Asset Management Plans: A Road Map to Success – Part 2: Setting Up an Asset Management Plan
With the last post, we discussed why it was important to have an Asset Management Plan and what it can do for you. But knowing you need one doesn’t help you develop a plan to benefit your utility or municipality. This time we’ll discuss the important things to include when setting up an Asset Management Plan tailored to your needs.
What Does an Asset Management Plan Include?
Just like the old saying “every snowflake is unique”, every utility and municipality is unique. What the county down the street needs, isn’t necessarily what you need. But there are some general needs that will be used across the board.
Existing Systems Description: Whether you focus on roadways, water, electricity, gas supply, etc., you have existing systems in place to make your organization run smoothly. Your Asset Management Plan should include a list of these systems and their current conditions. You can include information such as ground water sources, inter-municipal connection supplies, surface supplies, natural gas supplies, issues with deterioration and/or aging, quality data, security information, staffing information, distribution information, etc.
Usage Data: This area will focus on the resources you currently are using. Supply and demand, for one, should be covered if you deal with consumers. For example, if you are a natural gas utility, keeping information on how much is consumed by your customers should be included here. Also, projected consumption should be included, as well. Consumption can change based on weather, economy, or many other factors. Use your forecasted supply and demand to help tailor your Asset Management Plan.
Development: Is your community planning on expanding? More residential, commercial, or industrial tenants will increase usage. Including expected growth in your data prepares you for future changes.
Recommended Improvements: All this data can be compiled to help you determine the next steps for your utility or municipality. You can determine if you have enough resources to meet projected demands. For example, if you operate a water utility, do you have the supplies to meet the demands during a drought scenario? If you do not and are making plans to increase your water supply, do you have the storage capabilities for the increased resources? On the opposite side of the coin, do you have too much supplies? Will your natural resources’ quality deteriorate over time? Once you determine what improvements need to be made, you can make a plan to improve your current systems. You can use these plans to assess your current financial situation to determine what changes you can and need to make. If you can’t afford the changes, you can make a plan to reach that financial level to make the needed changes in the future.
Presenting the Data – Using Tables
You have all this data, neatly compiled in your Asset Management Plan. Now what? All this information can be confusing for even the most well versed individual. Your Asset Management Plan has complied financial, engineering, and planning data in one place. You may find you understand one aspect, but not all areas covered. This is when you need to include all those individuals in your utility or municipality that have a stake in it. The combined understanding of all individuals will help make sense of it all.
One way to make this process clear and concise is to use easy to understand tables. You can break down projected projects on a table including the expected start dates of the project, where the project will occur, a brief description of what the project intends to achieve, and the expected cost. This lets everyone involved easily see what your Asset Management Plan is.
|Expected Start Date||Location||Project||Projected Cost|
|2/1/2015||South Main Street||Replace water main||$X|
|6/1/2015||East River Avenue||Repave road||$X|
|10/1/2015||Valley Drive||Add additional stop light||$X|
Another effective table would include the name of equipment used and the expected life span of that equipment, as well as the current age. While it is unlikely that a backhoe, for example, with a 10 year lifespan would suddenly fall apart at exactly 10 years, knowing that this piece of equipment is coming up on its expected life expectancy allows you to plan financially for repairs or replacement.
|Equipment Name||Life Expectancy||Current Age|
|Backhoe||10 years||7 years|
|Bulldozer||12 years||2 years|
But Why Use Your Asset Management Plan
The Boy Scouts’ motto is “Always be prepared”. And this motto explains why you should use your Asset Management Plan. Knowing that a piece of equipment is nearing the end of its life, or that you are about to enter drought season and will need more water, or that the winter is going to take its toll on your roadways, prepares you to not scramble to financially cover these potential burdens.
Use your Asset Management Plan like a road map. Just like when you’re on a trip, sometimes you have to make unexpected detours or pit stops, but with a road map you are prepared for these events. You can adjust your business strategies, as needed, without major strain on you financially or your resources.
Along the way, things will change. Your supplies will increase or decrease. Equipment will fail earlier or continue years past expectancy. Natural resources may become scarce or bountiful. As these changes happen, update your Asset Management Plan to prepare for the future.
Let’s Get Going
You know what it is and why you need it. Now it’s time to make your own Asset Management Plan. The utility or municipality that is prepared is less likely to be caught unawares and scrambling. Remember to be prepared, be flexible, and change as your environment changes.