Session 2: Understand and

Define the Requirements of

Road Asset Management
Dr Theuns Henning
University of Auckland
18 September 2014
StrategicandLongTermPlanning
ComponentsofAssetManagement
AssetManagement
Component
Purpose Using Risk
DataandDataCollection
ToUnderstandthe
performanceofthe
network
Todeterminehowmuch
dataisneededcriticality
Reportingand
PerformanceManagement
Tocommunicate thestatus
ofnetwork
Highlight criticalareas
LevelofService
Aconversationwiththe
publiconstandards
Riskmanagementand
disasterresponse
Financials ? ?
Decision Making ? ?
AssetManagementPlan
StrategicandLongTermPlanning
StrategicAssetManagement
PASS55
StrategiclevelAM(PASS55)
AssetManagementDecision
Making
FinancialCulculation
Financialforecasts
ArethekeyoutputofanAMplan
Mustbepreparedforatleast1020years
Coveroperational,maintenance,renewaland
capital(new)costs
Belinkedtothemanagementstrategies
Listkeyassumptionsandconfidencelevels
SourceNAMS
ContentsFinancialForecasts
Summaryoffinancialpolicies
DevelopmentContributions
Assetvaluation(ifnotcoveredinasset
descriptionsection)
Methodofdevelopingfinancialforecasts
Confidencelevelsandkeyassumptions
Financialforecasts
SourceNAMS
Modified LOS
and
Capital Works
AMP Forecasts
Current LOS/Budgets
Version 1 Budget
Amended Budget
Financial
Model/
Constraints
LOS Budget Iteration Process
Balanced Budget
Budget Setting Process
SourceNAMS
DecisionMaking
Objectives
Weattempttosimulateappropriatedecision
making,repeatedonlargerscale,consistent
andrepeatable
Choosetheappropriatedecisionmaking
tool/techniquethattargetsthedecision
drivers;
Maketheoutcomesmorevaluable
Generaltechniques
Decisionalgorithms
Prioritisation
MultiCriteriaAnalysis
Optimisation
Lifecyclecostanalysis
OptimiseloS
Riskbaseddecisionmatrices
Riskoptimisation
DecisionAlgorithm
Example:Evaluatingleastcost(PV
ofcosts)
MultiCriteriaAnalysis
Option Grouping
S
o
c
i
a
l
C
u
l
t
u
r
a
l
F
i
n
a
n
c
i
a
l
E
n
v
i
r
o
n
m
e
n
t
a
l
S
u
b
t
o
t
a
l
s
T
o
t
a
l
Product & Service Quality 0 16.6 1.8 0 18.4
Public Impact 0 4.8 0 0 4.8
Business Risk 0 0 5.2 0 5.2
Legal Requirements 3 2 1 0 6
Technical issues 0 0 0 0 0
Performance issues 0 0 0 0 0
Environmental 0 0 2.4 0 2.4
Subtotals 3 23.4 10.4 0 36.8
7. Economic / Financial 0 0 0 20 20
Totals 3 23.4 10.4 20 56.8
Product & Service Quality 0 18.8 2 0 20.8
Public Impact 0 0 0 0 0
Business Risk 0 4.5 0 0 4.5
Legal Requirements 0 0 7.8 0 7.8
Technical issues 3 2 1 0 6
Performance issues 0 0 0 0 0
Environmental 0 0 2.4 0 2.4
Subtotals 3 25.3 13.2 0 41.5
7. Economic / Financial 0 0 0 0 0
Totals 3 25.3 13.2 0 41.5
Do Nothing (Base Case)
Option 1
OptimisationinaNutshell
Deighton
Water
Model
Optimisationexample
Worsefirstisnotcost
effective
SortedaccordingtotheSurfaceconditionin
descendingorder(worstfirst),
Fillthebudgetforyear1;
Theremainingsectionsscheduledforyear1
(oranyyearinfocus)butnotselectedwere
deferredtothenextyear.
ResultsSurfacePerformance
PavementPerformance
CostOutcome
Theaverageroutinemaintenancecostforthe
optimisedprogrammeoverthe20years
analysiswas80%thatoftheworstfirst
routinemaintenancecosts.
Thisrelatestoa10%overallinvestmentcost
savingsfollowinganoptimalprogramme.
Wheredoweuseriskconcepts?
Data
Collection
Preparingfor
disasters
Construction
and
Procurement
Planningand
Design
Network
Operations
Riskbaseddecisionmaking
Source:AS/NZS4369:1995
TreatmentPriorities
Source:(UniServices,Watson)
Consideringfuturerisks thereare
limitations
RISKMANAGEMENTINTHE
MANAGINGOFROADASSETS
Classesofriskstoconsider
- Strategic planning risks
- Asset management planning risks
- Levels of service risks
- Natural event and environmental risks
'Planning'
risks
- Systems / information risks
- People risks
- Financial risks
'Management'
risks
- Procurement risks
- Project management risks
- Contract management risks
- Communication risks
'Delivery'
risks
- Risks common to all assets
- Risks associated with specific asset types
'Physical Asset'
risks
Guidelines
Rolesandresponsibilities
Corporate risk regime Transportation-specific risks
Organisation
personnel
Risk policy
Risk
framework
Risk
monitoring &
reporting
Risk
identification
Risk ranking
Risk
monitoring
Risk
reporting
Risk
mitigation
Mayor &
councillors
Understand
and approve
Understand
Periodically
consider risk
status reports
- - - - -
CEO
High
understanding
High
understanding
Approves risk
status reports
to councillors
- - -
Understandin
g of status of
high risks
Overview of
mitigation
actions
Council risk
coordinator
Intimate
understanding
Intimate
understanding
Preparation of
risk status
reports
Overview to
ensure
consistent
approach
Overview to
ensure
consistent
approach
Coordinated
with TAM
Coordinated
with TAM
Monitoring
effectiveness
of mitigation
actions
Transportatio
n asset
manager
(TAM)
Understandin
g
Understandin
g
Responsible
for transport
aspects of risk
status report
Leader or
champion of
risk
identification
team
Consensus
seeker or
arbiter of
rankings
Overview of
monitoring
actions
Prepares
regular risk
status reports
Supervision of
mitigation
actions
Transportatio
n team
Understandin
g
Understandin
g
Understandin
g
Core part of
identification
team
Core part of
ranking team
Coordinated
with support
functions
Submits
information
for TAM
Undertakes
mitigation
actions
Other asset
teams
Understandin
g
Understandin
g
Understandin
g
Understandin
g and input
(interconnecte
d networks)
Understandin
g and input
(interconnecte
d networks)
Understandin
g and input
(interconnecte
d networks)
Understandin
g and input
(interconnecte
d networks)
Understandin
g and input
(interconnecte
d networks)
Conclusions
Riskmanagementcreatesopportunitiesto
savelivesand$$
Needtogetbuyinfromthetop throughto
manontheground creatingtheculture
Adoptappropriateprocessforsituation
StrategicandLongTermPlanning
ComponentsofAssetManagement
AssetManagement
Component
Purpose Using Risk
DataandDataCollection
ToUnderstandthe
performanceofthe
network
Todeterminehowmuch
dataisneededcriticality
Reportingand
PerformanceManagement
Tocommunicate thestatus
ofnetwork
Highlight criticalareas
LevelofService
Aconversationwiththe
publiconstandards
Riskmanagementand
disasterresponse
Financials
Setthefuture investment
needs
Scenarioanalysis
Decision Making
Maximisingtheoutcomes
forinvestment
Oneofthedecision
methods
AssetManagementPlan
StrategicandLongTermPlanning
References
Hill,F.,&Henning,T.F.(2011).SmartPlanning,SmartPerformance,
SmartOutcomes:TheImpendingDemiseofRiskManagement.
PresentedatIngenium 2011,Wellington,NewZealand.16June
18June2011.
Hill,F.,Henning,T.F.,Smith,B.,&DeverTod,K.(2010).Casestudies
andbestpracticeguidelinesforriskmanagementonroadnetworks.
(415)NZTransportAgencyResearchReport415(Pages:118).
Wellington,NZTransportAgency.Commissioningbody:NZ
TransportAgency.
StandardsNewZealand(2004)Riskmanagementstandard, AS/NZS
4360:2004.Wellington:StandardsNewZealand.
Henning,T.F.P.(2009).TheDevelopmentofPavementDeterioration
ModelsontheStateHighwayNetworkofNewZealand.(PhDThesis,
TheUniversityofAuckland).