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Machinery & Equipment MRO
December 2021
ASSET MANAGEMENT IN THE PUBLIC AND PRIVATE SECTORS – IS THERE A DIFFERENCE? The opportunity for North American companies to adopt asset management as their approach in doing business. BY CLIFF WILLIAMS
perceived benefit other than, maybe, reputational, as opposed to the private sector that has always considered ISO certification as being a way to demonstrate their commitment to quality, environment, and value in their marketplace, and by inference, a company you’d like to do business with. What has driven governments to suggest asset management has been the belief that money, such as grants, taxes, etc., has not been utilized to the fullest value? The belief in asset management in Ontario was so strong that the government enacted Ontario Regulation 588/17 – Asset Management Planning for Municipal Infrastructure, which required municipalities to provide detailed asset management plans with justification, initially for their core assets, such as water, wastewater, roads, bridges, and culverts and expanding to all of their assets (COVID-19 has forced the due dates to be a little bit fluid). This Ontario Regulation is detailed in what it requires from the municipalities, but, in a somewhat similar way to ISO 55000, it doesn’t prescribe how or what these details should result in; it presents itself more as a report card rather than a road map for continuous improvement. So, let’s look at some of the differences that applying asset management in the municipal or government sector brings.
Of course, the focus of asset management is providing value for the stakeholders, so how do the municipalities demonstrate that? The first challenges they face are; the number and different types of stakeholders; the government that provides grants and funds; the residents and businesses who pay taxes in one form or another; the employees at the municipality who are meant to oversee all of this; and the council. There is such a wide range in the stakeholder group of residents and businesses, which makes it very difficult to come up with a statement of what represents value. What is of value to some, will be meaningless to others, so how do we determine value? This usually ends up with strategic objectives as general as “deliver exceptional service” or “promote a high quality of life”, which mean many different things to different people. When the municipality then tries to cascade these objectives into meaningful measures so they can identify success, they find it difficult to do so, and this then cascades through the organization, with each level struggling to find those measures that really impact the strategic objectives. When some departments find themselves in this situation, they become
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sset Management has not been embraced in North America as much as it was expected by those who saw the benefits realized in other countries through the use of PAS 55, which was the precursor to the development of ISO 55000 suite and how organizations found value and success in managing the organizations. Recently, only 14 or 15 organizations were certified to ISO 55001 in North America, out of over 300 worldwide. Across the world, we see uptake from utilities, airports, transportation, facilities management, infrastructure, and engineering as well as a smattering of government type organizations. Obviously, there is an opportunity for North American organizations to adopt asset management as their approach to doing business, but we haven’t seen it yet. This is not a new phenomenon, as those of us who were around for the outburst of lean manufacturing around the world in the 1990s and 2000s can testify; many North American organizations took parts of the lean process and used it in conjunction with their existing processes and called themselves lean, but very few adopted all of the facets that would have realized the benefits of the lean approach. Some, in fact, thought it simply meant doing more with less, and reduced their workforce and claimed to be lean. The interesting take on asset management in North America, especially in Canada, is the uptake of asset management by governments and municipalities. It is unlikely that municipalities will certify to ISO 55001, as there is no
