The Key to Managing the Lifecycle of Built Assets

Mark Petchey
Developing a proactive and established asset lifecycle management program is key to effective management of built assets.

Knowledge is key to managing the lifecycle of built assets

Are your built assets aging? Do you know where your greatest risk of asset failure lies? Can you estimate the cost range to maintain your assets over the next 5, 10 or even 20 years? Do you have a deferred maintenance backlog? If so, how large is it? Have you assigned priorities to asset needs? Do you know what assets require attention to head-off impact to your business operations or exposure to liability?  

If you don’t know the answers to these questions, the chances are you don’t have a proactive and established asset lifecycle management program and/or asset management culture within your organization. Your maintenance activities are probably more reactive than planned, and your budget requirements may be unknown beyond the rolling year-to-year scramble to identify vague needs and wants. You may also face challenges achieving successful internal or external funding requests for maintenance and renewal projects. These requests are typically rejected outright or whittled back during the annual budget approval process.

Scenarios like these are exacerbated when demonstrable data or asset knowledge needed to comprehend your current status and identify the critical future requirements is absent.

Developing a management plan

Understanding individual assets will allow lifecycle forecasts to be developed into a comprehensive management plan. These lifecycle forecasts are tools that can be utilized in real time to maintain and operate facilities, therefore mitigating risk of impact to operations and end users. Real time means that data capture is an iterative process to ensure the forecast and plan remains current and relevant. The sought after data should support the combination of quantitative and qualitative assessments to enable value-based decision making.

Understanding individual assets will allow lifecycle forecasts to be developed into a comprehensive management plan.

BSI PAS55:2008, the first publically available asset management standard (ISO 55000 Standard for Asset Management is expected to be published in February 2014), identifies the Lifecycle Delivery phases as Acquire, Operate, Maintain and Dispose. Optimization of asset utilization during this cycle is critically linked to capturing and understanding information from these four key sources.

Steps to plan development

  • First, if the asset is already in service, its current condition must be assessed. This is a field-based activity that requires observation, data capture and reporting by qualified and experienced individuals.

  • Second, current asset operating conditions must also be understood. For example, is a pump in continuous service or standby duty? Are specific areas of the exterior building envelope subject to greater exposure to the elements? Are specific sections of roadway subject to a higher volume or particular vehicular type usage?

  • Maintenance records and performance history must also be documented. Does the asset have a history of unexpected failure? Is the asset subject to routine (or any) maintenance?

  • Finally, what is the Expected Useful Life (EUL) that the manufacturer would typically expect for the asset?

Predicting life cycle needs

By combining the above data and subsequently analyzing asset health and priorities to ensure operational continuity, predictions can be made regarding cyclical maintenance requirements, major refurbishment or renewal and, ultimately, replacement. Costs are estimated for each activity in the life cycle forecast and allocated to the asset. Initial forecasts can be prepared to represent an appropriate range, e.g. 5, 10, 15 or 20-year projections (longer projections decrease in accuracy, hence the need for an iterative process). The result is a comprehensive capital and maintenance budget forecast which can encompass an entire building or asset portfolio. This structured approach creates a demonstrable argument for funding requests and provides the basis for illustrating the potential consequences for inactivity. Qualitative inputs can support assignment of priorities to each action in the forecast.

This structured approach creates a demonstrable argument for funding requests and provides the basis for illustrating the potential consequences for inactivity.

Acquiring and analyzing asset data without organizational collaboration, assessment of external influences or subsequently deriving data from limited sources increases the risk of inefficient asset utilization. Problems with developing strategic targeting of expenditures may result. Similarly, managing information in data silos can contribute to inefficiencies.

Forecasting lifecycle costs

The lifecycle forecast forms the basis of a strategic plan for targeting expenditures. Monies spent in areas before they are needed can ultimately increase costs in managing the portfolio. For example, an un-prioritized budget may only last 18 months, compared to a targeted plan that may utilize the monies over two years or more. Conversely, limited or no targeted investment may accelerate the asset renewal, replacement or failure date. In many cases this can create a significant backlog in funding requirements to address the resultant growing deferred maintenance issue.

Creating asset knowledge

Asset knowledge can increase planned activities and reduce reactive activities. The asset lifespan is extended, frequency of renewal and replacement is reduced and risks of impact to end users and stakeholders are mitigated. Asset knowledge is the foundation of performance measurement, enabling monitoring, control and informed value-based decision making to drive success.

Asset knowledge is the foundation of performance measurement, enabling monitoring, control and informed value-based decision making to drive success.

Economic and social pressures demand organizations embrace new approaches for facility management with a move toward managing facilities holistically. Increased accountability, sustainability and stewardship call for organizations to create and use knowledge to improve facility performance and meet objectives that focus on the bottom line.

Faithful+Gould solutions assist organizations in providing a roadmap of current and future needs which drives informed, sustainable business decisions by creating knowledge through the capture, management and analysis of raw property and operating data. Our approach ensures comprehensive and defendable assessments, accurate cost and useful life projections, and prioritized/return-on-investment focused recommendations that provide budget approval success.