Question:
Discuss about the Life Cycle Cost Analysis And System.
Asset management can be said to be a systemic process that deals with acquisition, usage, maintenance, upgrade and disposal of an asset in the most cost-effective way possible. The concept of life cycle cost analysis and system Engineering can be used to enhance asset management such that the overall output of the asset management process is more desirable to all the stakeholders of the project. System Engineering can be said to be interdisciplinary way or approach in which a project is scoped along all its relevant aspects that needs to be put into consideration to achieve desired results for all the stakeholders. On the hand life cycle cost analysis is a process that is used to determine the most cost effective way of purchasing, owning, operating, maintaining and disposing of an asset when options available are all appropriate on technical grounds. This paper will therefore attempt to critically review and examine various existing literature on asset management in relation to system engineering and/or life cycle cost analysis. Specifically, the paper will attempt to address this concept with regard to water infrastructure with an aim of increasing derive life of water pipeline.
Life cycle cost analysis should be made one of the award criteria in procurement process. With this information the owners of the project will be in a position to get the best water project infrastructure in terms of its cost and usage. The document postulates that the nature of the infrastructure maintenance will determine the useful life span of the project. Therefore, having life cycle cost as an award criteria during procurement will enable the owners of the project to receive various options and offers with varied benefits in terms of long term usability of the water infrastructure project. The diagram below shows relationship between ability to influence cost and time in relation to various phases of the project.
From the figure 1 above, project cost will likely be low when LCC analysis is a requirement during procurement. This will in turn enable the project owner have suitable options that when implemented will see the water project infrastructure poses longer useful lifespan. (Alegre, 2009)
According to a study conducted on water system to provide water to the consumers in the most stable way and also ensuring that the owners of the project meet their goals, an inventory of water system was developed such that managers of the project will know when an item in the system was due for replacement. This enabled the consumers to receive the commodity in a very stable way and also assisting the company and/or managers to replace trouble making component of the system before it affects the whole system of the water supply. The paper developed five levels of water supply system inventory such that the higher the level, the more detailed facilities were classified. (Lee et al., 2017)
To determine the most environmentally friendly design strategy of wastewater system for small scales to medium scale usage; life cost analysis was carried out by composing an inventory of materials and energy that would be required for the project. The study established various variables regarding the consumption of water and linked it to environmental impact it could cause. The established variables could make it easy for the waste-water system managers to easily asses the environmental effects of the systems they are managing and draw mitigation measures to limit the same. (Stenström et al., 2015)
In a study conducted to efficiently utilize the limited resources available in ensuring the cost of maintenance and management of water system does not rapidly grow into uncontrollable levels found that the best strategy is to calculate the optimum time that a certain asset in the water system will take in use before needing a repair or replacement. To establish this, a life cycle analysis was conducted such components were categorized so that those that were in high risks of malfunction were put together and their estimated lifespan usage determined through studies on similar components. (Hitzhusen, 2008)
A simulation study on done for rehabilitation and performance improvement on existing dam structures was conducted using life cycle cost analysis techniques postulated best methods to carry out this activities with an aim of improving the useful lifespan of the dam structures. The study was done in four main steps that are; scoping and definition of the goal, analysis of the inventory, project impact analysis and improvement analysis. (Godfrey and Hailemichael, 2017)
In order to properly carry out a life cycle analysis on the project, water assets must be classified according to the water systems classification systems method. Any item in the entire supply network must be checked to determine the current its current status. Therefore according to this study current status determination of every item in the water supply system is crucial for the purpose of carrying out effective life cost analysis on water supply systems. (Tse et al., 2015)
To develop and built water infrastructure in rough terrain landscape, system engineering study must be conducted to determine the best routes and optional available for the project to optimally utilize the resources available such as gravity and water systems items. In such cases it is important to find out which areas of the place can be best used to lay down the pipeline network of the water supply system. System Engineering will therefore coma in handy for such scenarios.
To develop a strategic plan for water system, a life cycle analysis cycle must be carried out such the project can meet future demands and regulatory conditions set by the authorities. Without proper and reliable LCC, water systems asset management will be challenging and the project managers will not be able to estimate the future or expected work load of the system. This may future strain the resource leading to constant breakdowns that affects the useful lifespan of the project infrastructure. (Shahata and Zayed, 2013)
Asset management is continuous processes that require close monitoring of the system. In order to make decision on what needs to be done on any particular item of the system, LCC and system engineering tests need to be carried out for the managers to make informed decision regarding an item or an issue within the water network system. Effective scheduling of maintenance of the project is advised or informed by the outcome of an LCC done on the same infrastructure. (Brandes, 2009)
Strategic decision making to establish and identify reliable asset management policies and optimal long-term investments, be best arrived at be conducting life cycle analysis tests on the existing projects. The goal is to utilize technological advancement that is made available through research and development on water infrastructure. In making this strategic decision, managers must have in mind the options that their systems can take up or upgraded to and this can be established through conducting life cycle cost analysis and system engineering studies. (Aikman, 2014)
The aim of this paper is to come up with or develop an inventory that is needed for the purpose of life cycle analysis (LCC) of a water project supply system.
The article handles the concept of water system inventory development through defining data asset for each item in the water supply system. The article grouped or divided the water supply system into three main categories that is pipeline network, Pumps and distribution facilities. According to the study pipeline facilities accounts for the largest part of the water supply inventory. This was therefore future grouped depending on its purpose and functions into four groups that are; pipes uses for conveyance purposes, transmission, distribution and supply facilities. The article divided the inventory into five levels such that an inventory placed at the highest level contained more details than the items placed at the lower level of the inventory. By so doing the article was able to attach relevant importance of the item to the water supply system such that the managers would be able to easily identify areas of the project that require close monitoring. The paper also contains 12 items and diagnosis results that can be further altered by the water supply systems administrators to suit any of their systems and have customized study based on the this paper’s research design. The data used in this study was obtained from a real water supply company Yeong-Wol pipeline systems. (Lee et al., 2017)
The paper has systematically approached the concept of inventory development for the purpose of life cycle cost analysis of the project. The subsequent LCC done on the project following the laid down procedures as established through the detailed inventory, enables the management to easily identify and manage the water supply systems under their sections. The fact that the paper provides 12 diagnosis tools or areas of examination whereby a water supply system can be subjected to LCC analysis and further contains a provision for addition of further diagnosis measure, shows that the research can be applied in a number of water supply systems to provide reliable information to managers to make informed decision on the asset management issues concerning similar water systems or infrastructure.
Relating this document to ISO 55000 fundamentals, its clear that the article complies with the standards as established by the ISO 55000 certification. The standard formulate that the asset management has to have value to all the stakeholders that is the customers and the project owners. With the establishment of robust inventory system as postulated by the annotated article, the value of the asset will be realized to all the stakeholders. ISO 55001 provides that assets management decisions of a project needs to be aligned such that when an asset management decision is taken then it is the best or optimal decision for the entire asset in the project. Relating the study on ISO 55002, whereby it stipulates that a proper governance framework must be established for asset management, the outcome is that through the establishment of proper water system inventory there is going to be a proper governance structure or framework as all the assets in the system will be categorized with detailed information needed for oversight and governance. (Lee et al., 2017)
Management of the asset after acquisition has cost implication that affects life cycle cost associated with the asset. Depending on the type of the asset, its management can be a high or low. For example in water systems pumps require serving from time to time due to wear and tear and also due to the load as a result of pumping water on continuous basis. Water supply systems needs continuous investments depending on the change of demands such as growing market or complying with a certain regulation brought in place by the authorities. There is also the need for meeting varying customer’s demands and satisfaction that will necessitate investment in the infrastructure to enhance or upgrade it to accommodate new requirements. After the acquisition or installation of the project which has high initial cost, the cost of managing the project is the next significant cost of the project. This cost however comes in trenches as it is spread across the useful life time of the project. When this figure is calculated for a given considerable period of time, the figure may be significant in comparison to the entire cost of the project. Therefore managing the asset after acquisition has a substantial impact of the life cycle cost analysis of the project. (Alegre, 2009)
In conducting life cycle analysis the cost drivers of the management part of the cycle should be categorized such that those that require regular investments are grouped together while those that need fewer repairs for instance are also grouped together. This will provide the management with easier schedule and proper planning or scheduling of maintenance of the water project infrastructure. The cost drivers can also be handled in such a way that for those delicate items in the system a proper design or mechanism should be developed to minimize on their breakdown and leads to repairs within short period of time.
References
Aikman, D. (2014). Water services asset management: an international perspective. Infrastructure Asset Management, 1(2), pp.34-41.
Alegre, H. (2009). Strategic asset management of water supply and wastewater infrastructures. London: IWA Publ.
Austerberry, D. (2006). Digital asset management. Oxford: Focal.
Brandes, K. (2009). Life-Cycle-Cost Analysis and Design of Civil Infrastructure Systems. Stahlbau, 72(7), pp.534-534.
Bull, J. (2010). Life cycle costing for the analysis, management and maintenance of civil engineering infrastructure.
Godfrey, S. and Hailemichael, G. (2017). Life cycle cost analysis of water supply infrastructure affected by low rainfall. Journal of Water Sanitation and Hygiene for Development, p.washdev2017026.
Haffner, J. and Gennady, E. (2011). Water infrastructure issues. New York: Nova Science Publishers.
Haviland, D. (2012). Life cycle cost analysis 2. Washington: American Institute of Architects.
Hitzhusen, F. (2008). Cost-benefit analysis and its application to river water quality and infrastructure improvements. International Journal of Sustainable Development and Planning, 3(2), pp.147-160.
Lee, H., Shin, H., Rasheed, ,. and Kong, M. (2017). Establishment of an Inventory for the Life Cycle Cost (LCC) Analysis of a Water Supply System. Water, [online] 9(1), pp.1-13. Available at: https://file:///C:/Users/ben/Downloads/water-09-00592-v2.pdf.
Lee, S., Yoo, D., Jung, D. and Kim, J. (2017). Application of life cycle energy analysis for designing a water distribution network. The International Journal of Life Cycle Assessment.
Mathew, J., Ma, L., Tan, A., Weijnen, M. and Lee, J. (2012). Engineering Asset Management and Infrastructure Sustainability. London: Springer London.
Shahata, K. and Zayed, T. (2013). Simulation-based life cycle cost modeling and maintenance plan for water mains. Structure and Infrastructure Engineering, 9(5), pp.403-415.
Sonnemann, G. and Margni, M. (2015). Life cycle management. Dordrecht: SpringerOpen.
Stenström, C., Norrbin, P., Parida, A. and Kumar, U. (2015). Preventive and corrective maintenance – cost comparison and cost–benefit analysis. Structure and Infrastructure Engineering, 12(5), pp.603-617.
Thoft-Christensen, P. (2012). Infrastructures and life-cycle cost-benefit analysis. Structure and Infrastructure Engineering, 8(5), pp.507-516.
Tse, P., Mathew, J., Wong, K., Lam, R. and Ko, C. (2015). Engineering Asset Management – Systems, Professional Practices and Certification. Cham: Springer International Publishing.
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