Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement (2017)

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84 Guidebook for Considering Life-Cycle Costs in airport asset procurement Source: Fortin (2016). Figure 10-6. Team-based organizational structure. All teams should be guided by a formal team charter that details objectives, actions/activities with target completion dates, participant names and roles, and expected benefit statements. A sample procurement best practices steering committee charter is presented in Figure 10-7. Communication Plan Once the strategic plan is defined and documented and the DELTA FORCE elements become the execution roadmap, a communication plan must be in place to successfully inform the stake- holders of the initiative’s benefits, participants, and schedule as well as allow forums to address any of their concerns. A communication plan consists of four main components that deal with the audience, mes- sage, platform, and schedule. The following remainder of this chapter provides examples of these components. Audience • Leadership • Vendors • Employees • Regulators Message Internal • Procurement best practices such as TCO are the future direction. • Procurement best practices include all related functions and employees. • Executive leadership supports this initiative.

procurement Best practices Implementation 85 Procurement Improvement Program Steering Team Charter Mission: The Procurement Improvement Program (PIP) steering team will provide oversight and guidance to developing and implementing procurement best practices. Members: Procurement, Engineering, Construction, Operations, Maintenance, and Finance Executive Sponsor: Chief Operating Officer (COO) Deliverables + Schedule: 1. Conduct a best practices gap assessment (Q1) 2. Review assessment and develop improvement plan (Q2) 3. Determine what support and organizational resources are needed to support the PIP (Q3 and Q4) 4. Develop schedule and forum for updates to executive staff (Q1-Q4) Key Activities: – Attend steering committee/task team meetings – Ensure appropriate staffing resources are assigned to the PIP initiative – Review and comment on studies, reports, and staff recommendations – Monitor PIP schedule – Provide quarterly PIP progress updates to executive staff Expected Benefits: – Timely implementation of PIP best practices – Organization-wide involvement and initiative communication – Cost savings and improved customer service levels Charter Date: Endorsements: Source: Fortin (2016). Figure 10-7. Charter for a procurement improvement program team. • Business processes and decision making must be aligned across business units. • Active engagement and collaboration is expected from everyone during implementation. • Continuous communication and discussion between different functions are necessary for alignment. • Training and professional development will be provided to employees. • Accountability will be introduced within the processes. External • Provide vendors/suppliers information about procurement changes. • Request feedback from vendors/suppliers. Platform and Schedule The communication platform is how these messages will be issued to the different audiences. The platform can be a newsletter, e-mail, video, presentation, etc. The message can be commu- nicated monthly, quarterly, or yearly depending on the topic and its importance. Establishing a communications team to lead such efforts is recommended.

86 Asset management is a dynamic science that is continuously evolving and advancing with technological advancements, as presented in Figure 11-1. Although asset management has been established and implemented for many years at different industries, the aviation industry is lagging in implementation and realization of benefits. Airports of the future are facing two main challenges: • Maintaining assets with constrained and reduced budgets • Improving the quality of services provided to passengers and airlines Airports are becoming destinations and are regarded as small cities. Passengers are requesting more and enhanced services to accommodate their long traveling hours. Airlines are requesting airports provide better services to accommodate their passengers while waiting on their trips. Additionally, airport managers are looking for ways to increase their revenue to reduce their finan- cial dependency on government and local authorities. These changes and demands increase the need to utilize asset management best practices in operating and maintaining airports’ facilities. In answer to the question, “What innovations do airports envision in the next 5 to 10 years in the field of asset management, procurement, total life cycle, and in CMMS?” airport managers responded with the following insights: • Implement and use BIM to provide more accurate data and predictive life-cycle analysis • Implement predictive maintenance as part of the maintenance activities • Implement enhanced asset management technologies The real asset management challenge that faces airports is timing associated with investing capi- tal to build capacity just in advance of need. Airports are sweating their assets to ensure full value before investing in new capacity. This places pressure on the asset management teams to plan and design well; purchase smart; and implement robust, precise maintenance programs and pro- cesses complemented with highly trained and motivated staff. A CMMS and/or EAM is foun- dational to delivering these needs. In addition, thorough and readily available documentation, reporting capabilities, and a well-designed executive-level-supported governance model are key to excellence in asset management. C h a p t e r 1 1 Asset Management Future at Airports

asset Management Future at airports 87 Figure 11-1. The dynamics of airports in the future.

88 Airports are complex organizations composed of a high number and variety of assets operating under demanding conditions and economies. The tradition for airports to operate under functional governance structure, using lowest-cost purchasing policies has encouraged a linear approach to procurement rather than an integrated asset management framework that consistently drives suc- cess in other industries. There is ample opportunity for the airport industry to realize substantial benefits by adopting a different operating model—one which allows the organization to operate and maintain all its assets in a way that balances costs with risk while meeting service expectations. This new operating model—asset management under a total cost of ownership (TCO) model—is in itself a multi-faceted practice area. It is designed to span and fully integrate design, procurement/ construction, commissioning, operations, maintenance, and decommissioning processes. It is chal- lenging, if not impossible, to represent all of these aspects and tools in a single manual. Faced with that complexity, this guidebook is intended to be concise rather than comprehen- sive. It hones-in on proven tools, methodologies, and real-world examples that are most relevant to airports in an effort to help staff evaluate and begin adopting practices that makes sense to their operations. Taken as a whole, the recommended practices in this guidebook can help airports con- trol their operational expenditures, optimize reliability, and mitigate many types of organizational risk. It is also possible, however, for organizations to see benefits from adopting one or two of the methods described in these pages, focusing on areas of highest concern or accessibility. To recap the main points of this guidebook: • Adopting a total cost of ownership approach to procurement is a way airports can ensure that they use funds wisely to procure and employ assets that, across their entire life of service, will be able to meet their operational responsibilities. • Integrating sustainability into infrastructure decisions will allow airports to optimize their use of resources in a way that also supports their operational, social, and financial objectives. • Building information modeling (BIM) is one way airports can maintain information about indi- vidual assets and also see how each asset affects the system as a whole, enabling a more reliable overall operation. • O&M Ready is a way to integrate all aspects of asset management across business units and stakeholders to render the full benefits of their asset management program. • Lastly, airport organizations should try to keep sight of the fact that no asset management pro- gram or tool can be successful without ensuring that people are onboard with the work process changes that are required; executing successful change requires careful planning with plenty of communication, training, and engagement of the workforce. As complicated as adopting these practices may appear at first, the airport industry is well positioned to take advantage of the industry experience represented in these pages. It behooves the industry to begin immediately, as the challenges represented by stiff economies, aging infra- structure, and unending customer demands are not expected to fade. C h a p t e r 1 2 Final Words

89 ACRP Airport Cooperative Research Program AMMS airport maintenance management system APTS Airport Planning and Technical Services ATL Hartsfield–Jackson Atlanta International Airport BIM building information modeling Capex capital expenditures CH2M CH2M HILL CIPS Chartered Institute of Procurement and Supply CMMS computerized maintenance management system DAS direct attached storage EAM enterprise asset management EBI Honeywell’s Enterprise Buildings Integrator FAA Federal Aviation Administration GA general aviation GIS geographic information system GTAA Greater Toronto Airports Authority HSE health, safety, and environment HVAC heating, ventilation, and air conditioning IFC Industry Foundation Class ISO International Organization for Standardization IT information technology KPI key performance indicator LEED Leadership in Energy and Environmental Design MIT maintenance improvement team MRO maintenance, repair, and operation MSDGC Metropolitan Sewer District of Greater Cincinnati NAS network attached storage NR Network Rail O&M operations and maintenance O&M Ready operation and maintenance readiness Opex operational expenditures PAS Publicly Available Specification PBB passenger boarding bridges PHX Phoenix Sky Harbor International Airport PIP Procurement Improvement Program PMD people-moving devices PPP public–private partnership RCM resource conservation measure Abbreviations, Acronyms, and Initialisms