Matthew Justin, technical director at WSP, explains why asset management matters and what the consequences can be when things go wrong.

Why worry about asset management?

Stretched budgets and reduced investment capital means organisations and their managers have to do more with less. Done right, asset management can find additional value for regulators and other stakeholders, whether in terms of service delivery, life extension or overall financial return.

Organisations need a firm handle on ‘what good looks like’ from a stakeholder perspective, they can then maximise an asset’s utility and deliver service, even in the most dynamic market. For example, Network Rail’s national railway upgrade plan identifies schemes of work (including East West Rail, TransPennine Route upgrade and the Edinburgh Glasgow Improvement Programme) that will allow longer, faster and more frequent trains to run thereby meeting increasing demand for rail services.

To do this amid CP5 and CP6 funding constraints, Network Rail needs a clear asset management strategy and explicit asset management plans that will deliver it. Only in this way can it meet increased ridership needs with assets that are fit-for-purpose and do so at a whole-life cost that is both sustainable for the organisation and acceptable to the regulator. Without a robust and clear asset management strategy, assets could deteriorate and impact on service levels, which could damage our economy at a regional and national level.

What are the consequences of having a poor understanding of your assets?

Public infrastructure owners and private asset owners face risks factors, from financial and health to safety and environmental. To mitigate these risks an asset owner needs to know exactly what they are responsible for, where it is, its condition and how it should be maintained to continue delivering value. An asset’s operating environment and associated systems can also come into play, but the big questions will remain what, where and how.

Photo: Lawrence Clift/ CC BY-SA 3.0.

Not having clear answers to the basics can be significant and even catastrophic. This was the case when in 2007 a 95mph Virgin Pendolino train hit a ‘degraded’ set of points on the West Coast Main Line at Grayrigg and was derailed, killing one person and injuring 80 others. This degradation in combination with a variety of other issues and factors led to this tragic case, the consequences of which were reflected in the human toll and also the loss of service on the route and the loss of a value asset, the train.

Then there were those losses that are more difficult to assess, such as loss of reputation, raised insurance premiums and loss of potential revenue. Whilst such incidents are rare, this incident highlights the importance of knowing one’s assets inside and out so that potentially life-saving interventions can be made.

What are the components of a good asset management strategy?

A good asset management strategy should provide clear line of sight from the asset management policy through to the operational delivery of the asset’s lifecycle. To do so, the strategy must identify and quantify the organisational and asset management objectives and establish a consistent framework that delivers these objectives to optimise value from the assets.

The content and structure of the strategy will depend upon the size and complexity of the organisation and the scope of its asset responsibilities. However, it should also be the result of an iterative process that reflects organisational needs and expectations, and those of the asset. The context in which the assets will be managed across their lifecycle is vital; it allows the asset owner to clearly articulate what the business is about and how the assets fit into the big picture.

A clear context will help users and stakeholders understand the strategy, see where the organisation is going in respect of the assets, the scope of the asset management system and the nature of the assets, along with how they will derive value from the assets themselves.  To establish ‘how’ this will be achieved in a consistent manner and in line with organisational objectives, the strategy should outline a framework that considers approaches to risk management, whole-life costing, information management, and resourcing (human and system). Once the framework is established, SMART objectives will define the overall performance management approach to understanding whether the assets are meeting expectations.

A good asset management strategy is a roadmap to achieving organisational objectives and will focus activity on successful and optimised delivery of organisational objectives.

How is technology changing asset management?

The kind of connectivity represented by the ‘Internet of Things’ – where data from everyday objects is sent and received via the internet to inform performance, schedule maintenance, supplies etc – will produce vastly greater amounts of data for asset owners and operators. But to assimilate this real-time and objective data into informed decisions that optimise interventions and operational activities is a challenge: Gartner estimates that by 2020 there will be 26 billion connected devices in the world, all sharing data at prodigious rates! Organisations are exploring artificial intelligence that enables machines to interpret and act upon this data, while heeding the obvious risks to security of data and systems.

Technology is helping asset owners make better use of stretched budgets. WSP recently carried out a condition assessment study in Asia using drones to survey previously inaccessible bridge bearings and, via the Cloud, we shared LIDAR and video scanning data for tunnel and viaduct surveys with our client. We used handheld devices with GPS to pinpoint faults and classify them, saving time and money and enabling interventions to reduce risk of failure.

Photo: Shutterstock.com

Technology is transforming asset management, but it brings with it new risks and challenges. From a security perspective, hackers could interfere with assets. And organisations could be overwhelmed by data if they do not have a clear strategy or the resources to manage it. This is where good asset management plays its part in managing cost, risk and performance. Technology is an enabler not a solution.

How does asset management impact on safety performance?

Safety issues arise when people come into contact with assets willingly or unwillingly. For example the operation of an asset as part of a job, unauthorised trespass on a railway, or when assets fail to meet a design purpose. The Grayrigg incident falls into the latter category.

Assets can also be intangible. For example, software or asset data where a security breach and the misuse of data could threaten safety. Whilst safety is not a discreet clause (according to asset management standard ISO 55001:2014), it is woven into requirements at all levels. For example, Clause 5.1  (Leadership and Commitment) states asset management system requirements should be integrated into an organisation’s business systems, alignment with health and safety is therefore implied as a legislative requirement.

Clause 6 (Planning) requires ‘Actions to address risks and opportunities for the asset management system’, including the prevention or reduction of undesired effects which implicitly include causing harm to others. Amongst other clauses which impact upon the safe operation and management of assets and the risks arising, the standard also requires the competence of those working for, or under the control of, the organisation.

The standard specifies that organisations not only understand what risks need to be monitored but also that they evaluate and report on the effectiveness of the processes for managing risks, safety being not only a legislative requirement but an implicit objective.

Good asset management balances cost, risk and performance, and failure in any of these areas could impact safety. However, implementation of a robust asset management system will help reduce risks to a minimum, optimise performance and manage cost.

Matthew Justin will speaking at the Rail Asset Management Summit on February 28th on the topic of ‘Moving from BIM to Asset Management’.