Future Forward Interview: Advancing Asset Management for AEC through International Standards
Although not widespread in the United States, asset management, and the need for more of a model-based approach to operations and ongoing maintenance, is gaining steam. A driver for growth is development of the ISO 55000 standard for asset management. Informed Infrastructure Editor Matt Ball spoke with Thomas W. Smith of the University of Wisconsin about his role in helping develop the standard and how the standard aims to improve the efficiency of operations.
I2: You’re aligned with the Institute for Asset Management. Can you describe that organization and its mission?
Smith: The Institute for Asset Management is a professional association from the United Kingdom that just celebrated its 20th anniversary. I’m on the faculty of that organization. It’s expanding to a global organization, and we’re forming a U.S. chapter. The group has been developing asset-management policies and procedures, along with the British standard PAS 55, which is the predecessor of the ISO standard. It was actually the United Kingdom that petitioned ISO to form a committee to write a global standard on asset management. I also work with the Asset Management Council in Australia that has also been around for 20 years. These are both unique organizations, and there has been nothing like them in the United States up until now.
I2: So, at the University of Wisconsin, you teach asset management. How does that work into the program?
Smith: My work for the last 15 years or so has been in engineering management and engineering leadership, and the new asset-management courses we have developed are aligned with our engineering leadership curriculum. We also have coursework in maintenance management and operations, but asset management generally draws attendees from a different level of the organization.
As the focus of asset management has changed, it has become an organizational leadership function. The people involved are not coming just out of maintenance, they are coming out of engineering design and construction, finance, IT, operations. Asset management is a team effort that requires a broad-based set of skills and a solid team.
In our program, the asset-management courses are inline with our engineering leadership courses that include: finance, program planning, project planning, coaching/mentoring, teamwork and team leadership. Those are critical skills in asset management. People come into asset management with a foundation and a set of leadership skills.
I2: With the two organizations being just more than 20 years old, within your career, asset management as a professional pursuit has been born. How has it come about, and what distinguishes it from prior practice?
Smith: There have been niches of asset management within infrastructure. Federal highway has had a program, EPA has had a program within sewer and water, the defense industries have had a niche around property management (movable property), and vendors are often responsible for maintenance repair and rehabilitation. There have been a variety of asset-management activities in the United States, but nothing approaching the comprehensive nature that’s implied in the new standard.
I2: How does the new standard set up guidelines for improved practice?
Smith: The standard is a framework for practice and is the bridge for overall organizational acceptance of asset management. We’re seeing interest in the standard from a whole variety of places.
In the United States, the history has been in infrastructure. In the rest of the world, there has been significant interest from extraction industries, particularly oil and gas, and the mining industries in Australia. I think you’re going to see a fairly rapid expansion in the United States into process industries including food and beverage, pharmaceutical and perhaps manufacturing after that.
I2: Does asset management encompass project work as well as moving assets?
Smith: The standard is like other ISO management system standards; it’s meant to be a standard to guide any organization. There are more than 70 questions in the core document: ISO 55001. There is also an Introduction (ISO 55000) and a Guidance Document (ISO 55001).
Sedexo, for instance, with nearly 500,000 employees worldwide and operations in 80 countries, has a strong presence in facility management. They manage schools and hospitals, college campuses, and other facilities. The company has adopted ISO 55000 as the framework for their asset-management business. They needed a global framework, so ISO works for them. I think we’ll see other consultants, service businesses and management companies take ISO as their core framework.
Pacific Gas and Electric is now ISO certified. We’ve had quite a bit of interest from transit agencies, including New York Transit, who are committed to it, and Atlanta Transit is on a path to certification. All the transit industries are following the standard and are working to develop against the standard. Port authorities and airports are also looking at this. The critical infrastructure areas are where we see some of the greatest interest in the standard.
There are a lot of organizations that are working against the standard that may or may not seek certification until they see a need from a regulatory or public-relations standpoint. Certification is a moment of truth. It’s one thing to pursue the standard and audit yourself, but there’s a real benefit from third-party certification in terms of not fooling yourselves.
I2: The word “informed” in Informed Infrastructure is meant to convey modeling, simulation and analysis. We see the tools and frameworks to help quantify and maintain operational performance as hugely important for ongoing improvements. Are you encouraged by how software has advanced to help take the standards into operations?
Smith: I started my research career in building simulations, long before we had any of the software tools we have today. I think it’s one thing to build a model, but the second thing is to simulate against that model. The potential to do that is quite intriguing, and the level of benefit from that is an exponential add-on to the model itself.
I2: I’d like to talk a bit more about development of the ISO standard. What kind of team was involved, and what timeframe?
Smith: ISO is its own drummer. ISO 9000 that came out around 1990 was the first management system standards. There are others out there, and they have all followed a similar development pattern. It is essentially a three-year process. We started in 2010, and the standard was essentially finished in the middle of 2013, with the final vote at the end of 2013 and was released in January of 2014.
We had six meetings with 37 countries involved and probably 70 or so delegates that were consistent throughout that period. The chairman was from the UK, and all of the industrialized countries had delegates, including Brazil, China and Russia. We had representatives from all of the world’s standards bodies, with industry representatives, academics and consultants.
It was a broad mix, with people absolutely dedicated to improving asset management. It was a nice experience, and a group of people that I look forward to meeting and talking with.
I2: You’re all first-generation asset-management professionals, and I imagine there’s a good deal to talk about as the field begins to grow and propagate. How did the practice get its start, and what drew you to it?
Smith: You can find the roots in many areas, but translating this to a holistic view is relatively new. We’re still working on who is involved, what do they do, what does it mean, and what happens when it becomes a mainstream practice.
The holistic view certainly is what drew me to it, and I think what drew most to it is the idea of creating a lifecycle view and vision, and managing to that. We all know that the design determines a lot of the lifecycle cost and impact. The idea of taking a holistic view, not just a lifecycle view, but a view of all the systems, is important. It’s difficult to look at just one building, the equipment or just one production line or one piece of equipment, and isolate it from its neighbors.
It’s a view of the building systems, transportation systems and manufacturing. It’s not just a lifecycle view of the components, but how these pieces relate to each other. If it’s a transit system, looking not just at trains and tracks, but at stations, ticket machines, turnstiles, and so forth. Everything that goes into making it a successful system is important, and those examples were used again and again as we crafted the standard with an eye on a comprehensive view.
I2: There are definite benefits in terms of cost savings and reduced waste. Is that something that is quantified in the standard, or is there some type of accounting mechanism to gauge improvements?
Smith: A management system standard contains requirements that outline what you need to do and how you need to document your actions. One of the requirements relates to asset information management and another key requirement relates to asset strategy and planning, which makes use of this information.
How you get the data and use the data is up to each organization. For most organizations, there are sets of technical standards that tell you what to do. The management-system standards are a framework for the technical standards.
Certainly people gravitate toward cost savings on the first round. I don’t think that’s really the long-term benefit; I think it’s the improved service and new opportunities that are going to drive this.
The other aspect is risk. For most of the folks involved, they’ve seen serious changes in the risk profile on physical assets. If you’re a railroad or electric utility, your assets might be half of your balance sheet. If you’re a bank or a department store, they may only be five percent of your balance sheet. In either case, the physical asset is often the leading edge of exposure to climate change or security issues such as terrorism. Assets are also subject to rapid changes in the economy and customer preference.
There are some serious and varied drivers. If you look at the New York real estate market after Hurricane Sandy, it was a real wake-up call to the management of the assets—where are backup generators and what kind of control do you have over the building and systems. There has been a lot of change in terms of how people look at assets, particularly with climate change as a major factor.
The interest in asset management is twofold. One is improved efficiencies, and with new technologies for systems management, our ability to monitor and control is growing exponentially. Two, there are huge external pressures. The two have come together: the need and the opportunity.
The population pressures on transit systems is a good example. These systems are stressed. They all are looking to add capacity. The airports and ports are stressed as well. The ability to be more efficient and effective with physical assets is certainly a critical issue.
We used to assign 400 square feet per person in office space in the 1990s, and today it is more like 100 square feet. The financial capitals aren’t yet working 24/7, but they are working more like 120 hours a week than 50 hours a week. This adds up to an order of magnitude increase in density.
I2: Are you teaching this and seeing adoption, with a bright future for those who focus on it?
Smith: Most of our teaching is in continuing education courses for working adult professionals. We are just beginning to see the impact in the United States. Both the IAM and IAC have a young professional’s interest group. At their annual meetings, they have a special track. There are universities in Canada, the UK, Australia and South Africa that are offering undergraduate and graduate specializations in asset management.
Like anything, we need to figure out how to position this field. The old view of asset management comes out of maintenance management. It’s hard to get kids excited about maintenance, they want to design cool stuff.
Asset management is a management and leadership function, and it’s probably more appropriate to be taught at the continuing education and masters level.
I2: How do things like design, build and operate impact the adoption of asset management?
Smith: There is a movement from design to management in that some of the big engineering firms are taking over management, and establishing divisions to take over management of the assets they’ve built. Not just handing it off, but being willing to manage a facility after designing it.
There is also growing interest in lifecycle design, and the inclusion of operations and maintenance needs at the design stage. I think it’s very good to have a long-term stake in the thing that you build. It supports good design.
I2: How important is BIM to wider adoption of asset management, and do you see BIM extending into operations?
Smith: I think that the design community sees the extension of BIM to operations, but what’s missing is the commitment to create a bridge to the operations and maintenance communities. These communities need to see how it works and how that data is developed into knowledge that they can use and passed effectively into the tools they use. Right now, this integration is not seamless, and it’s a fair bit of work.
I talk to a number of people in operations and maintenance that don’t yet see or feel the value of BIM. We need to demonstrate this value and create a pull for BIM, I don’t think we can drive it from the design side.