LATEST TRENDS IN ASSET MANAGEMENT...SYNOPSIS OF ASSET MANAGEMENT WORKSHOP Table 3 - Integration of...

LATEST TRENDS IN ASSET MANAGEMENT

SYNOPSIS OF OUTCOMES FROM OZWATER ‘11

WORKSHOP ON ASSET MANAGEMENT

AUGUST 2011

OZWATER ‘11 SYNOPSIS OF ASSET MANAGEMENT WORKSHOP

TABLE OF CONTENTS

1.0 OVERVIEW ................................................................................................................................................ 3

1.1 BACKGROUND: .......................................................................................................................................... 3

1.2 STRUCTURE OF THE DOCUMENT: ................................................................................................................. 3

2.0 WHERE DOES THE AM STANDARD “FIT”? ........................................................................................... 4

3.0 OUTCOMES FROM THE WORKSHOP: .................................................................................................. 6

APPENDIX A – PRESENTATION MATERIALS ................................................................................................ 11

August 2011 Ozwater ’11 Workshop Synopsis 2


1.0 Overview 1.1 Background:

As the field of Asset Management(AM) is so dynamic, the Australian Water Association’s Asset Management Specialist Network (AMSN) welcomed the opportunity to host a workshop at the recent Ozwater ‘11 conference to discuss and develop some of the latest trends in the field of asset management and obtain feedback from members and asset management practitioners on how they thought these issues may be best addressed.

At the forefront of the changes in our field of practice is the proposed development of a series of International Standards on Asset Management (ISO 55000 series). The process of development of an international standard on AM commenced in 2009 when the International Standards Association received positive feedback from industry on the need for such a standard. The relevant committees were formed in mid 2010 and the draft documentation has been in development since. To date, there have been three (3) formal meetings of the ISO committee for the asset management standard. The first of these meetings (held in London in July 2010) provided an overall framework for the process of development of the standard. The second meeting (Melbourne, Feb 2011) allocated the development of the standard to key working groups with the objective of development of a draft document for review at the third meeting (June 2011).

The Australian water industry has long been recognized, both domestically and overseas, as being at the forefront in development of innovative asset management strategies. Our industry is represented on the standards committee by the Water Services Association of Australia (WSAA’s) Project Leader in Asset Management, Ms Danielle Roche. Consequently, Danielle is probably the best qualified person in the Australian water industry to talk on how the proposed standard will be developed and how it may affect our industry. Danielle provided a superb keynote address at the workshop, which highlighted all aspects of development of the proposed standard. Following on from the keynote address, participants at the workshop were invited to provide their feedback on a range of questions relevant to the field of asset management and specifically to reflect on how these issues could best be accommodated in the developing standard

The purpose of this synopsis is to capture the outcomes from this workshop.

1.2 Structure of the document:

This synopsis has been structured to provide a logical summary of the outcomes of the workshop. Section 1 of this synopsis provides a brief background and overview of the drivers behind the workshop, its objectives and structure. Section 2 of the synopsis provides a summary of how the proposed ISO standard on AM may “fit in” with other key management standards. Section 3 provides a direct summary of the questions discussed and issues raised at the workshop. Appendix A contains a copy of the presentation provided by WSAA



2.0 Where does the AM Standard “fit”? Most practitioners within the water industry are familiar with the range of management standards covered by ISO documents. Perhaps some of the most familiar such standards include the;

• ISO 9000 series – Quality Management; • ISO 14000 – Environmental Management; and • ISO 31000 – Risk Management

Those who are involved with these documents may recognise that each “management standard” has a similar structure and format. The International Standards Organization has developed a framework which is designed to capture the key aspects of the relevant management practice but also provide an element of consistency between management standards. The proposed ISO standards on Asset Management (ISO 55000, 55001 and 55002) will follow this format. The three standards include:

• ISO 55000 Asset management: Overview, principles and terminology • ISO 55001 Asset management: Management systems requirements; and • ISO 55002 Asset management – Guidelines on the application of ISO 55001

In general, ISO55000 and ISO55001 are being developed from the standard ISO template for such management systems. While additional information can (and will) be incorporated into the standard, essential components of the ISO format will be retained. The Guideline still needs to reflect the ISO format; however it will be developed to build upon key existing documents for asset management internationally. From the workshop, two of the key questions which were consistently raised were:

a) How does this ISO standard “fit in” with other ISO standards (ISO 9000,14000, 31000 etc); and

b) How well will it “fit” in the Australian water industry The purpose of this brief discussion is to try and provide a succinct answer to these questions.

The issue of how related standards interact is something that is familiar to the ISO process and is generally accommodated by cross referencing the relevant standards. For example, the extent of inclusion of risk issues within the AM standard will most likely be limited to cross references to the standard on Risk Management (ISO 31000). Such cross referencing of standards ensures that related standards do not contradict one another (or adopt competing methodologies/frameworks). The approach builds a stronger link between all ISO standards. However, the ISO also needs to be relevant in a “stand alone” capacity. For example, an organisation could choose to develop detailed AM strategies in accordance with ISO 55000 without the necessarily developing detailed risk management practices (ISO 31000). While it may be advantageous for the business to develop BOTH frameworks (as each complements the other), it is not a prerequisite.

However, it seems clear that the processes adopted by most ISO management standards are commonly based on quality principles (e.g. “Plan, do, check act”, “audit and compliance” etc). While it seems possible to develop an AM strategy independently of all other standards, it may be



easier for an organisation to develop its AM strategy in a manner which is consistent with (indeed complementary to) that business’ Quality Management processes.

Subsequently, while the intent of the standard will be to allow businesses to develop their AM strategies (in accordance with ISO 55000) independently of all other standards, it’s more likely that strong strategies will be developed in a manner which is interdependent with the other standards.

The second issue of how well the proposed standard will “fit” within the Australian Water industry is also one which was discussed at length at the workshop. At present, Asset Management practice within the Australian Water industry (particularly among the larger urban water authorities) has been developed to a very high level by international standards. The question then arises of how well a more “generic” management standard “fit” within an Australian context. The ISO standard itself will be designed to provide a non-prescriptive framework within which organizations can determine how they may best deploy their limited resources in meeting the objectives of the AM standard. It’s likely that those businesses that are currently operating at a high level of AM will be able to adapt their processes to reflect the ISO framework. Those organizations that are starting the AM journey may benefit more from the ISO standard as it will provide an outline of key issues which need to be considered in developing an effective AM strategy. In either instance (well developed AM or embryonic AM), the standard will provide a central point of reference for how AM may be developed.

So, if the Australian water industry is a fairly advanced AM practitioner, will the presence of a new standard take the industry forward? Perhaps there is a need for a complimentary guidance document which would translate the general AM framework contained within ISO 55000 series into more specific, water industry oriented, ideas. In previous discussion with IPWEA (the association responsible for development of the “International Infrastructure Management Manual” (IIMM)), we understand that the future versions of the IIMM may be developed in a manner which reflects the ISO 55000 framework and, in so doing, become a subordinate standard for asset management of public infrastructure within Australia. Developing a comparable complimentary guideline for the water industry may be a challenge that the water industry could consider in the coming years.



3.0 Outcomes from the workshop: A total of eight questions were posed for discussion at the workshop. The outcomes from this discussion are summarized in the tables below. In addition, several other questions and comments were raised and are captured on Table 9 below.

Table 1 - Scope of the Standard

Question 1 - Scope of the Standard (i.e. what should it cover? What should it leave out?)

Responses/Discussion Points

The standard • Needs to include provision for “environmental assets” (e.g. wetlands/aquifer; other, less

definable assets (atmosphere?) • Need to include consideration of ANCILLARY and SUBSIDIARY impacts of assets (over a

defined timeframe – geological scale? Anthropological?) • Include a link between asset management risk events (incident/failure) to risk management

standards • Include a requirement for appropriate engagement with key stakeholders around the

objectives, implementation and review of AM. This also needs to link to risk ownership/control principles

• The standard needs to adopt a broader definition of an asset – allowing for industry adaptation

Table 2 – ISO 55000 vs. PAS 55

Question 2 - The new standard and PAS55 (how does the ISO compare with the UK document Pas 55? Would a Pas55 audit help in the short term)


Need to determine: • How will existing systems fit into ISO? • Cost implications • Standard vs. guideline • Software systems – templates for software developers • O&M templates for manuals • Tendering for compliance with the ISO (e.g. how to supply manuals, asset maintenance

information) • Implications for utilities using NAMS templates – what are the similarities and differences

with the International Infrastructure Management Manual (IIMM) • Does the ISO prescribe development of an asset register? How advanced does the

organization need to be?



Table 3 - Integration of Management Systems

Question 3 - Integrated Management Systems (i.e. how will the ISO standard “fit” in with other management systems)


Key considerations include: • Safety • 1 x document • Strategic Asset Management • Financial implications • Cap x – delay/deterioration • Need a pot of $ for reactive expenses • Pipe networks vs. facilities • Level of service is paramount. Outcomes need to be driven more by LOS than profit • Development of AM plans uniformly across the industry • Water industry is reactive. Need to drive a more proactive engineering approach • Risk profile • State of the assets • Hazard and Critical Control Point (HACCP) • Quality – material suitability/durability • System information management (e.g. HANSEN) should be ISO 55000 compliant • Potential to create a rod for our own back – need a “get out of jail” clause

Table 4 - Scalability of the Standard

Question 4 - Scalability of the standard (i.e. the extent to which the standard needs to consider the capabilities of ALL businesses – small, medium, large; public vs. private)


• The standard should not be onerous on small organization (nor should it impose a burden on large)

• Recognize organizations which are sub-sets of larger entities • Responsibility vs. ownership – especially for “virtual assets e.g. catchments, demand

management programs, flood management, improved natural assets • Address ownership of asset – should reconcile who bears the risk



Table 5 - Value Proposition

Question 5 - What is the value proposition for the standard (i.e. how will it provide “value for money”; how could it drive innovation?)


• Where assets are owned by a utility but operated by others, the ISO standard may ensure that these assets are well maintained

• Economic regulation is likely to eventually insist on use of the standard to provide credibility for a business’s AM strategy

• Meeting the standard will be proof to a regulator of (at least) acceptable AM practice • A consistent (ISO) framework will allow better benchmarking against peers. • The standard may force an organization to review its processes and document them • The standard may allow an organization to measure its performance, benchmark and

improve • Customers will be more confident about the long term asset reliability

Table 6 - Regulatory Implications

Question 6 - Implications for regulation/certification (will the standard encourage compliance rather than commitment to AM)


Opportunities: • Competition, • Standardizing • Reinforcing the need for other management systems • Common language • Understanding of business needs by third parties • Integration across asset owners • Supports sustainability indicators by regulators

Issues: • Room for innovation • Availability of resources to support the system • Benchmarking against asset owners • Affordability of AM outcomes



Table 7 - Relevance to the Water Industry

Question 7 - Will the standard be relevant to the water industries specific needs?


• Believe relevant to the water industry needs; not so prescriptive to stifle innovation and interpretation in the water industry

• Needs to have a framework that will lead to consistent methodology • The standard will provide an auditing framework • Not so complex that it is not scalable to smaller authorities • Need to ensure that the standard aligns with ISO 9001 etc

Table 8 - AM Capability

Question 8 - AM Capability generally (i.e. what are the skills gaps and training needs for AM in the water industry? Do we need accreditation of practitioners?):


• Deficiency in technical skills/knowledge and experience across life-cycle phases • Understanding is limited in how to apply asset management systems by the technical

experts • Skills/knowledge/understanding of AMS by third party auditors is required • Engineering disciplines or experience across assets (Breakdown of “silos” – designers

talking to operators) • Regulators need a broad knowledge/understanding of AMS • Cost benefits of AMS need to be understood • Boards and executives of asset owning/operating organizations require a basic

understanding of AMS – What they’re in for. • Understanding of the difference between having an AMS and effectively applying it

(evidence) • PAS 55 traffic light tool is a simple survey to ascertain the current status of an organizations

AM approach/maturity



Table 9 - Other issues

Issue Opportunity (how could this change assist the industry?)

Limiting Factors (what could constrain the industry in adopting this standard)

Suggested Actions(what could AWA/Water Industry do to assist resolve the issue?)

Standardizing Standardizes the approaches to AM. Reinforces the need for a Quality Management System

Creates a common language

Improves understanding of business needs

Resources Dovetails in with sustainability indicators. benefits of AM in renewal expenditure/ops expenditure

Applicability The system or process contained within the standard needs to be applicable to an industry where an average of 60% of its assets are underground and unseen. This makes condition assessment very difficult (need to dig up to check out the asset end of life)

Condition assessment needs to be considered but not mandatory

Cross Functional Approach

the standard needs to make sure that AM takes a “cross- functional” team approach

Engineers aren’t accountants and accountants aren’t engineers

New standard should heavily encourage a cross functional team approach (including planning engineers, accountants, risk managers operations and asset managers)




Appendix A – Presentation Materials

A new International Standard for Asset

Management

Danielle Roche

Manager Asset Management City West Water

Program Leader Asset Management Water Services Association of Australia

2

There is an ISO project to

develop a new set of Asset

Management Standards

3

What is AM?

“The life cycle management of physical assets to achieve the outputs of the enterprise” AMC

“Systematic and coordinated activities and practices through which an organization optimally manages its assets, and their associated performance, risks and expenditures over their lifecycle for the purpose of achieving its organizational strategic plan”, IAM

4

Status check on asset management ….

We lack a common language (across sectors)

Ownership of the asset management system is often unclear

We lack information about best practice and processes

We can find it difficult to make an effective case for funding

Our behaviour and decisions tend to be reactive

5

How well do we manage assets?

Reference: Engineers Australia Infrastructure

Report Card 2010

6

And we have failures ….

7

Asset Management in Water Utilities

The goal of a water utility is to

deliver water and wastewater

services

8

Asset Management in Water Utilities

Asset Management in a water utility helps achieve that

goal

the assets

facilitate the delivery

of water and wastewater services

9

The Asset Management Cycle

Plan

Design Construct Commission Record

Operate

Improve Maintain

Monitor Decommission Replace Repair

10

The good news…..

We have the opportunity to improve….

and to help shape the future

11

What is happening in asset management

internationally ?

12

Institute of Asset Management

Advancing the science and practice of asset management in

all industries

Promote high standards of practice and professional

competence

Generate widespread awareness of asset management

13

PAS55

The standard comprises:

Requirements specification for good

practice

Guidance for the implementation of

such good practice

Definition of terms in asset

management

14

PAS55 Structure

Act

Check

Do

Plan

Asset Management Policy

Asset Management Strategy, Objectives and Plans

Asset management enablers and controls

Implement Asset Management Plans

Performance assessment and improvement

Management Review

General requirements

15

PAS55

16

International Organisation for

Standardisation

Network of national standards institutes of 161 member

countries

Central office in Geneva, Switzerland, that coordinates the

system and publishes the finished standards

Australia represented through Standards Australia

ISO standards specify the requirements for products,

services, processes, etc.

17

International Organisation for

Standardisation

ISO standards add value to all types of business operations

They contribute to making the development, manufacturing

and supply of products and services more efficient, safer

and cleaner

They make trade between countries easier and fairer

ISO standards also serve to safeguard consumers and

users of products and services in general

18

BSI Proposal

To develop an international standard for Asset

Management building on PAS55

ISO group met in London to discuss proposal in June last

year

19

Purpose of the London meeting

Get input from different countries

Hear from other ISO standards on possible interactions

Refine scope of standards

Prepare recommendations to ISO Board

Discuss work required to develop the standard

20

Key Outcomes

Management system standard like:

ISO 9001 Quality Management Systems

ISO 14001 Environmental Management Systems

ISO 30001 Risk Management Systems

Based on PAS55

21

Who is involved?

v

22

Australia USA United

Kingdom Sweden Netherlands Canada

23

Participants

Argentina Armenia Australia Austria Brazil Canada

Czech Rep. Denmark Finland France Germany India

Irag Ireland Israel Italy Japan Korea, Rep.

Malaysia Morocco Netherlands New

Zealand Norway Peru

S. Africa Slovakia Spain Switzerland Thailand United

Kingdom

USA

24

Standards Australia has set up a

committee to participate in this

project

25

Mirror Committee

• Asset Management Council

• Energy Networks Association

• Austroads

• Institute of Public Works Engineering Australia

• National Offshore Petroleum Safety Association

• CRC Mining

• CRC Integrated Engineering Asset Management

• Australia Petroleum Production Association

• Water Services Association of Australia

26

What is the process?

27

ISO Process

Preliminary Meeting Program

Approved Develop

documents Documents reviewed

Standard implemented

Up to 3 years

First meeting in London in June 2010

28

Standards Development Process

A new work item proposal

is submitted for vote Proposal

Stage Stage

1

29


A working group of

experts is set up for the

preparation of a working

draft

Preparatory Stage

Stage 2

30


The draft is registered by

the ISO Central Secretariat

It is distributed for

comment and voting until

consensus is reached

Committee Stage

Stage 3

31


The draft International

Standard is circulated to all

ISO member bodies for

voting and comment

Enquiry Stage

Stage 4

32


It is approved for

submission as a final

draft International

Standard if a 2/3rds

majority of the P-members

are in favour

Enquiry Stage

Stage 4

33


The final draft

International Standard is

circulated to all ISO

member bodies for a final

Yes/No vote

Approval Stage

Stage 5

34


The International Standard

is approved if a 2/3rds

majority of the P-members

of the TC/SC is in favour

Approval Stage

Stage 5

35


The final text is sent to the

ISO Central Secretariat

which publishes the

International Standard.

Publication Stage

Stage 6

36


All International Standards

are reviewed 3 years after

publication and every 5

years after

Review Stage

7

37

ISO to Australian Standard

Apply

Use ISO standard

as is

Modify

Make changes to ISO

standard

Reject

Choose not to apply

the ISO standard

38

What happened after London?

39

Initial draft

Draft developed based on PAS55

Put into ISO structure

Developed mainly by BSI/UK team

Developed as a starting point

40

Initial draft

Sent to participating countries for comment

Comments either technical or editorial

Comments collated by ISO secretariat

Inaugural PC251 meeting scheduled

41

Consultation

Process

42

Australian comments on draft ISO Standard

• Greater emphasis on defining levels of service

• Demand management and other non-asset

solutions

• The asset design and selection phase of the life

cycle

• Strategy development

• Financial aspects of AM

• Whole of business approach

• Avoid additional levels of governance

43

Inaugural meeting of PC251

44

Inaugural meeting of PC251

February 2011, in Melbourne

Purpose of meeting:

To review received comments and to create a

second working draft

45

A new ISO standard for

47

Danielle

(WSAA)

Peter

(IPWEA)

Peter

(AMC)

Melinda

(UWA)

Dave

(CRC Mining)

John

(ENA)

Tom

(APESMA)

48

ISO requirements

Structure for management systems standard

Includes identical text and common terminology for all

management systems standards

3 year default development timeline

49

Outcomes of Melbourne meeting

ISO 55000 Asset Management

Overview, principles and terminology


Management Systems - Requirements


Management Systems – Guidelines on the application of

ISO 55001

50

The new ISO standards

ISO 50000 Asset management – Overview principles

and terminology

• overview of the asset management family of

standards

• introduce asset management and describe its underlying principles and the terminology used

51

A new ISO standard

ISO 55001 Asset management – Management Systems

-Requirements

• specify the requirements for an asset management

system to manage assets and asset systems

over their life cycles.

52

A new ISO standard

ISO 55002 Asset management – Management Systems

- Guidelines on the application of ISO 55001

• provide guidelines for the application of the

specified requirements in in ISO 55001

53

To discuss comments received

and to create teams to write the

standard

54

Over 400 comments from

participating countries

Each comment must be

addressed in the standard

US 2.4.3 editorial Clarification; giving examples usually cause more confusion than their inclusion warrants.

Remove the second and fourth sentences. In that context, the existing third sentence becomes non-germane and can also be removed.

55

Working Group 1:

Overview, Principles & Terminology

Working Group 2:

Requirements

Guidelines

56

1. What is asset management and why do we need it?

2. What characterises asset management?

3. What is an asset?

4. What processes do we need for managing the life cycle of

assets?

5.What is an asset management system?

6. What characterises an asset management system?

etc..

Table of Contents

57

2.3 What is an asset and to what types of assets are

we referring?

D Daines

D Roche

J Woodhouse

2.4 What processes do we need for managing the life

cycle of assets?

58

Process

Fit PAS55 to ISO standard format

Take on board comments

Broaden PAS55 scope, make international

Utilise other existing documentation

59

What now?

60

Next steps

Second working draft of Overview and Requirements

documents by June 2011

Applications document by August 2011

Circulate for review and comment

Next meeting to discuss in October in USA

61

London Meeting

Approve Project

Melbourne Meeting

Review draft 1

Washington Meeting

Review draft 2

Next Meeting

Finalise draft

2013

62

Benefits

Achieve and demonstrate efficient use of resources

Improve risk management and corporate governance

Confidence in long term planning and performance

Improve asset performance and service delivery

63

Benefits

Develop common language for international use

Significant opportunity to improve asset management

and outcomes internationally

Improve the ability to benchmark

Australia is heavily involved in the development of the

standards

64

Questions?

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