The purpose of this paper is to define the relationship between transportation asset management and transportation system planning and to describe the current, and potential future, activities of the FHWA Office of Operations that support the implementation of asset management. The paper is one of a set of seven papers exploring the relationship of asset management to each of FHWA's major program areas including planning, right-of-way, environment, infrastructure, safety, operations, and Federal lands.
Section 1.0 provides a general overview of asset management relevant to all program areas. Section 2.0 defines the relationship between planning and asset management. Section 3.0 describes current, and potential future, activities of the Office of Operations that support asset management.
Transportation asset management is a set of guiding principles and best practice methods for making informed transportation resource allocation decisions, and improving accountability for these decisions. The term "resource allocation" covers not only allocation of money to program areas, projects, and activities but also covers deployment of other resources that add value (staff, equipment, materials, information, real estate, etc.). While several of these principles and practices were initially developed and applied within the domain of infrastructure preservation, most established definitions of asset management are considerably broader. The Asset Management Guide, recently adopted by AASHTO defines asset management as:"... a strategic approach to managing transportation infrastructure. It focuses on...business processes for resource allocation and utilization with the objective of better decision-making based upon quality information and well-defined objectives."
As Mary Peters, FHWA Administrator has frequently put it:"If I have one additional dollar to spend on the transportation system, what is the most effective way to spend it?"
The essence of asset management is answering that question.
Asset management is concerned with the entire life cycle of transportation decisions, including planning, programming, construction, maintenance, and operations. It emphasizes integration across these functions, reinforcing the fact that actions taken across this life cycle are interrelated. It also recognizes that investments in transportation assets must be made considering a broad set of objectives, including physical preservation, congestion relief, safety, security, economic productivity, and environmental stewardship.
These principles are not unfamiliar, nor are they radical. Most transportation practitioners would agree that investment decisions should be based on weighing costs against likely outcomes, that a variety of options should be considered and evaluated, and that quality information is needed for decision-making. Many agencies are now pursuing performance-based approaches to planning and programming, monitoring system performance, and developing more integrated data and analysis tools to evaluate tradeoffs among capital expansion, operations, and preservation activities. Most agencies recognize that application of asset management principles is critical in times of constrained resources, when all investment and budget decisions are subject to increased public scrutiny.
Figure 1 illustrates the strategic resource allocation process that embodies the asset management principles presented above.
The diagram includes the following elements:
In Figure 1, the box labeled "Analysis of Options and Tradeoffs" shows three types of investment categories - preservation, operations, and capacity expansion. These are defined as follows:
These three categories are defined in order to show that:
As noted above, tradeoff analysis may be done across investment categories as well as within them. An agency might wish to define investment areas coincident with the three categories discussed above (preservation, operations, capacity), or they may define a different set of categories. For example, a safety program could be defined as an investment category, with subareas for operational activities (e.g., signs, markings, signalization, channelization, etc.), preservation (replacement of guardrails), and capacity (project design features supporting safety, e.g., wide shoulders). This would provide the framework for understanding the best mix of complementary actions within the safety area as well as tradeoffs between safety and other objectives.
A common reaction to the broad description of asset management is "how is this different from the overall planning and programming process in an agency?" The response is that asset management is not a new kind of business process that replaces planning and programming. Rather, it should be viewed as a set of best practices to be employed within the established planning and programming framework. Existing regulations pertaining to the planning process, together with statutes related to specific funding programs and their allocation criteria, and the body of environmental regulations affecting transportation planning - provide the context within which asset management practice occurs. In terms of Figure 1, transportation regulations and statutes impact establishment of policy objectives, the manner in which options are generated and evaluated, and they also provide certain constraints on resource allocation (based on Federal and state funding eligibility restrictions). Many of the core principles of asset management are embodied in the existing planning regulations (e.g., consideration of alternatives). Examining the planning process using the lens of asset management provides an opportunity to explore ways to continue to strengthen the mission of transportation planning - for example:
While asset management is closely associated with planning and programming activities, asset management best practices are also integral to design, construction, routine and preventive maintenance and operations activities. For example:
Despite the support for taking an asset management approach, many agencies face very real organizational, institutional, and technical challenges to making further progress in asset management. Each one of these challenges represents a potential opportunity for FHWA to work with its partners to encourage broader implementation of asset management principles. For example:
While it is relatively straightforward to implement asset management within a well-defined area of the agency (a pavement management unit, for example), the issues identified above illustrate why it is much more challenging to implement it more fully within an agency, or across multiple agencies.
However, the need to allocate scarce resources as effectively as possible and demonstrate results and performance to the customers of the transportation system provides strong motivation and support for overcoming these challenges. A comprehensive, performance-based approach to transportation investment decisions will be essential to meeting the increasingly complex set of transportation needs of the 21st century.
The specific scope of operations activities to be considered in this paper is described below. This is presented from the perspective of a state or local operating agency; FHWA Office of Operations program areas are discussed in Section 3.
As shown in Figure 2.1, operations activities respond to several objectives, including providing mobility, travel time reliability, safety and security for both freight and passengers. The following types of activities are included within the scope of operations:
Arterial Management - monitoring and managing traffic flow on surface streets, focusing on the deployment, timing, and operation of traffic signal systems.
Freeway Management - managing freeway traffic operations including monitoring of traffic (via electronic detectors and video cameras), ramp controls (e.g. ramp metering, priority systems), lane management (e.g. contraflow lanes, use of shoulders during peak periods, HOV lanes), information dissemination (e.g. variable message signs, traffic advisories, in-vehicle systems), and electronic toll collection.
Traffic Incident Management - the planned and coordinated program process to detect, respond to and remove traffic incidents and restore traffic capacity as safely and quickly as possible. This coordinated process involves a number of public and private sector partners including: Law Enforcement, Fire and Rescue, Emergency Medical Services, Transportation, Public Safety Communications, Emergency Management, Towing and Recovery, Hazardous Materials Contractors, and Traffic Information Media.
Road Weather Management - providing information about current and forecast weather and road conditions to decision-makers to help them respond with appropriate maintenance, traffic management, traveler information and emergency response strategies - including pretreating roads with anti-icing materials, pre-positioning trucks for de-icing, sanding and plowing, adjustments to traffic control (e.g. variable speed limits, signal timing), accelerated incident response, and radio motorist advisories.
Work Zone Management - strategies to minimize construction work zone-related user delays and ensure safety for both workers and road users. These include a range of activities including full road closures to shorten construction times, night-time construction, traveler information systems and other ITS activities, enforcement methods, and modifications to project design and scheduling methods to better incorporate user cost considerations.
Emergency Management - ensuring that the transportation network operates effectively in the event of an emergency, including natural disasters, major highway incidents and terrorist attacks. Includes emergency preparedness planning and establishment of communications and coordination mechanisms.
Freight Management - actions to provide a efficient, safe and secure intermodal freight transportation system. Includes facilitation of intermodal freight movements, strategies to reduce delays at border crossings, strategies to improve freight safety and security, enforcement of truck size and weight limits, and management of truck permitting processes.
Each of the operations program areas described in the previous section requires physical hardware and equipment - traffic signals, variable message signs, computers, communications equipment, etc. Management of these physical operations assets is an important operations activity within each of the program areas. However, there is an important distinction between the management of operations assets and the application of transportation asset management principles to operations. While the topic of "operations asset management" tends to conjure up images of inventory systems and replacement schedules for traffic signals and ITS equipment, the physical component of operations is just one part of the picture. In order to answer the questions: "What am I getting from my operations investments" and "How can I achieve better performance", a broader systems-level approach is required.
Operations Asset Management takes a holistic, integrated view of the physical, system and personnel aspects of operations. It recognizes that improving operations performance requires coordinated investments in physical equipment; systems to monitor, control and connect this equipment; and skilled, effectively deployed staff.
Historically, asset management has its roots in one of the key investment areas: preservation. The reasons for this initial focus are clear and not surprising. Significant investments were made in expanding the country's transportation infrastructure throughout the second half of the 20th century. As new facilities were completed, the resources required to maintain, repair, and rehabilitate existing facilities began to grow at the same time that system expansion continued. As significant portions of the system aged, competition for resources increased and the need to develop the knowledge and tools to preserve the existing system as cost-effectively as possible stimulated a wide range of research/development efforts as well as the development of new applications and approaches and integrated system management tools.
Preservation thus philosophically had a "leg up" in the highway management field, not only because of its importance to both state highway agencies and motorists, but also the early recognition that it had to be managed on a continuing basis. By contrast, while the analysis of system expansion needs and solutions also benefited from analytic methods and computerization, once a facility was built to certain standards, those characteristics resulting from expansion projects remained static for many years until upgraded during rehabilitation or reconstruction. It was therefore natural to cite preservation as a model for managing an existing highway (or transportation) network: it had well developed management procedures supported by sophisticated information systems, organized data collection efforts, modern data collection technology, and a longstanding program of research.
But what about operations? While operations has always been a component of highway management, responsibility for operations has been fragmented, both within and across agencies and jurisdictions, and not effectively integrated into an overall system management strategy.
However, similar to the realization that preservation is critical to ensure that infrastructure service life is extended cost-effectively, the recent focus on operations has recognized that maximizing the efficiency and effectiveness of the operation of the existing system is a strategic function and a key element of "good system management."
From the perspective of a transportation agency CEO seeking to make strategic resource allocation decisions, operations is one of the three major types of investments to be made - its purpose is to manage how the system is used and make sure that the available capacity is utilized efficiently and effectively. High-level tradeoff questions might include:
An important challenge for operations asset management practice is to provide better information to support these high-level tradeoffs and reinforce the view of operations as one of the essential elements of a balanced strategy for achieving an agency's policy objectives.
Asset management principles encourage examination of tradeoffs across investment options. Within the operations investment area, it is therefore useful to define "sub-areas" for purposes of tradeoff analysis. Two levels of operations sub-areas can be identified. The first level corresponds to the types of operations activities shown in Figure 2.1 (e.g. freeway management, arterial management, etc). One can envision a DOT CEO looking at the distribution of operations dollars across these different program areas, and determining whether resources should be shifted in order to meet established objectives (e.g. move funds into expanding ramp metering in order to address worsening freeway congestion problems, integrating freeway and arterial ITS systems, leveraging state and local system operational and capital investments).
A second level of investment area can be defined based on the three key types of components that interconnect to support a regional operations system:
These components are interrelated in that an investment in one typically necessitates investments in the others - for example, upgrading a traffic signal system requires both physical and system investments as well as additional staff to operate and maintain it (or training of existing staff at a minimum).
An Operations manager must plan for and balance investments in personnel, physical hardware, and system improvement. Effective operations management requires consideration of how best to deploy available resources within each of these areas (e.g. for personnel, what is the best mix of in-house vs. contract labor?), as well as across areas, with consideration of the interconnections. Questions related to cross-area tradeoffs include:
A key mistake of the past was not properly estimating and budgeting for the maintenance, preservation and operations costs associated with new major transportation investments. It is critical that all new major transportation investment projects include life cycle cost implications in the final benefit-cost analysis and project scoping decisions.
The application of each of the principles of good asset management to operations is discussed below.
Policies that can guide system operations must focus on customer service and issues such as mobility, reliability, and safety. Adding to the complexity is the fact that different goals and objectives might apply to freight and passenger trips and even different user groups (interregional freight versus local package delivery, commuter versus tourist trips, etc.). Defining clear goals and objectives that reflect key user groups is the first step in applying asset management principles to operations. Figure 2.2 illustrates some user groups and system performance characteristics that might be considered in establishing operations-oriented policy goals and objectives.
In order for broad policy goals and objectives to influence decision-making and to provide a method to measure "goals achievement" over time, they must be connected to outcome-oriented performance measures. Measures related to operations are more complex and must reflect the interaction among facility capacity and condition, operational strategies and programs, levels and patterns of demand on the system and external events and conditions that can affect system operations. While some performance measures related to aspects of system operations may remain static over time, many others must be more dynamic to capture the real-time nature of operations. Many state DOTs, MPOs, transit agencies and local governments are beginning to develop and implement performance measures that cut across a range of their programs and activities.
Almost without exception, the development of measures that reflect asset physical conditions and long-range service objectives are far ahead of efforts to define mobility and reliability measures related to real-time system operations. One reason for this is the reluctance to measure performance in an area where an agency has limited control over the outcome due to the influence of outside factors. Performance measures are needed to represent the user perspective and the facility owner or stewardship perspective. User-oriented performance measures are concerned with total trip travel time, reliability and safety - even where the trip crosses jurisdiction and involves multiple modes. Facility owner performance measures may include the same technical measures, but focus on the agency's sphere of influence.
Additional research and field testing of user and facility-level operations performance measures, developing analytic capabilities to set targets for these measures, defining the data requirements to support key measures, and developing tools for performance prediction, all represent areas needing additional work.
The need to consider the full range of alternatives available at each level of decision-making has implications both for how elements of a comprehensive operations strategy need to be related to each other and for the types of technical tools necessary to evaluate operations program options.
Figure 2.1 illustrates the different categories of operations programs undertaken in state and local transportation agencies. All of these programs need to be related to a common set of goals, objectives, and performance measures. In developing an overall operations strategy, the issue is what contribution will these programs make collectively to achieve agency goals in operations relative to investments in preservation and expansion. Within the overall operations strategy, however, choices and tradeoffs must be evaluated among the operations programs themselves in terms of their contribution to an overall objective such as reducing delay. Every program shown in Figure 2.1 can contribute to this goal. The issue is what mix and balance among all the operations programs is most effective.
The notion of tradeoffs presumes that there is a single entity responsible for allocating resources across investment categories. Within each agency, there are indeed important decisions and tradeoffs to be made. However, it should be recognized that operations responsibilities are split across state DOTs, city and county agencies, and other organizations (e.g. state police, emergency services). Actions of these different entities need to be coordinated in order to improve system performance from a user "total trip" perspective. Each agency has a different set of resource constraints and priorities, which can make coordinated action difficult to achieve. However, tradeoff analysis in the multi-agency context offers a unique opportunity to leverage each agency's investments and provide tremendous value added for the traveling public.
An additional complexity that needs to be considered as part an operations strategy and resource allocation process is the allocation of system capacity to different user groups. Balancing capacity and service needs among transit, high-occupancy vehicles, and general purpose traffic, or between freight and passenger travel, represents both a critical and complex set of choices and tradeoffs.
Even within a specific operations program, an array of options and tradeoffs must be considered. Taking Arterial Management as an example, a performance goal might be established to maximize throughput and minimize delay on a particular arterial. This arterial road could cut across several jurisdictions and may be operated by multiple agencies - a scenario that is likely transparent to the user. A comprehensive Arterial Management Program might include: upgrading traffic signals; synchronizing traffic signals on regular intervals; improving signage, both static and dynamic; implementing incident management techniques; relocating utility poles and shrubbery to improve sight distance; extending turn lanes; minimizing access points; and re-striping or remarking lanes for both traffic control as well as visibility during rainstorms. Such a program includes both capital investments such as new signals or turn lane improvements and larger more systematic improvements such as synchronization of roadside assistance programs, which are labor intensive. Each component requires ongoing monitoring, management, and maintenance.
The analysis of investment options and tradeoffs within a comprehensive operations program is further complicated by the fact that many programs may share the same assets (i.e., equipment, software and facilities). Figure 2.3 shows a sample of operating assets across four program areas. For each operations program, there are assets that are either specific to that program or that cut across multiple programs. For example, ramp meters are generally thought of as primarily associated with a Freeway Management Program. In contrast, signage, both static and dynamic, is an asset that cuts across multiple program areas. The analysis of options and the potential performance benefits from investments in different operations programs must recognize that many programs require investments in a common set of operations assets. This provides an opportunity to achieve a greater degree of service coordination and equipment modernization than would be possible with a piecemeal approach.
The evaluation of different strategies within an operations program, and to "make the case" for the benefits of operations investments, requires the data and tools to define current performance levels and to be able to predict future performance as well. By supporting the development of real-time traffic simulation tools and impact analysis tools, FHWA has provided important support in this area. Conceptually, congestion management, safety management, maintenance management, and intermodal management systems could provide additional capabilities for assessing operations-oriented programs. However, few of the operations-oriented management systems have the required capabilities today or enough of an application track record to be relied on to guide resource allocation decisions.
Another point to be considered in developing better tradeoff capabilities both within the operations area and across operations, preservation and capacity is the fact that different program areas have very different time horizons which makes them difficult to compare. An engineering-economic approach to this problem should be explored to address the issue of how to construct a useful life-cycle analysis to compare strategies across areas. Because of the high degree of uncertainty associated with future predictions of operational performance, such an approach would need to incorporate risk analysis and sensitivity analysis capabilities.
The evaluation of operations programs should reflect the program's contribution to meeting performance objectives relative to cost. The objective is to be able to identify the most cost-effective mix of programs for meeting operations performance objectives for any given level of resources available. Wherever possible, decisions ought to be based on reliable information pertaining to desired system service outcomes and customer satisfaction. Producing comparisons of real time operational data with projected modeling results would be of value to better make the case for operational investments.
The performance of each operations program in supporting agency goals and objectives needs to be monitored and reported to establish credibility and accountability. While the use of performance measures and tracking results is now just a matter of good business practice, establishing this practice within the operations area is challenging because the focus must be on day-to-day delivery of real-time service.
Operations investments and strategies that have real-time and dynamic elements require different approaches and technologies for monitoring performance and in some cases, real-time response strategies. However, because of the real-time nature of performance monitoring for operations, as capabilities expand to cover more of the system with surveillance equipment, a rich data set is being generated that can support long-term performance monitoring efforts as well.
An agency can only be accountable to the extent that it has the responsibility and capability to make decisions that can impact performance. Performance in operations-related areas (mobility, travel delay, reliability, safety, etc.) will be affected by many factors outside of the control of an individual transportation agency. While it is important to track outcome-type performance measures which reflect the traveler perspective, monitoring programs for operations also need to include output-type measures that more directly relate to those aspects of system operations that are within an agency's control.
The purpose of this section is to describe the current activities of the FHWA Office of Operations that are supportive of asset management, and identify potential additional opportunities for the future. Asset management is not a new or separate function, but a set of best practice business principles that FHWA can encourage its partners to integrate into existing processes. Section 3.1 discusses how the Office of Operations is supporting its partners in understanding and implementing operations asset management. Section 3.2 describes potential future activities for asset management and operations.
The FHWA Office of Operations is already conducting or planning several activities that reflect the asset management principles discussed throughout this paper. The following sections highlight the key asset management activities in the areas of policy, technical assistance, research and technology, and coordination.
The application of asset management principles to operations is a relatively new concept, and there are few policy guidelines in place today. However, the Office of Operations has taken the initiative to provide high-level guidance on operations asset management through their website and publications. This guidance defines asset management, relates asset management to operations and overall transportation policy goals, and outlines the next steps for the future.
Working with the Office of Asset Management, the Office of Operations is developing an asset management framework to enable its partners to make better resource allocation decisions for operations. Eventually, the Office of Operations plans to produce an operations needs and cost identification tool, life cycle costing methodology for operations components, and various operations asset management systems.
In 2002, the FHWA Office of Operations developed a discussion paper investigating the relationship between operations and asset management. Since then, the Office of Operations has introduced a website for Operations Asset Management. The website contains a two-page brochure that summarizes work to date concerning the establishment of an Operations Asset Management program.
As mentioned above, the Office of Operations completed a study in 2002 that explores the relationship between operations and asset management, and included a preliminary high-level categorized list of operational physical assets. This information was used in the development of the operations asset management program plan and roadmap.
As a result of the study, the Office of Operations is also conducting a pilot investigation of an operations asset management system for the subsystem of traffic signals. This project is using data from across the country to identify the components for a comprehensive signal management system, including physical, system, and human resource assets, and also investigate how to incorporate investment scenario analysis and tradeoff analysis tools. The research will identify policy guidelines, data requirements, performance measures, and analytical tools necessary to support operations asset management decision-making. Analysis will also be conducted on the benefits of a traffic signal asset management approach by comparing the predicted benefits and risks of various investment scenarios.
The Office of Operations is working with a number of other offices and program areas to develop coordinated strategies and joint efforts. It is coordinating with the Office of Asset Management in developing an operations asset management program plan.
Building on many activities that already are underway, including joint efforts with the Office of Asset Management, the Office of Operations has developed a program plan for further development of Operations Asset Management. This program plan will be pursued in coordination with the Office of Asset Management. Key elements of this plan outline future activities and are summarized below.
 Transportation Asset Management Guide, prepared for the National Cooperative Highway Research Program (NCHRP) Project 20-24(11) by Cambridge Systematics, Inc. with Parsons Brinckerhoff Quade & Douglas, Inc., Roy Jorgensen Associates, Inc. and Paul D. Thompson, November 2002, AASHTO Publication RP-TAMG-1.
 The FHWA plays a key role in standardizing the content and format of data that are mandated by federal law: e.g., the National Bridge Inventory (NBI) data that are reported by state DOTs.