T h e U n i v e r s i t y o f S o u t h e r n Q u e e n s l a n d

[Link]

ENG8104
Module 1 – Introduction to Asset
Management
Lecture 1

A/Prof David Thorpe

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Course objectives
• Understand role of asset
management
• Apply whole of life financial
planning for asset development
and management
• Critically evaluate and apply
options for asset management
• Know and apply asset management
systems
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Contact Information

• Examiner:
A/Prof David Thorpe
• Room B418, Springfield Campus
• Telephone: 3470 4532
• Email: thorped@[Link]
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Course Overview
• Introduction to asset management
• Strategic asset management
framework
• Asset management economics
• Asset management operations
• Integrated asset management
• Asset management systems
• Emerging issues in asset
management
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Asset Management in an
Engineering Environment Relationships
1 Introduction to 1 week
between the
Concepts
Asset Management
Modules
Applications

3 weeks 2 The Strategic Asset

Management Framework

2 weeks 3 Asset Management 4 Asset Management

2 weeks
Economics Operations

5 Integrated Asset
1 week
Management

6 Asset Management
2 weeks
Systems

7 Emerging Issues in
1 week
Asset Management
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Workshops - 1
• Tuesdays 9.00 am to 12.00 pm
• L209
• On Campus: Weeks 1, 3, 5, 8, 9, 11,
13
• Online: Weeks 2, 4, 6, 7, 10, 12
• Lectures and tutorials will be
recorded.
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Workshops - 2
• All workshop periods combine
a lecture and a tutorial
• Main focus of tutorial
component - readings and
exercises from previous set of
lectures
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Assessment
• Assignment 1 (50%) is due 22 April
2021
• Should be posted on Study Desk
during Week 2
• Assignment 2 (50%) is due 3 June
2021
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Text
Uddin, W, Hudson, WR, & Haas, R,
2013, Public Infrastructure Asset
Management, (2nd ed.). McGraw-Hill,
New York.
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Main references
• Standards Australia, 2014, AS ISO 55000 Asset
management – Overview, principles and
terminology, SAI Global Limited, Sydney.
• Standards Australia, 2014, AS ISO 55001 Asset
management – Management systems -
Requirements, SAI Global Limited, Sydney.
• Standards Australia, 2014, AS ISO 55001 Asset
management – Management systems – Guidelines
for the application of AS ISO 55001, SAI Global
Limited, Sydney.
• They are available for viewing on the Standards On-
line Premium Database of the USQ Library
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Introduction

• Module 1 introduces asset

management in an engineering
environment
– Background
– Context
– Strategic systems oriented
approach
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This Lecture

• Introduction and historical

background of asset
management
• Importance of asset
management
• Strategic approach to asset
management
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Historical background

• Asset management with us since start

of civilisation
• All cultures built assets
• Many have lasted years
• Sophisticated asset networks since
advent of industrialisation
• Clear link between development and use
of assets and modern lifestyle
• Engineering assets represent a
substantial portion of our wealth
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Example – Pont du Gard,

Nimes, France

Courtesy - Foundation Haus der Geschichte der Bundesrepublik Deutschland

Photo: Explorer/François Jourdan [Link]
(accessed 7/12/02)
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Importance of Asset
Management
• Sound infrastructure and healthy
economy are related
• Assets need to be in good condition for
a successful economy
• Necessary for good health (e.g., water
supplies)
• Also important for quality of life
• Thus important to manage assets
physically, effectively and economically
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Silver Bridge – Example of

Consequences of Asset Failure
• Connected two USA towns
• Collapsed in 1967
• 46 people died
• Resulted from cleavage fracture in lower limb of
an eyebar
• Developed over 40 years as result of stress
corrosion and corrosion fatigue
• Older design
• Location of flaw not inaccessible to visual
inspection
• Flaw would need disassembly of eyebar joint to
detect
• Resulted in national bridge replacement program
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Silver Bridge Collapse

Source: Weingroff, R.F. (1993), Highway Existence -100 Years and Beyond; A peaceful campaign of progress and reform:
The Federal Highway Administration at 100, Public Roads, 51, 2.
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What are Technological (or

Engineering) Assets?
• Asset – item of economic value
convertible to cash
• From a financial viewpoint, engineering
assets are a special class of fixed (as
opposed to liquid) asset
• Examples:
– Physical infrastructure (including buildings)
– Plant and equipment
– Organisational knowledge (e.g.,
management systems)
– Resources that support the assets (e.g.,
management, etc.
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ISO 55000 2014 definition of

asset
•Item, thing or entity that has potential or actual
value to an organisation (AS ISO 5000:2014,
S.3.2.1).
• Physical assets usually refer to equipment,
inventory and property owned by the organisation.
•Physical assets are the opposite of intangible
assets, which are non-tangible assets (AS ISO
55000 2014, S. 3.2.1, Note 2)
•AS ISO 55000:2014 is discussed in more detail later
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What is asset management?

• Some definitions:
– A systematic process of operating,
maintaining, and upgrading assets cost-
effectively
– The practice of managing assets so that the
greatest return is achieved
– The process by which built systems of
facilities are monitored and maintained, with
the objective of providing the best possible
service to users
• Facilities management and infrastructure
management are related terms
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ISO 55000 2014 definition of

asset management
• Coordinated activity of an organisation to realise
value from assets (AS ISO 55000:2014 S. 3.3.1).

• Other points:
– Effective control and governance of assets by
organisations is essential to realise value through
managing risk and opportunity to achieve the desired
balance of cost, risks and performance (AS ISO
55000:2014 S. 2.1)

– Asset management enables an organisation to examine

the need for, and performance of, assets and asset
systems at different levels (AS ISO 55000:2014 S. 2.4.1)
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Strategic approach to asset

management
• Life cycle approach
• Beyond asset maintenance
• Planning, design, development,
operation, disposal
• Groups (or networks) of assets as
well as individual assets
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Relationship between assets

and their environments

Owner/Manager User Community External

Community

Social Environment

Economic Environment

PHYSICAL INFRASTRUCTURE

Natural Environment
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Note the relationships

• Assets are related not only to natural
environment but also to social and
economic environment
• There are three communities of interest:
– Owners and managers
– User community
– External community
• Each has different perspectives of the
asset
• Together they form the wider community
• Asset manager will need to balance all the
interests
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Goals of assets (1)

• User Community Goals
– Ability to provide an adequate level of
service at the required level of demand.
– Meets the required functional serviceability
(i.e., condition) to be fit for purpose.
• Owner / Manager Community Goals
– Delivers optimum service life, consistent
with the requirements of stakeholders.
– Delivers maximum benefit over the life cycle,
consistent with other requirements.
– Operates at minimum life cycle cost,
consistent with other requirements.
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Goals of assets (2)

• External Community Goal
– Satisfies external requirements (e.g.,
environmental, political) to a level
acceptable to the community outside
users, owners and managers.
• Wider Community Goal
– Delivers a whole of life performance (the
integral of functional serviceability)
acceptable to its stakeholders.
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Asset Manager Functions

• Network (or group) level
– Whole of network issues
– Program management
• Individual asset level
– Manage life cycle performance of
individual asset
– Project management
• Component (or item) level
– Sub-project management
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Summary
• Technological assets are important to the
community, the economy and the environment
• They are the installations, plant, equipment,
knowledge and resources that support and aid
community, commerce and industry.
• Asset management in the engineering environment
can be considered as developing, operating,
safeguarding and maintaining technological assets
to maximise whole of life return.
• A life cycle, strategic, systems oriented approach is
needed for successful asset management.