On the surface, our day-to-day life can seem quite simple. Things come easily to us. We need some groceries or even the latest tech gadget and we can head to the store or online and buy it, with a few simple steps. 

But behind that easy consumer experience is an increasingly complex world of interconnecting supply chains, just-in-time deliveries, logistics providers, water, gas, electricity and other utility and service providers, a complex and interdependent supply chain that may be vulnerable to just a single break in one tiny link. 

In recent years, we’ve seen how climate change and disease can disrupt these complex systems. Climate change—through flooding, wildfires, storms, and other weather events—now exposes more assets to risk. Lockdowns, like those we lived through in the worst of the COVID years, prevent commuter travel and goods deliveries. 

Every link in these interwoven chains—from the farms and factories producing the good we want, to the homes and offices we live and work in—is both at risk from climate change and a contributor to it.

One of the best places to see this cause and effect is in the transport system, says Shiv Iyer,  technical director of Atkins’ US Asset Management business.

“Transportation infrastructure both contributes to climate change, and is affected by it. 

Road and air transport are considered to be major contributors to climate change: by some estimates, that’s 23% of carbon emissions. But it is also vulnerable because many facilities like roads and bus terminals are located in flood zones. For example, New Jersey Transit Authority lost around $120m in damages to their buses after Hurricane Sandy. 

“Tunnels are usually built below grade, and they are prone to flooding. This happened to New York MTA subway tunnels which experienced severe damage, again, due to flooding from Sandy. 

“There are airports that are located at low elevations along the coastline areas and are at severe risk at sea level rise, rendering them non functional. Extreme heat and freeze thaw cycles cause buckling, pavement cracking, and potholes that become too expensive to fix and sustain.”

So, how can the owners of these assets ensure that they are there when we need them? “The key word is resilience,” says Iyer. “Resilience, in its most simplest definition, is the ability to resist and be ready against forces that are working to destabilise the function that you’re expected to deliver.”

“Resilience is, in one sense, your ability to return to normal after a disaster,” says Donna Huey, chief digital officer and senior vice president at Atkins in the US. “After an event happens, be it a heat event, a drought event, a flooding event, a hurricane, can you bring your people and your economic vitality back to its normal condition?”

A blockage in the system

In the first few weeks of COVID, the world changed like this. At first, some flights were stopped; then the first warnings came that lockdowns may be needed; and then very quickly everything went down the toilet.

Quite literally.

“When the pandemic hit, and there was a global lockdown, supply chains were affected, stores shut down,” says Iyer, “And something as basic as toilet paper, there was a huge shortage of toilet paper pretty much in every country. 

“People started using substitutes for toilet paper to get through. And they flush those. Guess what happened? They go and clog the sewers. There is a chance of contamination of the water supply.”

Basic human needs ran up against a system that wasn’t built to cope with a sudden influx of newspapers, in place of aloe vera infused, quilted four ply. And just as much as these systems weren’t designed for a sudden change in the materials flowing through them, so their maintenance and service systems weren’t able to operate when workers were suddenly trapped in their homes.

“At the same time, because of a COVID lock down, you are short on staff, you’re working on a very thin, lean crew. So you have a double whammy here. You have fast escalating failures in your infrastructure. At the same time, you are handicapped by your ability to respond to them because a pandemic has affected availability of staff and resources. So you’re quickly in a situation where infrastructure is failing infrastructure, but you lack of the ability to react”

Events like this have a long tail, which then ripples through from one system to another. For utilities, which are often owned by, or run on behalf of, local authorities, a system failure can lead to a loss of funds, just when cash is most needed to fix those systems.

“When something like COVID happens,” Iyer says, “Immediately businesses are not functioning, so they’re not paying taxes. There are budget cuts, which means funding is not available to reinvest in infrastructure. Infrastructure deteriorates because of a lack of funding, a lack of appropriate operations and maintenance, escalating the depreciation of your asset portfolio.”

It’s a vicious cycle. And it’s one that will happen with increasing frequency and unpredictability, says Huey. “In recent years the impact of climate change has caused a great deal of unpredictability in weather patterns. More intense storms, which result in more flooding, or more intense heat or drought areas which result in water scarcity. 

“From an asset management perspective, as we’re designing or maintaining infrastructure, whether that be roads, water treatment facilities, or anything of the like, it’s more important for us now than ever to think about how the impact of climate change is going to put additional stresses on that infrastructure. What are the things we can do to harden or sustain that infrastructure over a longer period of time, in light of those stresses?”

A system of systems

Like Iyer, Huey has seen how a failure at one asset can then ripple out, disrupting everything it comes into contact with, and often compounding the challenge of returning to normal.

“It’s not just a single fault in the system, you really have to think about the system of systems, and the ability to move goods, the ability for that to be disrupted for any number of things. As we saw in COVID, once you have a fault in one system, you get a ripple effect that goes through the chain,” Huey says.

“In the Southwest US we are facing water scarcity. And the single instance issue would be water levels, going down below the intake pipes, needed to provide a source of fresh water for the population,” Huey explains. “But that impact then ripples. If there’s not enough water, people will start to move away. Then you have an economic impact as well. Ripple effects go beyond the physical conditions themselves, straight into the economy of a community or the bottom line of a business.”

How then, can asset owners even begin to start thinking about resilience? In a Rumsfeldian world, where the unknown unknowns can often be as numerous as known unknowns, how can they create an asset management plan that ensures reliability, without costs sprawling uncontrollably?

The first step is to understand what your asset is there to do.

“There is a whole aspect of demand analysis,” says Iyer. “A key element of your asset management programme is understanding demand. Asset planners in an organisation that are constantly considering, ‘Are our assets currently sized to meet the current demands?’.”

They must then try to outline the risks they face. That takes a careful analysis of the likelihood of a failure of any component of the asset, or of a disaster striking the asset, and what the consequences of that failure might be. It’s important to focus on those assets that will have to remain in place, for the longest time.

“The key is to model these resilience strategies for the longest lived asset in your portfolio. And in most cases, it is going to be the pipes in the ground, because these last a hundred 100 years, compared to buildings and other infrastructure that have a 50 year design life.”

“Any prediction or projection of these risks has to factor this,” says Iyer. “What can I expect to happen in the next 100 years? Can I expect this particular event to happen in the next 10 years, in the next 50 years? Or the next 100 years?” 

Planners identify components that may face a catastrophe, before they are due to be replaced. The analysis can then move on from individual components, to their interaction within an asset; and to the interactions between assets.

“It’s not just a single factor that needs to be evaluated when you look at that long term resilience,” says Huey. “It’s not just, for example, the site and the long term weather patterns. It’s the environmental conditions around the site, it could be the lifeline assets to and from the site. That could be water, that could be roads or other infrastructure. 

“Let’s say that site is for a manufacturing facility, you need to be able to get your product and your goods moved to and from that facility. So you really need to look at a lot of different variables and a lot of different factors. And the more detail we can analyse when we look at these long term simulations the better.”

Teamwork beats guesswork

It’s often hard for asset owners to understand these complex interactions on their own. Instead, different asset owners, and different external stakeholders, must be included.

“You need to bring a lot of people into the mix,” says Huey.  “The more stakeholders you can convene, the more points of view you’re going to receive, and you’ll be able to build the detail into whatever stimulation or forecasting model you’re going to run”

Atkins recently worked with North Carolina’s department of transport on an extensive vulnerability study “They actually convened an 80 person technical advisory committee that stretched from divisions within their own organisation to state resilience organisations, to municipal planning organisations, and even federal stakeholders,” says Huey. “It’s really important when you go into long term resilience studies that it’s not done in a silo, that it starts with collaboration.”

Atkins has been developing some sophisticated tools to help them and their clients understand assets, and their resilience. But there’s one particularly sharp tool that Iyer favours for cutting through the complexity of these interconnected systems. And it dates back to the 13th Century. It’s called Occam’s razor.

“Usually the simplest explanation is the best one,” he says. “So all complexities, when broken down, are ultimately just a collection of very simple factors and variables that just come together in such a unique fashion that it makes it more complex.”

William of Ockham was a scholastic philosopher, one of a group of thinkers focussed on religion, who used logical reasoning developed by Aristotle almost two thousand years earlier. He made heavy use of the idea that one ‘should not needlessly multiply predicates’, only considering those assumptions that are needed to make an argument. And, he lived at a time before anyone had surnames or dictionaries, so his name in modern usage doesn’t quite match that of his analytic tool.

Even with Occam’s razor at hand, the predicates needed to understand an asset have a tendency to multiply. There’s a lot of slicing for Iyer to do.

“It’s about understanding ‘What infrastructure do you own?’, ‘Where is it?’, ‘What is the condition of your infrastructure?’, ‘How much life is left in your infrastructure?’, ‘What is the replacement value of your infrastructure?’ ‘What are the levels of services that you are expecting?’ ‘Which infrastructure is absolutely critical to deliver your levels of service that your regulators and customers expect you to deliver?’ ‘What are your optimised operations and maintenance strategies across your asset portfolio, In order to be able to meet those levels of service?’ 

“We help our clients answer these questions in a very methodical manner, using an asset management framework or an asset management model.”

The mere process of slicing through the problem like this, then brings scope of complexity into view. Iyer’s asset management team, and their clients, can start to see the forest, not just the trees.

“When you use a methodical framework, it becomes a lot easier to wrap your brain around [the bigger questions, such as], ‘How do I manage this massive infrastructure that I own, operate and maintain? And still do a good job and be the best steward of the public’s money?’

“As organisations go through developing what we call a SAMP, or strategic asset management plan, ultimately it boils down to thinking about three things,” says Iyer. “It’s about cost of service, level of service, and risk. 

“It’s like a sliding scale, where you have at the top your level of service and at the bottom is your cost of service. Your cost of service is connected to level of service in the sense that

whatever function or service your assets are offering, they’re incurring a cost. You increase your level of service, your cost goes up; you decrease your level of service, your cost goes down.”

For each asset, the asset managers now have a simple slider, which they can use to balance the level and cost of service.

But the complexity doesn’t end there.

“It is simple to visualise, when we’re talking about an asset or two,” says Iyer. “But now just think about the fact that you may have hundreds and thousands, maybe millions, of assets that you own, operate and maintain as an organisation. Each of these assets are of a different make, model, and manufacturer. And also they deliver a different function. They have varying lifecycle costs. Now, try to assess the level of service of these assets and the cost of service and the hidden risk that is built into the likelihood of failure of these assets.”

Asset management experts can help owners, throughout the life of an asset. The sort of analytic tools Iyer uses can help both at the very earliest stages of planning, and as owners consider new maintenance programmes for existing assets, in light of the changing risks posed by climate change.

“When we think about looking at resilience and asset management, it’s both near term and long term,” says Huey. “What can we do, temporarily maybe, in our maintenance regimes? That might mean introducing a more water resilient material for example, where we want to protect certain infrastructure pipes or other infrastructure from water. Or it could be longer term, when we think about building a new bridge and elevating that bridge higher.”

Everything in its proper place

For asset management experts, just like real estate agents, three things matter most: location, location, location.

“One of the things we’re starting to learn,” says Huey, “Is that when we look at the impact of some of these changes over longer and longer periods of time, we need to get the location right from the first instance.”

Huey and her team have developed a way to get the location of a new asset right, from the first instance, and well into the future. It’s called City Simulator.

“It’s a GIS based tool. So fundamentally, it’s focused on the spatial location of the asset. It simulates the growing city from present day, up to say mid century—40, 50 years out—and it hits your community over time with climate change influenced disasters, like hurricanes or floods, storm surges, heat waves, droughts, and it measures how vulnerable your city or facility or road is to that disruption, how many work hours are lost, how many trips are interrupted, how much damage occurs to buildings.”

Asset managers can use it in the same way that military planners use red team exercises, throwing simulated adversity at a system, until they have found a strategy that works. 

“You’re able to then look at questions like, ‘If I moved the road or if I elevated the building, and rerun the simulation, can I decrease the number of work hours lost, can I decrease the trips disrupted or decrease the damage?’  You can do this in a virtual environment and rerun a number of different scenarios and different ways to look at reducing your risk, or improving your resiliency, without the cost of actually implementing them. First, figure out what works best, and then lay out your plans for the future from there.”

As we saw during Covid, simple human factors, like how you work around a lack of toilet paper in the store, or how utility workers will get to a job site, can quickly devastate an asset’s performance. It’s vital that human behaviour, as well as external events, is considered in the simulation.

“You create a virtual population as well,” says Huey. “It’s an agent based model. The individuals in each location are going to and from work. And when they go to work, they’re going to have an estimated productivity in the economy of that location. 

“We can look then at the movement of those people, as we influence it with these weather disruptions, and be able to see where they’re impacted, where they’re affected. And we run that simulation with the people on a daily loop. So every day there’s simulations running and seeing how they’re coming and going. 

“But then on an annual basis, we’re looking at this combination of downscaled global circulation models—and historical weather data—together to be able to simulate that weather pattern. And the more detail you add into the model, the more trust you can have in its predictions.”

With those predictions at hand, asset owners can really start to think about the future.  They can site, design, and build assets that are truly resilient. And they can make sure their cost of service is just right for the level of service needed, whatever the risks an asset faces.