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Blog December 2023 Updated April 2024

10 Simple Steps to Build a Better Utility Asset Management Plan

Create a roadmap for effective utility asset management with our 10-step guide, whether you are writing your first plan or refining existing guidelines.

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Whether you deliver water services in a large city or energy distribution at a national level, renewing and replacing infrastructure is a never ending task for utility providers. In fact, it’s an essential part of providing cost-effective and reliable public services.

With some infrastructure in service for 20 years or more, managing and maintaining your assets requires a systematic approach, the success of which depends on your asset management plan. This scalable document provides a methodical outline for dealing with ageing infrastructure and equipment, including risk management and maintenance. It’s goal? To ensure your physical assets deliver maximum value over their entire lifecycle.

Why Do Utilities Need an Asset Management Plan?

The primary reason for creating a utility asset management plan is cost. Building a strategic utility asset management plan helps you maximize the value of your capital and streamline your operations for a long-lasting utility.

With a wide range of assets (both fixed and liquid), it is important to manage maintenance wisely in order to get the maximum possible return on investment and there are various industry standards to help you do this.

ISO 55000, for example, provides an overview of the asset management process, describing how to achieve value from physical assets by optimizing cost, risk and performance across the whole asset lifecycle. The US Environmental Protection Agency (EPA) also provides a document explaining the Fundamentals of Asset Management, outlining essential decision and management frameworks.

More than just maintenance, however, developing a long-term plan for assets will help you make decisions about when to repair, refurbish, replace, or augment your assets. By outlining a long-term strategy covering all these elements, you can properly and effectively manage changes over an extended time-frame.

What to Consider When Writing a Utility Asset Management Plan

Before creating an effective utility asset management plan, there are a few things you need to consider.

First, it’s important to assess your current practices including any computerized maintenance systems, capital planning, or standard operating procedures for maintenance. Taking a holistic view can help to identify strengths and weaknesses as well as opportunities for improvement.

Another key step is to create an inventory of your current assets. This should detail when the asset was acquired, the size/capacity, location, installation date, physical condition, remaining useful life, levels of service, maintenance, refurbishment and replacement costs. It will provide an overarching view of each asset’s life cycle.

Now you can identify any risks to your assets and provide solutions on how to avoid them. To calculate the risk value, take the likelihood of failure multiplied by the consequence of failure.

Finally, think about how you will recover your assets by selling excess inventory or refurbished items or returning equipment at the end of a lease. By managing effective reuse or liquidation, an asset recovery plan helps maximize returns.

After considering these key factors, you can create a comprehensive utility asset management plan to properly manage your assets and optimize your operations.

10-Steps to Creating an Effective Utility Asset Management Plan

Whether you are writing your first plan or refining an existing document, our 10-step guide will help you manage the process.

1. Define strategic goals

In order to be successful, your utility asset management plan must be aligned to strategic goals. Remember to make your goals SMART—specific, measurable, actionable, relevant and time-focused—and identify what you see as the outcome of your efforts.

If you don’t know where to start when planning goals, ask yourself:

You don’t have to focus on the details yet—just identify what’s important to your organization and where you hope to improve.

2. Determine critical assets

Your critical assets are what keeps your utility functioning and these should be your main focus. What are your most important assets? Are any at risk? Make sure your assets are in line with your strategic goals and long-term plan for success. If you want to improve data monitoring on assets, identify the tools you will need to accomplish this such as field services and asset management software.

3. Build a maintenance plan

Maintaining assets is a crucial part of your operation. Build a maintenance plan to ensure that all assets are working properly, and be sure to include how frequently you will perform maintenance.

This should include both preventative and reactive protocols: establish who will be involved in maintenance, how often each piece of equipment should be checked, and a summary of standard operating procedures (SOPs), a list of the parts needed, safety procedures and estimated time to complete preventative maintenance tasks.

4. Build an asset recovery plan

Begin your asset recovery plan by compiling a list of all equipment, tools and other resources. Every asset has a pre-allocated lifetime expectation with value depreciation over its lifetime, so consider what’s left of the remaining life cycle. If you’re short on storage, consider removing unnecessary machinery.

The physical and cost data in your inventory will provide a basis to plan and carry out work that restores or replaces an existing asset to its original size, condition or capacity. These decisions must be made on a life cycle basis so that the trade off between maintenance cost and replacement cost can be optimized.

5. Manage data risks

Data is arguably the most important asset your company has. In addition to thinking about how you plan to use data to drive value or adapt to business needs, you also need to protect against data loss. Storage, use, transmission, management and security of data are all key factors.

Conduct an audit to help you understand what data is most crucial to your business and to prevent data risks from occurring, make sure you:

6. Outline workflows

This is a key area for any utility asset management plan, helping you identify what workflow processes need to be in place and who is responsible for what. By giving your team insight and access into real-time workflows and distribution of tasks, everyone is aware of their responsibilities and accountable for work.

If your strategic plan requires new workflows, meet with the relevant team to initiate a conversation about refining and finalizing the process rather than making a top-down decision.

7. Build a financial plan

What is your budget? What finances are needed to successfully execute your utility asset management plan? Review your strategic plan and identify the resources that you will require—then identify if you need to expand your team, accrue more equipment, and if you’ll need financing to make these moves.

8. Choose effective tools and information systems

There are usually significant efficiency gains to be made by integrating asset management software into your plan. You may have existing systems related to maintenance tracking, laboratory, finance, GIS, documentation, or procurement, however integrating disparate tools into one overarching tool can offer advantages. Investigate today’s cloud-based software solutions, such as AMCS Field Services, to determine whether you could increase the productivity of your team.

9. Establish communication

Implementing a new asset management plan will impact the culture of your organization, and good communication is essential for success. Develop methods for change management to ensure this runs smoothly. Likewise, reporting to internal decision makers and external stakeholders is important for communicating asset conditions, investment alternatives and potential risks if assets are not maintained properly.

10. Develop and implement your plan

Based on the preceding steps, begin developing your strategic asset management plan and think about how you will roll this out to your team. Be sure to include short-term and long-term actions to improve asset management practices. You should also think about any specific schedules, resources, priorities, costs and actions necessary to implement the plan successfully.

Conclusion: How Asset Management Software Enhances Your Plan

As critical resources to support society, utility providers must tackle potential infrastructure issues in order to be sustainable. Your asset management plan serves as a roadmap to achieve this, which means it requires a long-term strategy with clear goals and a systematic approach.

As a core element of your plan, asset management software can help you achieve this goal cost-effectively. Implementing the latest cloud-based and mobile-friendly solutions, for example, can help you track asset performance, simplify data collection, improve reporting and promote collaboration.

With the right tools at your fingertips you can manage assets more efficiently for the duration of their lifecycle, reducing costs and ensuring maximum return on investment. Ultimately streamlining complex operations to deliver the foremost purpose of any utility asset management plan: understanding how to perform the right work, at the right time, and for the right reasons.

Discover how AMCS Field Services software could enhance your asset management plan by requesting a software demonstration below.

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