Evolution – How a systems based approach to asset management is realising new benefits

In 2014, the UK water industry moved from a capital investment-based funding model to one defined by performance. However, achieving corresponding behaviour change has been slow.

Utility companies must deal with the perennial requirement of doing more with less, a challenge now exacerbated by performance commitments, carbon targets, customer relationship management and more. For many organisations, these pressing day-to-day requirements have made it difficult to keep pace with regulatory changes. 

To improve performance, systems need to be thought about in their entirety. This is a simple truth, yet one that can be difficult to operationalise. It requires a mixture of fixed goals and flexible decision making, and there are some straightforward steps to achieving it.

Lowering costs, improving outcomes

Hardwiring a TOTEX hierarchy – looking at both capital spend (CAPEX) + operational spend (OPEX), as opposed to the traditional separation of these two approaches – into decision-making keeps programmes looking at systems as a whole. Every project is challenged sequentially to deliver the lowest total expenditure, or TOTEX, solution. Such a hierarchy puts the eliminating of issues first, via a series of behaviour or systems changes. Secondly, operational and maintenance solutions, followed by invigorating existing capabilities as potential third stage interventions. Finally exploring fabricating new assets – but only as the last resort.

Working through each step may provide only marginal gains but taken as a whole they all serve to reduce TOTEX, construction effort, and carbon impact. The result? On some billion-pound projects, this approach has offered savings in the hundreds of millions.

In one example, a TOTEX approach costing less than £10m replaced a capital expenditure scheme of over £30m. Starting at the point of collecting cleaner water, it worked through eliminating most coloured water in run off, lowering operating temperatures in existing network assets, and finally landed on a solution that required minimal fabrication.

The goal doesn’t have to be immediate, 100% mitigation of risk at every stage or for every asset. Looking at systems as a whole, and using investment to solve 80% of risk across say, five assets rather than 100% on one, offers the greatest return. In this scenario, this 80/20 ‘law of the vital few’ equates to a 400% improvement in risk reduction, and the 20% left unsolved at the investment stage can be addressed through operations. The result is a lower cost and carbon solution, and better outcomes based on full economic consequences. 

Clear long term goals, flexible short term dynamism

Long term planning is essential, but it doesn’t rule out good short-term planning. Short-term, dynamic thinking allows us to plan within five-year budget cycles. If a water treatment plant, other asset or solution isn’t performing, we can quickly address the problem. Using a complete system-based asset management process moves decisions upstream when the cost of making any changes is lower.

Constantly evolving technologies, and changing environmental and demographic circumstances mean that infrastructure built to last 60+ years is now in danger of quickly representing a sub-optimal solution. By focussing on improved operations, minimising new builds, and considering recyclable or disposable assets, we’re often financially and environmentally better off in the long run.

The key is having a clear idea of where you want to be in 50 years and using that as a goal to align short term decisions to, acknowledging when a plan is wrong and changing it.

Breaking down barriers to alignment, collaboration, and communication

The mindset used to be that you solve a problem by building something. It takes time and energy for the market to move from long life construction solutions to more flexible options and new thinking. And now more than ever, as organizations are being challenged to reduce costs, energy consumption, hit more stringent environmental/sustainability targets—all with less funding and staff—a new mentality is a must. 

Over the last year, we’ve used behavioural science to create psychologically safe environments for meetings that encourage staff to move beyond traditional approaches. Gone is the reinforcement of hierarchy from introductions and agendas. Now, each member of a team has an equal platform, without concern for seniority.  Encouraging a free flow of ideas and being inclusive within, and beyond existing teams to work openly and collaboratively is helping ideas to find new solutions.

Behavioural change in customers is just as important. Through websites and social platforms, water companies now enjoy many more touch points with customers than the traditional quarterly bill in the mail. By fostering these relationships, water companies can share information more effectively and so address consumption and sewer blocking behaviours. Media campaigns can also be used to both influence behaviour against specific targets, and to affect change more broadly in how consumers values water.

A fundamental rethink to deliver total lifecycle value

Redefining our approach to just process and technology is not enough. Behavioural change is the best tool to unlock better operations and maintenance, and the potential of a true systems- based asset management approach. With a TOTEX hierarchy to challenge decision making, a mixed term planning approach and an open culture, people have the freedom to think about what the right things are, before moving on to how they deliver them correctly. 

This systems-based asset management allows identification of patterns, solving issues before they become problems and optimising interrelationships before looking to engineering solutions. By truly adopting this approach, the water industry can reduce its carbon footprint, save money, make better decisions, improve environmental outcomes, and realise the enhanced performance demanded by today’s regulations.