SAM - Strategic Asset Management for Water and Wastewater Assets

SAM - Strategic Asset Management

for Water and Wastewater Assets

Infos

Abstract

This description aims at explaining strategic asset management (SAM) of water and wastewater infrastructures and at the giving an overview of the global development of SAM.

Asset management has a broad range of development and the use of this management method is in steady increase. As a result a lot of different definitions, approaches, methods and tools exist side by side. This summary brings close the key elements of the “art of balancing performance, cost and risk” (according to one of the definitions), works out the development based on asset management schools, gives an insight in the topic on the example of sewer collection systems, shows standardizations according to asset management and indicates approaches, methods and tools.

Definition of Asset Management

Water supply and wastewater utilities are organisations where physical infrastructure assets are important and critical factors in achieving its business objectives and effective service delivery. Asset management (AM) in the water sector can be described as managing infrastructure capital assets to minimize the total cost of owning and operating them, while delivering the service levels customer’s desire. (F. L. Schulting & H. Alegre, 2007)

Components are regularly maintained over long planning cycles, and finally replaced when deterioration outweighs the benefit of further maintenance. Costs are well-distributed over the life of the asset. (EPA, 2002)

Fig.: Asset Management Model (EPA, 2002)

Although the term “Asset Management” is used and discussed in many cases, a uniform definition does not exist. The different definitions are based on the own focus and view angles of the authors. As illustration two broad scope and complementary ones are described below. In the definition of Brown & Humphrey the word “art” aims at pointing out that asset management cannot be seen as an exact science. (F. L. Schulting & H. Alegre, 2007)

Brown & Humphrey (2005):

«Asset management is the art of balancing performance, cost and risk. Achieving this balance requires support from three pillars of competence:

management, engineering and information».

IIMM (2006):

«Asset management (AM) is the combination of management, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost-effective manner».

International Overview of Asset Management Activities and Developments

Although water supply and wastewater utilities managed their physical infrastructure assets with the aim of a due management, most of the used managing instruments targeted only on short time tactic measures. Decisions were often based on the question what to do without considering the overriding goal according to the question: why?

On this reflection asset management was developed, which “brings the attention to the need for adopting a multi-layer planning structure in the total asset management process, which includes planning at a strategic, tactical and operational leve”. (IIMM, 2006)

Fig.: Hierarchy of the management process (GWRC, 2005b)

The term ‘strategic asset management’ as adopted by International Water Association (IWA), aims at bringing the attention for the need of incorporating the strategic vision and planning in the AM approach. (Alegre, 2007)

Fig.: Dimensions of SAM (Alegre, 2007b)

Some of the national/regional approaches to infrastructure asset management like in Australia and New Zealand, Canada, European Union and the UK, have developed to a level that they could be referred to as ‘AM schools’ with impact for beyond their initial range of influence (Alegre, 2007b).

Less attention has been paid on the fact that many developing nations and countries in transition are also facing major challenges related to the management of their water and wastewater assets (Vinnari et al., 2007). But the contributions at LESAM 2007 the 2nd leading edge conference on strategic asset management show that this situation is rapidly changing.

In the following a number of examples of the asset management activities and developments are briefed to give an international overview:

Fig.: Asset Management Schools

Schulting and Alegre (2007) name the following examples of the asset management activities and developments in the global water community – “not comprehensive but more as a ‘tour de globe and selection of flavours’”:

Asset Management around the World:

•Southeast Asia: high level attended workshop to discuss how comprehensive AM can increase productivity and improve efficiency of water utilities in this region
•Malaysia: Strategic Asset Management Plans used as basis for the water reform
•China: framework for water asset management (WAM)
•Japan: Performance indicators for pipeline replacements in an objective and quantitative matter
•Kenya: case study: issue of water sector asset ownership and management in developing countries
•Portugal: several on-going initiatives related to urban water system diagnosis, rehabilitation planning and investment prioritization
•Netherlands: overview of asset management of water-related infrastructure
•Bulgaria: assessment of the historical and current management models
•Denmark: implementation of AM in the the largest utility
•United States: US Guidebook Implementing Asset Management: A Practical Guide and tool: Strategic Infrastructure Management
Planned Learning Environment (SIMPLE), provides a structured approach for learning and applying asset management programs in utilities

Representation of Asset Management using the Example of Sewer Collection Systems:

To give an insight in asset management in the following the key facts are shown on the example of the fact sheet of the United States Environmental Protection Agency on Asset Management for Sewer Collection Systems:

For wastewater management utilities, asset management can be defined as managing infrastructure capital assets to minimize the total cost of owning and operating them, while delivering the service levels customers desire.

Developed to foster more efficient financial and physical resource investments and to prolong the life of infrastructure system components, asset management offers the potential to more than pay for itself over the long term. It can also serve as a logical, cost-effective framework for making organizational changes to meet new environmental regulations and financial reporting requirements.

Each collection system utility is responsible for making sure that its system stays in good working order—regardless of the age of components or the availability of additional funds. Asset management programs with long-range planning, life-cycle costing, proactive operations and maintenance, and capital replacement plans based on ost-benefit analyses can be the most efficient method of meeting this challenge. Use of asset management will help protect sewers and extend financial resources by:

•Making sure components are protected from premature failure through proper operations and maintenance.
•Facilitating proactive capital improvement planning and implementation over longer cycles to reduce annual and overall costs.
•Reducing the need for expansions and additions through demand management (I/I reduction, flow balancing, etc.)
•Reducing the cost of new or planned investments through economic evaluation of options using life-cycle costing and value engineering.
•Focusing attention on results by clearly defining responsibility, accountability, and reporting requirements within the organization.

The key elements of asset management are:

•Level of service definition
•Selection of performance goals
•Information system
•Asset identification and valuation
•Failure impact evaluation and risk management
•Condition assessment
•Rehabilitation and replacement planning
•Capacity assessment and assurance
•Maintenance analysis and planning
•Financial management
•Continuous improvement

These elements should be implemented by everyone in the organization, involving management, financial, engineering, administrative and field staff.

Components of an Asset Management System for a Sewer Collection Network:

Level of service definition

A basic level of service definition for most collection systems will be to deliver reliable sewer collection services at a minimum cost, consistent with applicable environmental and health regulations.

•Ensuring adequate system capacity for all service areas
•Eliminating system bottlenecks due to pipe blockages
•Reducing peak flow volumes through inflow/infiltration (I/I) controls
•Providing rapid and effective emergency response service
•Minimizing cost and maximizing effectiveness …

Performance measurements

Performance measurements are specific metrics designed to assess whether level of service objectives are being met. Some examples of performance measurements:

•Annual performance goals for sewer system inspection, cleaning, maintenance, rehabilitation, and capital improvement
•Correlating grease control education and enforcement measures with expected reductions in the number, distribution, and severity of grease blockages
•Establishing maximum hourly and monthly peak flow volumes
•Establishing maximum emergency response time to emergency calls, tracking customer complaints and claims for private property restoration
•Performing cost-benefit analysis of key completed activities, taking into account expected vs. actual outcome and budgeted vs. actual cost

Information system

How much information is needed to create and implement an asset management system? There is no standard answer. Each utility must analyze its information needs, based on a variety of factors such as asset management goals, performance measures selected, regulatory requirements, and collection system size, complexity, and condition.

Collection system information should be managed by computer to ensure its availability for analysis and decision-making.

Asset identification and capitalization

Asset Identification

Asset identification is the process of identifying and numbering the primary components in the sewer system. Once the components are assigned unique identifiers, the utility can link information systems and aggregate data for financial, economic, technical and management use. Identification begins with architectural or engineering maps and as-built construction or repair records, which may exist in paper or electronic format. Information from these records should be transferred to a database, such as a spreadsheet, relational database, or asset management software program. Each component record includes fields for relevant information.

Asset Capitalization

In general, the capitalized amount of an asset is defined as its acquisition cost (design, construction, land acquisition, etc.), plus capital improvements. Accumulated depreciation is also reported (except for systems accounted for using the modified approach). For collection system utilities, this capitalization amount could be established at the subsystem level—force mains, sewer mains, service laterals, manholes, catch basins, etc., or at the overall system level.

Failure impact evaluation and risk management

The potential impacts from sewer line failures should be assessed on a system-wide basis. The goal is to identify those areas of the system that will have the most impact if a failure occurs, and focus asset management resources to minimize the risk.

Condition Assessment

Condition assessment is performed to identify assets that are underperforming, determine the reason for the deficiency, predict when failure is likely to occur, and determine what corrective action is needed and when.

Rehabilitation and Replacement Planning

Proactive rehabilitation and replacement planning provides the best opportunity for capital cost savings. By rehabilitating or replacing sewers and other components before they fail, the utility automatically avoids costs such as emergency contractor fees, staff overtime, unplanned repairs, and SSO cleanup costs.

Capacity Assurance Planning

In general, capacity planning should be based on:

•Review of operational, SSO, and peak flow data for evidence of existing capacity constraints.
•Analysis of predicted demand for sewer service, based on regional growth patterns. Where possible, sewer planning should be linked to regional land use and/or watershed management planning activities.
•Identification of current and future capacity shortfalls.
•Identification and evaluation of alternatives for correcting the deficiencies, focusing first on those that are contributing to SSOs or peak flow violations at the treatment plant.

Maintenance Analysis and Planning

An effective maintenance program keeps the sewer system running smoothly and helps prevent premature deterioration of components. Planning should be performed annually and updated throughout the year as needed to address changing conditions. Maintenance activities are either planned (i.e., inspecting all major lines in the system every 15 years, cleaning all major lines on a rotating basis every five years) or unplanned (i.e., defect repair, emergency blockage removal).

The asset management goal is to maximize planned maintenance and minimize unplanned maintenance. Planned maintenance is more cost-effective because it is performed on a non-emergency basis, is coordinated with other system operation activities, and provides more opportunity to value engineer activities during the planning process.

Maintenance planning is improved by evaluating the patterns of failures leading to unplanned maintenance to see if they were related to timing (the line failed before the next cleaning was scheduled); ineffective maintenance methods (repeatedly clearing sediment blockages in a sagging line, rather than correcting the sag); or to advanced deterioration or improper design. It is important to document the assumptions, methods, and information used to support maintenance planning analysis.

Financial Management

The goal of sewer system financial management is to identify how much money will be needed to meet level of service goals and maintain the system at or above the identified minimum condition, forecast when the money will be needed, and use the information to set user fees, other revenues, and debt financing.

Continuous Improvement

Continuous improvement processes are based on periodic review of systems against performance measures to identify any shortfalls. Performance measures can be related to level of service goals, condition maintenance goals, or asset management system goals.

Standardizations according to Asset Management

ISO - Standards:

The Technical Committee ISO/TC 224 (Service activities relating to drinking water supply systems and wastewater systems - Quality criteria of the service and performance indicators) of the International Organization for Standardization prepared a three standards series which is according to asset management.

The series includes:

ISO 24510 – Service activities relating to drinking water and wastewater – Guidelines for the improvement and for the assessment of the service to users (service-oriented standard)

ISO 24511 – Service activities relating to drinking water and wastewater – Guidelines for the management of wastewater utilities and for the assessment of wastewater services (management-oriented standard)

ISO 24512 – Service activities relating to drinking water and wastewater – Guidelines for the management of drinking water utilities and for the assessment of drinking water services (management-oriented standard)

This standard proposes a step-by -step process from defining the objectives of the utility to establishing performance indicators of the service, with a loop back to the objectives and to the management, after having assessed the performances, see Figure 7.

Fig.: Step-by-step process from objectives of the utility to PIs

Management components of drinking/wastewater utilities:

It is recommended that the drinking/wastewater utility establishes an integrated management system that would encompass all the management components for providing the drinking/wastewater utility.

Management of a utility requires the integrated management in various fields:

•activities and processes,
•resources,
•customer relations,
•information,
•assets,
•environment,
•risks.

Process management of and within wastewater utilities should be carried out using the methodology of “plan-do-check-act”:

Plan: establish the objectives and processes necessary deliver results in accordance with costumer requirements, the organisation policies and legal requirements.

Do: implement the processes.

Check: monitor and measure processes and product against policies, objectives and requirements for the product and report the results.

Action: take actions to continually improve process performance.

Asset management

In theses standards the terms asset and asset management are apllied in the following:

asset:

capital goods used for the provision of the service

asset management:

processes that enable a water utility to direct, control and optimize the provision, maintenance and disposal of infrastructure assets , including the necessary costs for specified performances, over their life-cycle

Wastewater utilities have tangible and intangible assets.

Management of the assets includes:

•maintenance of the up-to-date system inventory,
•monitoring and registration of data of the condition of the system,
•planning, maintaining or rehabilitating the system,
•optimising depreciation and reinvestment, and
•performing risk management.

All of these actions should aim at ensuring the serviceability of the assets.

CEN - Standards:

The Technical Committee CEN/TC 165 (“Wastewater Engineering”) of the the European Committee for Standardization prepared a standard which is according to asset management for drain and sewer systems: EN 752:2007 Drain and sewer systems outside buildings.

EN 752 provides a framework for the design, construction, rehabilitation, maintenance and operation of drain and sewer systems outside buildings. To acchiev the goals of the EU Water Framework Directive the EN 752 states the use of an Integrated Sewer System Management. Integrated sewer system management is the process of achieving an understanding of existing and proposed drain and sewer systems, and using this information to develop strategies to ensure that the hydraulic, environmental, structural and operational performance meets the specified performance requirements taking into account future conditions and economic efficiency.

The integrated sewer system management process has four principal activities.

•An appropriate level of investigation of all aspects of the performance of the drain and sewers system;
•Assessment of the performance by comparison with the performance requirements including identification of the reasons for the performance failures;
•Developing the plan of measures to be taken;
•Implementation of the plan.

Fig.: The Integrated Sewer System Management Process

The need for further investigation can become apparent either during the performance assessment or the development of the plan.

Integrated sewer system management forms the basis for the operation and rehabilitation of the drain and sewer system. The information is regularly updated for the future management of the drain and sewer system.

This standard contains a list for operation and maintenance planning with detailed descriptions of possible problems in the system which must be taken into consideration by asset management.

Approach, Methods & Tools

Bottom-up and Top- down Approaches

CAR-S and CARE-W

Link between these Approaches

Are you interested in the underlying technique and services of Strategic Asset Management (SAM) for Water and Wastewater Assets?

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References

Brown, R.E., Humphrey, B.G (2005), Asset Management for Transmission and Distribution. IEEE Power & Energy Vol 3 No: 3 May/June 2005.

EPA (2002). Asset Management for Sewer Collection Systems. Fact Sheet. Washington DC: Environmental Protection Agency.

IIMM (2006). International infrastructure management manual, version 3.0 2006, Association of Local Government Engineering NZ Inc (INGENIUM), ISBN: 0-473-10685-X.

ISO (2007 a). ISO/FDIS 24510:2007(E) - Activities relating to drinking water and wastewater services Guidelines for the assessment and for the improvement of the service to users.

ISO (2007 b). ISO/FDIS 24511:2007(E) - Activities relating to drinking water and wastewater services Guidelines for the management and for the assessment of wastewater services.

ISO (2007 c). ISO/FDIS 24512:2007(E) - Activities relating to drinking water and wastewater services Guidelines for the management and for the assessment of drinking water services.

prEN 752rev Final Draft (2007). CEN/TC165/WG22 N 590 (E) - Drain and Sewer Systems Outside Buildings

Schulting, F. L. & Alegre, H. (2007). Global developments of strategic asset management, LESAM 2007, IWA and LNEC, Lisbon, 17-19 October.

Vinnari, E.M.; Nyangeri Nyanchaga, E; Hukka, J.J. (2007). Ownership and Management of water Utilities Assets in Developing Countires: Case Kenya. LESAM 2007, IWA and LNEC, Lisbon, 17-19 October.