Good practice and standards set strict requirements for optimization and continuous improvement of physical asset management. The new international standard for asset management provides a framework for asset intensive industries to develop and implement sound asset management systems. Unlike the largest and most global industries, there are very few, if any, providers of services in the water sector that have developed and implemented a full set of best practices, in compliance with specifications created by the standard. Oslo Water and Sewerage Works (Oslo VAV) has worked systematically to evolve its asset management system by standardizing work processes and operating procedures in its Business Process Management System, implementing good practice in infrastructure asset management, and by improved management and control of the private contractor that operates the wastewater treatment plant's processes and activities. This paper provides insight into Oslo VAV's asset management system, assessment of current practice vs. best practice for complying with the standard and high priority areas for improvement.
INTRODUCTION
The European water supply and sanitation sector comprises a wide range of institutional models, with different degrees of external autonomy in setting tariffs and sourcing external financing. Some important challenges with regard to sector fragmentation, efficiency, and financial viability have already been addressed in Europe, in countries that have implemented water sector reform recently (Denmark, Italy, Scotland, The Netherlands) or where changes are under way (Norway, Sweden).
In Norway, the Act providing public ownership of water supply and sanitation systems specifies that they can be operated by private sector enterprises, although this is rarely done. The water infrastructure is operated by the relevant municipality, through inter-municipal arrangements, or as consumer-owned cooperatives. Oslo Water and Sewerage Works (Oslo VAV) operates as part of the Oslo municipal government. It is entrusted with investment and operation, and the maintenance and renewal of facilities for water supply and sanitation serving 650,000 people. It operates on a full cost recovery basis. Water- and sanitation- related charges are collected for Oslo VAV by the city council, which incorporates them into the council tax bill.
Over the past decade, the city of Oslo has financed several complex water and sanitation projects. These have triggered the use of innovative construction technologies and new approaches to design, modelling, measurement, operation and maintenance. The execution and operation of technically complex systems, the increase in necessary new capital investment, the pressure to operate more effectively and efficiently, and the need to aggregate the organizations serving a number of municipalities in the city's metropolitan region, have imposed new requirements for Oslo VAV's financial, operations, human resources and customer management (EAM Europe – Enterprise Asset Management conference, 2014).
Facing a confluence of challenges, Oslo VAV is under mounting pressure to revise and improve its asset management principles and practices. The recently introduced PAS 55-1:2008/ISO 55001: 2014 standard has been used to perform a preliminary gap analysis and maturity assessment.
BUSINESS PROCESS MANAGEMENT SYSTEM AS A FRAMEWORK FOR ASSET MANAGEMENT
The pressure to operate more effectively and efficiently is driving public works agencies and water utilities to focus on business process management improvement and optimization. In 2011/2012 Oslo VAV started a Business Process Management project to optimize multi-tasks through multiple activities across multiple processes. The project has evolved through collaboration between self-organizing, cross-functional teams and is expected to end in 2016.
- Provision of a structure for understanding how the organization operates;
- Standardization of processes and best practice, with clear roles and responsibilities;
- Easy access to correct information;
- Compliance, a system for meeting internal and external requirements;
- Retrieval of tacit knowledge and competence documentation, and access to other discipline areas.
Oslo VAV BPMS architecture with management, core and support processes (lower process levels contain flow diagrams displaying activities, roles, responsibilities, supporting documents, guiding rules and documentation). (a) Management processes. Long-term action plans include master and investment plans. (b) Core processes (* 2: Operations; 3: Monitoring; 4: Control and maintenance activities). (c) Support processes.
Oslo VAV BPMS architecture with management, core and support processes (lower process levels contain flow diagrams displaying activities, roles, responsibilities, supporting documents, guiding rules and documentation). (a) Management processes. Long-term action plans include master and investment plans. (b) Core processes (* 2: Operations; 3: Monitoring; 4: Control and maintenance activities). (c) Support processes.
MAIN COMPONENTS OF OSLO VAV'S ASSET MANAGEMENT SYSTEM
Oslo VAV's portfolio of water resources, water supply and sanitation assets comprises 37 dams for raw water intake from lakes, two drinking water treatment plants, 19 water tanks, 30 drinking water pumping stations, 1,550 km of water mains, 75 wastewater pumping stations, 2,250 km of sewers and 10 flood retention basins. Oslo VAV owns Bekkelaget wastewater treatment plant, which is operated by a private contractor, and part-owns the regional wastewater treatment plant VEAS, which is run by an inter-municipal organization. Acting as a municipal service provider by tariffs being set by city government, Oslo VAV is responsible for implementing regulations and technical guidance in relation to its operations, and the estimated replacement value of its assets is 9.5 billion euro (10.5 billion USD).
Main components of VAV's asset management system.
To meet new, more stringent regulatory requirements related to safety and the security of critical infrastructure, Oslo VAV has assessed risk throughout the urban water cycle using a Water Cycle Safety Plan (WCSP) framework. Integrated and system level analyses were applied to analyze cascades of unwanted events. The fault tree analytical technique was used to assess risk at strategic works (treatment plants, water and wastewater pumping stations, and critical servers). The emergency plan, and security management and preparedness system (Crisis Information Management, CIM) are based on the identification of important assets, a risk analysis based on major threat scenarios, and counter-measures and procedures.
SELF-ASSESSMENT GAP ANALYSIS OF OSLO VAV ASSET MANAGEMENT
Like many other public agencies and utilities, Oslo VAV seeks to consolidate and optimize its asset management process without sacrificing safety or customer service quality. As an initial step, a ‘gap analysis’ has been used to identify improvement opportunities and develop an improvement plan. A workshop for the members of the Scandinavian Water Sector Cooperation was organized in March 2015 to discuss best practice and the common benchmarks necessary to drive management efficiency (The Scandinavian Water Sector Cooperation: Workshop on Asset management 2015). The international standard for asset management ISO 55000:2014 was used as a platform to benchmark asset management practice of six Scandinavian water and wastewater utilities. The PAM self-assessment tool (the previous version of PAS 55-1:2008a, 2008b Assessment Methodology) was used to measure asset management capability and identify areas of improvement. The PAM multi-step requirements checklist of best practice and the results of Oslo VAV's PAM self- assessment and gap analysis are presented in Table 1.
Results of the Oslo VAV's PAM self-assessment and gap analysis
| PAM 55 clause | Observations and evidence |
|---|---|
| General requirements | Oslo VAV understands the need for an asset management system and a few components are in place, but there is no structure linking them. |
| Asset management policy | There is no general asset management policy, only segmented systems. |
| Asset management strategy, objectives and plans |
|
| Asset management enablers (how to) and controls | Some enablers (how to) and controls are in place, but gaps and inconsistencies exist.
|
| Implementation of asset management plan(s) | Oslo VAV has not established process(es)/procedure(s) for efficient and cost effective delivery of the asset management plan(s) or control of life-cycle activities. |
| Performance assessment and improvement | Oslo VAV monitors the performance and condition of its assets. The organization seeks and acquires knowledge about new asset management-related technologies and practices employing specialist organizations, through benchmarking, alliances/contractors/service providers, RD&I activities/results of academic research. |
| Management review | No review is in place as the asset management system has not formally been established, but the organization is aware of the need. |
| PAM 55 clause | Observations and evidence |
|---|---|
| General requirements | Oslo VAV understands the need for an asset management system and a few components are in place, but there is no structure linking them. |
| Asset management policy | There is no general asset management policy, only segmented systems. |
| Asset management strategy, objectives and plans |
|
| Asset management enablers (how to) and controls | Some enablers (how to) and controls are in place, but gaps and inconsistencies exist.
|
| Implementation of asset management plan(s) | Oslo VAV has not established process(es)/procedure(s) for efficient and cost effective delivery of the asset management plan(s) or control of life-cycle activities. |
| Performance assessment and improvement | Oslo VAV monitors the performance and condition of its assets. The organization seeks and acquires knowledge about new asset management-related technologies and practices employing specialist organizations, through benchmarking, alliances/contractors/service providers, RD&I activities/results of academic research. |
| Management review | No review is in place as the asset management system has not formally been established, but the organization is aware of the need. |
The gap analysis shows that high-priority areas of improvement for Oslo VAV asset management include development of a full-scale asset management policy, strategy and asset management plan.
MANAGEMENT BY OBJECTIVES
Management by objectives (MBO) is Oslo municipality's basic management principle (Instructions for performance management in Oslo municipality, City government proposition 1070-15, adopted by the City Government 02.07.2015). This means that the strategic objectives should describe the strategy, and reflect the cause-and-effect thinking, being proactive and as specific as possible, with quantification and milestones. In this context a broad asset management policy should be derived from and be consistent with the strategic plan. The long asset management strategy should include a statement of performance and key performance indicators cascading down the organization from the strategic to the operational level (EN 15341 Maintenance – Maintenance Key Performance Indicators, CEN).
Oslo VAV asset management processes are a mix of applications, practices and procedures that have evolved over time. The focus has been on operational objectives, with a few strategic objectives and none that underpin efficiency (Wilhelmsen & Holmsen 2015). The linking of asset management and financial information will improve the budgeting process for capital and operating costs, and long-term investment decision-making.
MAINTENANCE PRACTICES
Oslo VAV maintenance sections are dealing with a considerable number of different assets. The main common cause of asset maintenance ‘under-development’ is a lack of formal structure for effective maintenance management. A review of current practices in place indicates that Reliability Centered Maintenance (Vatn 2007) would help facilitate continuous improvement in maintenance practices. However, for some maintenance sections (electrical, IT, warehouse, and procurement) a suitable ‘work order release system’ and maintenance resources management system are required before they advance to the implementation of Reliability Centered Maintenance.
CONCLUSIONS
Standardizing and optimizing asset management processes and practices are very important for efficient operation in water utilities, and prerequisites to embarking on 21st century economic models. Analysis of differences between Oslo VAV's asset management processes, tools, techniques, and procedures, and PAS 55-1:2008/ISO 550001:2014 requirements has identified several shortcomings. Development of organizational policy and strategy, improvement of whole life cycle management of assets by integrating financial and technical data, and improvement of ‘under-developed’ asset maintenance practices are identified as high priority areas for improvement.
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