# Presentation: 432447

## What to expect in the future – Integration of other Management Systems with Asset Management:

**What to expect in the future – Integration of other Management Systems with Asset Management:**

- Sue McNeil
- Urban Transportation Center
- University of Illinois at Chicago

**Portland**
**October 2000**

- What is asset management?
- How does it relate to pavement management?

## Asset Management: A Tool for Managing Highway Assetsor What is Asset Management

**Asset Management: A Tool for Managing Highway Assets****or What is Asset Management**

- Overview

## Overview and Status

- Asset management definitions/goals/attributes
- Asset management components
- History
- Status of asset management in the United States
- So why do State DOTs need asset management?

## Overview and Status 

-  . . . Combines the use of sound engineering principles, accepted business practices, and economic theory to improve the decision-making process

**Overview and Status **
**Asset Management  Definitions**

## Goals

- Goals

- To provide ready access to quantitative and qualitative data
- To facilitate decisionmaking based on data
- To utilize principles drawn from economics, accounting, risk management, and customer service models
- To ensure efficient resource allocation and asset optimization

**Notes:**
Enhance decisionmakers’ knowledge both of inventory and of asset value
Instill a sense of ownership regarding assets at the operator/plant manager level
Recognize data as a “corporate asset”
Lend credibility in decisionmaking
Encourage decisionmakers and managers to “think globally, but act locally”
Provide opportunities to reevaluate standards
Provide a strategic implementation perspective by:
replacing turf battles with teamwork,
including training and communications,
recognizing people as assets,
including system user needs.

## Attributes Required to Realize Benefits

- Common performance measures and criteria
- User-friendly environment
- Customer focus
- Accessibility within agency
- Flexibility
- Link to technical, management, and budgetary processes
- Exchange of information

## Quantifiable Objectives

- Enhance knowledge of inventory and asset value
- Develop links that tie resource allocations to savings from replacement
- Establish standardized processes and protocols
- Consider life-cycle costing

## Benefits of AMS

- Improve program quality
- Improve information and access to information
- Facilitate economic assessment of various tradeoffs
- Improve documentation of decisions
- Improve information on return on investment and value of investments
- Reduce short-and long-term costs

- Any of these sound familiar?

## Asset Management Concept

## Asset Management Concept

## Components of an AMS

- Asset inventory
- Location/Asset Referencing System
- A centralized database
- Analysis tools
- Reporting tools

## Components(FHWA)

- Goals and Policies

- Asset Inventory

- Condition Assessment
- and Performance
- Modeling

- Alternatives Evaluation
- and Program Optimization

- Short and Long- Range Plans

- Program Implementation

- Performance Monitoring

- Budget/Allocations

## Framework for AMS

## Asset Inventory System

- Identification of assets included
- Inventory of basic characteristics
- Assessment of asset conditions
- Estimate of asset age

## Location/Asset Referencing System

- Geographic location
- Reference system
- Identifiers for equipment

## Central Database

- Contains inventory information
- Facilitates exchange of information

## Analysis Modules

- Forecast of Future Conditions
- Impact Analysis of Various Scenarios

## Reporting Modules

- Presentation of Inventory Information
- Presentation of Analysis Results
- Formats:
- Graphics
- Tables
- Maps

## Asset Management versus Managing Assets

- History
- Survey - Status of Asset Management in the United States.

## History

- 1970’s - pavement management
- 1980’s - bridge management
- 1990’s - asset management

## Background

- Recognition of common characteristics
- Projects/ components are parts of networks
- Long time horizons
- Presence of trade-offs
- Indivisibility
- Variability in space and time

- Subject to design standards
- Subject to deterioration
- Subject to uncertainty
- Exhibit many modes of failure
- Hierarchical decision process

## History

- 1991 - ISTEA
- 1994- Road Asset Management Guideline - Austroads
- 1995 - Report on Current Practice - Australia
- 1996 - AASHTO/FHWA Workshop - Public Private Perspectives

- 1997 -
- AASHTO/FHWA Workshop - The Future
- AASHTO Task Force formed

## History 

- 1998
- New York State - Concept Plan
- AASHTO Task Force Strategic Plan
- TAC - Primer on Highway Asset Management
- APWA - Asset Management for the Public Works Manager
- 1999
- FHWA - Office of Asset Management formed
- OECD Asset Management Systems Working group
- FHWA/AASHTO Workshop (December)

## Status of Asset Management in the United States

- Survey Questions
- Inventory of Assets
- Investment Decisions
- Workshop Agenda
- Responses

## Survey QuestionsInventory of Assets

- Asset management responsibilities and contacts
- Inventories and condition by type of asset
- Management systems and performance by type of asset
- Asset valuation

## Survey Questions Investment Decisions

- Integration with management systems
- Decision-making tools for investment
- How tools are used
- Use of tools across modes
- Analysis to make allocations to capital versus maintenance
- Quantitative evaluation of capital, operational or maintenance expenditures needs to improve performance
- Comparison of effectiveness of investments
- Relationship of budget expenditures to system performance
- Mechanisms to provide feedback

## Survey Responses (CONTINUED)

- Number of Responses -- 33
- Points of Contact for Asset Management
- none  --	12, one  -- 13, more than one  --	8
- States with Inventories -- 33
- average per state -- 9
- inventories with conditions -- 66%
- States with Management Systems -- 32
- average per state -- 7
- inventories with performance indicators -- 70%

## SURVEY RESPONSES(CONTINUED)

- States with Inventories -- 33
- average per state -- 9
- percent of inventories with conditions -- 64
- Predominant Inventories (with conditions)
- bridge            --	33	(32)
- pavement          --	32	(32)
- road and highways   --	32	(24)
- traffic signals       --	27	(15)
- grade crossing      --	25	(16)

## SURVEY RESPONSES(CONTINUED)

- States with Management Systems -- 33
- average per state -- 7
- percent of inventories with performance indicators -- 70
- Predominant Systems (with performance)
- pavement          --	33	(30)
- bridge             --	33	(30)
- safety              --	26	(17)
- maintenance       --	25	(17)
- traffic monitoring    --	23	(11)

## SURVEY RESPONSES(CONTINUED)

- Apply tools across modes -- 7
- Analysis to allocate capital vs. maintenance -- 10
- CBA of major maintenance expenditures -- 11
- CBA for operational improvements -- 11
- Evaluate how expenditure improves system -- 17
- Relate budget expenditures to system performance -- 22
- Automatic updating of systems based on expenditures -- 13

## Survey Responses -Conclusion

- Many states have elements of asset management
- for specific types of assets
- for specific activities
- Examples include
- Performance based programming
- Integrated maintenance management
- Integrated management systems
- Preservation and improvement tradeoffs

## Why do State DOT’s need asset management?

- Aging infrastructure
- Preservation, and good business practices provide a foundation
- Customer focus means a shift in emphasis from outputs to performance
- Demand for better accountability
- Magnitude of the investment
- Asset management is a vehicle for delivering

## Premises

- One size does not fit all
- Champions are needed
- Dependent on a corporate database
- Builds on content, concepts and substance of other management systems
- Recognize that organizations have frequent leadership changes, and need to develop a means for continuity in asset management

## Performance What have we learned?

- For example, Minnesota
- Three areas:
- System performance
- Public values/issues
- Organizational Performance

## Performance Minnesota -

- System Performance
- Time/ Directness
- Safety
- Condition of infrastructure
- Access/ Basic service levels
- Public values/issues
- Environment
- Socioeconomics

- Organizational Performance
- Performance/ Productivity
- Progress towards targeted focus areas

## Performance Lessons learned 

- Critical elements
- Focus leadership
- Demonstrated benefit
- Customer involvement
- System managers key

- Experience
- Time consuming
- Expensive
- No single answer
- Not an answer to funding issues

## Performance What are the issues?

- Good data
- Consistent and continued application
- Customer input
- Benchmarking
- Not the answer

## Examples  - how asset management is used

- New York State
- Washington State
- Montana

## NYSDOT’s Program Update Process

- Tradeoff analysis
- Using forecasts to set program goals and allocations
- Examples:

## Slide 42

## Slide 43

## Slide 44

## NYSDOT’s Program Update Process

- Executive Level Review
- Looking across programs and regions
- Direct result of asset management.

## Washington State DOT

- Use asset management for 20-year forecasting of revenues and costs
- Example:

## Highway System Plan

- PPSC
- 6/17/97

***Highway System Plan***

***1999-2018 (1997 Billion $)***

***20 Year Revenue Scenarios***

**$0.0**

**$11.4**

**$18.3**

**$41.0**

## Montana DOT

- Similar budget to some counties
- Asset management is part of the performance planning process
- Examples:

## *

- Performance Programming Annual Cycle

- INVESTMENT ANALYSIS

- PERFORMANCE OBJECTIVES

- RESOURCE CONSTRAINTS

- FUNDING PLAN APPROVAL

- PROJECT NOMINATION

- SYSTEMS PERFORMANCE QUERY TOOL

- TECHNICAL REVIEW

- PUBLIC COMMENT

- STIP APPROVALS

- POLICY DIRECTION FROM STATEWIDE PLAN

**DEC.**

_**APRIL**_

**AUG.**

- Program Development Module

- Funding Plan Module

- Policy Module

- Updated _+_ 5 years

## Funding Plan Module

- Investment Analysis

- Performance Objectives

- Resource Constraints

- Funding Plan

- GOAL:  A matrix with sufficient detail to allow various roll-ups with funding either Directly or Proportionately based on Performance

- NHS STRATEGY
- Financial District

- 2

- 3

- 4

- 5

-  Rehab

- Pav Pres.

- Recon to Geom Design stand.

- Recon to address Capacity

- Rehab /Recon Bridge

- Safety

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- Misc.

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- 1

**Example:**

- How does pavement management fit in?
- OR
- What role does pavement management play in each of these examples?

## Pavement management

- Input to asset management
- Source of data
- Base of experience
- Complement to asset management

## Questions?

- How much should you spend on signs versus equipment?
- How much should spend on maintenance versus expansion?
- What resources will you need 10 years from now?

## Lessons learned from PMS

- Recognition of classes of “users”
- Elected officials
- Budgets
- Impacts
- Future funding
- Administrators
- Data
- Prioirities
- Current status
- Impact of changes (budget)

- Technical staff
- Data
- Analysis methods and procedures
- Models
- Ability to include new technology

## Summary

- Asset management is not a new concept
- Asset management is not a substitute for pavement management
- Asset management is broader than pavements – other types of infrastructure, all phases of the life cycle.
- Asset management uses the same principles as pavement management
- Asset management focuses on the network level
- Asset management is not a system, it is a framework or concept.

## Slide 56

## Resources

- APWA
- FHWA Office of Asset Management

## Coming soon....

- Synthesis of current practice (NCHRP project)
- Asset Management guide
- Training

## Still needed...

- Tools to support asset management
- Educational programs
- Good examples of successful efforts

## Asset management is what you make it!