Airport Asset ManagementACRP 1-16 Update

David Hein, P. Eng., Principal Engineer

Vice-President, Transportation

2

Outline

• Background to the project• What is Holistic Asset Management?• Main Findings of the Research• Getting Started• Primer Highlights• Guidebook Highlights• Conclusions Minimum acceptable service

level

Overlay

0

100

Now Now + 3Pavement age, years

Now + 9

Micro-surfacing

2

1

Pave

men

t Con

diti

on I

ndex

Minimum acceptable service level

Overlay

0

100

Now Now + 3Pavement age, years

Now + 9

Micro-surfacing

2

11

Pave

men

t Con

diti

on I

ndex

3

Project TeamGHD Consulting Inc.

• Principal Investigator:• Larissa James

• Shivprakash Iyer• Crystal McNeely

• Wayne Francisco• Duncan Rose• Sophie Denford• Keith Brown• Christian Roberts• Rex Harland• Colin James• Scott Sellers

TransSolutions LLC• Gloria Bender• Rex Roe

Applied Research Associates Inc.• David Hein• Allen Parra

• Lawrence Smith PE

4

ACRP 01-16 Project Objectives

• Primer for executive-level decision makers at airports of all sizes• Overview of an asset and infrastructure management program

• Components• Benefits and costs

• Guidebook • Instruction in the development and implementation of an asset

and infrastructure management program• Captures best management practices• Provides guidance in developing and incorporating asset and

infrastructure management programs at airports of all sizes

5

ACRP 01-16 PanellistsChairMs. Karen Scott, P.E.Deputy Executive Director - Planning & EngineeringLouisville Regional Airport Authority

MembersMs. Carol M. F. DavisVice President, Asset ManagementDFW International Airport/Asset Management

Mr. Josh Francosky, AAESenior Airport PlannerHartsfield-Jackson Atlanta International Airport

Mr. Royce HoldenIT DirectorAsheville Regional Airport

Ms. Joyce K. JohnsonPresidentCAD Concepts, Inc.

Ms. Therese "Teri" Norcross, CPAFinance ManagerMissoula County Airport Authority

FAA LiaisonMr. Kevin C. WillisAirport Compliance OfficerFederal Aviation Administration

FHWA LiaisonMr. J. B. "Butch" Wlaschin, P.E.Director, Office of Asset ManagementFederal Highway Administration

Other LiaisonMr. Matthew J. GriffinManager Policy and RegulationAirports Council International - North America

TRB LiaisonMr. Thomas PalmerleeAssociate Division DirectorTransportation Research Board

ACRP StaffMs. Marci A. Greenberger, AAESenior Program OfficerTransportation Research BoardAirport Cooperative Research ProgramMs. Tiana M. BarnesSenior Program AssistantTransportation Research Board

6

Key Airport ParticipantsLong Survey ParticipantsMiami InternationalCorpus Christi InternationalToronto Pearson InternationalCincinnati/Northern Kentucky Int. Churchill ManitobaJackson MunicipalMinneapolis/St. Paul InternationalSacramento InternationalFresno Yosemite InternationalHartsfield-Jackson Atlanta InternationalChicago O’Hare InternationalDallas/Fort Worth InternationalReno-Tahoe InternationalMcCarran InternationalBangor InternationalGreenville Spartanburg InternationalPalm Springs InternationalJacksonville InternationalOakland InternationalCharlottetownMemphis InternationalSeattle Tacoma InternationalVancouver InternationalWinnipeg Airports AuthoritySpringfield Branson NationalSalt Lake City InternationalLouisville InternationalLouis Armstrong New Orleans Int. AddisonSan Francisco InternationalTallahassee RegionalWashington Dulles InternationalNashville InternationalGatwick, UK

Short Survey Participants

Large HubAddison Arlington MunicipalBaltimore Washington InternationalChicago O’Hare InternationalDenver InternationalDetroit MetroGeorge Bush Intercontinental Minneapolis/ St. Paul International

Medium HubAustin Bergstrom InternationalCincinnati/Northern KentuckyColorado Springs MunicipalGeneral Mitchell InternationalLambert St. Louis InternationalManchester Boston RegionalMemphis InternationalSacramento InternationalSouth West FL. InternationalVancouver InternationalAlbuquerque International

Non-HubBangor InternationalGrand Canyon National ParkMetropolitan Knoxville Airport AuthorityMissoula InternationalPittsburgh InternationalSaint John Airport Canada

Small HubSan Diego InternationalAtlantic City InternationalBaton Rouge InternationalCorpus Christi InternationalDes Moines InternationalFresno Yosemite InternationalGerald Ford InternationalGreenville Spartanburg InternationalHuntsville InternationalLong Island MacarthurPreston Smith InternationalTallahassee RegionalTucson InternationalTulsa InternationalValley InternationalWichita Mid-Continent

Site VisitsDallas/Fort Worth InternationalMiami InternationalAddisonGreenville Spartanburg InternationalSacramento InternationalToronto Pearson International AirportBangor InternationalGatwick LondonBrisbane Airport CorporationAucklandCharlotte Douglas International

Conference CallsPort Authority of NY and NJPort of SeattleSarasota InternationalDenver InternationalCincinnati International

7

What is Holistic Asset Management?

“Systematic and coordinated activities and practices through which an organization optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles for the purposes of achieving its organizational strategic plan.”

An organizational strategic plan is defined as:

“ Overall long-term plan for the organization that is derived from, and embodies its vision, mission, values, business policies, stakeholder requirements, objectives and the management of its risks.”

Source: PAS 55 Part 1 2008

8

Main Findings of the Research

Aviation Planning, Seattle-Tacoma International Airport,

“Asset Management is a planned and proactive strategy for optimizing the life of vital facilities.

The business management practices are based on total cost of ownership for ongoing renewal, maintenance and operation. They are a source of competitive advantage and critical to the long term stewardship of airport infrastructure”

• An holistic approach to asset management helps infrastructure managers to:• Do more with less• Identify and manage risks to the business• Make better investment decisions• Extend asset life, reduce downtime, achieve

better control over performance• Align decision makers to a common purpose• Respond more easily to changes in the

regulatory and commercial environment

Examples:• 15% increase in pavement life• Roof condition maintained with 30%

reduction in budget

9

Available Standards

• No current standard for holistic infrastructure management in the US

• ISO 55000 series of standards currently under development• Using the British Standards Institute Publicly Available Specification

PAS 55 as a basis• Due for completion by end of 2013

• Recognized guidebooks for infrastructure asset management• International Infrastructure Management Manual:

• Institute of Public Works Engineering, Australia (IPWEA)• National Asset Management Steering Group, New Zealand (NAMS)

10

11

Asset Management Enablers

• Review infrastructure management to indentify poor performers related to best practices

• Support asset management vision

• Provide centralized leadership for AM Improvement Plan

• Assign a Champion for AM Implementation Program

12

What Asset Management could mean to you? CEO and Board Better understanding of future needs to service customers competitively

Budget and Finance Reduce unforeseen post-budget capital needsProvide 10 year and beyond forecast of capital, operations, maintenance needsPrice forecasts to address changing infrastructure investment needs

Planning Manager Planning requirements for infrastructure and assets included in airport asset management plans

Engineering Manager Greater lead time on project work load, processes for continuous improvement in design and construction standards, improved engineering records, data and knowledge management

Operations Manager Support for and focus on achieving operating efficiency and effectiveness, and service level outcomes

Maintenance Manager Increased support for improved maintenance processes and practices

Environmental Manager Awareness of the environmental consequences of infrastructure failures and ability to pre-plan mitigations

Information Technology Greater awareness and understanding of the specific system functionalities needed to support the business

13

Model Fit with Airport Planning Approaches RISK IDENTIFICATION OPPORTUNITIES

AIRPORTS STRATEGIC PLAN

RISK MANAGEMENT

PLAN

MARKETING PLAN

BUSINESS PLAN MASTER PLAN LAND USE PLAN

INSURANCE AIR SERVICE CONTRACTS FACILITIES ACQUISITIONS

ASSET MANAGEMENT

PLAN

RESOURCE AND STAFFING PLAN

TRAINING AND DEVELOPMENT

PLAN

Business Finance

Planning and Development

Administration

14

Asset Management Governance

• Do you know the required service function of each asset and how the asset is performing in that context?

• Do you know what assets you have and their condition?

• Are you actively managing risk?

• Do you have documented operation, maintenance and capital investment plans?

• Are you balancing business risk with long-term funding and management improvement strategies?

15

Governance Structures

16

Best Management Practices – Asset Management Planning

Leve

ls of

Serv

ice

Conveyor

Baggage Handling System

Passenger Boarding Bridge

Lift Column

17

“10 Step Process” to Asset Management

DevelopAsset

Registry

AssessPerformance,Failure Modes

AssessPerformance,Failure Modes

DetermineResidual

Life

DetermineResidual

Life

DetermineLife Cycle &Replacement

Costs

DetermineLife Cycle &Replacement

Costs

Set TargetLevels of

Service (LOS)

Set TargetLevels of

Service (LOS)

DetermineBusiness Risk(“Criticality”)

OptimizeO&M

Investment

OptimizeO&M

Investment

OptimizeCapital

Investment

OptimizeCapital

Investment

DetermineFundingStrategy

DetermineFundingStrategy

Build AMPlan

Build AMPlan

2. What is my required level of service?

3. Which assets are critical to sustained performance?

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

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

1. What is the current state of my assets?

Source: US EPA Asset Management Training

18

Asset Management Systems

• Integration between financial and technical data and information

• Decision support tools to analyse asset data and information for optimized investment decision making

Work Orders

Preventative Maintenance

Inspections

Resource Labor

Tracking

Service Contract/Vendors

Maintenance of Assets

Rolling Stock

Facilities

Materials

Equipment

Asset Tracking

Inventory Receiving

Historical Data

Budget and Planning

Warehousing

Requisition

Purchasing

Asset Management Data

Hub

Apply data and business rules

using the airport data hub

After data and business rules are applied hand

off to financial management

information system

Financial Management

Information SystemClean Data

Business Rules

Data rules

Above systems update the data hub

To/From

Updates asset management information

system

In addition, applicable functional areas and the

divisions are updated

19

Getting started

• ACRP 01-16 Primer – The “what” and “why” for Executive Management• Overview of an asset and infrastructure management program

• Components• Benefits and costs

• ACRP 01-16 Guidebook – The “how” for Implementers

• Overview of how to implement a framework, develop and implement Asset Management Plans

• Undertake continuous improvement reviews

20

Primer – Table of Contents• Why Asset Management for Airports?• What can Asset Management do for you?• Introduction and Primer Overview• Introduction to Asset Management• Asset Management Policy• Asset Management Objectives, Strategies and Plans• Asset Management Enablers• Implementation of Asset Management Plans• Performance Assessment and Improvement • Management Review• Pulling it all Together: Implementing an Asset Management Framework• Concluding Observations

21

Primer Highlights• Undertake an asset management maturity/gap assessment

to prioritize an implementation roadmap:Primer Table of Contents

What does Asset Management do for you?Introduction and Primer OverviewIntroduction to Asset ManagementAsset Management PolicyAsset Management Objectives, Strategies and PlansAsset Management EnablersImplementation of Asset Management PlansPerformance Assessment and ImprovementManagement ReviewPulling it all Together: Implementing an Asset Management FrameworkConcluding Observations

Series 1 = Your AssessmentSeries 2 = Top 10 % of Airports in the USSeries 3 = Best Appropriate Practice

22

Guidebook – Table of Contents

• Introduction and Guidebook Overview• Implementing an Asset Management Framework:

Establishing the Foundation• Asset Management Objectives• Asset Management Strategies and Plans• Airport Information and Data Systems• Implementation of Asset Management Plans: Lifecycle

Processes and Best Appropriate Practices• Performance Assessment and Improvement • Management Review

23

Guidebook HighlightsSmall Municipal Airport Asset Management Plan (Excerpt)

24

Guidebook Highlights

25

Guidebook HighlightsPavement Management Distress Condition

26

Guidebook HighlightsLife-Cycle Cost Components

27

Guidebook HighlightsRisk Management Plan for a Small Airport

28

Guidebook HighlightsDecision Support ToolsA. Primary Considerations Part A Weighting: 50

Consideration Rating Weighting Weighted Value Low Medium High

Time constraints for implemenation Medium 25.0 15.0 Sufficient time for standard procurement Need to accelerate delivery Insufficient time for standard deliveryCost High 50.0 50.0 No fixed budget Some budget flexibility Fixed budgetWell defined scope Medium 25.0 15.0 Concept only Scope needs refinement Clearly defined scopeTotal 100.0 80.0

Weighted Total: 40.0

B. Secondary Considerations Part B Weighting: 35

Consideration Rating Weighting Weighted Value Low Medium High

Overall complexity High 35.0 35.0 Simple Moderate complexity Significant complexityComplexity of performance requirements High 25.0 25.0 Performance requirements unknown Performance requirements established Performance requirements knownAvailability Medium 20.0 12.0 < 3 possible bidders 3 to 5 possible bidders > 5 biddersOwner experience and resources Medium 10.0 6.0 No experience Some experience Significant experienceAllocation of risks Medium 10.0 6.0 Owner retains majority of risk Risks shared with supplier Risk transferred to supplierTotal 100.0 84.0

Weighted Total: 29.4

C. Other Considerations Part C Weighting: 15

Consideration Rating Weighting Weighted Value Low Medium High

Operational constraints Low 40.0 8.0 Significant operational constraints Some operational constraints No operational constraintsQC/QA responsibilities Medium 30.0 18.0 Owner's responsibility Shared responsibility Supplier responsibilityPerformance guarantees/warranties Medium 30.0 18.0 Short term coverage Medium term coverage Long term warrantiesTotal 100.0 44.0

Weighted Total: 6.6

Sub TotalsA. Primary Considerations 50 40.0 From To Implement Alternative

B. Secondary Considerations 35 29.4 0 50 No

C. Other Considerations 15 6.6 50 65 Can ConsiderGrand Total 100 76.0 65 100 Yes

Decision Yes

Weighting Guidelines

Weighting Guidelines

Weighting Guidelines

Decision Range

29

Example 10 Step Process (Boarding Bridge)1. Develop asset registry2. Assess Performance and Failure Modes

a) Level of service failureb) Economic efficiency failurec) Physical mortalityd) Capacity

3. Determine Residual Life4. Determine Life-Cycle and Replacement Costs5. Set Target Levels of Service6. Determine Business Risk/Criticality

a) Loss of service impact

b) Public health and safety

30

Example 10 Step Process (Boarding Bridge)6. Determine Business Risk/Criticality (Continued)

c) Loss of service impactd) Public health and safetye) Airport credibilityf) Cost of failure (restoration cost)g) Resource and operational impactsh) Level of service impacti) Regulatory violations, air/water/land contamination

7. Optimize Operations and Maintenance Investment8. Optimize Capital Investment9. Determine Best Funding Strategy10. Document the Asset Management Plan

31

Detailed 10 Step Analysis Example• 10 Step Asset Management Plan development process: Example for a Passenger Boarding Bridge (PBB)

What is the State of My Assets? What Funding Strategy?

Installed Date

Asset Class

Original Cost

Estimated Effective

Life

Condition Rating

Current Year 2011 Year $ Years 1 to 10Level 1 Level 2 Level 3 Level 4 Act or Est Tab A Act or Est Tab A

1 - Gate -11 Gate 1 PBB -111PC Air -1111 Air Hose 2010 2 1,275$ 5 2-1112 Condenser 2005 2 2,705$ 15 3-1113 Compressor 2005 3 1,445$ 15 3

-112 400 Hz Power -1121 Cord 2010 5 765$ 5 2 -1122 Plug 2008 5 595$ 3 2

-1123 Retractor/Cable Hoist 2005 5 765$ 15 5-113 Potable Water -1131 Cabinet 2005 7 595$ 15 7

-1132 Hose 2010 7 1,725$ 5 2-114 Interiors -1141 Wall covering 2005 7 340$ 7 6

-1142 Carpet 2008 7 442$ 3 7-1143 Hand rails 2005 7 765$ 15 3

-115 Rotunda -1151 Bearings 2005 3 595$ 15 8-1152 Curtain 2008 7 765$ 3 2-1153 Base Column 2005 3 9,000$ 15 2

-116 Pedestal 2005 7 595$ 15 7-117 Tunnel assembly -1171 Tunnel Assemblies 2005 7 85$ 7 7

-1172 Tunnel Roller Assemblies 2005 3 8,600$ 10 8-118 Wheel Bogie -1181 Assembly 2005 7 595$ 10 6

-1182 Wheel 2005 3 1,360$ 15 8-1183 Tire Pneumatic 2008 3 765$ 3 7-1184 Wheel Motor DC Drive 2010 4 595$ 5 6-1185 Wheel Motor AC Drive 2009 3 4,250$ 5 5-1186 Tire Solid 2005 3 6,800$ 10 6

-119 Lift Column -1191 Lift Column Motors 2005 4 5,100$ 15 6-1192 Lift Column Ball Screws 2005 4 850$ 15 6

-120 Cab Assembly 2005 7 595$ 25 6-121 Cab Curtain 2005 7 765$ 15 6-122 Cab Bumper 2005 7 595$ 15 7-123 Stairs 2005 7 595$ 15 6-124 Bag chute 2005 7 765$ 15 4-125 Use/power meter 2005 5 765$ 15 4

Asset Register and Hierarchy

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

Investment Profile - Passanger Boarding Bridge

Operations $

PM $

Capital $

Avg Annual $

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Capital $ 2,000$ 38,400$ 3,500$ 18,000$ 48,000$ 130,500$ -$ -$ -$ 50,800$

$294,617.85Avg Annual $ $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89 $77,180.89

Annual Depreciation $ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ 6,079.01$ PM $ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$ 32,450$

Operations $ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$ 30,000$

32

Guidebook Highlights

• Also includes a summary of best appropriate practices:• Master Planning• Project Initiation and Delivery• Master Planning• New Capital Asset Project Delivery• Asset Commissioning• Maintenance• Performance Monitoring• Renewal and Decommissioning Planning• Information Systems• Data and Knowledge Retention• Organization and People• Commercial Tactics• Asset Management Planning

33

For more information contact:

David Hein dhein@ara.comLarissa James larissa.james@ghd.com