Asset Hierarchy

Within a system there are often natural groupings of assets where one asset might be a part of a larger system or function. If assets are entered into the asset inventory in a way that recognizes these groupings, it is easier to examine asset data and make decisions about asset maintenance, repairs, replacements, or restoration.  

This type of grouping is called the “asset hierarchy.” There are multiple ways to develop an asset hierarchy, depending on your system and how you have chosen to define assets. 

A straightforward approach is a simple structure that begins with your system type at the top, then includes assets throughout the system. This image shows a water system split into two (2) functions: Sources and Distribution, and shows the assets associated with each function. 

Examples of some hierarchy structures are provided for the following:

If you have multiple facilities that are completely independent of each other, each one can be an asset category. Or, if you operated multiple systems under one department, each system can be a category. For example, a larger system with multiple facilities may need to consider the assets at each facility; therefore, the hierarchy would include each facility as a category and then all subsequent assets beneath. 

The hierarchy can flow downward like the examples above or they can flow to the side. In this example, the system is labeled with each type of element and the assets within.  

Systems can develop a hierarchy structure in a variety of ways. The most common method is to start at the top and work down. Staff can use the standards set for defining an asset as a reference to developing the hierarchy structure that the system finds beneficial.  

Building an asset hierarchy can seem daunting and may not be right for your utility; however, there are things to consider when deciding if your utility could benefit from an asset hierarchy. 

• • • Knowing how all assets work together can help with efficient operations and maintenance, repairs, and eventual replacement. 

    • Grouping assets together can assist with the development of costs for the entire system. Visualizing the costs associated with individual assets, asset groups, and entire segments can give utilities an estimate of full costs associated with operations and replacement. 

    • The hierarchy structure makes it straight-forward to find a specific asset. 

The identification of asset categories within the system should be done in consultation with the various divisions within the system. It should also be supported by existing documents, such as stormwater best management practices manuals, O&M manuals, financial records, and others.  

Credit MSD of Greater Cincinnati