Rick Laver

Best Approaches to Build

an Asset Management System
14 February 2023
Outline
1. What is asset management?
2. How does it apply to transit?
3. What are the current best practices in transit asset management?
• What are others doing?
4. How is asset management practiced in other modes?
• Lessons from the highway community
5. Where do we go from here?

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What is Asset Management?

3
What is Asset Management?

Transportation Asset Management (TAM): Definition

– “Asset management” has different meanings to different users:

• For many, “asset management” is synonymous with a single
component, such as maintenance management
• True asset management provides a broader, multi-disciplinary
and agency wide perspective on the optimal long-term
management of capital assets
– The US highway community is pursuing a much broader definition:

“Transportation Asset Management is a strategic and systematic

process of operating, maintaining, improving and expanding
physical assets effectively throughout their lifecycle. It focuses
on business and engineering practices for resource allocation
and utilization, with the objective of better decision making based
upon quality information and well defined objectives.”

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What is Asset Management?

Transportation Asset Management (TAM): Definition (cont)

– Based on this broader definition, asset management is:

• Strategic and not tactical (i.e., has a long-term focus)
• Seeks to balance the competing needs of operations,
maintenance, reinvestment and system expansion
• An organization wide endeavor: It seeks to integrate planning,
engineering, funding, and IT perspectives
• Seeks to make informed and prioritized decisions regarding the
use of scare resources based on reliable data
Transportation Asset Management
RESOURCES

Preservation Operations Capital Safety,

Improvement Etc.

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What is Asset Management?

Infrastructure Asset Management: IIMM Definition

– The International Infrastructure Management Manual defines asset a

management as follows:

“The goal of infrastructure asset management is

to meet a required level of service, in the most
cost effective manner, through the management
of assets for present and future customers.
Key elements include:

• Taking a life cycle approach

• Developing cost-effective strategies for the long-term
• Providing a defined level of service quality and then
monitoring performance
• Meeting the needs of growth
• Managing risks associated with failures
• Sustainable use of physical resources

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What is Asset Management?

Components of Transportation Asset Management

Comprehensive asset management includes:

Transportation Asset Management (TAM) Process
– Goals and Objectives: For example, attainment of
a state of good repair Goals and Objectives

– Asset Inventory: Listing of all fixed assets, Asset Inventory

including type, condition, remaining life and value
– Condition Assessment Process: Process to Condition Assessment and
Investment Needs Modeling
assess the condition of all inventory assets
– Decision Support Tools (models): Tools to analyze Alternatives Evaluation and
Program Optimization
and prioritize long-term investment needs
– Options and Tradeoff Analysis: Process to Short- and Long-Range Plans Budget /
evaluate the investment tradeoffs and investment (Project Selection) Allocations

returns of alternate investment options

Program Implementation
– Decision Making Processes: Decision making
process to allocate resources between competing Performance Monitoring
uses
TAM process as promoted by AASHTO and FHWA
– Monitoring: Performance measures and
performance targets based on agency goals and
objectives

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What is Asset Management?

What We Can Learn from Asset Management?

– Asset management provides decision makers with reliable information on:

• Current asset conditions
• Investment levels required to attain specific objectives
• Optimal resource allocation
Years to Address Current Backlog if Funding is Unconstrained Backlog if Current Funding Levels Remain Unchanged ($410m/yr)
Output
from
MBTA’s
SGR
Model

Funding to Maintain Current Backlog ($470m/yr) Investment Required to Eliminate Backlog in Twenty Years ($620m/yr)

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Transit Asset Management

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Transit Asset Management

“Traditional” Transit Asset Management

– “Traditional” transit asset management encompasses a broad range of

agency processes:
• Maintenance management systems
• Condition assessments
• Capital investment planning (CIP)
• Investment prioritization
• Long-range planning
– While each process supports asset management, each is generally
performed:
• By different staff
• Covering differing periods of analysis
• With differing emphasis on tactical vs. strategic objectives
• Activities may not be fully coordinated
• Performed differently by different agencies
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Transit Asset Management

“Traditional” Transit Asset Management (Cont)

– Industry and agency staff definitions of asset management can also

differ based on professional and personal perspectives
• Maintenance staff:
▪ Short-term, maintenance activity focus
▪ Fine level of asset detail
• Capital planning staff:
▪ Longer time horizon
▪ Aggregated level of detail
• Engineering staff: middle ground between these viewpoints
– The following slide places these differing perspectives and planning
horizons into a common framework
– The objective is to help understand where each perspective is “coming
from” and how they relate to each other

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Transit Asset Management

State of Good Repair Continuum

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Transit Asset Management

Transit Asset Management: Where do we go from here?

– Given these existing functions, how can we begin Transportation Asset Management (TAM) Process

to improve our TAM practices? Goals and Objectives

– Following are suggested questions to address Asset Inventory

based on asset management best practices in Condition Assessment and

other industries: Investment Needs Modeling

• Are there clear, agency-wide goals, objectives and Alternatives Evaluation and
Program Optimization
priorities to guide TAM activities?
Short- and Long-Range Plans Budget /
• Are these goals supported and articulated by senior (Project Selection) Allocations

management? Program Implementation

• Is there an approved TAM plan that addresses these Performance Monitoring

goals?
TAM process as promoted by AASHTO and FHWA
• Are TAM activities coordinated between groups /
functions?
• Does the agency have the data sources / resources
to support both asset management activities?
• Do we have the tools required for the job?
• How are we measuring and evaluating performance?

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Best Practices in Transit Asset Management

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Transit Asset Management: Best Practices

FTA’s Recent Rail Mod Study Documented the TAM Practices of Nine
Major Rail Transit Agencies

– The study documented the current

practices of the nine agencies with respect
to the following key TAM program
components:
• Capital planning transit asset inventory
• Collection and use of asset condition
assessment data
• Decision support tools
• Investment prioritization processes
– The key findings in each of these areas is
considered next

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Transit Asset Management: Best Practices

Asset Inventory

– Effective asset management requires good quality asset data

– Asset Inventory Data
• What does the agency own?
• What condition is it in?
• What is the remaining service life?
• Are there plans to expand?

Without good asset data,

infrastructure managers
cannot accurately assess
conditions, needs or risks

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Transit Asset Management: Best Practices

Asset Inventory (cont)

– Rail Mod Finding:
• Seven of nine study agencies maintain asset inventories for capital
planning purposes
• This is much higher than in the past or for the general population of
US transit agencies
• Inventories differ significantly in structure, content and level of detail
Differences between Fixed Asset Ledgers and Asset Inventories
Characteristics Fixed Asset Ledger Capital Asset Inventory
Calculating depreciation for Capital planning and asset
Purpose
accounting purposes management
Purchase contracts, past Pieces of equipment to be
Typical Records
projects maintained and replaced
Asset type, useful life, and date
Records aggregated by: Date purchased
purchased
Basis for Useful Life Accounting schedules Engineering assessments
Appropriate for Estimating
No Yes
Long-Term SGR Needs?

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Transit Asset Management: Best Practices

Asset Condition Monitoring

– Asset inventory data is more valuable when coupled with current

condition data
– How should condition be measured?
• Condition rating scale?
• Percent exceeding useful life?
• Performance based?
▪ Mean time between failures
▪ Delay time
▪ Availability for service
▪ Customer surveys
Without reliable condition
measures, owners cannot fully
assess needs or progress

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Transit Asset Management: Best Practices

Asset Condition Monitoring (cont)

– Rail Mod Finding:

Asset Conditions:
• Three of the nine study agencies Condition of US Rail Assets
Study Agencies
conduct condition assessments on Excellent
Poor
a regular basis 8% 8%

• A fourth agency does so Marginal Good

periodically 27% 22%
• Transit lags other sectors in this
respect

Adequate
Source: TERM 2008 35%

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Transit Asset Management: Best Practices

Decision Support Tools

– Decision support tools help asset managers conduct “what-if” analyses

and better predict and prepare for future outcomes:
• What happens to asset conditions if funding remains at current levels?
• How does our current funding mix compare with projected future needs?
• What level of funding do we need to attain SGR (the State of Good Repair)
program?

– Rail Mod Finding

• Only one of the nine agencies currently maintains a decision support tool
Example Transit Decision Support Tools

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Transit Asset Management: Best Practices

TERM’s Needs Assessment Process for Rehab – Replacement

Asset Decay
Process
Asset Inventory
Investment Policy Model Run:
Needs Forecast
Listing of Current
Asset Inventory Rehabilitate / replace all Simulated Decay,
assets with a condition Rehab and
(Track, Structures, Replacement of
Systems, Facilities, of 2.5 or lower
Transit Assets Over
Vehicles, Stations) Twenty Year Period

Observed Physical Condition Versus Age:

40 Foot Buses
5.0
Spline - Bus (High PM) SGR
4.5 Spline - Bus (Avg PM)
Spline - Bus (Low PM) Needs
Physical Condition Rating

4.0 Bus Inspection

Forecast
3.5

3.0 Asset
2.5
Conditions
2.0
Forecast
1.5

1.0
0 2 4 6 8 10 12 14 16 18 20
Vehicle Age (Years)

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Transit Asset Management: Best Practices

Investment Prioritization

Investment Prioritization
• All agencies face a mix of $A
investment needs including those $B
for: Infrastructure Condition

▪ Asset preservation
0 1 2 3 4 5 6 7 8 9 10
▪ Expansion to support growth / Time
reduce crowding
$B
▪ Maintain / improve reliability, Mobility Improvement
$A
safety and service quality
• What is the optimal allocation of
limited funds? 0 1 2 3 4 5 6 7 8 9 10
Time
– Rail Mod Finding:
Which mix of investments best
• Only two of the nine study serves long-term customer needs?
agencies currently employ
objective processes /
techniques to prioritize
investment funds
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Best Practices in Highway Asset Management

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Highway Asset Management

Highway Asset Management: Current Practices

– State DOT’s, AASHTO and FHWA have been applying and refining
highway asset management concepts for more than a decade
– While highway practices are still not fully “matured”, the highway
community is well out front of transit for TAM implementation

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Highway Asset Management

Highway Asset Management: Resources

Media Resources
Conferences • 8th National Transportation Asset Management
Conference (Portland Oregon, October 19-21)
Committees • TRB Asset Management Committee
• AASHTO Asset Management Subcommittee
Decision Support • AASHTOWare: AssetManager NT and PT
Software • FHWA HERS ST
Education • National Highway Institute TAM Course
Organizations • FHWA Office of Asset Management
• Task Force on Asset Management
Publications • AASHTO Asset Management Guide Vol. I and II
(sample) • AASHTO-AGC-ARTBA Data Collection Guide
• FHWA Case Study Series
• FHWA Asset Management Primer
• Best Practice Scans
Web Sites • TAM Today
• FHWA and State DOT sites
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Highway Asset Management

Core Questions TAM Should Address

1. What is the current state of

my assets?
• What do I own?
• Where is it?
• What condition is it in?
• What is its remaining
useful life?
• What is its remaining
economic value?

All State DOT’s Maintain Inventories And Condition Assessment

Data for Their Pavement and Bridges

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Highway Asset Management

Core Questions TAM Should Address (Cont)

2. What is my required
level of service/
performance level?
• What is the
demand for
services by
stakeholders?
• Are there
regulatory
requirements?
• What is my actual
MODOT: Benchmarking Analysis
performance?

As of 2002, More Than Half of State DOT’s Maintained Specific

Condition Targets for Bridges and Pavement

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Highway Asset Management

Core Questions TAM Should Address (Cont)

3. Which assets are critical to sustained performance?

• How does it fail? How can it fail?
• What is the likelihood of failure?
• What does it cost to repair?
• What are the consequences of failure?
• How does this impact investment prioritization?

Fatalities on Missouri Roads:

Trend Tied to Improvement in Roadway Condition
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Highway Asset Management

Core Questions TAM Should Address (Cont)

4. What is my optimal mix

of preservation,
expansion and safety
investment strategies?
• What alternative
management
options exist?
• Which are the most
feasible for my
organization?

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Highway Asset Management

Core Questions TAM Should Address (Cont)

5. What is my best long-term funding strategy?

Annual budget = $ 3 million

Annual budget = $ 2.5 million

Annual budget = $ 2 million

Funding Versus Pavement Condition

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Highway Asset Management

TAM Program Implementation

1. Set Target Level of

Service/Performance Goals
2. Develop Asset Inventory Graphic
3. Conduct Condition
Assessment
4. Determine Remaining Service
Life
5. Determine Life Cycle &
Replacement Costs
6. Determine Business Risk
7. Optimize Maintenance
8. Optimize Capital Investment
9. Determine Funding Strategy
10. Build Asset Management Plan

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Highway Asset Management

The Most Successful Asset Management Programs:

– Have performance measures that guide investment decisions

– Adopt a ‘preservation first’ strategy for their investment priorities
– Moved away from a “worst first” investment strategy, and instead have
adopted investment principles that are based on life cycle costing and
maximizing benefits
– Undertake scenario analysis showing the consequences on
performance measures of various investment decisions
– Conduct an organizational self assessment as one of the most
important starting points for implementing an asset management
process
– Have an Asset Management champion

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Highway Asset Management

Challenges to Implementation

– Linking Asset Management to

decision making
– Collecting the right data for
performance measures
– Developing and conveying top
management support and
commitment
– Identifying the individuals
responsible for implementation
– Overcome resistance to change

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Highway Asset Management

TAM Improves Service Quality and Resource Utilization By:

– Maximizing service performance / reliability

– Minimizing life cycle costs
– Making managers more accountable
– Being better positioned to anticipate and secure needed funding
– Improving safety
– Matching service levels with customer expectations

Customer Satisfaction Survey

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