1.1 TAM Basics

TAM is important because of the size and value of the infrastructure that has been built. The total value of the existing inventory of U.S. transportation assets is staggering; based on data from FHWA Highway Statistics, the replacement value of U.S. bridges and pavement alone is over $5 trillion. TAM offers a set of tools and techniques applicable to sustain the condition and performance of the full range of transportation assets.

TAM has been a focus area for DOTs in the U.S. for over 15 years, paralleling similar efforts to improve asset management in infrastructure-intensive industries in the U.S. and abroad. Over this period, transportation agencies have worked to increase their understanding of the value and performance of existing assets; and implement improved asset management systems and approaches.

This guidance responds to the new challenges that have emerged since TAM was first recognized as a critical area in the U.S. transportation community such as: evolving business practices, technology advancements, constrained funding, changing environment, and legislative requirements.

Video Guides to Transit Asset Management Fundamentals

The following videos have been produced by transportation agencies to communicate what TAM is and why it should be important to a transportation agency.

Why Invest in Asset Management?

An introduction to asset management and explanation for why it is so essential.

Iowa Department of Transportation: TAM Defined

Three-minute video that compares preservation and worst-first approaches to asset management.

An Overview of TAM from the Federal Highway Administration

Eight-minute overview of TAM and its benefits (featuring the original TAM ETG members!)

Transportation asset management (TAM) is defined by AASHTO as a strategic and systematic process of operating, maintaining, upgrading, and expanding physical assets effectively throughout their life cycle. It focuses on business and engineering practices for resource allocation and utilization, with the objective of better decision making based upon quality information and well defined objectives.

FHWA defines TAM similarly, stating, “Asset management is a strategic and systematic process of operating, maintaining, and improving physical assets, with a focus on engineering and economic analysis based upon quality information, to identify a structured sequence of maintenance, preservation, repair, rehabilitation, and replacement actions that will achieve and sustain a desired state of good repair (SOGR) over the lifecycle of the assets at minimum practicable cost.”

In the International Standards Organization (ISO) Standard 55000, asset management is defined as the “coordinated activity of an organization to realize value from assets. Realization of value involves the balancing of costs, risks, opportunities and performance benefits.” In addition, the ISO standard states that, “Asset management enables an organization to examine the need for, and performance of, assets and asset systems at different levels. Additionally, it enables the application of analytical approaches towards managing an asset over the different stages of its life cycle (which can start with the conception of the need for the asset, through to its disposal, and includes the managing of any potential post disposal liabilities).”

Performance measures are quantifiable metrics that are used to track progress toward goals, objectives, and established performance targets.

A performance target is a level of performance desired to be achieved within a specific time frame.

State of good repair (SGR) refers to a condition in which existing physical assets, both individually and as a system, are functioning as designed within their useful service life and are kept functional through regular maintenance and replacement programs.

Levels of service are an agency’s stated commitment to deliver asset service at a specified level of quality and reliability. Service levels can be asset performance-related or customer/regulatory-related (complaints, meeting regulatory requirements). These levels of service can include, but are not limited to, the historic “level of service” used to grade traffic congestion.

Asset condition refers to an asset’s current state, as specifically defined by its appearance, perceived level of service, and observed physical state, whether or not it impacts its performance.

Risk is the positive or negative effect of uncertainty or variability upon agency objectives. [23 USC 515.6]

Life cycle planning and management is a process to estimate the cost of managing an asset class, or asset sub-group over its whole life with consideration for minimizing cost while preserving or improving asset condition. [23 CFR 515.5]

Whole-life costing is the systematic consideration of all relevant costs and revenues associated with the development, operations, and maintenance of the asset.

Reliability-centered maintenance is a structured, risk-based approach for determining the maintenance requirement for any physical asset, based on its operating context within the agency.

Resource allocation is the process of assigning scarce resources to investments in transportation assets. The assigned resources can be money, staff time, contractor capacity, equipment, or other organizational requirements for assets. The investments can be capital projects, maintenance efforts, or other projects and activities that require the use of an organization’s resources through various delivery methods.

Policy-Driven. TAM should capture and respond to policy objectives, and provide meaningful information about how changes in the transportation system support these objectives. A TAM policy can set boundaries, clarify intent, and communicate the scope of a TAM program including types of assets that will be managed and what work activities to emphasize. [NCHRP 551]

Performance-Based. TAM should have concrete objectives that are translated into system performance measures used for both day-to-day operation and longer-term strategic management. The use of performance data to support the management of assets enables agencies to select and deliver projects that achieve its objectives. Transparent processes allow for accountability to both internal and external stakeholders.

Risk-Based. Risk management plays a role in resource allocation, project selection, long-term planning and other essential parts of the TAM process. As such, an organization’s approach to risk management and the outcomes resulting from a risk assessment have important implications for TAM. An agency must establish a risk management approach and integrate risk management in TAM planning and decision making.

Strategically Aligned with Agency Priorities. TAM measures should be aligned with agency priorities and goals to ensure that investments made to extend asset service life provide the maximum impact to achieve long-term goals. Connecting performance measures to higher level strategic goals also supports an agency’s ability to communicate to customers and stakeholders how technical measures relate to system performance.

Transparent. TAM planning and results should be monitored and reported for both impact and effectiveness. Feedback on actual performance should influence agency goals and objectives, as well as future resource allocation and project decisions. Transparency and agency accountability are key in ensuring the long-term support of project partners, customers and stakeholders.

Information-Driven/Evidence-Based. Strategic decisions with respect to agency goals and TAM objectives should be evaluated using credible and current data. Decision support tools such as management systems should be applied to help in accessing, analyzing and tracking data, and must be an integral part of business and decision processes. Data requirements for performance measures should be realistic and feasible. [NCHRP 551]

Option Oriented. By taking a structured and repeatable approach to TAM decision-making, an organization improves its own resilience and ensures that it will continue to succeed even as new challenges arise and personnel changes over time.

Continuously Improved. TAM processes should provide managers with sufficient information to understand problems and suggest solutions. The agency should be committed to regular, ongoing processes of monitoring and reporting results in order to identify and implement improvements to system performance or further the effectiveness of TAM. [NCHRP 551]

Video Explanation of Asset Management Principles

Principles of Asset Management: Ontario

This video from Ontario, Canada provides an overview of asset management principles.

TAM Elements Overview

Monitoring the state of the assets and developing desired and expected Levels of Service (LoS). Performance measures are used to align agency investment decisions with organizational objectives, such as asset condition or system reliability, and to monitor progress towards achieving agency goals. In TAM, asset performance is most commonly defined in terms of asset condition or maintenance LoS. LoS provides the link between agency goals and the investments and interventions that should take priority when managing assets.

Maximizing use of available revenues. Agencies are faced with the problem of determining how to divide scarce resources between different asset types, in order to accomplish a variety of different objectives. TAM planning offers processes to help make these resource allocation decisions, such as Multi-Objective Decision Analysis (MODA), long term financial planning, and Life-Cycle Planning.

Monitoring and managing risk. In TAM, uncertainty complicates efforts to make decisions about the future and forces agencies to be nimble so as to effectively respond to unpredictable events and evolving conditions. An organization’s approach to risk management and the outcomes resulting from a risk assessment have implications for TAM. It is important to establish processes to track changes in risks over time and monitor actions taken to manage risks, through tools such as a risk register and/or a risk mitigation plan.

Investing in asset maintenance. State DOTs can specify their desired SGR, consistent with their TAM objectives, for the 10-year analysis period of their TAMP. This strategic long-term maintenance strategy helps agencies minimize the life cycle costs of preserving assets, while also managing asset performance to a defined target to the extent practicable with available resources.

Understanding the potential for asset failure and developing intervention strategies. Being aware of the potential for asset failure and making strategic investment decisions can help agencies prevent failures, reduce costs, and maintain a desired level of service. Over an asset lifecycle, a range of interventions are possible, from reactive, routine and preventative maintenance, to large investment associated with renewal, replacement and disposal.

Allocating resources and prioritizing work based on both short and long-term performance. The resource allocation process should support achieving short- and long-term goals. An agency must establish what scarce resources must be allocated, and what the constraints on these resources are. A key part of the process is to translate goals and objectives into performance measures so the agency can set target values for key measures and/or establish a target level of service.

Continuous improvement based on feedback. An agency should have regular, ongoing processes of monitoring and reporting results in order to identify and implement improvements to system performance or further the effectiveness of the performance management process. Ongoing monitoring, improvement and/or problem identification should be incorporated into the planning process to help adjust and determine future targets and processes.

Aligning the organization. Successful TAM depends on the alignment of a diverse set of internal business units and external partners and stakeholders. Strategic coordination and communication can bring these people and groups together to achieve TAM goals. In addition, the choice of a TAM organization model is important, and should align with and support agency policies and priorities.