tom delaura, p.e. eramosa international david vago, p.e ... for asset management.pdftom delaura,...
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Tom DeLaura, P.E.
Eramosa International
David Vago, P.E.
Midwest Asset Management Consultants
1/30/2014 1
Michigan Water Environment Association
Developing An Asset Management Plan Seminar
January 22, 2014
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Manage the entire life of assets, and receive the best return on investments.
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An integrated optimization process of “managing infrastructure assets to minimize the total cost of owning and operating them, while continuously delivering the service levels customers desire, at acceptable levels of risk.”
Managing Public Infrastructure Assets, 2001
NACWA (AMSA), AMWA, WEF, AWWA
“Asset Management” Defined
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• Ongoing Operations and Maintenance
• Focus on performance/requirements/compliance
• Life-cycle cost management
• Focus on money
• Reliability management
• Focus on design and engineering
• Accounting management
• Focus on fiscal responsibility to customer
What is Asset Management??
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Measure what counts
Measure what you can control
“When you can measure what you are speaking about, and
express it in numbers, you know something about it; but when
you cannot measure it, when you cannot express it in numbers,
your knowledge is of a meager and unsatisfactory kind.”
Lord Kelvin
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Role of Performance Management
The business process of monitoring
organizational performance
against pre-established targets.
“You can’t manage what you don’t measure.”
(These metrics will be the basis for establishing risk and criticality)
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Resources
Accountability
Tools
Training
Execution
Vision
Mission
Goals
Role of Performance Management
Strategic Plan
Implementation
Plan
Performance Measures
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Resources
Accountability
Tools
Training
Execution
Vision
Mission
Goals
Performance Measures
Role of Performance Management
Strategic Plan
Implementation
Plan
Communication
Corrective Action
Plan – Do – Check - Act
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Some say “SMART”
Objective
Balanced
Defined Target Level of Performance
Linked to the Utility’s Strategy
Supported by Leadership
Use Industry Standards where Available
Sustainable
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Those which monitor performance
against pre-established
targets or industry standards.
Know where you are going - know how you are doing, so you know if you are getting there!
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• 4 step program for improving performance
and increasing customer satisfaction
• Created key “performance indicators” and
benchmarked them (22 in 5 categories)
• Debate over the “correct” number and type
of indicators continues today
• Data gathering continues, while other
approaches have arisen
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“Water Sector Utility Management Strategy” - created in March 2007, by seven “Collaborating Organizations” • Water Environment Federation (WEF) • National Association of Clean Water Agencies (NACWA) • United States Environmental Protection Agency (EPA) • Association of Metropolitan Water Agencies (AMWA) • American Public Works Association (APWA) • American Water Works Association (AWWA) • National Association of Water Companies (NAWC)
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Product Quality
Customer Satisfaction
Employee and Leadership Development
Operational Optimization
Financial Viability
Infrastructure Stability
Operational Resiliency
Community Sustainability
Water Resource Adequacy
Stakeholder Understanding and Support
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www.epa.gov/waterinfrastructure/pdfs/ www.waterEUM.org
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Organizational Best Practices Index
Employee Health & Safety Severity
Rate
Training Hours per Employee
Customer Account Ratios
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Strategic Planning
Long-term Financial Planning
Risk Management Planning
Cohesiveness in Measures
Optimized Asset Management
Performance Measurement
Customer Involvement
Continuous Improvement
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Customer Complaints
Disruption of Service
Residential Cost of Water/Sewer Service
Customer Service Costs per Account
Billing Accuracy
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Debt Ratio
System Renewal/Replacement Rate
Return on Assets
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Sewer Overflow Rate
Collection System Integrity
Wastewater Treatment Effectiveness Rate
Operation & Maintenance Cost
Planned Maintenance Ratio
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GM or City
Manager
Dept. and Division Management
Managers and Supervisors
Every Employee
Mission/Goals
Organization
Process
Person
Roll Up and
Expand Down
Link the strategic goals to every Employee
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Balanced Scorecard Goals &
Measures
Customer Perspective
How do we look to customers?
Financial Perspective
How do we look to stakeholders?
Internal Business
Perspective What must we
do to excel?
Innovation & Learning Perspective
Can we continue to improve and
create value?
Source: The Balanced Scorecard Kaplan & Norton
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• Provide historic objective performance data
• Set expected levels of performance
• Provide insight into problem areas
• Provide information for decision making
• Provide incentives to high performers
• Translate strategy into operational terms
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20 Triple Doubles/Year
1.7 ERA
.885 Save Percentage
8 Minute Mile
98 Bowling Average
52 Times Hit by Pitch
5 Stanley Cups
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200 vacancies
25 breaks / year
45% preventive/reactive maintenance ratio
$45.30 Single Family Monthly Sewer Rate
Avg. 98 days to hire
2.5% turnover rate
1% R&R rate
A+ bond rating
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90% response in less than 45 minutes
7 days emergency storage capacity
Avg. 45 seconds/customer call
$805 / O&M Cost per MG Water Processed
$25/year/customer on public education
$350/MG treated water cost
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419 Customer Accounts per Employee
33.6 H&S Severity Rate
0.31 MGD Delivered per Employee
36.1 Customer Complaints per 1000 Customers
1.12 Unplanned Disruptions of Service
0.32 Debt Ratio
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Performance Management?
Activity Jan Feb March April Total
Valves Actuated 14 22 15 6 57
Hydrants Repaired 2 0 2 3 2
Hydrants Painted 0 0 14 56 70
Miles of Sewer Cleaned 4 7 2 6 19
Tanks Inspected 3 2 0 1 1
Fleet Vehicles Washed 2 0 13 17 25
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Performance Management
The process of monitoring organizational
performance against pre-established targets.
Time
Gap in Performance to Plan
Valve Actuation Program
% Actuated per Year
100%
0%
Jan Dec
Strategy – Maintain our Infrastructure
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‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08
Lost & Unaccounted For Water
Regulatory Guideline
Best Practice
Industry Standard
Utility Target
How are we doing??
2
4
6
8
10
(%)
Performance Management - The process of monitoring organizational performance against pre-established targets.
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• What are we doing? - Output
• How long does it take? - Time
• How much does it cost? - Cost
• How well are we doing it? - Quality
Did we achieve our Goal? - Outcome
Vacancy Identified
Approval To Fill
Post Job Opening
Qualify Candidates
Select Candidates
Negotiate Terms
Start Date
Utility Hiring Process
“Not everything that can be counted counts, and not everything that counts can be counted.” A. Einstein
So – What do we measure?? - All of these??? - How do we pick???
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Help Understand your Situation
Decide What is Important
Goals to Improve Performance
Use “Tools” and “Dashboards”
Collaborate, Track, Trend, and Act
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Provide Asset Visibility Compare performance, costs, reliability
Assign Total Costs of Ownership Labor and materials charged to the correct assets
Long-Term CIP Planning and Programming R&R&R based on actual condition and performance
Eliminate Fiscal Surprises Budgets and plans built on facts and strategies
Questions?
35 1/30/2014
David Vago, P.E.
Midwest Asset Management Consultants
[email protected] – (313) 570-2496
Tom DeLaura, P.E.
Eramosa International
[email protected] – (313) 610-3559
1/30/2014 36