1. Summary of project, product, framework Sydney Trains (ST) is introducing new business processes and decision support tools to evaluate and justify, in quantified cost, risk and performance terms, the optimal time to replace aging and obsolete equipment. These are a significant departure from traditional data-analytical methods or conventional investment evaluation techniques. They incorporate technical, commercial and sustainability factors and enable expert knowledge to be quantified for filling gaps in hard data evidence and forecasts. The techniques have now been applied to a range of ST asset classes, yielding multi-million dollar added value through changes in Capex and Opex requirements, risk reduction and performance improvement. 2. Description of LCO project: best practice asset management – in practice Two big initiatives have occurred recently in the development of asset management in ST: These have delivered improved line-of-sight alignment, strategic planning, value and efficiency in how ST’s asset portfolio is managed. The other priority is to optimise effectiveness. This is where good decision-making is vital: determining what is worth doing, when, to deliver best value-for-money over the whole asset lifecycle. We conducted a world-wide study of best practices and technical solutions to address these questions, concluding that the SALVO (Strategic Assets Lifecycle Value Optimisation)[1] methodology and DST[2] toolkit from The Woodhouse Partnership Ltd represented the most robust, advanced and practical solutions for our business needs. They align with the ISO 55001 requirement for a clear decision-making framework and decision criteria. SALVO is a six-step process developed by an international group of asset-intensive organisations to: We adapted SALVO to establish an innovative Life Cycle Optimisation (LCO) process, involving a ST-customised mix of business process changes (i.e. who makes what sort of decision, how), training courses (rigorous consideration of cost, risk and performance elements, along with all other decision drivers) and decision support tools (DST) that enable instant ‘what if?’ calculation of optimal intervention timing and value impact. The combined process has opened people’s eyes and established a new way of breaking down functional silos to rapidly achieve consensus. We have created a fundamentally new way of looking at our assets, our interventions and our demonstration of value to our stakeholders. A distinctive feature of this approach has been how it draws together and visibly applies core asset management principles into every-day decision-making. SALVO forces us to always consider whole lifecycle value (business impact). It connects good decision-making to context-specific stakeholder expectations and AM objectives. And produces clear-cut justification (and assurance) that we are doing the right things, for the right reasons, at the right times. Figure 1. Example of DST ‘storyboard’ and cost/risk/performance-optimised decision results Figure 2. Summary of Sydney Trains Lifecycle Cost Optimisation process The LCO process has also proven extremely flexible; evaluating options and quantifying the business cases for diverse cases as: User feedback: Originality and ingenuity We believe this is the first fully-rigorous development and implementation of such a decision-making framework for Asset Management within Australia. Many organisations have addressed parts of the requirement (e.g. certain decision types) and have component tools for specific purposes, but our LCO is a systematic decision-making methodology, covering all types of asset management decision and at criticality-proportionate levels of application. It combines human psychology (e.g. how to elicit ‘tacit knowledge’ from subject experts while minimising bias and identifying/quantifying the inevitable uncertainties) with advanced technology (e.g. artificial intelligence algorithms incorporated within the DST modules to seek the optimal work program for total cost, risk, performance impact). Other elements of innovation lie in: Program and project management Implementation of an LCO process requires new skills and a significant change in organisational culture, besides the process changes and tools/systems configuration. The successful change from established (strongly departmental) methods of working, to cross-functional, value-based decision-making required a people-centric transformation program. From the outset, therefore, significant investment was made in training those directly involved in asset management decision-making, as well as an awareness and education program for ST stakeholders and sources of relevant asset and intervention expertise. Following signoff of a project charter and appointment of the steering committee, the program started with SALVO/LCO introductory training for potential users/contributors/beneficiaries. The next phase developed an integrated process map for the LCO process, showing its fit with existing ST business processes and systems. Detailed methods training was then grouped by decision-type audiences, such as those responsible for projects/change evaluations, strategic spares, operational maintenance, inspection and lifecycle (e.g. Refurbishment, Renewal) interventions. In all cases, the formal training was followed by immediate on-the-job facilitation of ‘live’ current cases, and coaching to ensure conceptual understanding was reinforced and consolidated by practical application. Throughout the program, skills and competency assurance was a priority, using a formal certification scheme (mini exams and independent case validations) to ensure that standards and consistency are maintained. An agile project management process was used throughout, to adapt as skills, knowledge and confidence grew. This has resulted in a naturally-evolved group of ‘super-users’ providing peer support and quality validation to those with more intermittent involvement. This has delivered a strong sense of ‘ownership’ in the resulting solution, embedded in strategic planning and the AM management system (e.g. a clear-cut decision-making framework/criteria) and transparently evident justification for AM decisions that show how costs, risks and performance are optimised in day-to-day decision-making. The next phase of the transition is therefore in sight – namely to consolidate such decisions into corporate resourcing and strategic budgeting processes, including the business interface with Transport for NSW, the ultimate asset owner. Business impact The LCO process is consistently revealing scope for improving the mix of costs, risks and performance (compared to expert judgement or current/historical practices). From a representative sample of eight asset management decisions, one case typically confirms current practice to be correct and the others show improvement opportunities of A$20k/year to A$300k/year each (through a mixture of costs avoided, risks reduced and/or performance improved). And, in a few cases, the impact is substantially greater: already we have several cases where the process has shown benefits of A$20-plus million NPV. Other organisational benefits, we