What to expect in the future – Integration of other Management Systems with Asset Management:

1. What to expect in the future – Integration of other Management Systems with Asset Management: Sue McNeil Urban Transportation Center University of Illinois at Chicago Portland October 2000

2. What is asset management? • How does it relate to pavement management?

3. Asset Management: A Tool for Managing Highway Assetsor What is Asset Management Overview

4. Overview and Status • Asset management definitions/goals/attributes • Asset management components • History • Status of asset management in the United States • So why do State DOTs need asset management?

5. Overview and Status Asset Management Definitions • . . . is a systematic process of maintaining, upgrading, and operating physical assets cost-effectively • . . . Combines the use of sound engineering principles, accepted business practices, and economic theory to improve the decision-making process

6. Goals • To provide ready access to quantitative and qualitative data • To facilitate decisionmaking based on data • To utilize principles drawn from economics, accounting, risk management, and customer service models • To ensure efficient resource allocation and asset optimization

7. Attributes Required to Realize Benefits • Common performance measures and criteria • User-friendly environment • Customer focus • Accessibility within agency • Flexibility • Link to technical, management, and budgetary processes • Exchange of information

8. Quantifiable Objectives • Enhance knowledge of inventory and asset value • Develop links that tie resource allocations to savings from replacement • Establish standardized processes and protocols • Consider life-cycle costing

9. Benefits of AMS • Improve program quality • Improve information and access to information • Facilitate economic assessment of various tradeoffs • Improve documentation of decisions • Improve information on return on investment and value of investments • Reduce short-and long-term costs

10. Any of these sound familiar?

11. Asset Management Concept

12. Asset Management Concept

13. Components of an AMS • Asset inventory • Location/Asset Referencing System • A centralized database • Analysis tools • Reporting tools

14. Components(FHWA) Goals and Policies Asset Inventory Condition Assessment and Performance Modeling Budget/Allocations Alternatives Evaluation and Program Optimization Short and Long- Range Plans Program Implementation Performance Monitoring

15. Asset Inventory Analysis Modules Central Database Location/ Asset Referencing Systems Report Modules Graphics - Summaries - Map Links Framework for AMS

16. Asset Inventory System • Identification of assets included • Inventory of basic characteristics • Assessment of asset conditions • Estimate of asset age

17. Location/Asset Referencing System • Geographic location • Reference system • Identifiers for equipment

18. BMS Revenues Project BMS Maintenance Accounting Pavement Safety Data Congestion Budgeting Permits Contracts Equipment Materials District and Local Offices Central Database • Contains inventory information • Facilitates exchange of information

19. Analysis Modules • Forecast of Future Conditions • Impact Analysis of Various Scenarios

20. Reporting Modules • Presentation of Inventory Information • Presentation of Analysis Results • Formats: • Graphics • Tables • Maps

21. Asset Management versus Managing Assets • History • Survey - Status of Asset Management in the United States.

22. History • 1970’s - pavement management • 1980’s - bridge management • 1990’s - asset management

23. Recognition of common characteristics Projects/ components are parts of networks Long time horizons Presence of trade-offs Indivisibility Variability in space and time Subject to design standards Subject to deterioration Subject to uncertainty Exhibit many modes of failure Hierarchical decision process Background

24. 1991 - ISTEA 1994- Road Asset Management Guideline - Austroads 1995 - Report on Current Practice - Australia 1996 - AASHTO/FHWA Workshop - Public Private Perspectives 1997 - AASHTO/FHWA Workshop - The Future AASHTO Task Force formed History

25. History • 1998 • New York State - Concept Plan • AASHTO Task Force Strategic Plan • TAC - Primer on Highway Asset Management • APWA - Asset Management for the Public Works Manager • 1999 • FHWA - Office of Asset Management formed • OECD Asset Management Systems Working group • FHWA/AASHTO Workshop (December)

26. Status of Asset Management in the United States • Survey Questions • Inventory of Assets • Investment Decisions • Workshop Agenda • Responses

27. Survey QuestionsInventory of Assets • Asset management responsibilities and contacts • Inventories and condition by type of asset • Management systems and performance by type of asset • Asset valuation

28. Survey QuestionsInvestment Decisions • Integration with management systems • Decision-making tools for investment • How tools are used • Use of tools across modes • Analysis to make allocations to capital versus maintenance • Quantitative evaluation of capital, operational or maintenance expenditures needs to improve performance • Comparison of effectiveness of investments • Relationship of budget expenditures to system performance • Mechanisms to provide feedback

29. Survey Responses (CONTINUED) • Number of Responses -- 33 • Points of Contact for Asset Management • none -- 12, one -- 13, more than one -- 8 • States with Inventories -- 33 • average per state -- 9 • inventories with conditions -- 66% • States with Management Systems -- 32 • average per state -- 7 • inventories with performance indicators -- 70%

30. SURVEY RESPONSES(CONTINUED) • States with Inventories -- 33 • average per state -- 9 • percent of inventories with conditions -- 64 • Predominant Inventories (with conditions) • bridge -- 33 (32) • pavement -- 32 (32) • road and highways -- 32 (24) • traffic signals -- 27 (15) • grade crossing -- 25 (16)

31. SURVEY RESPONSES(CONTINUED) • States with Management Systems -- 33 • average per state -- 7 • percent of inventories with performance indicators -- 70 • Predominant Systems (with performance) • pavement -- 33 (30) • bridge -- 33 (30) • safety -- 26 (17) • maintenance -- 25 (17) • traffic monitoring -- 23 (11)

32. SURVEY RESPONSES(CONTINUED) • Apply tools across modes -- 7 • Analysis to allocate capital vs. maintenance -- 10 • CBA of major maintenance expenditures -- 11 • CBA for operational improvements -- 11 • Evaluate how expenditure improves system -- 17 • Relate budget expenditures to system performance -- 22 • Automatic updating of systems based on expenditures -- 13

33. Survey Responses -Conclusion • Many states have elements of asset management • for specific types of assets • for specific activities • Examples include • Performance based programming • Integrated maintenance management • Integrated management systems • Preservation and improvement tradeoffs

34. Why do State DOT’s need asset management? • Aging infrastructure • Preservation, and good business practices provide a foundation • Customer focus means a shift in emphasis from outputs to performance • Demand for better accountability • Magnitude of the investment • Asset management is a vehicle for delivering

35. Premises • One size does not fit all • Champions are needed • Dependent on a corporate database • Builds on content, concepts and substance of other management systems • Recognize that organizations have frequent leadership changes, and need to develop a means for continuity in asset management

36. Performance What have we learned? • For example, Minnesota • Three areas: • System performance • Public values/issues • Organizational Performance

37. System Performance Time/ Directness Safety Condition of infrastructure Access/ Basic service levels Public values/issues Environment Socioeconomics Organizational Performance Performance/ Productivity Progress towards targeted focus areas Performance Minnesota -

38. Critical elements Focus leadership Demonstrated benefit Customer involvement System managers key Experience Time consuming Expensive No single answer Not an answer to funding issues Performance Lessons learned

39. Performance What are the issues? • Good data • Consistent and continued application • Customer input • Benchmarking • Not the answer

40. Examples - how asset management is used • New York State • Washington State • Montana

41. NYSDOT’s Program Update Process • Tradeoff analysis • Using forecasts to set program goals and allocations • Examples:

45. NYSDOT’s Program Update Process • Executive Level Review • Looking across programs and regions • Direct result of asset management.

46. Washington State DOT • Use asset management for 20-year forecasting of revenues and costs • Example:

47. Highway System Plan Existing Revenues (11.4) Historical Revenue Increases (18.3) Fully Funded Plan (41.0) 20 Year Costs (5) (3) (6) (1) (2) (7) (4) (8) (5) Environmental Retrofit (0.74) (1) Maintenance (2.72) (6) Economic Init. (1.09) (2) Traffic Ops. (0.45) (7) Core HOV Lanes (1.69) (3) Preservation (4.75) (8) Mobility (27.33) (4) Safety (2.11) 1999-2018 (1997 Billion $) 20 Year Revenue Scenarios $0.0 $41.0 $11.4 $18.3 PPSC 6/17/97

48. Montana DOT • Similar budget to some counties • Asset management is part of the performance planning process • Examples:

49. Performance Programming Annual Cycle Updated + 5 years POLICY DIRECTION FROM STATEWIDE PLAN Policy Module * DEC. PERFORMANCE OBJECTIVES RESOURCE CONSTRAINTS INVESTMENT ANALYSIS Funding Plan Module FUNDING PLAN APPROVAL * APRIL SYSTEMS PERFORMANCE QUERY TOOL PROJECT NOMINATION Program Development Module TECHNICAL REVIEW PUBLIC COMMENT STIP APPROVALS AUG.

50. Funding Plan Module Performance Objectives Investment Analysis Resource Constraints Funding Plan GOAL: A matrix with sufficient detail to allow various roll-ups with funding either Directly or Proportionately based on Performance Example: Recon to address Capacity Recon to Geom Design stand. Rehab /Recon Bridge NHS STRATEGY Financial District Rehab Pav Pres. Safety Misc. 1 $ $$ $$$ $ $$ $ $$ 2 $$ $ $ $$ $$ $$ $$ 3 $$ $$$ $$$ $ $$ $ $ 4 $$ $$$ $$ $$ $$ $ $ 5 $$$ $$ $$ $ $$ $$ $