Managing the asset time bomb: a system dynamics approach

Abstract

For organisations responsible for managing the UK's national infrastructure, particularly those that are tightly regulated, a major challenge today is how to maintain performance of their infrastructure assets within the constraints of both limited budgets and externally set performance targets. This problem becomes more acute when significant members of an asset base approach an end-of life state at the same time. Resolving this problem has often proved difficult as it doesn't readily lend itself to exploration with traditional analytical and forecasting tools. This paper discusses how system dynamics methods and tools have been successfully used to develop a new approach to asset and infrastructure planning which builds simulation models that both give insight into the nature of the asset time bomb threat but, more importantly, enable the development of asset management polices and strategies that will eliminate the threat. The paper includes a description of system dynamics showing the detailed structure of the models developed. A case study of a leading European electricity distribution network operator who used system dynamics to understand and solve the asset time bomb threat is described including the outcome which resulting in a fundamental change in asset management strategy.