Not all assets are equally important to a system; some assets are highly critical to achieving a system’s Level of Service goals and others are much less so. Criticality is the measure of risk associated with an asset. Projects and activities should be prioritized based on criticality analysis in order to use limited financial and personnel resources efficiently. To determine where to allocate resources, it is important to determine which assets are the most likely to fail and the consequences if the failure occurs.
Furthermore, the criticality of assets is system specific. Certain assets or types of assets may be critical in one location but less critical in another. System staff must examine the assets in their inventory carefully to determine which assets are critical and why.
To determine which assets are critical, two questions are important:
- How likely the asset is to fail (probability of failure)?
- What are the consequences if it does (consequence of failure)?
Assets have several modes of failure beyond simple mortality and there are many factors impacting the likelihood of a given asset failing. The factors taken together provide an overall assessment of the asset’s probability of failure and can be represented with a numerical rating scale (e.g., 1 to 5 or 1 to 10) ranging from a very low probability of failure to a very high probability of failure. In assessing risk, the lower number is always for lower probability and the higher number for higher probability. A zero probability is not used because no asset has virtually zero risk. There is always at least a small chance the asset could fail. After the likelihood of failure of each asset is determined, it is important to determine how bad a failure would be. This determination of consequence of failure involves the consideration of several tangible and intangible factors and can also be expressed numerically using a similar rating scale (e.g., 1 to 5 or 1 to 10) as probability of failure.
Not all assets are equally important
Air Release Valve Can
Sanitary Sewer Manhole
Ground Water Storage Tank
Multiplying probability of failure and consequence of failure ratings together provides the overall criticality score (risk score) for a given asset, with higher scores indicating greater risk. Calculating criticality scores gives a structured approach for comparing risk across asset types. Quantifying risk for each asset type provides an informed prioritization process that not only identifies the highest risk assets, but also allows for the comparison of risk reduction options. The criticality of any given asset will change over time but there are also ways to reduce risk and systems should investigate which methods will work best for given assets or asset classes. Once a criticality score has been assigned to each asset, system staff should evaluate the data and create a prioritization framework or a risk response plan. The severity of the risk can also be visualized in a matrix. This is a useful tool for communicating asset risk to board members or community members who may not understand what a particular criticality score might mean. Knowing which assets are more risky or critical to the operation can aid in determining how to spend funds, where to deploy personnel resources, how to manage an individual asset or collection of assets over time, and feed into capital improvement planning decisions.