A Brave New World: Asset management for the water sector
It’s no secret that the water industry faces many challenges and a constantly changing world. In a 2022 report prepared by the American Water Works Association, over 3,700 North American water professionals ranked various issues facing the water sector. The three most pressing issues were:
- Renewal and replacement of aging infrastructure
- Financing for capital improvements
- Long-term drinking water supply availability
Additional large industry issues, as reported by the Institute of Asset Management, include climate change, resilience/futureproofing, equity and social justice, cyber and physical security, and digital transformation/data management.
Identifying isolated solutions to any one of these issues may fail to address or even counteract mitigation efforts for another. Instead, an approach that takes a holistic lifecycle view of assets, people, and systems is needed. A consistent decision-making framework based on risk is also necessary.
Asset management is not a new discipline — people and organizations have been doing it in some form for a long time. However, more recently, asset management has emerged as a formal discipline that organizations effectively leverage to maximize the value of their physical assets, while balancing cost, levels of service and risk. Water professionals and organizations should look to adopt this standardized and disciplined approach to asset management as a core business competency.
Modern asset management is not simply asset maintenance, but rather an integration of diverse disciplines across the organization. Though the model is not prescriptive, asset management typically consists of:
- Alignment of the water utility’s aim or strategic goals to an asset management strategy and plans. For example, the aim could be to deliver safe, reliable drinking water to customers while providing exceptional service in a sustainable manner. The asset management strategy might include customer-centric levels of service such as minimum water pressure, number or duration of failures/outages, and quality objectives that its assets must meet.
- The asset management strategy lays out “rules of the game,” such as how asset decisions (maintenance planning and scheduling, repair versus replace) will be made. It may also specify what asset information (such as condition, run time, total cost of ownership, etc.) will be used to make those decisions.
- Certain asset information in particular, such as the likelihood and consequence of asset failure (risk), can be used as inputs in the strategy. In combination with other asset information, this helps utilities understand which capital investments are urgent and set priorities.
- The asset management strategy drives lifecycle delivery and day-to-day asset activities, from creation/acquisition through disposal, supplying clarity of leadership, teamwork and holistic understanding.
Asset management in action
ISO55000 defines asset management as the “coordinated activity of an organization to realize value from its assets.” What it looks like in practice will vary across organizations, but the following example may illustrate how asset management can function, and how utilities can leverage it to address imminent challenges.
A water utility with several miles of main assets may define its main goal as safe, reliable water delivery. It may even set not-to-exceed standards for outages, leaks, or low pressure/flow events.
To realize its goal from its mains, a water utility must identify and deal with bad actors — mains likely to fail and/or those for which failure would cause significant impact to public health and safety, brand reputation, financial bottom line, and the environment. Disciplined asset management would require the utility to coordinate across its workforce to ensure the right data is collected in order to identify high-risk mains. Such data could include leak events, cost of failure, pipe size, and location.
With coordinated data, the water utility can then prioritize mains for either capital replacement or monitoring. For example, it may choose to prioritize mains with a high likelihood of failure for replacement and mains with a high consequence of failure for proactive leak monitoring. It can even determine a long-term sustainable replacement rate that will keep leak events at an acceptably low level.
This is asset management in action: it is a continuous and coordinated effort across the organization to best manage resources so that they deliver the greatest value as defined by the organization. The water utility makes data-driven decisions on which assets to renew/replace and when. This, in turn, gives it clear vision on financing needs for the future, with strong justification presentable for stakeholders and regulators along the way.
To offer a real-world example, San Jose Water (SJW) serves over a million people in California. The company's system consists of three water treatment plants, 2,400 miles of pipelines, 340 pumps and motors, 100 wells, 120 tanks and reservoirs, and thousands of valves, hydrants, meters, and support systems.
The provider used a thorough asset management approach for a systemic evaluation of critical assets and vulnerabilities for emergency preparedness and natural disaster response planning. It assessed more than 850 threat-asset pairs to develop over 2,500 logged and prioritized risk calculations.
Today, these prioritized calculations inform SJW’s risk mitigation strategy for implementing capital projects; structuring agreements and contracts with outside agencies to serve in critical capacities during large-scale emergencies; and modifying operational procedure and maintenance practices.
There are numerous scenarios, beyond emergency planning or maintenance strategy, where water utilities practice disciplined asset management to gain insight and counter the rising challenges facing the industry.
As more utilities embrace formalized practice and grow more mature in their integrated asset management capabilities, they gain a powerful tool for ensuring resiliency — and unlock great potential to flourish in a brave new world.
