asset management utility management the “connection · the manual contains sections outlining...

MWEA/MI-AWWA AM Seminar 2019

Asset Management – Utility ManagementThe “Connection”

Tom DeLaura, PE

Connector

DeLaura Consulting

January 24, 2019

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The “Connection?”

As we go through these presentations

– find your “perspective” of what AM

is, and prepare to “explain” it

Recognize how that “connects” to

Utility Management

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AIM Committee – here to serve

Know what’s been done (resources)

Ask for what you wish to see

Connect with peers in similar situations

AM is all about Money

Provide Visibility

Inform on performance, conditions, risks, costs,

reliability – starts the necessary culture change

“Assign” Costs of Ownership

Labor and materials associated with the correct

assets

Justifying CIP Planning and O&M Programming

based on actual condition and performance

Eliminate Surprises

By planning for them

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How do you manage?

• Balanced Scorecard

• Triple Bottom Line

• Another way?

• AM provides the justification, the

data, the facts, etc. - to accomplish

your “plans”

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Step 1 - Define “Assets” in AM

• AM has been defined a lot of ways, and by

a lot of people

• Assets can be everything you use to

accomplish your mission

• Begin every conversation on AM with a

common ground on definitions

• Resources exist to create your definitions

Asset Management depends on your perspective

on your

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“Assets” (at some level of detail and relationship…)

• Vertical

• Linear

• Facilities/Buildings

• Vehicles/Equipment

• People

• Money

• Documentation

• Knowledge

• Others?

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The manual starts with basic asset management principles

and works through to practical steps for implementing

advanced asset management systems within your

organization.

The manual contains sections outlining asset management

practice in NZ, AUS, SA, UK and US. Loaded with

informative case studies, and presented in a easy to use

format, the International Infrastructure Management Manual

is the ultimate reference document for any asset manager.

Over 20 years ago….

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Asset Management Lifecycle

Manage the entire

life of “assets”

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2001 NACWA (AMSA), AMWA, WEF, AWWA

Managing Public Infrastructure Assets

1. What is the current state of my assets?

2. What is my required level of service (LOS)?

3. Which assets are critical to sustained performance?

4. What is my best O&M and CIP investment strategies?

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

EPA’s Five Core Questions

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EPA’s 10 Step Process

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Triple Bottom Line

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MWEA/MI-AWWA AM Seminar 2019

Affordability

MWEA/MI-AWWA AM Seminar 2019

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Resources

Accountability

Tools

Training

Execution

Vision

Mission

Goals

Performance Measures

Role of Performance Management

Strategic Plan

Implementation

Plan

Communication

Corrective Action

Plan – Do – Check - Act

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Those which monitor performance

against pre-established

targets or industry standards.

What are “Effective” Metrics?

If you don’t know where you are going, and you

don’t know how you are doing, you won’t know if

you ever get there!

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Lord Kelvin said it first

“When you can measure what you are speaking about, and express

it in numbers, you know something about it; but when you

cannot measure it, when you cannot express it in numbers, your

knowledge is of a meager and unsatisfactory kind.”

Measure what counts.

Measure what you can control.

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Effective KPIs

Objective

Balanced

Defined Targets for Levels of Performance

Linked to Strategic Plans

Supported by All

Follow Industry Standards

Sustainable (as defined by the KPIs)

MWEA/MI-AWWA AM Seminar 2019

Effective Utility Management

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“Attributes of the Best Managed”

“Water Sector Utility Management Strategy” - created in

March 2007, by seven “Collaborating Organizations”

• Water Environment Federation (WEF)

• National Association of Clean Water Agencies (NACWA)

• United States Environmental Protection Agency (EPA)

• Association of Metropolitan Water Agencies (AMWA)

• American Public Works Association (APWA)

• American Water Works Association (AWWA)

• National Association of Water Companies (NAWC)

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Effective Utility Management

www.epa.gov/waterinfrastructure/pdfs/

www.waterEUM.org

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The 10 Attributes

• Product Quality

• Customer Satisfaction

• Employee and Leadership Development

• Operational Optimization

• Financial Viability

• Infrastructure Stability

• Operational Resiliency

• Community Sustainability

• Water Resource Adequacy

• Stakeholder Understanding and Support

MWEA/MI-AWWA AM Seminar 2019

This publication is made possible by AWWA Utility

Benchmarking Program Participants, and it allows

utility managers to use data and analyses to determine

how their utility’s performance compares to the water or

wastewater industry.

The report includes performance indicators for five

areas of operations: Organizational Development,

Customer Relations, Business Operations, Water

Operations, and Wastewater Operations.

The 2018 publication includes 54 key performance

indicators.

2018 AWWA Utility Benchmarking

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‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08

Lost & Unaccounted For Water

Regulatory Guideline

Best Practice

Industry

Standard

Utility Target

How are we doing??

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4

6

8

10

(%)

Benchmarking vs. Performance Management

Performance Management - The process of monitoring organizational

performance against pre-established targets.

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Organizational Development (contents)

• Organizational Best Practices Index (AM)

• Employee Health & Safety Severity Rate

• Training Hours per Employee

• Customer Account Ratios

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Organizational Best Practices -Measured by 7 Mgmt Practices

• Strategic Planning

• Long-term Financial Planning

• Risk Management Planning

• Cohesiveness in Measures

• Optimized Asset Management

• Performance Measurement

• Customer Involvement

• Continuous Improvement

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Moneyball

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What are the “Best” Performance Measures?

20 Triple Doubles/Year

1.7 ERA

.8851 Save Percentage

8 Minute Mile

98 Bowling Average

52 Hit by Pitch

5 Stanley Cups

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Performance Measures Matter

200 vacancies

25 breaks / year

45% preventive/reactive maintenance ratio

Avg. 98 days to hire

2.5% turnover rate

A+ bond rating

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Performance Measures Matter

90% response time in less than 45 minutes

7 days emergency storage capacity

Avg. 45 seconds/customer call

$25/year/customer on public education

$350/MG treated water cost

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What are your peers doing?

• A recent presentation brought AM results that

requested changing a current level or replacing 3

miles/year of main to 8 miles/year based on “heat

maps” and water quality reports, as it referenced

a nationally recognized measure of an

“optimized” utility having 15 breaks/100 mi/yr

• It showed a fully vetted analysis of what needs to

be done – and that there were factors outside of

age, or even pipe type, that justified adjusting

plans and budgets

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BalancedScorecard

Goals &Measures

Customer

Perspective

How do we look

to customers?

Financial

Perspective

How do we look

to stakeholders?

Internal

Business

Perspective

What must we

do to excel?

Innovation

& Learning

Perspective

Can we continue

to improve and

create value?

Source: The Balanced ScorecardKaplan & Norton

Keep Perspectives Balanced

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Asset Management is Utility Management

• You’ve always been doing AM, you just didn’t call

it that

• Make your definition of Asset Management

• AM is not “shelfware” – a report, a plan; it is your

lifestyle

• KPIs that align with plans and achieve objectives

• Plan with open eyes and an informed perspective,

and connect your plans in cohesive actions and

common goals

• Act with confidence

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AM is Utility Management

• CIPs/O&M – budgets justified

• Perspectives are balanced

• Provides answers to “Did you know…..?”

• Use today as “reference points” while you

gather perspectives from your peers

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Asset Management is Utility Management

• Inform your perspectives, beginning with higher

perspectives, and adjust the amount of detail as

you hear from peers, and change the culture on

capturing “data” that can better match goals to

realities

• Adjust, as you progress

• Prepare: CIPs; O&M; Strategic Plans – that are

structured as required/expected, based on factual

data, to communicate needs, and open the dialog

on how to reach common goals (health, safety,

service)

MWEA/MI-AWWA AM Seminar 2019

Tom DeLaura

tom.delaura@gmail.com

Thank You