No thanks, I don't need to be in the know.
There's more to learn.
Subscribe to our blog mailing list so you can continue reading.
Type your search

How to Mitigate Risk and Get Strategic About Asset Management

Jun 05, 2019
Reading Time:
Strategic asset management

We all know we should take our personal vehicles in for regular tune-ups. It’s sometimes inconvenient and expensive, but being proactive about it mitigates the risk of a roadside breakdown and further costs down the line. The same holds true for public transit fleets, but the cost of that deferred vehicle maintenance is multiplied – in dollars, inefficiencies and the negative impact on the experiences of potentially hundreds or thousands of passengers.

Why is strategic asset management so important?

A study by the American Public Transit Association found the backlog of public transit modernization needs results in a loss of $340-billion in business revenue to the U.S. economy over six years. 

The economic impact of that deferred maintenance is significant.

Millions of Americans depend on public transportation for daily access to their loved ones, jobs, grocery stores, hospitals, and schools. The hard truth is that recessions, tight budgets, and other priorities have left transit agencies across the board with hefty challenges because of aging infrastructure and lack of funding. The U.S. Department of Transportation in 2015 found that an estimated 40% of buses and 23% of rail transit assets were listed in marginal or poor condition, with a backlog of $90 billion in deferred maintenance and replacement.

Gordon Sparks, professor of civil engineering at the University of Saskatchewan in Canada, explained it this way in his Public Sector Digest article, “Doing the right thing, at the right time, involves knowing and actually doing the most cost-effective maintenance, repair, rehabilitation or replacement activity at the right time throughout the entire lifecycle of the asset.” Taking this approach can provide significant benefits, such as 20% to 40% reductions in lifecycle costs.

Transit agencies are now legislated by Moving Ahead for Progress in the 21st Century Act (MAP-21) to have a Transit Asset Management Plan (TAMP) in place to increase safety and maximize return on investment from all assets. Yes, the requirements demand extra documentation and eagle-eyeing operations, but asset management empowers agencies to make the best use of their dollars in a way that maximizes asset conditions, mitigates public risk, and minimizes costs in the long term.

The reporting on buses, rail cars, railway track, signal systems, stations, tunnels, and facilities that’s part of compliance with the Federal Transit Administration’s (FTA) oversight of the State of Good Repair (SGR) goes a long way to keep agencies on top of their asset management. Rising costs and increasing demands of stakeholders—customers, local governments, and the FTA—are propelling agencies to become strategic about their business.

Are We There Yet? Planning Transit Services for Today and Tomorrow

Asset management is a business plan for the services that transit agencies provide to their communities. Agencies need to know what they’ve got, how much it costs to run it, at what standard of service, and how to repair and maintain it in a cost-effective way going forward for future generations. It’s not just about checks and balances in place for the here and now. It’s strategic for future services as well. Strategic asset management provides methods and tools to answer these questions.

Some agencies have departments focused on asset management, while others have not reached that level of maturity yet. But people are taking notice of SGR and buying in—not simply because they have to for compliance, but because the mindset of the organization has shifted to the long-term view.

Big Picture: Sustainable Fleet, Facilities and Linear Asset Management

Safety and boosting rider experience are always a top priority. Agencies follow through on maintenance and keep assets running, but are they planning for the future? Have they identified the levels of service of their assets, and are they meeting those levels?

The mindset of the organization from the bottom up has shifted to long-term, sustainable asset management. It’s an opportunity to step back from day-to-day operations and consider a strategic approach. Getting bogged down with technical details can derail an asset management plan. Instead, managers can gather input from all agency departments to create a high-level analysis that sets out where they are now, what the options are for the future, and what they want to achieve in that future.

The goal is to maintain and improve transit capital assets, based on careful planning and improved decision-making, like reviewing inventories and setting performance targets and budgets.

 ‘Transforming Risks into Opportunities’

Another main consideration for asset management is risk mitigation. As some industry experts position it, “transforming risks into opportunities” for the organization. Larry Redd is a chemical engineer who has consulted with several state departments of transportation on risk analysis and management. He says there are rules of thumb to follow.

“When we talk about risk management, we’re really talking about identifying your goals and objectives, and then identifying the uncertainties of reaching your goals,” he says. “It’s about having a defined, consistent process in place to mitigate risk. Repeatability is a key thing. You want to repeat your analysis year after year as you evaluate things.”

Agencies should define risks, and have discussions within departments about the variety of risks, from rare, catastrophic events to more frequent occurrences. A fleet manager cares about the breakdown risk of vehicles. A manager with employees who drive vehicles for their job cares about driver performance and the risk of speeding and hard braking to rider safety and excess fuel burn. Identifying all manner of risks and the processes to manage them is a significant and valuable undertaking.

Risk becomes a search for opportunities to look at candidate strategies, prioritize solutions, and make the best investments.

That brings us to data, a huge focus in the transit industry. Your TAMP’s key strength is that it is data-driven. Decisions can be directed and supported by the data it uses and generates, as well as by sound engineering judgment. The reporting requirements and standards for all transit asset inventory data will give the FTA much better data to base its forecasts, improving the accuracy of FTA’s estimates of current asset conditions and capital reinvestment needs.

That data gathering and analysis also supports strategic asset management for the agency, whether it’s using GPS telematics software to monitor vehicle and driver performance, planning tie replacements along the right of way, or knowing at the touch of a button which vehicles in the yard require maintenance and how much it is going to cost the agency.

With the right tools, agencies can predict the future to optimize resources for maintenance, operations, replacements, and overall improvements. And providing safe and reliable service for the future is exactly where transit needs to go.

To learn more about what agencies need to know about SGR, watch this webinar.


 
Kelley recently joined Trapeze as Product Director, EAM and brings years of experience, having worked for Trapeze's sister company, AssetWorks, most recently as Product Director, EAM. Kelley possesses vast experience with the EAM Product and Business. She has successfully steered the EAM Business as Product Manager since 2002. Prior to leading the EAM product, she held roles in EAM Development and Quality Engineering.
 
The latest in transit, delivered straight to your inbox.
Thanks
You are now subscribed to the Trapeze blog
Request a Live Demo
 
Let's get you on the mailing list
 
Select Your Region