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Beyond the Short Term: Transportation Asset Management for Long-Term Sustainability, Accountability and Performance

Key Agency Roles in Asset Management

Chapter 2 uses a photograph to represent the idea that creating organizational alignment is one of many benefits of adopting an asset management approach. TAM provides an overarching framework for decision making which coordinates disparate activities.

To explain how to organize and operate an agency to maximize Asset Management it is necessary to elaborate on the how the traditional functions within a department of transportation need to change. The functions of planning, design, construction and maintenance all need to alter or tailor their activities in important ways to achieve the full benefits of Asset Management. Operating in silos with a reactive, short-term term mindset impedes Asset Management, while a multi-disciplinary, long-term approach enhances it.

Policy, Strategy and Planning Establish Direction for Asset Management

Asset Management begins with sound strategy. It rejects a "business-as-usual", "muddling-through" acceptance of past practices. Instead it embraces a clearly articulated "rational comprehensive" approach to planning, programming, project-delivery, maintenance and on-going analysis. As such, a department which wants to embrace Asset Management must develop realistic long-term goals for its system conditions. It needs to set clear, numeric goals for what level of condition it wants to achieve for its pavements, bridges, maintenance features, fleet and facilities. These specific, numeric goals must be realistic to be credible. They can be based upon computerized forecasts conducted by models or be conducted by ad hoc analysis of past trends and future projections. They should extend at least a decade into the future to fully capture the long-term effects of current practices in planning, programming, construction and maintenance. To understand whether today's actions are sufficient, the departmental leader needs to understand how today's actions will affect system conditions in the future. By its very nature, Asset Management assumes a long-term view. Therefore, a long-term strategic approach to thinking about the department and about organizing its activities is essential to implementing Asset Management.

The department's planning function must be able to produce sound investment scenarios. The asset planning functions reside in various units in different agencies. Sometimes, the asset planning functions are in the Planning Division, other times they are within districts, or materials units, or for bridges they may be in the structures divisions or even maintenance. Wherever the asset planning function resides, it must do more than fulfill the short-term mechanics of the federal or state planning process. The planning function must conduct strategic long-term forecasts of system conditions and provide senior management with alternative investment options based upon various long-term scenarios. The scenario which best meets the department's policy needs, system-condition goals and financial resource forecasts can be selected.

An important component of the department's strategic, long-term approach is to meaningfully translate the long-term objectives into short-term performance measures which are drivers for annual activities. If the department seeks to increase preventive maintenance investments for greater long-term pavement performance, the number of preventive maintenance projects in the short-term Transportation Improvement Program probably needs to increase. The planning function can measure and track the short-term annual and bi-annual pavement project accomplishments for their conformance to the long-term objectives.

Formerly separate functions often become linked in an Asset Management process, therefore cross-cutting coordination is important. The maintenance of asset inventories is an important planning function within an Asset Management environment. Another important planning function is the development of the State Transportation Improvement Program (STIP), or the collection of capital projects and activities to be undertaken. In an Asset-Management framework, these two formerly separate functions become linked in important ways. Each year as the inventory conditions are updated, the conditions should be assessed and compared against the short-term condition goals which the department had set for the year. Also, the development of the projects in the STIP should be carefully done so that the particular projects actually include the precise number of preventive, reactive, rehabilitative and replacement projects which were prescribed in order to achieve the desired long-term system conditions. As mentioned earlier, all the traditional departmental functions occur in an Asset Management operation but they often occur with more cognizance and linkage as to their effects upon other aspects of the department. In this case, the development of the STIP is done with a clear objective of achieving the short-term system-condition goals, which are one annual component of a multi-year strategy. Also, as the annual inventory assessments of the condition of bridges, pavements and maintenance items occur, the resulting overall condition levels are compared to "field verify" whether the forecasted conditions were actually achieved. The two formerly separate functions of STIP development and inventory condition updates become strategically linked in an Asset Management planning framework.

Traditional planning and forecasting scenarios must be clearly understood by policy makers. The planning functions must fulfill an important forecasting role, both internally and externally to policy makers. Departments are always influenced by outside policy forces, whether they be gubernatorial, legislative, media-driven or embodied within a commission. These forces will seek to influence project selection and programming to whatever ends they deem most important. The policy and planning process of an organization can provide these influencers with clear information on the tradeoffs to be faced and the consequences to be expected from their decisions. To effectively influence the investment decisions, the forecasts need to be clear, credible and understandable. This requires the planning function to not only be expert in conducting forecasts but also to be able to clearly explain them to the public and policy makers. Important within this forecasting function is:

  • the clear estimation of available resources;
  • the trends in system condition;
  • the investment tradeoff scenarios which are possible, and;
  • a recommendation for how to balance these complex, and competing needs.

These competings needs can be between asset classes such as bridges and pavements, between important objectives such as safety and environmental enhancement, or between modes.

Project Delivery Reliability is Key to Timely Asset Treatments

The coordination between the asset planning functions and the project delivery functions is very important in an optimized Asset Management operation. The planning and programming functions play an explicit role in selecting specific projects to achieve specific system-condition goals. Outcome-related metrics drive programming decisions, as opposed to more general output measures such as merely the number of miles paved or whether a department hit a goal for the size of its construction program. The programming and project-selection decisions are explicitly tied to predicted asset-deterioration cycles. The timing of preventive and reactive maintenance projects are carefully planned to maximize asset-condition longevity. For any one project, predicting this time window and delivering a treatment project accordingly is relatively simple. When departments are managing thousands of disparate pavement sections and thousands of separate structures, the coordination of hundreds of specifically scoped and specifically timed projects becomes quite complex. Therefore, the coordination between planning and design functions must be sound.

For instance, by tracking structural deficiencies in pavement sections, the pavement planning officials can identify pavement sections appropriate for preventive maintenance treatments. Projects for those treatments can be scoped and timed appropriately with the design division. The pavement planning function also can assist design by forecasting the cumulative effects of all programmed projects upon meeting the department's pavement or bridge-condition goals. If the overall program is not projected to achieve the desired goals for a specific horizon year, either additional projects can be considered or the scope of the existing projects can be altered to achieve the asset condition goals.

Projects are reliably delivered on time and within scope in an agency that successfully optimizes asset management. The role of design or plan development units is to reliably deliver the appropriately scoped project on time so that the lowest-lifecycle-cost treatment actually is delivered to the asset when it is needed. If preventive or reactive maintenance is delivered too late in an asset's deterioration curve, the treatment effectiveness will be diminished. The importance of treatment timing is particularly acute considering the lack of adequate funding that most agencies experience.

Agencies are seeking to stretch their assets' useful lives without letting them deteriorate to a stage where they require expensive reconstruction or replacement. This creates a treatment window in which the appropriate low-cost treatment will improve the asset but the same treatment delayed may be inappropriate for that asset. For instance, a minor overlay timed appropriately can extend a pavement's life but a minor overlay on a severely structurally deficient pavement will accomplish little in the long-term. The overall lifecycle cost assumptions of when to treat an asset and how to treat it must be predicated on the reliable assumption that the treatments will occur on schedule.

Design units also must have sound cost data to successfully support Asset Management. Asset Management is about seeking the highest-return-on-investment strategies for the assets over their useful life. Assumptions about how to treat those assets must be predicated upon sound cost information. This cost information generally comes from a comparison between estimated costs and actual costs. The actual costs are derived not only from the awarded bids, but also from all the change orders which occur to a project during its construction. The final, as-built costs must be tracked and translated into useful unit costs which are fed back into the planning forecasts. The accuracy of the unit costs which can be escalated with realistic growth factors is essential to investment forecasts and scenarios. To coordinate the accuracy of planned, estimated and as-built costs, requires coordination of the planning, estimating and construction sectors. The accurate data they generate must be available to the Asset Management planners who are forecasting system needs. In the Utah DOT case study, the Asset Management staff noted that capturing reliable asset-treatment unit prices was a key step in their Asset Management development. Separating the costs of pavement treatments from ancillary costs in projects was important to forecasting budget levels needed to sustain pavement conditions.

Departments have a formal, documented process for approving significant change orders and cost increases in an Asset Management framework. Because funding and programming decisions have been carefully balanced in an Asset Management environment, a significant cost increase in one project results in the delay or cancellation of another. The cost change which results in a project delay or cancellation may ripple through the carefully balanced network analysis. The production or plan delivery unit needs to formally report the cost increases and coordinate that information with the planning and programming staffs who had balanced the program originally. Not only are project-delivery dates carefully tracked, but adherence to project cost and scope must also be coordinated.

Construction's Critical Quality-Control Role

It is self-evident that sound construction, inspection and materials-testing practices are important in Asset Management. The detailed adherence to materials and construction specifications are always a priority. In an Asset Management framework, the reliance on sound construction techniques is even heightened because the organization is relying on the full performance of any particular treatment as part of its carefully choreographed and balanced program of projects.

The Importance of Maintenance Should Not be Overlooked in Asset Management

Maintenance forces can become a key partner in an Asset Management framework. Maintenance activities traditionally have been reactive but they become incrementally more strategic and pro-active when they are fully integrated into an Asset Management framework. The daily work maintenance forces do can be strategically focused upon the maintenance activities which most directly support the continued performance of assets. These activities are unglamorous but important. They can include:

  • Systematic crack sealing;
  • The application of low-cost treatments such as chip seals;
  • The cleaning of under drains;
  • General drainage maintenance;
  • The strengthening of shoulders which can prevent pavement edge failures;
  • The clearing of scuppers and expansion joints on bridges;
  • Bridge deck patching;
  • Full-depth pavement repairs which contribute to pavement structural integrity instead of mere surface patching.

It has been common in recent decades for maintenance forces to operate under maintenance management systems. It has been less common, however, for those forces to be explicitly trained as to how the above activities can extend the life of pavements and bridges. In a fully organized, asset management framework the front-line maintenance forces are viewed as an important ally in the process.

Information and Analysis Rises in Importance in Asset Management

Information and analysis is probably the area of a traditional department of transportation which most grows in importance during the transition to a full Asset Management environment. As departments embark on an Asset Management effort, they quickly consume ever-increasing amounts of information and analysis. Legacy asset inventories such as bridge, pavement and maintenance inventories are increasingly relied upon as the basis for scenario and tradeoff analysis. Management systems are often found to be lacking in the detail and flexibility which decision-makers soon require as they seek ever-more complex scenario planning.

Nearly all departments have basic inventories for their pavement, bridge and maintenance assets. In some cases where Asset Management was not emphasized, these inventories degraded in terms of the accuracy and timeliness of their data. If the data were not heavily relied upon for decision making, there was little institutional imperative to sustain them in a high condition. Once decision makers come to rely upon sound condition data as the basis of scenario forecasting and project selection, the need to update and enhance the legacy inventories rises in importance.

Management systems are called upon for increasingly sophisticated scenario analysis. As the department refines its Asset Management approach it will seek to increasingly improve the accuracy, specificity and scope of its scenario forecasting. As it discusses options with policy makers, they will seek answers to ever-more complex questions about the effect of different investment options. These scenarios will put increased pressure upon traditional management systems, which the information technology unit will be asked to enhance.

The measurement of performance in all Asset Management functions will require continuous reporting. Departments which rely heavily upon Asset Management tend to develop "dashboards" and other performance reporting processes. These reports are desired so that policy makers can measure progress of the multiple and inter-related functions which must occur continuously to effectively implement Asset Management.

Leadership and Communication in Asset Management

The execution of Asset Management requires vision, communication and continuous self-evaluation. In short, it requires leadership. If left to their own best efforts, the various units within a department will attempt within their span of control to improve the assets under their jurisdiction. However, to effectively achieve the extensive coordination and resource-allocation tradeoffs described above, a leadership structure needs to be in place. This structure must be able to effect timely and reliable execution of activities and it must be able to enhance institutional learning by compelling the continuous analysis of results. In short, the successful change from "business as usual" to a "rational and comprehensive" system requires compelling leadership.

North Carolina DOT Case Study

Following is a case study of the North Carolina DOT. The evolution of Asset Management in North Carolina clearly reflects many of the evolutionary trends described in Chapter 2. In North Carolina, the roles and responsibilities of many disparate units were clarified to focus their efforts to collaboratively embrace Asset Management as the organization's framework for managing its highway system. The North Carolina case study also foreshadows trends relating to organizational structures and informational needs, which are discussed in Chapters 3 and 4.

North Carolina DOT - A Case Study in Leadership, Performance Management, Accountability and Asset Management

To best serve North Carolinians in the 21st century, NCDOT conducted an internal review to identify areas of improvement that could be undertaken to help them better manage all the transportation assets, projects, programs, initiatives and services. This report discusses the changes implemented by NCDOT as a result of that review. Actions taken by NCDOT included changes to its processes, management strategies, organizational structure, roles and responsibilities. It resulted in a stratified approach to investment in the multimodal transportation network. It aligned accountability and performance measures around a clear understanding of agency mission and goals. The approach also focuses on systematically managing all assets within the charge of NCDOT.

Performance measures and accountability were simple and transparent. They cascaded from the top leadership down to each employee. Employees could link their job responsibilities and actions to performance of the agency mission and goals. NCDOT's actions have resulted in systems, policies processes and structures that have enabled the agency to forecast the condition of its infrastructure and develop strategic and tactical plans to systematically manage its assets. The process helps the agency to better address system needs while working within budget constraints.

DOT FACTS

The DOT manages:

  • 79,009 road miles,
  • 158, 592 paved lane miles,
  • 6,644 miles of unpaved miles,
  • 17,756 State Structures,
    • 14,000 Bridges,
    • 3,756 Culverts,
  • 511 Traveler Information System and Intelligent Transportation System that includes,
    • 140 dynamic message signs,
    • 200 traffic cameras,
    • 500 centerline miles of Interstate Motorist Assistance Patrol,
    • 8,800 traffic signals

The North Carolina DOT was established in 1915 as the State Highway Commission. Over the years, the agency has gone through major changes when the General Assembly consolidated services provided by other state departments into the DOT. The agency, earlier referred to as the North Carolina Department of Transportation and Highway Safety, was later shortened to the North Carolina Department of Transportation and incorporated the Division of Motor Vehicles.

The North Carolina DOT is amongst DOTs that manage not only state and local roads and ferries, but also provides funding and oversight to rail, public airports, and other modes of transportation. The agency has the second largest state-maintained highway system in the nation and an annual budget of approximately $4 billion.

Nearly 12,000 employees in the agency headquarters and across 14 highway division offices, 41 district offices and 100 county maintenance facilities are involved in managing all of these assets.

In the late '90s, NCDOT established a Maintenance Quality Assurance program and implemented a Maintenance Management System. The goal was to estimate and plan its routine maintenance and resurfacing needs. The agency's initiative was in response to the State Legislature passing a General Statute requiring the agency to survey the condition of the State Highway system every even-numbered year and reporting the findings to them.

Significant increase in the use of the state's infrastructure has been observed and this is expected to continue to increase. With inflation and funding constraints, maintaining the condition of an agency's asset has become a tremendously challenging task.

According to projections, the VMT of North Carolina is expected to double by 2020 and the population is expected to grow by 50% between 2000 and 2030. This will make North Carolina the seventh most populous State by 2030. The constraints in funding and the increases in population and VMT will magnify the challenge of the agency to keep the transportation assets in good condition.

Setting Direction

In 2008, the agency revised its mission and goals to meet the transportation needs of the 21st century. The goals of all the business units were revised to be closely tied to the mission and goals of the agency.

The revised goals addressed all aspects of asset management necessary to run a world class transportation agency. It addressed processes to effectively manage the network proactively and make it last longer while ensuring safe and efficient movement of people and goods. The goals also focused on Human Resources, considering the employees as assets and creating an environment that would attract, retain and bring out the best in the employees.

The State Highway Administrator, Terry Gibson said "Long term success of an organization has to come from within. This can be accomplished by setting clear directions and enabling the employees to feel like shareholders, involved in the long term success, taking ownership and contributing to its continuous improvement."

The Agency Mission

Connecting people and places in >North Carolina - safely and efficiently, with accountability and environmental sensitivity.

The Agency Goals

  • Make our transportation network safer.
  • Make our transportation network move people and goods more efficiently
  • Make our infrastructure last longer.
  • Make our organization a place that works well.
  • Make our organization a great place to work.
Review and Continuous Improvement

The heart of all effective management strategies lies in planning, implementing, reviewing and correcting. This cycle has to occur continuously in order for the improvement to be effective and appropriate to the changing times. The NCDOT initiated an effort to better understand the challenges of the 21st century. The objective was to identify the areas within the DOT where improvements could be made and to lay the foundation for how to best deliver transportation services to North Carolinians in the 21st century within the constraints of the budget.

In 2007, to assist in this effort the leadership hired McKinsey and Company to survey, review, identify and diagnose the operation, processes, workings and the organizational structure of the DOT. The company worked closely with the NCDOT team in completing this assessment. Many agencies conduct similar internal reviews including the use of external assistance such as that used by NCDOT to accomplish the objective of reviewing and refining/ making changes to existing processes, programs, structures and policies. Based on the goals set by the NCDOT, McKinsey and Company made recommendations to build capabilities and support the transformation that would enable the agency to deliver transportation services to North Carolinians in the 21st century. After the review, the agency systematically implemented a series of changes. The agency also implemented a revamped Continuous Improvement Program that helps it to continue the review and refinement of various aspects of its organization as they relate to the mission and goals of the agency.

This has resulted in many new ideas for improving the life of assets and the delivery of services within the DOT. In 2009, the agency received over 20 suggestions for improvements. One of these suggested improvements was about, "How to improve asphalt surface treatment." The process started by the leadership taking the initiative to make continuous improvements and this approach is now integrated into the agency culture. It is thus more likely to continue in the future.

As organizations continue to grow, business units try to make internal improvements. Often these internal improvements are not done in collaboration with other business units and are narrowly focused more on improving unit specific products and services. Without continuous review and alignment of the goals of the organization with the goals of each of the business units, over the years these can get off synch. This can lead to the silo effect. Reviews at the organizational level can be expensive and can be perceived as wasteful, making it difficult for public organizations to conduct frequent review and realignments.

Change is always difficult. But when such reviews and changes are led by the agency leadership that is open to and leading the change, it sets an example for its employees also to embrace such change.

When NCDOT conducted its review in 2007, its leadership identified the formation of silos as one of the challenges that needed to be addressed. They found that even though business units had streamlined their internal operations, because of the presence of silos, often the goals were not collaborative and in many cases competed with those of other units. The sum of these improvements did not result in the better performance of the agency as a whole.

Clear, Simple Common Mission and Goals

Having clear and simple mission and goals makes it easier for employees to understand, adopt and contribute to the success of an organization.

NCDOT leadership addressed the issues of silos and competing goals by revising and setting simple but very clear goals and a clear mission for the agency. The goals of each business unit were completely aligned with the mission and vision of the organization. The agency then set up an implementation plan to communicate these goals and its mission across the agency. These were repeatedly communicated to all employees. The communication and changes included:

  • One Common Focused Direction
  • Revised the mission and goal statement to make it consistent within the agency.
Communication and Common Understanding

The NCDOT mission and goals were cascaded throughout the organization. The agency adopted a practice in use at many well-run organizations to start every meeting by tying the objectives of the meeting back to the mission and goals of the department. This practice achieves two objectives:

Firstly, it reminds everyone about the mission and goals of the agency, and secondly, it forces employees to relate the objective of the meeting to the mission and goals of the agency. This helps further align agency activities with common goals and reduces the formation of silos.

Like most large organizations, in the DOTs, many business units, divisions and offices contribute to the successful delivery of projects, programs initiatives and services. In organizations where business units are silos it is difficult to assign accountability or responsibility for successful delivery of products at the agency level. Accountability and responsibility can be defined clearly when the sub-deliverables, sub-tasks and sub-products to be delivered by each business unit are well defined.

Silos within NCDOT made it difficult to clearly assign accountability and responsibility. This led to missed opportunities due to lack of collaboration in areas including in planning, project selection and implementation. Duplication and contradictory decisions led to some waste of resources and efforts. It also led to imbalance in staffing with respect to the overall agency goals.

"Employees tend to focus on the goals of their business unit often at the cost of agency goals. Silos coupled with lack of processes for agency wide prioritization, accountability and coordination leads to delays in projects and waste of resources" said the Chief Operating Officer, Jim Trogden.

To create an efficient streamlined organization, where there was less duplication of efforts and there was collaboration to meet the transportation needs of 21st century, NCDOT reviewed the operations of all of its divisions and identified areas for improvements.

Restructure and Realign

Restructuring of an organization has to be done thoughtfully. It is important to restructure in order to realign areas of the organization for efficient functioning and improved collaboration across the agency. NCDOT restructured itself by focusing on developing a more productive organization. They restructured only selected areas that would lead to accomplishing the overall success of the organization and the proactive management of assets and services based on long and short term goals of the Department.

Realignment should facilitate maximum coordination and align business units to collaborate, be accountable and responsible in delivering the agency's goals and mission for the 21st century effectively. Some of the actions taken to address the issues with collaboration included:

  • Selective organizational restructuring and realignment to support collaborative and well coordinated decisions in project planning and project delivery
  • Alignment of business units along functional lines and improvement of coordination amongst business units;
  • Improving coordination across geographies in planning, designing, delivering and maintaining projects
  • Restructuring in a way to improve accountability for delivery of projects, programs, services and initiatives;
  • Improved coordination of Core Processes
  • Focused and well planned recruiting and retention of critical talent
  • Working with employees to change mindsets to a more collaborative approach focused on organizational success and accomplishment versus individual or business-unit-specific accomplishments;
  • Focus on Outcome Based Performance Metrics
Collaboration from Cradle-to-Grave

An approach to improving efficiency and increasing effectiveness in decision making identified by NCDOT was to increase sharing and collaboration in processes from planning through project development. To facilitate this, the agency recommended the implementation of a Project Collaboration Software that supports core processes in planning, programming and project development. This prevented isolation and disconnect in decision making amongst the various business units and processes necessary to plan and develop projects in a shorter period of time.

Focus Resources in Strategic Planning and Asset Management

Figure 4: The Strategic Planning Office reports to the Deputy Secretary
Figure 4 shows the Strategic Planning Office reporting directly to the Deputy Secretary. Other areas that report directly to the Deputy Secretary include the Transportation Planning, Legislative Coordination, Federal Funds Coordination, Policy and Procedure Administration and the Highway Safety Program.

To strategically help with improving overall management of assets and to link it to strategic planning, NCDOT created the Strategic Planning Office (SPOT). SPOT was responsible for analyzing system-needs, conducting trade-off analysis and prioritizing projects, for the Statewide Transportation Improvement Program (STIP) state-wide. SPOT as shown in Figure 4, is high in the organizational chart and is responsible for coordinating the submission of candidate projects for the STIP and prioritization based on the DOT's mission and goals.

SPOT assisted the agency and helped make strategic planning transparent and proactive. The process followed by SPOT involves comprehensive 1-year, 2-year and 8-year strategic planning efforts. The steps involved:

  • Every 8 years, establishing a strategic direction and creating a 30 year outlook;
  • Every 2 years, developing strategic prioritization based on a 5 to 10 year outlook
  • Every year, creating action plans based on a one to two year outlook.

The formal and systematic annual process of prioritization guides the development of the Transportation Improvement Plan. Though collaborative in nature, it takes input from multiple sources and applies a numerical value based on the contribution of the project to reaching the department's goals and objectives. The agency has also a process for stakeholders to provide input early in the process.

Keeping the process transparent and communicating the details of the prioritization models publicly has helped the agency to improve and shorten the selection and prioritization process.

Office of Asset Management

Transportation Asset Management (TAM) has been a part of the agency's operation for a long time. It was formalized in 2003. According to Terry Gibson, the NCDOT State Highway Administrator, the approach of the staff has been "give us the resources and hold us accountable for the performance of our transportation assets. The agency already had many elements of Asset Management in place. With the revised performance management process and the resulting performance measures being closely linked to the goals and performance being measured based on the results, Asset Management has become more appreciated."

Figure 5: Highway management systems are coordinated under the Asset Management Office.
Figure 5 shows that in the North Carolina DOT Asset Management reports to the State Highway Administrator. The State Road Management consisting of Road Inventory and Mapping, Bridge Management, Pavement Management, Equipment and Secondary Roads report to the Office of Asset Management.

According to Mr. Gibson, Performance Management and Asset Management are closely tied. Any agency starting the journey into developing effective performance management processes and measures can use some of the following simplified steps:

  • Jump-start the process by creating a TAM office;
  • Assign someone the responsibility and authority which by itself will force change in the organization;
  • Develop performance measures and metrics and tie them to performance of the assets;
  • Lay out the benefits of TAM in the context of the mission and goals of the business;
  • Communicate the goals, objectives and role of TAM to all the business units and explain how each business unit could use TAM to make better decisions and improve performance of projects, programs, services and initiatives within their charge.

Since TAM makes sense from a business perspective, agencies will be able to get buy-in across the organization, sooner or later, depending on the organization and the type of strategies they use to educate and communicate.

Jon Nance, Chief Engineer stated, "we use Asset Management linked to the performance of our assets to communicate with the legislature and stakeholders. This has resulted in an increase in our budget and has helped to improve their understanding of our strategies, efforts and challenges."

NCDOT uses tools to translate conditions of the assets into strategies. For example, the number of miles of pavements in good, fair and poor conditions is used to develop short term and long term strategies. These strategies are translated into action plans for the field managers.

Asset Management plays an important role in the NC DOT. As shown in Figure 5, The Director of the Asset Management Office reports to the State Highway Administrator. The Office of Asset Management is responsible for coordination of condition assessments on all three tiers (state, regional and sub-regional) of the roads, pavements and bridges and the management systems that support these assets.

"Transportation Asset Management has allowed us to communicate financial resources to the legislature. It is a mechanism to show how you are good stewards of funds and how you are making the best use of resources to benefit the public", said Terry Gibson. Lacy Love, Director Asset Management said, "Asset Management has been important for decision making in NCDOT. It helps the agency have an accurate picture of the current conditions of the assets and the resources required to change and improve the conditions of the system."

The Asset Management group has an important role in providing data and sharing the information required to accomplish the outcomes and results established through the performance management process.

Terry Gibson, said, "The agency's asset management is focused on highways for which we have very good information. We are looking to ultimately develop a cross functional analysis to help us meet targets of performance across all modes."

The North Carolina Multimodal Investment Network (NCMIN)

NCMIN is an investment template developed by NCDOT to help prioritize investment strategies based on how the components of the transportation network contribute to serving different transportation movements. The agency also developed the Strategic Highway Corridor initiative to" protect and maximize the mobility and connectivity on a core set of highway corridors." In North Carolina, all transportation facilities are classified into three groups based on their function in serving transportation. The three tiers as shown in Figure 6 are defined as follows:

Figure 6: The hierarchy of state and local interest.
Figure 6, shows a pyramid with the Sub-regional Tier at the base, the Regional Tier next and the Statewide Tier at the top of the pyramid. It represents how the state interest and local interest increase in opposite directions. An arrow representing local interest starts at the Statewide Tier (top of pyramid), points downwards to the Regional Tier and the Sub-regional Tie, showing maximum local interest at the Sub-regional tier, less at the regional tier and least at the Statewide Tier. Another arrow in the opposite direction, representing State interest starts at the Sub-Regional Tier (base of pyramid), points upward to the Regional Tier and the Statewide Tier, showing maximum state interest at the Statewide Tier, less at the regional tier and least at the Sub-regional Tier.

  • Statewide Tier serves long-distance trips, connects regional centers and has the highest usage. This includes the Strategic Highway Corridors (SHC) which consists of 7% of the roads that carry over 45% of the traffic.
  • Regional Tier serves to connect major population centers. All Primary routes (US and NC) not on the Statewide tier fall into this tier,
  • Sub-Regional Tier serves localized movements and is of most interest to cities and counties. This includes all secondary routes (SR) not on the SHC.

Tiered approach to asset management is an effective way to prioritize and make decisions when large numbers of assets compete for limited resources. In NCDOT this tiered approach is an effective strategy for making decisions on investments based on the use and function being served by the transportation component.

Being Strategic in Selecting Projects and Services

The NC DOT portfolio of projects and services is explicitly linked to the revised goals of the agency. The portfolio of projects is based on the long-term as well as short-term goals. The portfolio also is based on innovative funding approaches beyond relying on existing sources of funding. The plan of activities includes day-to-day actions that need to occur for effective performance of the assets as well as the long term actions required by the agency. The short term plans become part of the annual action plan for the managers.

Role of Data in Quality Processes

Good decisions depend on the quality and consistency of data being used. In quality processes such as Baldrige, Six Sigma, Balance Scorecard and ISO, the quality of data and information systems and their contribution to data driven decision making, are major components of the evaluation process. The quality of decisions depends on the sustainable availability and the quality, reliability and consistency of the data and directly contributes to the quality of the agency's plans.

One of the big data challenges faced by organizations is the lack of consistently reliable data to make decisions. Standardization of data has always been a challenge. Often, data pertaining to the same asset used by different business units for decision making even for the same period of time is different. This may be because:

  • different business units collect their own data;
  • the frequency and hence "how current the data is" varies across business units;
  • the interpretation of the data by different users is different, or;
  • business units save the data in their own databases that are not linked to and do not communicate with other databases in the agency.

This results in islands of data that do not connect with each other. All of these issues of data inconsistency make it difficult for an agency to make sound strategic decisions. These issues can lead to external stakeholders, the public and the legislature questioning the credibility of the agency's decisions.

NCDOT, in the review of its internal systems, found a lack of integration of data in its core businesses such as Bridge Management, Pavement Management, Maintenance Management, Traveler Information Management System, Accident History, Construction Management, Project Management, Financial Management (SAP system) and GIS.

Based on the findings, NCDOT identified the need for Data Integration, Enterprise Document Management and Project Collaboration Software as high priority projects necessary to support the delivery of transportation projects, programs, services and initiatives effectively. To accomplish these, the agency identified the following goals for Data Integration:

  • Integrate data across DOT to enable management reporting
  • Ensure consistent and accurate reporting
  • Provide reporting from a single source

To address the lack of integration between many of the systems pertaining to core processes, the agency implemented changes to its data warehouse and integrated important data about the performance of core assets and functions into a one-stop performance management and accountability system. The agency thus created a single source of business intelligence data for all DOT management reporting. This single view of the data across the enterprise - an essential element of asset management - has resulted in an integrated approach to making decisions on the short-term and long-term management of the agency's infrastructure assets. This has also helped the agency in its analysis of the conditions and in developing corrective actions required for developing the short-term and long-term plans.

Data Collection and Dissemination

DOTs have many assets and therefore, data collection in a DOT can be a very expensive process. NCDOT has over 75,000 miles of pavement and over 17,700 structures. Monitoring and evaluating the condition and performance of these assets require collection of large numbers of specific data throughout the life of the asset. NCDOT addressed the data collection and data consistency issue by consolidating and centralizing strategic data collection for the Division of Highways under the Office of Asset Management.

To make sure that all users get on-time access to the same data, the collected data is streamed to all users. The data is also mapped and stored in the central repository. This approach ensures that the same type of data is not collected by multiple areas within the agency. It also enables consolidation of data to a single repository so decisions made across the agency are based on the same data.

Aging Assets, Long Term Decisions and Asset Management

NCDOT is facing the same challenges that many other states are facing. Many bridges across the nation are nearing the end of their life. Delayed action will mean more expensive treatments. However, the current funding situation makes it extremely difficult for states to address the challenges in maintenance and preservation that need more immediate action.

  • In North Carolina about 8,000 bridges will need to be addressed within the next 20 years.
  • About 12, 700 bridges are owned and maintained by NCDOT
  • 3,400 bridges have an estimated remaining life of less than 10 years;
  • The agency will need to address about 400 bridges each year to make gains on the number of deficient bridges;
  • The agency is able to address only 100 per year leading to approximately 200 bridges becoming structurally deficient each year.

One of the issues the agency found was that delays in project delivery led to the agency not being able to use all of its federal allocation of "B" funds. Bridge project delivery issues included overdesign at the sub-regional tier, lack of budget controls where scoping was not based on a budget, too long a time between planning and letting of projects. The agency found that improving coordination and development, and including maintenance, preservation and rehabilitation strategies in project prioritization would help the agency to increase the number of bridges that it addressed each year.

The agency also found that accountability and responsibility of the bridge program was too dispersed. To address these issues, the agency identified the need to create a structure with a Central Bridge Manager, Division Bridge Manager and Right-of-Way Utility Coordinator responsible for coordination and successful management of bridge projects. The intent of this organization change was to make the Central Bridge Management Office accountable for the entire bridge program with the Division Managers being accountable for bridges in the divisions. The agency is in the process of implementing these changes and hiring managers to fill these new roles. The agency also understood that all bridge projects are not the same. To address the varied needs of the divisions, the agency implemented two different project management approaches for bridges. One consisted of a TRI-managed process and another is a Division Managed Process. The selection of the type of process depends on the complexity of the project and the site conditions. The agency also implemented budget-based design and construction. It is also developing formal processes and capturing these in manuals for bridge preservation and management and communicated these through training the employees. The agency has also established two new positions to help with their preservation efforts; a pavement preservation engineer and a bridge preservation engineer.

Streamlining and Instituting On-site Project Scoping for Bridge Projects

NCDOT streamlined preconstruction and project development to reduce the time taken from planning to project letting. The agency focused on making sure that over-design was eliminated and "right-sized" its bridges to meet transportation needs. They are institutionalizing on-site scoping of bridge projects to minimize the number of alternatives. The agency believes this will led to saving time and money in the completion of projects. The agency is grouping projects geographically and plans on letting them as "groups of projects as one" for economy of scale.

Performance Tied to Mission and Goals

Figure 7: The Performance metrics relationship chart.
Figure 7, is a diagram that shows as an Employee, 'Results You are Expected to Achieve', 'Ways You are Expected to Act' and 'Skills You Need to be Effective' are linked to the Mission, Goals and Values through performance metrics.

The agency developed a detailed performance management process with participation and involvement of a large number of its employees. The leadership sought input from all employees before the process was finalized. In this revised performance management process, the performance measures are tied to the mission and goals of the agency. The mission and goals of the agency are focused on how to most effectively manage the agency's assets in the short and long term.

The process led to the reduction of the silo-effect and increased collaboration and synergy between the various business units and maximized the returns on the efforts of all employees. The group developed performance metrics through collaborative processes that involved many workshops and meetings of Employee Subject Matter Experts. The Performance Metrics Relationship Chart linked outcomes to agency mission, goals and values. It tied as shown in Figure 8:

  • Outcomes and expected results to agency goals;
  • The way an employee is expected to act to uphold NCDOT values;
  • The skills needed to be effective for required competencies.
  • Contributions to achievement of higher-level metrics as they relate to NCDOT's mission or goals;
  • Meeting customer requirements;
  • Improving processes;
  • Carrying out key job responsibilities.

The agency then went through a rigorous and systematic process of relating each job in the agency with goals. This ensured that every job function was tied to goals and performance measures. More importantly employees knew what was expected of them in their jobs and how they contributed to accomplishing the agency's goals.

The performance metrics had measures, targets and weights. The targets are based on the expected conditions and performance of the agency's assets and are directly tied to the strategies and approaches used by the agency to manage its assets.

  • The "Measure" was defined as "results of action to be gauged related to Mission and Goals."
  • The" Target" was defined as "the desired level of achievement."
  • The "Weight" was defined as "the level of importance."
Lagging Metrics to Adjust Target for Leading Activities

The agency identified lagging metrics to adjust targets for metrics of leading activities. Leading indicators measure and track performance before a problem arises. They are proactive and task specific. They indicate what may happen in the future based on the value of the measure and are good to predict the ability to meet future goals.

Examples of some leading activities for the lagging metrics for "Crash Rates" that provide information about safety are:

  • Improving shoulder drop-offs
  • Adding reflective markers
  • Adding turn lanes
  • Reduction of VMT by use of alternative modes
  • Timely project delivery

NCDOT has had performance measures for a number of years; some formal, some informal. The agency has been tracking and measuring its performance in the past. The change now is that the agency is more focused on the on-time and on- budget delivery of its deliverables than on the completion of the activities.

Following are some examples of revised measures:

  • A specific quantitative measure of 1.5 to 1.75 Crash Rate versus a generic goal of providing leadership to ensure safety;
  • 90% to 95% system reliability on the strategic highway corridor;
  • 85% to 90% delivery on schedule and on budget for projects.

The NCDOT performance system is result based. The measures are tied to the mission and goals of the agency. For effective management of its assets, NCDOT has linked all of its projects, programs and services to goals.

Figure 8: The relationship between the NC DOT's mission, goals and assets.
Figure 8, is a diagram that shows the relationship between the NC DOT's mission, goals and assets. 'Transportation System and Facilities' and 'Vehicle Operations' are directly linked to the goal, 'Make Our Transportation Network Safer', 'Ease Congestion', 'Manage Incidents' and 'Add Capacity' are directly linked to the goal, 'Make Our Transportation Network Move People and Goods More Efficiently'. 'Infrastructure Life' and 'DOT Facilities' are linked to the Goal, 'Make Our Infrastructure Last Longer', 'Projects, Programs, Services and Shareholder Interaction' are linked to 'Make Our Organization A Place that Works Well' and 'Attractive to People' and 'Performance Mindset' are linked to 'Make Our Organization A Great Place to Work.'

The focus on effective management of the agency's assets is reflected in Figure 8. It shows how performance of the goals directly ties to performance of the assets. For example, the life of infrastructure is tied to the Goal "Make our infrastructure last longer." Effectiveness in easing congestion and effectiveness in managing incidents, are tied to the goal "Make our transportation network move people and goods efficiently."

Performance Management, Accountability and Asset Management

The Performance measures developed by the NCDOT are used to:

  • Measure process results;
  • Measure expectations;
  • Establish goals for the agency;
  • Establish goals for the individual;
  • Gauge performance throughout the organization;
  • Provide information to make better decisions.

In view of the current nationwide focus and the direction of the US Congress in considering performance management to gauge the performance of the overall transportation network, DOTs are reviewing their own agency's performance framework. The approach to performance management and the measures developed and adopted by NCDOT serves as a illustrative model for other DOTs to study as they review, revise or develop their own approach.

Effectiveness of Cascading Performance Measures

Figure 9: Performance measures cascade from the top of the organization.
Figure 9 is a diagram that shows Performance measures cascading down from the Secretary of Transportation at the top to the Director, to the Branch Heads, to the Unit Heads and to the Employees.

Measuring the performance in the NCDOT starts with the Secretary of Transportation and cascades down to each level of the organization and reaches every employee as shown in Figure 9. Strategic direction, clear metrics and leading by example goes a long way in obtaining agency-wide buy-in on evaluation of employee performance.

There is broad understanding in NCDOT of what is being measured and how measures are tied to the mission and goals of the agency. This transparency coupled with clear direction on how to contribute to meeting the agency's performance targets makes employees take responsibility and motivates them to work toward accomplishing the goals.

Some examples of measures for the Chief Engineer are:

  • System Reliability: "Percentage of incidents cleared within 90 minutes," with a target 70-85%;
  • Infrastructure Health: is "Improve Index Score (3 year avg.) toward Goal," with a Goal of 68-72.

Table 2: Weights for accountability

Measures Weights (Percentages)
Chief Engineer Director Asset Management

Crash Rates

5

 

System Reliability

5

5

Infrastructure Health and Performance

40

20

Projects/Programs/Services Delivery

40

60

Employee Safety

10

10

As shown in the Table 2, the same measures apply to all positions but the weights of the measures vary depending on the job responsibilities and accountability of individual employees.

Figure 10 is an example of how each position in the agency is tied to performance measures. Measures for each position are further related to the overall goals and targets of performance for the agency.

Role of Leadership Emphasized

In NCDOT the senior leadership is leading by example. They have embraced change and are holding themselves accountable and responsible for the performance of the agency. An example is seen in how the same performance measures are used to measure all the employees in the organization. This lends credibility to the use of the performance measures.

The systematic and logical approach of tying the performance of assets, projects, programs, initiatives and services to goals and relating each job to the measures selected, makes it easy to understand and help get buy-in from the employees. The process in NCDOT helps employees understand the actions they need to take to improve the performance of the transportation network.

The approach used in the NCDOT is to:

  • firstly, define clear goals linked to the condition of the transportation assets and services being provided;
  • secondly, tie them to performance measures;
  • thirdly, link the performance of all employees to the performance of the goals, and ;
  • fourthly, have an on-going process of continuous reviews and corrections to align the goals.

Continued effective running of organizations cannot be dependent on a handful of people. Leadership has to come from within the organization. Leadership and effective management styles have to be instilled in the culture. They have to be integrated in the good business practices and strategies throughout the organization.

Figure 10: Similar goals and metrics are used at all levels of the organization, which creates a common focus on priorities.
Figure 10, represents a diagram that shows similar goals and metrics are used at all levels of the organization, which creates a common focus on priorities. The Division Engineer, the Divisional Operations Engineer, the Division Traffic Engineer, the Transportation Supervisor and the Transportation Worker are all measured on performance of the Infrastructure Health. The Division Engineer, and the Division Operations Engineer are measured on the 'Division Infrastructure Health and Performance - Division LOS Rating or percentage of Division Program/Projects/Services delivered on schedule', the Division Traffic Engineer is measured on the 'Division Traffic Control Division-LOS Rating' while the Transportation Supervisor and Transportation Worker are measured on the 'percentage Planned Pavement Marking Replacements Achieved', 'percentage Planned Deficient Signs Replaced' and 'percentage Planned Shoulder Repairs Achieved'.

To address continuity in leadership, NCDOT has focused on developing processes that ensure the on-going development of leadership and competencies. This is important for the long-term success of the organization and necessary as the leadership of the organization changes. With the focus on talent management, recruiting, employee development and succession planning, the agency expects to continue to be a model best practice agency delivering the transportation needs of its stakeholders.

Improving Assets through Changes in Preservation and Maintenance Strategies

For many years chip seals and crack sealing have been a core business function of the agency. Recently, the NCDOT has refined its Bridge Preservation, Pavement Preservation and Maintenance strategies. The agency included chip seals, slurry seals, microsurfacing and thin hot mix asphalt to its preventive and maintenance programs where the pavement conditions are in "good" to "fair" condition.

Figure 11: Pavement condition trends.
Figure 11 is a chart that shows the pavement condition ratings and trends. The chart shows the good and fair conditions of pavement in 2008 trending upwards.

Based on the Pavement Condition Rating, the severity of distress and projected traffic conditions, specific treatments are determined and applied to each roadway. The agency's goal is to apply preservation strategies early in the life of the pavement where possible, to extend the life of the pavement in "good" condition at a much lower cost.

Figure 11 shows the pavement conditions for the agency. The figure shows the good and fair condition of pavements in 2008 trending upwards. In 2009, the numbers of miles resurfaced by the agency declined due to the economic downturn. This is expected to lead to a slight decrease in the percentage of good pavements.

The North Carolina DOT faces the challenges confronted by many DOTs nationwide of rising material costs, aging infrastructure and reduction in funds to manage the transportation assets. With the changes made to overall asset management strategies and the use of performance measures agency-wide, NCDOT expects to extend the use of dollars and make good decisions to improve the condition of all its assets within the constraints of the budget.

Outcomes of Better Asset Information and Forecasting

Figure 12: Pavement conditions will decline if current trends continue. Figure 12 is a bar chart that shows 70% of the Pavement Condition Rating (PCR) in 2009 to be above 80. It also shows the projected PCR falling to 40% by 2015 if the funding levels continue at the current levels.

One of the important outcomes of implementing strategic performance measurements linked to the goals of the agency has been having better information to make decisions. It is important for an organization to make projections about the future condition of its assets. It allows the organization to develop strategic and tactical plans to address its transportation priorities systematically.

As shown in the Figure 12, based on the current data, the DOT is projecting that if the funding levels remain at current levels, the percent of pavements in good condition will fall to from 70% to 40% by 2015.


Figure 13: NC DOT forecasts that overall conditions will decline if funding levels remain as forecasted.
Figure 13 is a bar chart that shows the agency projecting the Roadway Level of Service falling from a composite score of 82 in 2009, to a score of 72 in 2015 if the funding levels remain at the current levels.

As shown in Figure 13, the agency is also projecting that if the funding levels remain at the current levels, the Roadway Level of Service will fall from a composite score of 82 to a score of 72 in seven years. Projections as shown in figures 12 and 13 help the agency make informed decisions, educate its stakeholders and also collaborate with them to plan for and implement acceptable corrective action.

Summary: Leadership and Accountability Contribute to Successful Management of Transportation Assets

Based on the experiences of NCDOT, listed below is a summary of some of steps that contribute to the successful management of transportation infrastructure and efficient and effective delivery of transportation services:

  • Have simple, clear, consistent Mission and Goals;
  • Align strategic direction to Mission and Goals;
  • Communicate direction, Mission and Goals repeatedly. Use multiple strategies to communicate;
  • Create a culture where objectives of all business units are linked to the Mission and Goals of the organization;
  • Streamline core operations such as Planning, Project Prioritization, Project Design and Project Delivery;
  • Link Performance Measures to the organization's Mission and Goals;
  • Clearly link job and performance expectations to Performance Measures;
  • Link accountability and responsibility to performance starting at the topmost level of the organization and cascade them down to every employee;
  • Streamline project prioritization. Build simple quantitative models for prioritization. Keep the prioritization process transparent;
  • For good asset management, include projects, programs and services in the prioritization process;
  • Obtain feedback on the prioritization process. Review and revise the prioritization process, as appropriate, based on feedback;
  • Plan and prioritize for funding shortages,
  • Conduct quarterly or bi-annual meetings to discuss the overall performance of the organization;
  • Focus resources on strategic planning And Asset Management. To be effective, these resources should be high in the organizational chart;
  • Use and propagate data-driven decision making;
  • Ensure that there is horizontal and vertical integration across the organization;
  • Facilitate collaboration through tools, processes and use of data from a central source for decision making;
  • Centralize select activities for efficiency. Examples include data collection and data dissemination;
  • Focus on developing a productive organization. Recruit, retain and develop the workforce;
  • Facilitate cross-training of employees. Motivate and facilitate the sense of ownership in the employees;
  • Develop and plan for succession;
  • Review and revise Goals to keep current with the transportation needs;
  • Incorporate continuous review and revision of all core operations and performance measures into the strategic planning process.
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Updated: 06/18/2012