News 6 Elements of a Successful Asset Management Plan

An asset management plan (AMP) contains six major elements:

1. Asset register
2. Risk matrix
3. Condition assessment
4. Level of service determination
5. Decision matrix
6. Financial planning with a funding strategy

Asset Register

An asset register is a georeferenced list of all assets in a system accompanied by their pertinent attributes, such as their type, manufacturer, age, material, size, and location. In the case of vertical assets, it can be a dashboard or list that represents the various primary components of the system.

Risk Matrix

A risk matrix is a tool for determining the degree of risk a situation or action poses—in this case, how risky an asset’s condition is to people, property, and the environment.

A risk matrix has two axes:

1. Likelihood of Failure (LoF) includes variables such as asset age, material, velocity, and past work orders.
2. Consequence of Failure (CoF) includes variables such as the presence and significance of public spaces, traffic, medical and educational facilities, and environmental impact.

The risk matrix assigns numerical values to both the LoF and CoF, and then multiplies them together to provide a final score, called criticality. Assets can then be ranked based on their criticality.

Condition Assessment

A condition assessment is the total value of the calculated likelihood of failure (LOF) for each asset. As described above, the key performance indicators will vary based on asset type and available data.

Level of Service Determination

A level of service determination is tied to the physical performance of assets and can be defined via customer expectation and satisfaction.

Decision Matrix

A decision matrix is a tool for prioritizing projects based on an array of criteria weighted to reflect what the decision-maker deems most important. Typical criteria used to assess projects include criticality, cost, alignment with other projects, operational impacts, and public inconvenience.

Each asset receives a score for each criterion, multiplied by its weight and then added together to provide a final score, called a priority rating. Projects can then be grouped and ranked based on their priority rating, which is the foundation of a capital improvement plan.

Financial Planning with a Funding Strategy

Financial planning with a funding strategy pairs the results of the steps above with a methodology to assure the improvements can be attained financially. It outlines various steps required to achieve the level of service determined.