Strategic Asset Management

Running head: STRATEGIC ASSET MANAGEMENT
Strategic Asset Management
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Table of Contents
1. Introduction............................................................................................................................6
1.1. Background.....................................................................................................................6
1.2. Goals and Objectives of Asset Ownership......................................................................6
1.3. Plan Framework..............................................................................................................6
1.4. Basic and Advance Asset Management..........................................................................7
2. Levels of Service....................................................................................................................7
2.1. Customer Research and Expectation...............................................................................7
2.2. Strategic and Corporate Goals........................................................................................8
2.3. Legislative Requirements................................................................................................8
2.4. Current Level of Service.................................................................................................8
2.5. Desired Level of Service.................................................................................................9
3. Future Demand.......................................................................................................................9
3.1. Demand Forecast.............................................................................................................9
3.2. Changes in Technology...................................................................................................9
3.3. Demand Management Plan...........................................................................................10
4. Life Cycle Management Plan...............................................................................................10
4.1. Background Data...............................................................................................................10
4.2. Routine Maintenance Plan................................................................................................10
4.2.1. Maintenance Plan...................................................................................................10
4.2.2. Standards and Specifications..................................................................................11
4.2.3. Summary of Future Costs.......................................................................................11
4.3. Renewal Replacement Plan...............................................................................................11
4.3.1. Renewal Plan..................................................................................................................11
4.3.2. Renewal Standards.........................................................................................................11
4.3.3. Summary of Future Costs...............................................................................................12
4.4. Creation/Acquisition/Augmentation Plan.....................................................................12
4.4.1. Selection Criteria....................................................................................................12
4.4.2 Standards and Specifications...................................................................................12
4.4.3. Summary of Future Costs.......................................................................................13
4.4. Creation/Acquisition/Augmentation Plan.....................................................................13
4.4.1. Selection Criteria....................................................................................................13
4.4.2 Standards and Specifications...................................................................................13
4.4.3. Summary of Future Costs.......................................................................................14
4.5. Disposal Plan.............................................................................................................14
5. Financial Summary..............................................................................................................14
5.1. Financial Statements and Projections............................................................................14
5.2. Funding Strategy...........................................................................................................15
5.3. Valuation Forecasting...................................................................................................15
5.4. Key Assumption in Financial Forecasts........................................................................15
6. Asset Management Practices................................................................................................16
6.1. Accounting /Financial Systems.........................................................................................16
6.2. Asset Management Systems..........................................................................................16
6.3. Inflation Flow Requirements.........................................................................................16
7. Plan Improvement and Monitoring......................................................................................17
7.1. Performance Measures..................................................................................................17
7.2. Improvement Program..................................................................................................17
7.3. Monitoring and Reviewing Procedures.........................................................................17
8. References............................................................................................................................18
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9. Bibliography.........................................................................................................................20
Appendices...............................................................................................................................21
Appendix 1: Population Increase in every 10 Years............................................................21
Appendix 2: Demography Population Increase...................................................................21
Appendix 3: Forecasted Annual Tax Rate...........................................................................22
Appendix 4: Life Cycle Management Plan..........................................................................22
Appendix 5: Future Cost of Routine Maintenance..............................................................23
Appendix 6: Future Cost of SAMville Council...................................................................23
Appendix 7: Creation/Acquisition/Augmentation Future Cost............................................23
Appendix 8: Car Park Garage Budget Management............................................................24
Appendix 9: Financial Statement Estimation.......................................................................24
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1. Introduction
1.1. Background
SAMville Council is recognized as a town where almost 93,000 people reside and among this
population only 25% of the individuals actually pay their taxes. Being located over a distance
of 60 km from the main city, the approved plans for the development of highway is expected
to connect SAMs Council as well as the city at the same time. SAMville Council owns varied
number of facilities but the recent exercise states the requirement of determining future
liabilities associated with the council’s current management.
1.2. Goals and Objectives of Asset Ownership
The asset owner must aim to construct and renew assets, maintain and minimize asset’s cost
through the implementation of effective strategies, privatization of the authority, and develop
non-asset solutions. Increasing the source from where revenue is generated, outsourcing the
requirement i.e., leases and then disposing some of the unfavorable assets also falls under the
objectives as well as the goals of an asset owner (PRI 2018). Apart from these, another goal
of asset ownership can be recognized as maximizing huge returns at the end of every fiscal
year.
1.3. Plan Framework
In the business world, asset management is referred as a framework, through which a
decision is made in the companies. Decision, which is framed, actually involves an
integration of different principles associated with engineering as well as different business
principles. Asset management actually involves activities, which are associated with
managing, maintaining, and enhancing its physical assets in the most effective and in a cost
effective manner so that returns generated can be higher than the expenses made on it. In
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addition, this framework ensures an organization to identify certain risks present within the
operational process of a company and then mitigates it through the least possible cost
(Valencia et al. 2011).
1.4. Basic and Advance Asset Management
Basic advanced asset management plan refers to monitoring and identifying several risks
through effective analytical approaches. In order to manage the available assets, the council is
set to consider it as its major objective. Besides, the structure of asset management to be
implemented involves six different processes, which are further identified as the actual need
to handle the situation, source of data, setting-up of a model, cost allocation, perform output
analysis, and then strategize process and activities that will be approached under the
management of available assets in the council.
2. Levels of Service
2.1. Customer Research and Expectation
Research on the customers by approaching the well-designed ‘Factor Analysis Platform’ has
been considered as one of the management-related aspects, which entail information only on
about the customers. It also enables a company to determine several factors that are highly
influential with respect to the measures undertaken for the sake of the customers (Proust
2015). In accordance, customer’s expectation or needs are crucial for any company to ensure
that their expectation is fulfilled. Thus, customer satisfaction is valued because it can help the
companies identify the actual expectations of its customers (Almsalam 2014). Focusing on
the context of SAMville Council, the people residing in the town have set their expectations
on different grounds such as expectations on educational needs due to increasing rate of elder
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people in the town. Integration of high school and primary schools is another expectation of
the overall population.
2.2. Strategic and Corporate Goals
Strategic goals on resolving the current problem of SAMville Council is to construct as well
as renew the strategies, develop effective plan, procure the requirements, construct and
commission the cost breakdown structure and the resources to be used for developing an
effective asset management plan. Reduction in time consumption to perform all the strategic
activities is also a part of the strategic goals. A corporate goal has been observed as to
maintain and manage the available assets in an effective and efficient way.
2.3. Legislative Requirements
Conformance of the regulatory requirements must be practiced in order to avoid certain risks
such as financial loss, good will, other penalties, and availability of poor quality of health
safety services. Standard of the asset management and complying with every asset
management-based processes and policies must be highlighted as per the strategic activities
of asset management. Besides, the collecting data, validating it, developing as well as
managing the n effectively must also be ensured (Safi & Leversha 2017). In the present
context of SAMville Council, legalization must be met when the council approaches the
privatization process of selling the electricity generating motor at the price stated and
approved by law. NSW Government has set different legislation, which are usually imposed
upon asset related matters of different organizations or associations i.e., privatization.
2.4. Current Level of Service
The current level of service to be provided by SAMville Council to its people includes the
high quality of health-based services, reliability, and performance-based services. Besides,
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