8.3 The Asset Management Plan

You will achieve 80% of your gains for 20% of your effort.
--Ross Waugh, New Zealand


An Asset Management plan does not have to be complicated or lengthy to be useful. It can be a very simple document written in such a way that everyone within the utility can understand it. It should not be a document that is completed, put on a shelf, and never looked at again. The Asset Management Plan should be thought of as a "road map" to explain how the utility is going to address and implement each component and how the utility will continue with Asset Management over the long-term. It should not be thought of as "the answer," but rather a guide explaining how the utility intends to do business. The Asset Management Plan should also be written in such a way that all levels of the organization can use it. It should be readily available to all members of the organization and distributed freely. It can also be made available on the web to customers; it should not be a secretive document that only employees or the governing body can access. It is equally important, however, that customers understand that the document is not to be viewed as an absolute or law. It is a living breathing document and the utility will make changes and adjustments to it over time. While it establishes levels of service, it is not a contract and should not be thought of that way. The document provides information to the customers regarding how the utility operates and what services they can expect. Viewed in this way it should serve to create more confidence in the utility and more support for the rates that are charged.

Increasingly, Asset Management is becoming either a requirement of funding or an activity that can provide additional points or a higher ranking on a funding application for a particular project. Consequently, having an Asset Management Plan that includes all of the core components can allow your utility to meet this requirement or receive a more favorable rating. Funding agencies may wish to review your Asset Management Plan or they may wish to use the AM IQ to determine the adequacy of your plan or Asset Management activities. The AM IQ can be found throughout this document and a complete AM IQ can be found in Appendix F.






The Asset Management Plan should include the following, at a minimum:
  • Introduction: The overall goal of the plan, how it was developed, who was involved (See Chapters 1, 2, and 8 in this guide)

  • Current State of the Assets: The methodology used to gather asset data, how assets were defined, total number of assets, the type of data gathered for each asset or asset class, the type of inventory program, the type of mapping completed, and the location of the asset inventory. If there are a small number of utility assets, the listing of the asset inventory can be included in an appendix or as an attachment. If there are many assets, the actual data on the assets does not need to be included in the document, but it should be clear where this data resides (i.e., on a computer or in a notebook) and how you would get access to the data. (See Chapter 3 of this guide)

  • Level of Service: The Level of Service goals, including target levels, how the goals will be measured, where the data will come from, how frequently the goals will be measured and how the results of the measurements will be communicated to the governing body and customers should be included. (See Chapter 4 of this guide)

  • Criticality: The methodology used to evaluate criticality, including how probability of failure and consequence of failure were determined, should be included. If there are not many assets, a graph showing the relative risk of assets can be included in the document. If there are many assets, a listing of highly critical assets can be included, and how to locate this information can be referenced in the document. (See Chapter 5 of this guide)

  • Life Cycle Costing: The approach used to determine how much operation and maintenance will be done on assets, by whom, and how frequently should be explained in this section. The actual maintenance tasks do not need to be explained, but a reference to where these tasks are explained should be included. For example, if there is a computer program that identifies who should do what and when, that program should be referenced. If there is a book that lists maintenance tasks, the book can be referenced. The process used to determine when assets will be repaired, rehabilitated or replaced should be explained along with the process used for capital validation. (See Chapter 6 of this guide)

  • Financial Plan: The approach the utility will use to obtain the necessary funding now and in the future should be explained. (See Chapter 7 of this guide)

  • Updating the Plan: The frequency by which the Plan will be reviewed and revised as well as who will do the revision should be included in this section. (See Section 8.4 of this guide)
The plan should specify how the utility will accomplish the various components, as discussed above, but does not need to include all the data that went into the plan (all the assets, or all the maintenance tasks). It can be as specific in these areas as the utility desires and the amount of specificity will depend on the number of assets or amount of data involved.