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A Guide for Transit Agencies in Introducing Asset Management (Part 1)

In the first of a two-part series on transit asset management best practice, Dr. Christian Roberts discusses the imminent launch of the International Standard for Asset Management and how this aligns with the requirements of MAP-21.

The enactment of Moving Ahead for Progress in the 21st Century (MAP-21) has established a national policy to improve asset management practices. MAP-21 requires agencies to establish and use an asset management system. The requirements are not yet explicit, but the intention is clear: agencies are to be held more accountable, with an increased expectation on safety, reliability, and performance.

The intentions and requirements of MAP-21, while new in the US, are comparable to requirements in place in other industries across the globe—notably, requirements for asset management were introduced to the UK utilities and transportation sectors following privatization in the 1980s and 1990s. The need for explicitly setting out the requirements of a management system for asset management directly led to the development of the British Standards Institute (BSI) Publicly Available Specification 55 (PAS 55), Specification for the optimized management of physical assets, first published in 2004 and updated in 2008. PAS 55:2008 provides 28 criteria for establishing a management system for the economic and efficient management of physical assets.

Over the last 10 years, the worldwide adoption of efficient and economic asset management practices has increased dramatically. Within two years of its publication, PAS 55:2008 became BSI’s top selling standard, surpassing even the more traditional management systems, such as those for quality and environmental. This increase is partially linked to a shift from the historic bottom-up to an emerging top-down approach for improving practices. Implementation is now being driven by regulators, general managers, and boardrooms to achieve a combination of regulatory compliance and contribution to due diligence to achieve competitive advantage or improve business position.

We have gotten to this point for a reason. Whether it’s driven by MAP-21 legislative changes, the funding challenges that we have seen over the last few years, Hurricane Sandy and fear of future catastrophes, or the fact that 33 percent of transit assets in the US have exceeded their expected useful life, the point is that the challenges we face in managing assets are increasing. A city is only as good as its transit system; the same goes for utilities, roads, airports, factories, etc. It is these challenges that have led organizations globally to perform better asset management.

The shift in focus has directly led to International Organization for Standardization’s (ISO) standard for Asset Management. ISO 55001: Asset management—Management systems—Requirements will be published in early 2014. It has built upon the approaches established in PAS 55 and combined them with the best practice experiences from over 30 countries. The standard sets out requirements for organization, leadership, planning, risk management, support, operation, performance evaluation, and improvement. The standard and accompanying guidelines recognize that change management plays a big role in the adoption of best practice asset management.

What Does This Mean for US Transit Agencies?

For many agencies in the US, the short-term view of certification by an international standard program will be that it is unnecessary or does not add value. Conversations with industry leaders provide a view that while the value of management systems is acknowledged, in general, their implementation is considered a process-laden burden on already stretched resources. A counter-argument to this is that management systems are only as process laden as one makes them. Examples from around the world demonstrate wide variances in the extent of control management systems impose on organizations. There is also evidence to suggest that the benefits of transparency in decision making—the audit trail of what, why, and when—will not be fully attainable through the current regulatory landscape. However, with rule-making currently underway, this is yet to be concluded.

The important thing for agencies to consider is not whether to seek compliance, but rather the benefits to an organization from following the structure and guidance of a standard that has captured international best practice. ISO 55001 provides a roadmap for introducing best-practice approaches to asset management. It sets out an agency-wide framework to enable the capture of information to support better decision making. It focuses on the need for a clear line of sight from the performance outcomes set by the organization to the work undertaken to achieve the same. It requires the capture of the approaches in an asset management plan. This framework is aligned to both current and anticipated MAP-21 requirements.

Importantly, for agencies currently working to introduce better asset management practices (and for those considering their next steps) ISO 55001 provides both the framework within which to develop capability and guidance on how to achieve it. The approach and the framework are consistent with the Federal Transit Administration’s (FTA) Asset Management Guide: Focusing on the Management of Our Transit Investments, published in October 2012. ISO 55001 reinforces the need for leadership, which helps to provide the necessary direction to drive change across the business. It promotes a common language for asset management, which helps to raise awareness from the board level to the shop floor. It promotes a common platform and a consistent approach to managing assets, which helps with staff engagement and involvement.

It also expands the asset management community throughout the organization which facilitates commitment by all stakeholders. These are all are crucial change enablers.

Industry Advantage

There is an industry-wide advantage as well. Reinventing the wheel will be inherently costly and time consuming, both of which the industry can ill-afford. The ability to access guidance, best practice, and international case studies will fast track the implementation across the industry. It will also increase access to a growing resource pool of asset management practitioners. This is important because the asset manager role is still fairly new, and traditional education and development bodies have yet to catch up to the requirements of industry. It is also important because of the challenges facing the US transit industry with an aging workforce. The professionalization of the asset management discipline helps create more transportable job skills and expertise that are essential to introduce new blood into an industry with a workforce that will lose over 30 percent of its workers to retirement in the next decade.

Next Steps

ISO 55001 will be published in early 2014. The standard is designed for use by organizations of all sizes and provides checklists to help agencies establish and shape a control framework that meets their individual requirements. While the FTA deliberates on the feedback from their advanced notice for proposed rule-making, agencies would do well to review the guidance in the standard as they advance their asset management improvement programs. If nothing else, the guidance will help them to establish best practice principles within their organizations and will ensure that they are well prepared for future legislative changes.

 

Image Header Source: Isaac Wedin (Creative Commons)