Meeting the infrastructure asset management challenge

As pressures on budgets intensify the industry is working harder to find more cost effective ways to manage assets through closer integration and promotion of data led innovation.

Bernadette Ballantyne
30 July 2015

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A mood of cautious optimism pervaded among participants at the Amey/Infrastructure Intelligence discussion in London last month. Political consistency, economic growth, longer term planning and clarity from clients, complimented by innovative approaches and new technical developments from the supply chain were all cited as reasons for positivity.

Yet challenges remain, said participants with resources under pressure, bureaucracy stifling procurement processes, key infrastructure policy decisions outstanding and a pressing need for cultural change to encourage more collaborative approaches.

“There is a sense that the economy is moving in the right direction and there are elements of optimism in the industry across the board. We have seen some flagship projects move on a number of fronts; there are still lots of challenges ahead but ones we like to solve,” said David Spencer, managing director of Amey’s consulting business.

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Geographically participants said there were big differences in workload across the UK. Devolution in cities such as Manchester is being viewed with great excitement. “In Manchester devolution will see a significant element of the budget devolved and that has transformative potential,” said Mark Brown, business development director, Amey.

Participants

Chair: Antony Oliver, editor, Infrastructure Intelligence

Dr Mark Brown, business development director, Amey 

Nick Burman, business development director, FM Conway

Dale Evans, alliance director, Anglian Water

Steve Fox, chief executive, BAM

Andy Jinks, head of asset strategy & investment, London Underground

Yogesh Patel, process & improvement director, Eurovia UK

Nick Shires, regional director southern, Lafarge Tarmac

Dana Skelley, director of asset management, Transport for London

David Spencer, managing director, Amey

However firms also pointed to a north south divide with Scotland and the north static compared to a booming South East. “London is a hot spot. Demand for concrete is at the highest level for some time,” said Nick Shires, regional director southern for Lafarge Tarmac, highlighting that demand for all product areas is strong in the south.

“We are generally very positive,” said Nick Burman, business development director for London based infrastructure maintenance provider FM Conway. “There are certain challenges and we are under pressure to make investment go further.”

Director of asset management for one of London’s biggest infrastructure owners and operators Transport for London, Dana Skelley, pointed to the city’s growth as being a key driver behind maximising efficiency and capital investment.

“We must constantly adapt to how London is growing. That means a huge amount of investment in new assets,” she said explaining that as a client the organisation was also seeking to manage existing assets more efficiently. “For the first time the surface transport, rail and underground teams are working together developing common strategies and demonstrating efficiencies.”

At the same time the organisation is looking long term said London Underground head of asset strategy and investment Andy Jinks. “We have a strong 10 year asset management plan, so we know where we are going. We cannot turn our services off so we have to sustain investment in maintenance alongside managing capacity growth. Transport keeps London growing and the rest of the UK depends on London fulfilling its potential.”

New ways of working

Added to the growth challenge is the increased political aspect of infrastructure provision with customers having more influence on assets than ever before.

“Regulatory models have matured. In the water industry the focus used to be around delivering a five year programme, now we have a 25 year strategic plan and clear customer outcomes, and then a five year plan that then fits within that longer term framework,” said Dale Evans, alliance director, Anglian Water and a member of the influential Infrastructure Client Group (ICG).

Effectively delivering these outcomes is the current challenge he said, and requires a much more integrated approach.

“Collaboration is sometimes misinterpreted as just developing better relationships. Alignment and Integration are the real aims, ensuring that all parties are working towards a common set of outcomes and that integrated teams can deliver the changes required. This is easy to say, but hard to achieve as it requires underlying and complex culture change.”

“We are taking a customer focused vision. We want to remove the pain and delight our customers”

Dana Skelley, director of asset management, TfL

For some clients this may mean changing delivery models, and some are further along with this than others. “In the past couple of years we have seen changes where as a Tier 2 supplier we were brought in through the early contractor involvement model and we have helped to drive more cost effective solutions,” said Shires.

“But in some cases we’re brought in too late for the client to get efficiencies,” he said noting that Highways England has led on this and some Local Authorities, taking this approach have found that it delivers real value.

“If clients give the supply chain the opportunity they will get greater value. The barrier to working more effectively is not the contractors, it starts with the clients,” said Evans. “Clients get the supply chain they deserve.” 

Others agreed. “Suppliers have to be followers as other people write the rules. It can only be changed from within the clients and we are stuck within these rules of engagement,” said Steve Fox, chief executive of BAM.

If clients want more efficient asset management then decisions must be made on value not cost said participants pointing to procurement processes as being one of the biggest issues holding back the industry. However others said it was too easy to blame client procurement departments. “The industry has a lot to answer for, we haven’t always helped ourselves,” remarked Yogesh Patel, process and improvement director, Eurovia UK (previously of Ringway Jacobs).

One area where industry could help itself is in standardising areas of procurement which are the same for all parties however this is challenging with contractors reluctant to relinquish any competitive advantage.

In Manchester devolution will see a significant element of the budget devolved and that has transformative potential,”

Mark Brown, business development director, Amey

“We should align where we can to concentrate on efficiency, but it is difficult to get commonality of approach. I have suggested to a group of contractors that we take one approach to health and safety as every employer has a different version of it, even though we are completely aligned on wanting to eliminate accidents. I have not seen much desire to support this,” said Fox.

“Waste is a huge issue,” agreed Burman, “We are getting more into design to help clients reuse more materials.”

Future trends

Looking ahead models for managing assets are changing said firms, partially driven by the increasing amounts of data now available and technology such as BIM that is driving more collaboration between parties.

“We are all starting to share more, we are moving into the Google realm but there are other industries out there that are much better at it,” said Shires. 

The drive to share is also being pushed forward by young professionals. “The next generation collaborate naturally,” said Fox explaining that ideas that might traditionally have been patented are now simply shared. Information will ultimately be visible to everyone breaking down some of the traditional boundaries agreed participants.

Again this means more collaboration between clients and the supply chain which used to happen naturally noted Brown.

“Needing more collaboration seems to me to be the sign of a problem not the solution. This used to happen naturally twenty years ago so what has changed? There is much more emphasis now on rules, procurement and contracts, we are trying to pin more down than ever. Do all the clever people go into the contracts side now? Have we lost trust?”

“Clients get the supply chain they deserve”

Dale Evans, alliance director, Anglian Water

Some agreed this was the case with so much pressure on the bottom line that many of the compelling arguments to drive value in asset management are being lost. Others pointed to the importance of ensuring that the best investments are made for the long term. “We have to hold our nerve. £1 spent now can save £5 later,” said Jinks. “The best outcome is the best whole life cost option and clients should be more concerned about the cost of not delivering that.”

An example of this was given by Shires who pointed to trials of a new high friction coloured surfacing material, Ultigrip, on the A6 in Leicestershire. The materials aids skid resistance in areas of heavy braking and according to Lafarge Tarmac its 12 year life expectancy outperforms traditional anti-skid hot laid asphalt by up to 9 years greatly reducing the operational and whole life costs.

A new colourless version of the product is soon to be used on the M25. “These products have been developed to meet the needs of our clients,” said Shires.

Transferring maintenance risk to the supply chain is another strategy being employed by some clients. “We have worked closely with the lift and escalator supply chain and made it clear that we want more standard products. A 30 year design, manufacture, install and maintain arrangement has been put in place for these new products, meaning the supplier is more able to manage risk, which in turn has helped drive innovation,” said Jinks.

Such developments are a far cry from some past approaches where a lack of maintenance investment has ended in disaster. Amey’s Mark Brown pointed to US road bridges as a prime example.

“There was no maintenance because the government planned just to replace them at the end of their design life but now there are too many, 60,000 structures. Government squeezed operational spend but now have to spend billions on new assets.”

Infrastructure politicised

Another critical dimension affecting assets of the future is the increased public awareness related to the services that infrastructure delivers. Users are able to highlight problems directly and immediately to asset owners, often in a public environment such as social media. Potholes, rail services, power supply and road availability are just some of the hot topics with users demanding better performance.

”The industry is making a huge leap from being engineers to being customer service providers,” said Patel.

“Customer feedback is becoming more dynamic by the day,” pointed out Evans. “If we’re going to be part of the ever increasing flow of information around customer experience and assets then we need to develop really joined up and integrated teams that are able to deliver continuous innovation. As clients we need to give partners the opportunity to deliver customer outcomes, not just ask them to build stuff.”

Such challenges, along with the increasing amounts of data means more analysis is needed said Brown pointing to a need to recreate operational research departments in companies as was once commonplace.

“We need to spend less time on mechanics and more on analysis”. At the same time clients are also battling with technology change which is too fast to predict. “We don’t know what we want infrastructure to do in 20 years time. There is not enough future proofing happening,” said Fox. 

This is coupled with customers and investors demanding that their infrastructure does more, something that other sectors are moving ahead on. “Airlines really focus on their customers, which means that an airport is also a place where customers can shop, eat and relax,” said Patel. Skelley agreed that influences from other industries were finding their way into transport. “We are taking a customer focused vision. We want to remove the pain and delight our customers,” she said.

To do this infrastructure asset owners must therefore create a culture and a delivery model that promotes innovation and efficiency. Bringing forward the best technologies from suppliers means engaging with them early enough to benefit.

Understanding the most efficient maintenance approach means analysing asset performance and planning the most cost effective strategy. Delighting customers might mean providing services before users even know that they need them. If the industry can do all of these things in an integrated, data rich environment, then asset owners and users alike are set to benefit long into the future.