Question 1

Asset Management Strategic Planning

Background

You are an asset manager for a medium sized company, the primary purpose of which is to provide services or products to industrial and/or domestic consumers. Some examples of such an organisation include, but are not limited to:

• Water supply authority
• Sewerage authority
• Road network owner
• Electricity supply company
• Gas supply company
• Telecommunications provider
• Systems network provider
• Power station owner
• Product manufacturer.

Your organisation owns a network of assets that enable it to deliver its services. The assets in the network are of various types, sizes, ages and condition. Because of financial constraints over the past several years, the assets in the network have not been replaced except when absolutely necessary.

Maintenance equipment is also not in a generally good condition. Inspection is mainly by visual means, supplemented where required by more detailed investigation.

While a basic asset management system program is in place, few minor assets are recorded on it. Most assets are still located by traditional methods such as links of key reference points (for example, bends, pits, poles, equipment) to property boundaries and centreline distances, building locations, or similar types of reference points. Other asset information is minimal, and is mainly limited to information that is absolutely necessary for maintenance purposes.

There is concern that your organisation's assets are not always located as per your organisation's records. The situation has been exacerbated by poor record keeping in the past, and by not recording changes when there have been changes to property boundaries, ground levels, and the assets themselves.

This poor state of records makes it difficult for other service providers to have sufficient confidence in the information you supply about your assets for their design, construction and maintenance.

Over the past several years, there have been a steadily increasing number of complaints by users of your products as a result of numerous breakdowns in service and failures. Were it not for the fact that there are a number of barriers of entry to the business in which your organisation is engaged (for example, cost, government licences, technology), and the fact that the charges your organisation has levied for usage of its services are cheap compared with similar services elsewhere, your organisation might by now be in considerable difficulty.

With changes in technology and lessening government controls, there are a number of potential competitors entering the market. The rapid technological changes in the assets under your organisation's control, in asset management processes and methods, and in the types of products delivered by your organisation, are increasingly placing competitors in a position to challenge your organisation to perform.

In search for an answer to what are clearly a number of looming concerns, your organisation has recently appointed you to develop an asset management strategy that meets the board's targets of best industry practice for your particular type of asset network within five years, and a national leadership position within ten years.

Funds - but not unlimited funds - have been made available for this purpose. Your organisation is expecting that the vastly improved standard of service brought by your management skills will bring contented customers who will pay the additional price required for a modern and reliable service.

New technologies are available are expected to assist you to minimise the cost of upgrading your asset, select the best type of maintenance and rehabilitation, and enable your organisation to take a leading position in the asset management field. Other new technologies are likely to enable you to increase the choices available to the consumer and greatly improve the quality of service provided.

Your Task

Write a submission to your chief executive officer of your organisation describing a strategy to review and improve your organisation's assets, their management, and the standard of service which they provide, to achieve the board's goals.

You will need to select the organisation, type of assets and asset network you are managing.

While a real organisation is preferred, you may write your answer for a hypothetical organisation. You should indicate whether the organisation about which you are writing is real or hypothetical.

Your submission should be between 3000 and 4000 words in length and will have, in addition to the body of the report, an abstract, table of contents, background, introduction, conclusion and list of references. Background information should be as brief as possible and include a brief description of your organisation, its asset network, services provided by that asset network, and current state of the network.

At a minimum, your report should address the following specific points:

• Background information about the asset network and the assets in it (this should be sufficient to set the scene for the reader)
• The asset life cycle
• Stakeholder expectations
• The outcomes you want to achieve at the end of the five and ten year periods
• Performance and serviceability requirements and indicators
• Development of a reliable asset inventory
• Deterioration and condition monitoring
• How to achieve optimum performance from the asset network
• Current and future technologies
• Development of a corporate asset management plan
• Use of appropriate asset management systems
• Likely benefits and costs
• Conclusion
• Recommendations.