best approaches to building an asset management system

First FTA SGR Roundtable

Best Approaches to Building An Asset Management System

July 9, 2009

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Agenda

– What is asset management?

– How does it apply to transit?

– What are the current best practices in transit asset management?

• What are others doing?

– How is asset management practiced in other modes?

• Lessons from the highway community

– Where do we go from here?

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What is Asset Management?

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Transportation Asset Management (TAM): Definition

– “Asset management” has different meanings to different users:

• For many, “asset management” is synonymous with a single component, such as maintenance management

• True asset management provides a broader, multi-disciplinary and agency wide perspective on the optimal long-term management of capital assets

– The US highway community is pursuing a much broader definition:“Transportation Asset Management is a strategic and

systematic process of operating, maintaining, improving and expanding physical assets effectively throughout their lifecycle. It focuses on business and engineering

practices for resource allocation and utilization, with the objective of better decision making based upon quality

information and well defined objectives.”


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Transportation Asset Management (TAM): Definition (cont)

– Based on this broader definition, asset management is:

• Strategic and not tactical (i.e., has a long-term focus)

• Seeks to balance the competing needs of operations, maintenance, reinvestment and system expansion

• An organization wide endeavor: It seeks to integrate planning, engineering, funding, and IT perspectives

• Seeks to make informed and prioritized decisions regarding the use of scare resources based on reliable data

Transportation Asset Management

Preservation Capital Improvement

Operations

RESOURCES

Safety, Etc.


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Infrastructure Asset Management: IIMM Definition

– The International Infrastructure Management Manual defines asset a management as follows:

“The goal of infrastructure asset management is to meet a required level of service, in the most cost effective manner,

through the management of assets for present and future customers. Key

elements include:

•Taking a life cycle approach

•Developing cost-effective strategies for the long-

term

•Providing a defined level of service quality and

then monitoring performance

•Meeting the needs of growth

•Managing risks associated with failures

•Sustainable use of physical resources


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Components of Transportation Asset Management

Comprehensive asset management includes:

– Goals and Objectives: For example, attainment of a state of good repair

– Asset Inventory: Listing of all fixed assets, including type, condition, remaining life and value

– Condition Assessment Process: Process to assess the condition of all inventory assets

– Decision Support Tools (models): Tools to analyze and prioritize long-term investment needs

– Options and Tradeoff Analysis: Process to evaluate the investment tradeoffs and investment returns of alternate investment options

– Decision Making Processes: Decision making process to allocate resources between competing uses

– Monitoring: Performance measures and performance targets based on agency goals and objectives

Transportation Asset Management (TAM) Process

Goals and Objectives

Asset Inventory

Condition Assessment and Investment Needs Modeling

Performance Monitoring

Short- and Long-Range Plans (Project Selection)

Program Implementation

Budget / Allocations

Alternatives Evaluation and Program Optimization

TAM process as promoted by AASHTO and FHWA


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What We Can Learn from Asset Management?

– Asset management provides decision makers with reliable information on:

• Current asset conditions

• Investment levels required to attain specific objectives

• Optimal resource allocationYears to Address Current Backlog if Funding is Unconstrained Backlog if Current Funding Levels Remain Unchanged ($410m/yr)

Funding to Maintain Current Backlog ($470m/yr) Investment Required to Eliminate Backlog in Twenty Years ($620m/yr)

Output from

MBTA’s SGR

Model


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Transit Asset Management

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“Traditional” Transit Asset Management

– “Traditional” transit asset management encompasses a broad range of agency processes:

• Maintenance management systems

• Condition assessments

• CIPs

• Investment prioritization

• Long-range planning

– While each process supports asset management, each is generally performed:

• By different staff

• Covering differing periods of analysis

• With differing emphasis on tactical vs. strategic objectives

• Activities may not be fully coordinated

• Performed differently by different agencies


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“Traditional” Transit Asset Management (Cont)

– Industry and agency staff definitions of asset management can also differ based on professional and personal perspectives

• Maintenance staff:

Short-term, maintenance activity focus

Fine level of asset detail

• Capital planning staff:

Longer time horizon

Aggregated level of detail

• Engineering staff: middle ground between these viewpoints

– The following slide places these differing perspectives and planning horizons into a common framework

– The objective is to help understand where each perspective is “coming from” and how they relate to each other


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State of Good Repair Continuum


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Transit Asset Management: Where do we go from here?

– Given these existing functions, how can we begin to improve our TAM practices?

– Following are suggested questions to address based on asset management best practices in other industries:

• Are there clear, agency-wide goals, objectives and priorities to guide TAM activities?

• Are these goals supported and articulated by senior management?

• Is there an approved TAM plan that addresses these goals?

• Are TAM activities coordinated between groups / functions?

• Does the agency have the data sources / resources to support both asset management activities?

• Do we have the tools required for the job?

• How are we measuring and evaluating performance?

Transportation Asset Management (TAM) Process

Goals and Objectives

Asset Inventory

Condition Assessment and Investment Needs Modeling

Performance Monitoring

Short- and Long-Range Plans (Project Selection)

Program Implementation

Budget / Allocations

Alternatives Evaluation and Program Optimization

TAM process as promoted by AASHTO and FHWA


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Best Practices in Transit Asset Management

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FTA’s Recent Rail Mod Study Documented the TAM Practices of Nine Major Rail Transit Agencies

– The study documented the current practices of the nine agencies with respect to the following key TAM program components:

• Capital planning transit asset inventory

• Collection and use of asset condition assessment data

• Decision support tools

• Investment prioritization processes

– The key findings in each of these areas is considered next

Transit Asset Management: Best Practices

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Asset Inventory

– Effective asset management requires good quality asset data

– Asset Inventory Data

• What does the agency own?

• What condition is it in?

• What is the remaining service life?

• Are there plans to expand?

Without good asset data, infrastructure managers cannot accurately assess

conditions, needs or risks


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Asset Inventory (cont)

– Rail Mod Finding:

• Seven of nine study agencies maintain asset inventories for capital planning purposes

• This is much higher than in the past or for the general population of US transit agencies

• Inventories differ significantly in structure, content and level of detail

Characteristics Fixed Asset Ledger Capital Asset Inventory

PurposeCalculating depreciation for

accounting purposesCapital planning and asset

management

Typical RecordsPurchase contracts, past

projectsPieces of equipment to be maintained and replaced

Records aggregated by: Date purchased Asset type, useful life, and date purchased

Basis for Useful Life Accounting schedules Engineering assessments

Appropriate for Estimating Long-Term SGR Needs?

No Yes

Differences between Fixed Asset Ledgers and Asset Inventories


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Asset Condition Monitoring

– Asset inventory data is more valuable when coupled with current condition data

– How should condition be measured?

• Condition rating scale?

• Percent exceeding useful life?

• Performance based?

Mean time between failures

Delay time

Availability for service

Customer surveys Without reliable condition measures, owners cannot

fully assess needs or progress


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Asset Condition Monitoring (cont)


• Three of the nine study agencies conduct condition assessments on a regular basis

• A fourth agency does so periodically

• Transit lags other sectors in this respect

Asset Conditions: Study Agencies

Excellent8%

Good22%

Adequate35%

Marginal27%

Poor8%

Source: TERM 2008

Condition of US Rail Assets


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Decision Support Tools

– Decision support tools help asset managers conduct “what-if” analyses and better predict and prepare for future outcomes:

• What happens to asset conditions if funding remains at current levels?

• How does our current funding mix compare with projected future needs?

• What level of funding do we need to attain SGR?

– Rail Mod Finding

• Only one of the nine agencies currently maintains a decision support tool Example Transit Decision Support Tools


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TERM’s Needs Assessment Process for Rehab – Replacement

Listing of Current Asset Inventory

(Track, Structures, Systems, Facilities, Vehicles, Stations)

Asset Inventory

Simulated Decay, Rehab and

Replacement of Transit Assets Over Twenty Year Period

Model Run:Needs Forecast

SGR Needs

Forecast

Investment Policy

Rehabilitate / replace all assets with a

condition of 2.5 or lower

Asset Conditions Forecast

Asset Decay Process

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 2 4 6 8 10 12 14 16 18 20

Ph

ysic

al C

on

dit

ion

Rat

ing

Vehicle Age (Years)

Observed Physical Condition Versus Age: 40 Foot Buses

Spline - Bus (High PM)Spline - Bus (Avg PM)Spline - Bus (Low PM)Bus Inspection


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Investment Prioritization

Investment Prioritization

• All agencies face a mix of investment needs including those for:

Asset preservation

Expansion to support growth / reduce crowding

Maintain / improve reliability, safety and service quality

• What is the optimal allocation of limited funds?


• Only two of the nine study agencies currently employ objective processes / techniques to prioritize investment funds

Infrastructure Condition

Mobility Improvement

Time0 1 2 3 4 5 6 7 8 9 10

$A

$B

Time

$B$A

0 1 2 3 4 5 6 7 8 9 10

Which mix of investments best serves long-term customer

needs?


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Best Practices in Highway Asset Management

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Highway Asset Management: Current Practices

– State DOT’s, AASHTO and FHWA have been applying and refining highway asset management concepts for more than a decade

– While highway practices are still not fully “matured”, the highway community is well out front of transit for TAM implementation

Highway Asset Management

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Highway Asset Management: Resources

Media Resources

Conferences • 8th National Transportation Asset Management Conference (Portland Oregon, October 19-21)

Committees • TRB Asset Management Committee• AASHTO Asset Management Subcommittee

Decision Support Software

• AASHTOWare: AssetManager NT and PT• FHWA HERS ST

Education • National Highway Institute TAM Course

Organizations • FHWA Office of Asset Management• Task Force on Asset Management

Publications (sample)

• AASHTO Asset Management Guide Vol. I and II

• AASHTO-AGC-ARTBA Data Collection Guide• FHWA Case Study Series• FHWA Asset Management Primer• Best Practice Scans

Web Sites • TAM Today• FHWA and State DOT sites


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What Can We Learn From Highways?

– While the mix of highway asset types differ significantly from transit’s (i.e., pavement and bridges vs. vehicles, stations, train control, traction power, track, etc.) the basic TAM concepts are the same

– The following slides consider a range of “lessons learned” from highway TAM that can be applied to transit:

• Key questions an asset management system should address

• Framework for developing a TAM program

• Attributes of successful TAM programs

• Common implementation issues

• TAM program impacts


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Core Questions TAM Should Address

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 remaining economic value?All State DOT’s Maintain Inventories And Condition

Assessment Data for Their Pavement and Bridges


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Core Questions TAM Should Address (Cont)

2. What is my required level of service/ performance level?

• What is the demand for services by stakeholders?

• Are there regulatory requirements?

• What is my actual performance?

As of 2002, More Than Half of State DOT’s Maintained Specific Condition Targets for Bridges and Pavement

MODOT: Benchmarking Analysis


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3. 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?

• How does this impact investment prioritization?

Fatalities on Missouri Roads: Trend Tied to Improvement in Roadway Condition


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4. What is my optimal mix of preservation, expansion and safety investment strategies?

• What alternative management options exist?

• Which are the most feasible for my organization?


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5. What is my best long-term funding strategy?

Funding Versus Pavement Condition

Annual budget = $ 2 million

Annual budget = $ 2.5 million

Annual budget = $ 3 million


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1. Set Target Level of Service/Performance Goals

2. Develop Asset Inventory

3. Conduct Condition Assessment

4. Determine Remaining Service Life

5. Determine Life Cycle & Replacement Costs

6. Determine Business Risk

7. Optimize Maintenance

8. Optimize Capital Investment

9. Determine Funding Strategy

10.Build Asset Management Plan

TAM Program Implementation

Graphic


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The Most Successful Asset Management Programs:

– Have performance measures that guide investment decisions

– Adopt a ‘preservation first’ strategy for their investment priorities

– Moved away from a “worst first” investment strategy, and instead have adopted investment principles that are based on life cycle costing and maximizing benefits

– Undertake scenario analysis showing the consequences on performance measures of various investment decisions

– Conduct an organizational self assessment as one of the most important starting points for implementing an asset management process

– Have an Asset Management champion


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Challenges to Implementation

– Linking Asset Management to decision making

– Collecting the right data for performance measures

– Developing and conveying top management support and commitment

– Identifying the individuals responsible for implementation

– Overcome resistance to change


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TAM Improves Service Quality and Resource Utilization By:

– Maximizing service performance / reliability

– Minimizing life cycle costs

– Making managers more accountable

– Being better positioned to anticipate and secure needed funding

– Improving safety

– Matching service levels with customer expectations

Customer Satisfaction Survey


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Where Do We Go From Here?

best approaches to building an asset management system

Documents

definition asset management

asset management system

fine level of asset

myr investment

different staff

current backlog

investment tradeoffs

broader definition