Towards a new business model for asset management in water sector

Title: Towards a new business model for asset management in water sector
Author(s): H. Ehrenburg, J.B.G. Bruinsma
Paper category : conference
Book title: 2nd International Symposium on Service Life Design for Infrastructures
Editor(s): K. van Breugel, Guang Ye, Yong Yuan
Print-ISBN: 978-2-35158-096-7
e-ISBN: 978-2-35158-097-4
Publisher: RILEM Publications SARL
Publication year: 2010
Pages: 1181 - 1190
Total Pages: 10
Language: English

Abstract: Asset management is defined as the maximisation of the value of assets for all stakeholders over the lifecycle of the assets. To be more specific, it is a range of systematic and coordinated activities and practices through which an organization optimally manages its assets, assets performance, risks and expenditures over their lifecycle for the purpose of meeting strategically defined targets. In the context of this paper, assets are physical items (object and/or people) that are subject to management. Other types of assets which include information, intangible (reputation, knowledge, etc.) and financial assets, are out of scope of this paper. Management of assets means organising the delivery of the desired outcome and dealing with the natural behaviour of systems to develop into chaos. It entails a constant balancing of risks involved with every choice to do (or not do) something. Major benefits of asset management include improved asset performance and optimized return on investments.
Organizations can perform asset management on three different levels: strategic, tactical and operational (Figure 1). Strategic management involves developing a long term vision for 5 to 10 years ahead, developing a mission statement, compiling a balance sheet for the assets and revising the mentioned activities on a yearly basis. Tactical management includes translating the vision into a more detailed business plan for 2 to 5 years ahead, the plan is subject to yearly revisions; allocation budgets (financial and HRM) which are revised on a monthly basis; and dealing with escalations in operations. Operational management consists of planning (daily, weekly to a year ahead), controlling budgets, managing deviations, supervising workers, overseeing suppliers and contractors and dealing with escalations in (technical) operations.
Synchronizing the Asset Management through the three levels is difficult. First of all, the language of the levels differs, which makes intra-level communication challenging.
Therefore, the message must always be ‘translated’ for the next level. Secondly, the decision rates differ: strategic management requires a ‘rate’ of 2 to 4 times a year, while tactical management has a monthly ‘rate’ and operational management maintains a weekly "rate."
Thirdly, the decision making requires a different set of knowledge and experience on each level; this is necessary to make a proper risk analysis for each decision. Hence, it is necessary to develop a methodology for asset management which will allow for optimized synchronizations of activities at different levels.
Gr8 (GREAT) is an asset management methodology developed by Grontmij aimed to optimise asset management process (Figure 2). Gr8 was created to help companies with management of their objectives, goals, values, risks, uncertainties and opportunities. In this paper, a detailed explanation of the Gr8 methodology will be presented together with a case study demonstrating how Gr8 can be applied in for projects in the Water Sector.

Online publication: 2011-04-20
Publication type : full_text
Public price (Euros): 0.00