How Sustainable Asset Management Works

Laura Sykes | May-07-13



Guest Post: by Matthew J. Paznar, P.Eng., EP
Manager of Asset Management and Community Infrastructure group
R.J. Burnside & Associates Limited and Neegan Burnside Ltd
Imagine waking up in the morning to turn on the tap and not having water pour out. Or walking outside and having to breathe in thick smog. Or walking your dog by a stream of untreated wastewater. These types of events could become a common occurrence if Environmental Professionals (EPs) do not advocate for and implement procedures to sustainably manage the assets (i.e. infrastructure) that have been put in place to prevent environmental situations such as these.  
Most of the infrastructure to help our environment was built over decades - much of it by previous generations who may not have used detailed documentation.  Since a lot of this infrastructure is out of sight, it is also out of mind.  Organizations often lack a detailed inventory of all of their assets, so they do not know where these assets are located, when they were put into service, what materials they are made out of, or what condition they are currently in.  Consequently, these assets are not refurbished or replaced before they fail.  When they do fail, organizations must deal with serious environmental situations, service disruptions, and costly emergency repairs. You need only to refer to recent news stories of the massive sinkholes produced by water main breaks to see the disastrous impact that asset failure can cause.
To effectively manage their assets, organizations must use comprehensive, data-driven processes to make informed investment and operational decisions.  Effective asset management requires sharing data and decisions between various departments in a community or company, such as planning, engineering, operations and maintenance, administration, and finance.  Thus, asset management is not a static plan, but a dynamic process that changes with time according to an asset’s condition, a change in service levels to be maintained, a change in legislation, regulation and/or policies, the availability of resources such as funding or a change in priorities.


The Two Major Goals of Asset Management

Goal 1: Preventative Maintenance
Organizations should perform preventative maintenance to ensure their assets will provide the expected level of service while also meeting or exceeding their original projected useful life.  This helps you get the best bang for your buck – and recoup the capital dollars you originally spent on purchasing and installing an asset.  An example of this is regularly checking and greasing the bearings in a water distribution pump.  With this regular maintenance, the pump will not wear out prematurely.  
Goal 2: Asset Replacement
The second goal is to plan for the eventual replacement of all assets that will one day reach the end of their useful life.   This is no easy task.  Most finance departments budget for asset replacement by using a straight-line depreciation method to determine when the asset no longer has any value.  However, this method may not provide an accurate prediction of when an asset actually needs to be replaced - the actual condition of the asset needs to be taken into account.  The asset may be wearing faster than intended because it is used in a manner that was never foreseen, such as heavier loads being driven on roads and bridges, or it is affected by unusually strong storms.  
By developing long term (e.g. 25 or 50 year) replacement plans, organizations can gather relevant information about each asset and allocate funds ahead of time to replace assets before they fail. This strategy minimizes the risk of disrupting services, harming the environment and paying for costly, unplanned emergency repairs or replacement. It also allows time for reserves to be built up to fund the repairs and prevent a financial shock in the future.
There are a number of valuable methods and tools to implement effective asset management.  These range from paper charts and spreadsheets to more complex, but better controlled, software programs.  


Why is asset management so important?  

Last year, Canada’s first Infrastructure Report Card concluded that a significant amount of municipal infrastructure is in fair to very poor condition.  The report also estimated that the replacement costs for these assets added up to almost $172 billion dollars – the equivalent of approximately $5,000 per person currently living in Canada.   Without proper management, our infrastructure will deteriorate quickly and cost more to replace, exacerbating our current economic challenges.
Environmental professionals need to implement sustainable asset management into our daily activities and add this tool to our environmental tool belt.  The public has relied upon engineers to design, build and operate infrastructure to improve lives and protect the environment for future generations.  We need to take the next logical step and ensure we keep track of our assets, plan for preventative maintenance and arrange for appropriate asset replacement.  These steps will lower the risk of harming our environment or encountering major service disruptions by preventing serious asset failure. 


About the Author  
Matthew J. Paznar, P.Eng., EP, is an environmental engineer who graduated from the University of Waterloo.  He is the manager of the Asset Management and Community Infrastructure group at R.J. Burnside & Associates Limited and Neegan Burnside Ltd.  His specialty is related to the planning, assessment, design, tendering, construction administration, monitoring and sustainable management of community infrastructure - especially water and wastewater systems – across Canada and abroad.