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A Simple Methodology to Deploy Asset Management and Increase Utility Performance

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Many communities share a common vision to be environmentally sustainable, vibrant, and livable. They also share the goals of providing citizens with safe drinking water, sustainable sanitation and storm drainage, clean air and multi-modal transportation systems. However, at the same time, many communities are struggling with the need for reinvestment in old and deteriorating infrastructure and trying to comply with additional environmental regulations, while meeting citizen expectations to keep rates affordable. This creates the too common situation where the pricing of services does not reflect the real cost of the service. Our utilities face the downward spiral of the condition or failure of infrastructure assets, often resulting in regulatory compliance issues as a result of inadequate financial resources. When infrastructure investments are not made in a timely manner, citizens are faced with service disruptions and unexpected rate spikes caused by necessary repair and rehabilitation on an emergency or unplanned basis.

The City of Albany, Oregon has implemented a proactive program to replace and upgrade its deteriorating and capacity-stressed water and wastewater treatment facilities with state-of-the-art facilities to meet today's needs through 2030, and that are ready to be expanded for future needs to 2070. The City has also implemented a program to systematically identify and restore all of its utility assets to a sustainable condition. This process is often discussed in utility circles as Asset Management. Often the Asset Management process seems overly complex and daunting, leaving many utility managers wondering if it is worth implementing. The City of Albany recognized that much of what was being discussed as Asset Management could be simplified and integrated into existing processes. The approach used to integrate Asset Management principles into the organization was simple to execute and provided the opportunity to increase the overall performance of the utility.

The process used to manage Albany's utility assets is best defined by the DMAIC process (Define, Measure, Analyze, Improve, Control) of structured process improvements, or the lean Six Sigma methodology. For utilities, this translates into a focused method to improve existing internal processes to strategically focus on repair, replacement or rehabilitation of assets at the optimum time to prevent service disruptions, and at the lowest cost to the ratepayers. But how does it work?

Using a formalized set of management problem-solving tools based on structured process improvement principals, the City of Albany Defined the problem by first identifying its high-risk utility assets, Measured each asset's physical condition and likelihood of failure, Analyzed options for the operations and maintenance (O&M) of those assets, Improved the process by modifying the timing of planned improvements for certain assets, and changed maintenance practices to focus on prolonging asset life in the future. The City is currently in the Control phase to document that the process changes implemented results in reduced operating costs.

The City of Albany used private O&M consultants to assist and augment the skills of City staff during the Defining, Measuring, and Analysis steps. Using expertise from the private sector coupled with City staff enabled the City to rapidly assess its most critical assets to develop a priority list of capital improvements that would 1) provide the most efficient risk reduction, and 2) be clearly defensible to the citizen/ratepayer.

The City also required that the process be sustainable in the organization and that maximum technology transfer be used to make City staff self-sufficient in the continued deployment of this effort. Maintenance staff were trained by the professional condition assessment technicians during the initial inspections so that they can perform these tasks during subsequent evaluations. Both the consequence of failure and likelihood (condition) rating systems were formalized and quantified, so that future assessments could be numerically compared to the initial asset inspections, which are established as a baseline. As the condition of assets declines over time, subsequent evaluations will provide data to develop “decay curves” for each asset. These are used to predict when rehabilitation or replacement investments should be made within the capital improvement project process.

Combining a streamlined, top-down – bottom-up approach to asset management, using structured improvement process tools to strategically focus investment decisions based on asset condition, risk, and the likelihood of failure, the City of Albany is working smarter, using its limited funds in the most efficient way.

Document Type: Research Article


Publication date: 2008-01-01

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