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Zen and the Art of Asset Management

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When Robert M. Pirsig wrote his classic in 1974, “Zen and the Art of Motorcycle Maintenance”, he comingled two books into one; one about ideas and the other about people. The zen referred to the self awareness or enlightenment reached about ideas through experience. The same challenge of comingling ideas and people and achieving zen faces us when implementing asset management into public water and wastewater organizations. Great gains can be made if people in these organizations can be taken on a journey of personal and group development with the right ideas in the right way.

The asset management team from Hunter Water has been on this journey for nearly two decades now. The first decade was mainly spent in creating asset management expertise at home. The journey started with a simple question: how is it that an organization that is dominated by large capital expenditure on assets applies so little real science and economic rigor in making decisions about its assets? A decade later, and after much “soul searching”, there was a rigorous asset management framework for all decisions and enormous dollar gains made.

In 1995, the opportunity came up to assist the USEPA in developing its ideas on pipe replacement. As much as the USEPA borrowed us from far off Australia, our co-consultant came from the nuclear power industry. That was the starting point. Over a decade later, there is a wealth of experience to draw upon from places such as Seattle, Sacramento, Orange County, Calgary and even Alaska. It has been a journey which we realize is far from over in terms of developing ideas and people. Many lessons have been learnt along the way.

Early implementation focused on a “gaps analysis” approach. Asset management practices were divided into six to ten groupings and an audit was taken of an organization's capabilities in asset management. Gaps were identified and a long list of practices that needed to be remedied or put in place listed and prioritized. An implementation project plan was developed. Whether the plan was even implemented was another matter altogether.

This approach was suitable on a small scale but was not the pathway to changing an organization. The approach failed to recognize the importance of people and organizational culture in achieving significant change. Gaps analysis tools are used today in well developed asset management organizations to assess the organization's overall rating and identify one or two areas for improvement. Their strength lies in this type of application.

The next stage on our journey was to act as trainers in the three basics of asset management viz, service levels, business case evaluation and risk assessment. People were trained in the concepts and practices of modern asset management but they went back into an organization where the approval processes for expenditure were not based on business case evaluation and the concept of risk quantification was an alien language. Understanding concepts and applying them in an organization are two different things.

The latest step in this evolutionary chain is the “learn though doing” approach, which we call ‘action management’. The people and the cultures of an organization are put first and change occurs over a timeframe that the organization can handle through training of staff in real case studies. Business processes are tackled as well so that the way the organization makes decisions changes as well. A case example of this approach has been documented for CSD-1 at Sacramento.

Each organization has differences that require a tailored solution to asset management. Many are municipalities whilst a few are commercial in nature. The scale and the scope of assets managed vary significantly. Success lies in recognizing and tailoring solutions to these differences.

The objective of many asset management decisions takes time to understand. Most asset maintenance and replacement decisions involve situations where you don't have the data necessary to automate the solution. More iterative approaches are needed. Added together this is complex for the newcomer and outsiders to understand.

The dilemma has been to explain how we solve complex asset management problems in simple terms for staff, decisions makers and outsiders. Our approach is to challenge people with three questions. We ask them whether they believe that good decisions will be made when:

Benefits exceed the costs

A triple bottom line approach is taken involving economic, social and environmental perspectives

Risk is taken into account.

After some discussion, people agree or agree to go along with these three principles. We then proceed to show them the logic and mathematics of our decision making for particular assets. If a few experts are in the room who can test our logic and mathematics then we achieve a credible outcome. The focus has to be first on the people and secondly on the content if credibility and enduring success in implementation is to be obtained.

What can be said about the future of asset management? There is now a core of water and wastewater organizations in the USA who have asset management expertise. Some, such as Seattle Public Utilities, have made great dollar gains. There is now pressure on other organizations to get similar gains. The private sector is now realizing that they have billions of dollars of fixed assets on their balance sheets that are not well managed. This will provide another driver. Asset management will go forward.

The USA has a proud history of taking ideas, improving them and developing advanced systems to automate the output. It is likely to be the same with asset management. However, implementation will also rely on putting the people change issue upfront and involving all layers of an organization in the change process. Recent developments in asset management enable this to occur. Interesting times lie ahead in implementing advanced asset management.
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Document Type: Research Article

Publication date: 2008-01-01

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