Life-cycle asset management

Life-cycle asset management

Abstract

This research examines the effectiveness of applying a life-cycle project management (LCPM) approach to asset management that will optimise strategic business performance outcomes to the power industry. The research discusses the findings of two case studies in the NSW electrical power industry that apply the theory of life cycle asset management (LCAM) and demonstrate LCAM as a better way of doing business.

Experts in the electricity industry identified the challenge of providing senior management with a decision support reporting environment with enough detail and clarity to support decisions on future company operations and capital investment. Most organisations either have already, or could obtain through appropriate measurement or sensing, a large amount of information about their capital infrastructure and operational parameters. The modelling and manipulation of this information into a meaningful decision support environment is poorly understood and rarely achieved.

The research presents a new solution called LCAM by overlaying the two fields of project management and asset management and examines complementary and synergistic facets. LCAM guides the acquisition, utilisation and disposal of major assets with a view to optimise end-to-end business outcomes.

LCAM is a business process and decision-making framework that covers an extended time horizon, brings together economic and engineering factors and considers individual assets as an integral part of a holistic network system. The LCAM approach incorporates the economic evaluation and trade-offs between alternative investment scenarios, both at project level and the network system level, and utilises this information to support cost-effective strategic investment decisions.

A business model is developed that applies LCAM theory to the case study of a 132kV to 33kV Transmission Substation (TS) and a 600MW Power Station.

LCAM application provides new management insight and prompts decision making closely aligned with business performance factors. LCAM is an improved way of doing business that responds to an environment of increasing performance demands, aging infrastructure and limited resources.

A business case decision-making tool called Smart Project Management Information System (SPMIS), developed by The University of Sydney's Project Management Group supports LCAM theory and is utilised and adapted in a second phase of this research project to support LCAM in the electrical power industry.