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Achieving Best Appropriate Practice

The SIMPLE tool has been developed around the Quality Framework that:

When the seven quality elements are applied systematically and in an integrated manner, these practices lead to:

  • The lowest possible life cycle costs for sustained performance of the asset base, at the level of risk set by the organization
  • Sustainable world class outcomes in quality and customer service, flexibility, timeliness, innovation, cost and competitiveness.

Not all "world's best practices" are relevant to every organization - an organization may not be culturally ready for certain practices, or the cost to deploy the practices may exceed the return.

 

The difference between "worlds best practice" and "best appropriate practice" is important. Best appropriate practices are those world's best practices that are relevant to an organization at a given point in time. If best appropriate practices are followed, while still not perfect, the very best decisions about the asset base that can be made at that time, will be. We should, therefore, have high confidence that the anticipated outcomes will actually materialize.

 

Organizations need to decide what is appropriate to deliver the outcomes and confidence levels for their own circumstances. To accommodate increasing system demand and associated community needs and expectations, an AM program needs to be developed gradually. TEAMQF is built around a "balanced scorecard". It takes a highly effective, step-by-step approach to identifying which of the best practices and techniques are appropriate- providing an implementation strategy for the organization. The graphic below indicates how an organization can improve its performance rating by following a step-by-step process, moving from "basics" about the core concepts and techniques to best appropriate practice. The organization could complete these steps in any order, providing the activities are programmed in the asset management planning process.

 

 

 

Practices and Processes

Asset management is built around a modest number of core "building block" techniques or "practices and processes". These include:
  • Asset registry hierarchies and data standards
  • Levels of service, condition and residual life assessments
  • Valuation and life cycle costing
  • Risk-consequence determination
  • Optimal renewal decision-making
  • Business risk exposure
  • Confidence level metrics
  • "Whole portfolio" financial planning.
Each of these can be deployed at different levels of sophistication. The organization needs to determine what steps are required to provide the improvements and undertake only those that are warranted now.

The Principles of Sustainable Best Practice Asset Management

An organization that is delivering best appropriate practice in asset management should be able to make the following claims, as these are the principles of sustainable asset management:
  • It knows what assets it has responsibility or legal liability for.
  • It records these assets in a register down to a "maintenance managed item" (MMI) level.
  • It monitors the condition, performance, utilization and costs of assets down to the MMI component level (as justified). It aggregates this data to give outputs of cost and performance.
  • It stores data and knowledge about its assets in suitable corporate information systems that support asset management responsibilities.
  • It understands and records the current levels of service in terms of quantity and quality of service including:
    • Condition
    • Function/size/type (fit for use)
    • Regulatory requirements
    • Reliability
    • Repair or outage response times.
  • It thoroughly understands the critical assets necessary for sustained service levels and either monitors its assets to ensure they don't fail or mitigates the failure.
  • It understands the likely future levels of service required, including regulatory requirements such as:
    • Environmental discharge standards
    • Occupational health and safety regulations
    • Building regulations.
  • It understands customers' "non-regulatory" expectations such as:
    • Appearance of facilities
    • Number of complaints
    • Response times to complaints.
  • It understands the full economic cost and minimum economic cost of service delivery.
  • It understands the long-term capital and recurrent funding needs (20 - 30 year) to meet these regulatory and customer expectations
  • It has pricing and funding strategies that match the needs of the business and ensure sustainability
  • It reports annually in triple bottom line terms, that is, economic, environmental and social
  • It understands the real growth of its business and the way in which the demands for service could alter in the future including changes in:
    • Population, both users and community
    • Unit demand for services
    • Demographics of customers and users.
  • It monitors and reports on the condition, performance and functionality of assets against prescribed service levels and regulatory requirements.
  • It links the asset condition index with service levels at a cost that its customers are willing to pay. If the costs are too high for customers, the organization engages in a stakeholder consultation program to identify trade offs and strategies to better meet customer expectations and service constraints.
  • It is able to understand the future level of service options available and their associated costs.
  • It publishes the options for future service level publicly through its asset management plans, associated long term funding strategies and stakeholder consultation programs.
  • It has uniform processes across the whole organization for the evaluation / validation / approval of any investment in:
    • Capital works
    • Maintenance
    • Operations
    • Asset disposal.
  • It prioritizes the renewals program that sustains existing levels of service before other discretionary works, providing the program is justified through the previous process.
  • It approves capital for new assets and services once the commitment of necessary recurrent expenditure and other non-asset solutions is met.
  • It refurbishes and builds new assets for the future needs of its customers to potential future standards rather than current (past) standards.
  • It assesses the indirect or ancillary cost impacts of inadequate asset condition or performance on its customers, in terms of the economic, environmental and social costs of the consequences of failing to meet its agreed standards or service levels.
  • It uses a variety of practices to drive its Asset Management Improvement Program including the improvement of:
    • Effectiveness through input or process benchmarking
    • Efficiency through output/outcomes benchmarking
    • A business value chain to prioritize business drivers
    • A confidence level rating process to identify where the agency should direct its current resources
    • Critical assets identified through the Asset Management Planning process.
  • The AM Improvement program, and the organization's success at complying with it, is published as part of the annual reporting process.

Only when an organization can confidently claim that all of the above facets of asset management are being practiced, will best appropriate practice in sustainable asset management be achieved, for the benefit of the broader community and the customers being served.

 

A major driving force is the need for asset owners to adopt modern, business-like practices that lead to efficiency and cost-effectiveness. Scarce capital resources can be allocated on a needs or risk (benefit/cost) basis, between opportunities for investment in new assets, or renewal of old assets. The allocation of these resources will become a critical part of the investment policies of all organizations. Depending on the organization's current financial status, investments are often substantially reduced, often to the detriment of the asset's life cycle costs. In general, the overall objectives will be to deliver an acceptable level of service, at the lowest sustainable life cycle cost, at a level of risk acceptable to the community.


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The Seven Quality Elements   A Gap Tool