Moving towards mature adoption of Totex

A perspective on some of the key drivers and opportunitiesfor implementation of enhanced Totex approaches in the UK water sector

Steven Lloyd, Arup

8 November 2017

Totex – what is it

Totex: Combined investment of operating cost (Opex), maintenance and capital expenditure (Capex)

Ofwat PR19:

Tougher performance and cost evidence challenges for PR19

Changing nature of programmes for AMP7 and beyond

Fewer big capital projects,lots of small works,more maintenance challenges.

Challenge of ageing infrastructure

Big data analytics

Distributed sensor networks

Open data

Live stream satellites

Challenging Capex interventions

Real-time control and response

Predictive maintenance

Autonomous repair

CC

BY

Ges

toos

Artificial intelligence and machine learning

Advanced robotics

.

Virtual and augmentedreality

WIF Totex maturity assessment

A progressive approach to support the industries exploitation of Totex thinking

Phase 1 Phase 2 Phase 3Current Work Future WorkComplete

The partners

Review of Case Studies

Components of success

TotexMaturity

assessment

Embedding Totex

Understanding characteristics of best practice Totex

Key Totex themes

Stakeholders

Regulator Interaction

Organisational Strategy

Operational Approach

Maintenance Approach

Information Management

Regulatory approach

Ownership

Customers

Stakeholder Engagement

Leadership

Operational practice including Incident & Event Management

Reactive Maintenance vs. Planned Maintenance

Information and Data Management

Asset Investment and Renewals

Performance Monitoring / Risk and Review Approach

Collaboration between Departments

Capability and Skills

Outsourcing

Totex activities and behaviours

Stakeholders

Stakeholders

Enablers Challenges

Communicating change with stakeholders

Forward thinking stakeholders

Long-term investment incentives

Stakeholders imposing financial constraints to sp

Limited stakeholder education

Short-term investment objectives

Stakeholders financial constraints to spending

Limited incentives to Totex thinking

Regulator interaction

Regulatory interaction

Enablers Challenges

Communicating change with regulators

Challenging traditional approaches to regulation

Collaboration within water industry

Limited guidance for implementation

Lack of willingness to change

Uncertainty about regulatory change (e.g. Brexit)

Limited incentives for long term solutions

Organisational strategy

Organisational strategy

Enablers Challenges

Good vertical and horizontal communication

Risk averse thinking

Cultural attitude to resist change

Lack of skills to operate in a Totex world

Limited incentives for change

Implementation of approach across all policies

Companies sharing Totex best practise

Resource Management – flexibility to hire

Slow change in supply chain agreements

Operational approach

Operational approach

Enablers Challenges

Holistic life cycle asset planning

Solution incentivised with supply chain

Monitoring asset performance

Risk averse engineering

Capex focused procurement

Opex collectively allocated, not separated by site

Collection and utilisation of performance dataManaging performance data and cost

Maintenance approach

Maintenance approach

Enablers Challenges

High amount of proactive maintenance

Challenging traditional approaches

Ageing assets

Workforce falling behind training requirements

High amount of reactive maintenance

Capex-biased project development

Adaptive planning processes

Optimising existing sites

Optimising build processes, e.g. off-site

.

Information management

Information management

Enablers Challenges

Effective systems for data collection

Dedicated data storage guidelines and controls

Adequate data analytics skills

Incomplete asset inventories

Manual paper-based information gathering

Dated information management systems

Inadequate training and change management

People to manage information systems correctly

Reliable automated processes

Dedicated change management and training

Summary- a call for action!

Highlighted the drivers for change

Presented some of the data challenges and opportunities

Explored need for whole lifecycle decision making

Showed how analytics and new digtal technologies may enable accelerated progress

Reviewed current Totex maturity highlighting some areas to address

Huge opportunity for the industry to grasp the Totex approach to improve resilience, drive enhanced performance and provide greater value to customers