All assets pass through a life cycle and deteriorate over time. Understand the assets life-cycle, and save costs by conducting Asset Management Lifecycle Planning based on this rule.

The Rules for Asset Management Planning Success:
There exists a cost that is the minimum across the entire life cycle of the asset. To find this optimal cost you must follow the 7 rules for Asset Management Planning success.
Site: Strategic Reservoir; Asset type: Reservoir; Asset classification: Civil
Asset Objective: To safely store potable water, while:
(a) having adequate storage capacity to allow Riyadh 10 days water storage, in case of a failure of the desalination WTP,
(b) ensure water at outlet meets water quality standards, and;
(c) achieve suitable pressure / flow from the reservoir outlet.
Site: Buwayb Water Treatment Plant 2; Asset type: Pump; Asset classification: M&E
Site: Buwayb Water Treatment Plant 2; Asset type: P.L.C.; Asset classification: Electrical
Asset Objective: To safely store transfer potable water to Riyadh, converting electricity to kinetic energy, accelerating the water by the movement of a revolving component.
Pumps provide conveyance under pressure from a lower to a higher elevation, while having adequate capacity to achieve suitable pressure, flow and continuity of supply.

P.L.C. is the acronym for "Programmable Logic Controller"
Asset Objective: To safely enable control of the Buwayb water treatment plant process. Provides the ability to automate all electromechanical processes - including sequentially starting & stopping assets within the process, enter set points for alarms, and change I/O conditions - from the control panel.
There are two types of Asset Management Plans:
Strategic Asset Management Plan (SAMP):
This documents the role of the asset management system to support delivery of asset management strategy and objectives. This plan is high level.
Asset Management Plans (AMPS):
Detailed plans for specific activities for the assets.
Includes the intended projects & programs, based on the organisation's understanding of service level requirements and the network's capability to meet those requirements.
The right AMP for the job:
Understand service and value
Acknowledge & Study failure
Analyze consequences
Learn probabilities
Focus on priorities
Understand life-cycles
Value to our customers: Regularly supplied safe & affordable water for cooking, cleaning & drinking.
Service Requirements: At the outlet of the reservoir, water quality standards shall be in accordance with SASO 701, with a design pressure of 2.5 - 7.5 bar, flow of 2,500 m3/s, and as cost effective as possible.
Value to our customers: Regularly supplied safe & affordable water for cooking, cleaning & drinking.
Service Requirements: Low cost operation, at a pressure range 4 to 4.5 bar and a flow of 1,800 m3/s. There are three pumps in duty/standby. One pump is to be operational, on average*, 8 hours a day.
Value to our customers: Regularly supplied safe & affordable water for cooking, cleaning & drinking.
Service Requirements: Continuous (7/24/365) control, data monitoring, alarm delivery and data storage; so the operator can ensure WTP produces low cost water, with standards in accordance with SASO 701.
Please note: Customers in the Riyadh distribution network are supplied in cycles; typically 1 day on 4 days off. In other cities the value is "Continuously".
Customer value is the same for all assets in the supply. Regardless of where the asset is in the network or what the function of the asset is, it is always operated for one reason. To realize value.
Planning Team
You can see a common trend here in the defined value for the customer
*due to maintenance downtime
Enables application of analytical approaches towards managing an asset over the different stages of its lifecycle (which can start with the conception of the need for the asset, through to its disposal).
The Vision:
“Planning, leadership and excellence in managing assets”

The Mission:
“Achieving high return of investment of assets in the water and wastewater sectors. To accommodate growth and development and satisfy customer needs. Maintain the current assets and ensure their sustainability, accompanied with projects planning and leadership ”

Alignment required with the Project Management Manual (PMM)
Benefits of following ISO55001
Asset Planning is a continuous business process, which includes conceptual modeling & strategic asset need identification activities by specialists in the City Business Units. These activities are carried out in alignment with the city’s master plan and the outputs are described by the City Business Units in their Capital Development Plans, which operate over a five-year period.
Project Management Manual Definition
Reporting feedback loop
Vision & Mission
The Vision:
“To be a world-class water utility company”

The Mission:
“To provide exceptional water and wastewater services in a reliable, sustainable and cost-effective manner. Focusing on the satisfaction of our customers, employees and communities; to deliver strong performance through a commercially viable organization ”
Data Analysis #1
Data Analysis #2
Data Analysis #3
Demand modeling from projected growth & independent development
Updated water and wastewater models
Strategic Drivers to meet needs & expectations of Stakeholders
Levels of Service requirements for the customer / CEM
Growth Analysis within DMZs / PZs and Catchments

Deterioration [Replace-Refurbish-Retrofit (RRR)] modeling
Updated Asset Management Database (eAM)
Risk and Asset Condition assessments
Lifecycle Management Strategies (future state)
Determination of assets' useful lives and criticality
Asset lifecycle analysis to determine options at 'Project Inception'
Issue identification, issue analysis and 'Need' assessment
Analysis of the 'Need' to be able to identify project options
Strategic Drivers and Levels of Service requirements
OPEX for lifecycle management of the specific assets

* NOTE: Overview - not all inclusive
* NOTE: Overview - not all inclusive
improvement through alignment
Smart Data Analysis
To ensure that City Business Units (CBUs) are conducting smart data analysis correctly, HQ has to ensure CBUs are:
It is suggested that HQ assist CBUs with the establishment of new systems & tools and review existing technology and tools which they have, to better enable planning.
* NOTE: Overview - not all inclusive
Reasons that an infrastructure organization would wish to be certified include:
ISO standards are developed by industry experts, world-wide.
Provides confidence that Asset Management Systems are world-class to:
Potential investors.
Existing stakeholders.
Customers using our service.
Demonstrates to stakeholders there is prudent, risk-based, efficient and effective management.
Because of auditing requirements it confirms business reputation over the long-term.
ISO55001 states that the organization:
Will establish and maintain documents which will outline methods for decision making and prioritization, including capital planning.
Shall determine the following information, for use in planning
Best practice Asset Management
the strategic plan for Asset Management
methods to manage the lifecycle of assets
what will be done to manage assets
resources required to manage assets
who will be responsible to manage assets
how [smart] data analysis will be done
the financial risk implications
Conformity assessments for ISO certification are performed by organizations who specialize in auditing and certification of management systems. It is highly suggested to ensure the people auditing from the organization are compliant with ISO/IEC DTS 17021-5. This has been adopted to provide technical guidance on the skills and competencies required of those involved in ISO 55001 audit and certification.
ISO 55001 audit and certification:
ISO state the main aim of standards are to promote good practice, not purely for compliance. The Standards themselves do not carry force to require their application. It will be up to you to choose to apply them as part of best practice.

As part of privatization, it is likely that financiers will look to the Standards to protect their interests
Lifecycle Management Decision Making Strategy
Prioritization Strategy
Standards, Specifications & Reliability Requirements
Vulnerability and Resilience Management Strategy
Financial Management Strategy
Risk Management Framework
Value Management Strategy
Asset Planning Strategy
Asset Creation/Augmentation Strategy
Asset Operations and Maintenance Strategy
Asset Disposal Strategy
Asset Lifecycle Performance Review Strategy
These are operational Asset Management Plans, with specific details about all project, operational and maintenance planning for the City Business Unit.
Hybrid SAMP / AMPS:
Water Industry:
Examples from New Zealand:
How the Strategic Asset Management Plan will align the City Business Units
Failure modes are dependent upon the reservoir material. Specific failure modes fall into two categories:
1. Structural failure of the materials within walls, supports, roof, or foundation.
2. Corrosion of the materials (causing a failure of water quality standards in accordance with SASO 701).

There are greater than 15 failure modes for a centrifugal pump. Here are five failure modes:
Air entrainment; suction obstructed; cavitation; loose impeller, and worn bearings

There are greater than 80 failure modes for a PLC. Here are a collection of failure modes:
Loss of a processor module; failure of a communication module; loss of a RXM module; digital input point(s) stuck off or on, open or closed; output fails high or low; bus failure open or short to ground.

To find the optimal cost, run an algorithm within a Deterioration RRR* Model. The model will contain estimated renewal costs, condition assessments, historical breakdowns and future demand requirements for customer levels of service improvements to determine the lowest cost refurbishment, replacement and retrofitting (RRR) requirements.
For an entire network all refurbishment, replacement and retrofitting requirements for assets are analyzed to prioritize the program of projects into the long term future. Financial forecasts for funding can then be finalized.
*RRR refers to Refurbishment, Replacement and Retrofitting
Apply all rules across all assets to calculate the optimal cost - minimizing expenditure across the entire life cycle of the asset:
A comprehensive durability analysis will determine actual serviceable life for specific assets, performing condition assessments will determine which part of the life-cycle the asset is in and the probability of failure will be based on historical failures & the current condition of the asset.
This requires analysis of each failure mode. We’ll focus on one failure mode: corrosion inside the reservoir.
This has a consequence on 'water quality' when it occurs and 'affordability' when it is repaired. The reservoir design has an effect on consequence - it is reduced for water quality because it is able to be disconnected from the network, and it is increased for affordability because to repair it is necessary to drain 300,000m3 of desalinated water.
This requires analysis of each failure mode. We’ll focus on one failure mode: loose impeller.
Because the failure of the pump due to a loose impeller will automatically start the standby pump, the consequences will only be on affordability due to a repair to the pump being required.
We’ll focus on worst case for this, so we can see how rule 5 affects the worst case consequences: loss of all processors.
This will cause total PLC failure and all service requirements will fail. Once again, design will have an effect on the consequences. In this case there is a delay due to storage in the WTP reservoirs and if they run dry consequences will also be reduced because other WTPs can increase production. If left unresolved, however, consequences will be high.

Likelihood depends upon material used and the quality of the construction / installation. As a part of a PMM audit the quality of the concrete pour for the reservoir roof supports has been noted. It has been assessed that it is likely corrosion will occur. Recommendations have been provided for solutions which will reduce whole of life costs of strategic reservoirs, including a material selection tool. This has again shown the benefit of the PMM audit process.
Likelihood depends upon maintenance and condition monitoring. From discussions with the operator, the pump is maintained and monitored at such an interval that it is unlikely the pump will fail due to a worn bearing. It is more likely a worn bearing will be recognized during condition monitoring and prior to the pump failing. Costs will be reduced because the cost for maintenance and condition monitoring is less than for emergency pump repairs.
Likelihood depends upon the quality of the purchased product. Basing the probability analysis on the electrical asset which has been purchased and installed, this failure mode (all PLC processors failing) is very unlikely. This likelihood greatly reduces the risk to the business. An excellent purchasing decision.
Medium Consequence [affordability] * High Likelihood [condition assessment] = Medium to High Risk.
Due to a high likelihood, this is an issue that should be “monitored”.
Prioritizing of remedial work for these three assets: resolving this issue is priority one.
Low Consequence [backup pump] * Low Likelihood [maintenance & condition monitoring] = Low Risk.
Likelihood is low due to the monitoring that is done, therefore keep “monitoring”.
Prioritizing of remedial work for these three assets: resolving this issue is priority three.
High Consequence [failure of WTP process] * Low Likelihood [product selection] = Medium Risk.
Due to a low likelihood, this is an issue that should be “managed”.
Prioritizing of remedial work for these three assets: resolving this issue is priority two.
Project confirmation
Stakeholders meetings
Staff meetings
Determine the appropriate process and gateway principles
Document the explanation of (a) objectives, (b) policies, (c) KPIs, (d) process flow, and (e) procedures for:

Feel free to review details within the table below of the these 3 examples, at your leisure
Adapted from IAM diagram - see https://theiam.org/
Strategies for
Service Sustainability
Managing water demand
Managing effluent quality
Managing profitability
Managing affordability
Vision, Mission and Strategic Drivers
Asset Management Policy and Asset Management Objectives
Goals and Objectives of Asset Ownership
Governance Structure
Stakeholder Engagement Processes
How the SAMP will be used
Relationship with other planning functions
Link to the Asset Management Plans
Level of Sophistication of this AMP
Asset management framework
Asset management opportunities
Asset management improvement plan
levels of service
Corporate Goals & Strategic Objectives
Regulation Requirements
Anticipated Changes in Customer Expectations
Desired Levels of Service
Purpose of the AMP
Levels of Service
Future Demand
Current and Future Asset Portfolio
Lifecycle Management Plan
Financial Summary (OPEX & CAPEX)
Asset Management Practices
Monitoring and Improvement Programme
Purpose of the AMP
Relationship with other planning documentation
Infrastructure assets included within this plan
Key stakeholders of the plan
Management Structure
Link to Strategic AMP
Links to Vision, Mission, and Asset Management Policy
Realization of Asset Management Objectives
Structure of the AMP
Core and Advanced Asset Management Overview
Level of Sophistication of this AMP
Customer Research and Expectations
Complaints monitoring and resolution
Parameter Compliance
Water quality
Effluent quality
TSE quality
Regulation Requirements
Emergency & Contingency Planning and Response
Vision, Mission and Strategic Drivers
Asset Management Policy and Asset Management Objectives
Complaints monitoring and resolution
Anticipated changes to Parameter Compliance
Anticipated changes to Regulation Requirements
Anticipated Changes in Customer Expectations
Desired Levels of Service
Current Demand
Future Demand
Factors influencing demand
Demand Management
Projected Growth and Demand on Services
Growth forecast
Demand trends
Changes in land use
Changes in local climate and global climate change
Future limitations of Water resources (including TSE), and Wastewater environmental contamination
Future resources (Water & TSE) & disposal (Wastewater)
Impact of Changes in Demand on Asset Utilization
Short- and medium-term demands
Long-term demands
Existing Network Overview
Asset Portfolio Overview
Asset Capacity and % capacity used
Asset Criticality
Asset Condition
Asset Valuation
Historical Data
Master Plan Decisions
Future Asset Portfolio Overview
Future Asset Capacity and proposed % capacity to be used
Changes in demand on asset utilization
Future Asset Criticality
Future Proposed Condition
Future Asset Valuation
Translating SAMP strategy into reality
Standards, Specifications & Reliability Requirements
Vulnerability and Resilience Management
Financial Management
Risk Management
Value Management
The Integrated Master Plan
Prioritized & Programmed Long Term Plan (LTP - 25 years) [CAPEX & OPEX]
Prioritized & Programmed Capital Investment Plan (CIP- 5 years) [CAPEX only]
Prioritized & Programmed 5 year Plan [CAPEX & OPEX]
Asset Planning
Overview of Processes, Procedures and Practices
Delivery of Services
Hydraulic Modeling
Prioritization & Programming
Options Studies Plan
Prioritized & Programmed Long Term Plan (LTP - 25 years)
Prioritized & Programmed 5 year Plan
Options Studies Funding
Asset Creation/Augmentation
Overview of Processes, Procedures and Practices
Delivery of Services
Prioritization & Programming
Creation and Augmentation Plan
Prioritized & Programmed Long Term Plan (LTP - 25 years)
Prioritized & Programmed Capital Investment Plan (CIP- 5 years)
Creation and Augmentation Plan Funding
Asset Operations and Maintenance
Overview of Processes, Procedures and Practices
Prioritization & Programming
Delivery of Services
Asset failure monitoring and resolution
Customer Experience Management
Contingency Planning
Routine Maintenance Plan
Deterioration (RRR) Modeling
Refurbishment, Replacement and Retrofit Plan
Prioritized & Programmed Long Term Plan (LTP - 25 years)
Prioritized & Programmed Capital Investment Plan (CIP- 5 years)
Operations and Maintenance Funding
Asset Disposal
Overview of Processes, Procedures and Practices
Prioritization & Programming
Delivery of Services
Disposal Plan
Prioritized & Programmed Long Term Plan (LTP - 25 years)
Prioritized & Programmed 5 year Plan
Asset Disposal Funding
Asset Lifecycle Performance Review
Performance Evaluation
Continual Improvement
Financial Summary Statements and Projections
Options Studies Financial Forecast
Creation and Augmentation Financial Forecast
Routine Maintenance Financial Forecast
Refurbishment and Replacement Financial Forecast
Disposal Financial Forecast
Funding Strategy
Funding Sources
Financial Forecast Key Assumptions
Confidence Levels
Overview of Asset Management Framework
Financial Management System
Asset Management Systems
Data Requirements
Information Flow Requirements and Processes
Modeling Systems
Geographical Information Systems (GIS)
Workflow Management System
Maintenance Planning System
Environmental Management Systems
Emergency Management Systems
Refurbishment and Replacement Planning System
Operational Performance Systems
SCADA System
Operational Compliance System
Performance Measures
Improvement Programme
Monitoring and Review Procedures

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