How Water Utilities Can Clear Up Their Supply Chains
By Didem Cataloglu
Water utility companies are used to clearing up pipeline obstructions — but today, the issues are not necessarily limited to the underground. According to a recent survey by the American Water Works Association, 72 percent of water utilities are facing difficulties obtaining pipes or other infrastructure components1. Over 45 percent report issues with purchases of electronic equipment and chemicals. A huge number are struggling to obtain computer chips for their water trucks.
Supply chain disruptions are contributing to the problem of aging infrastructures worsening from troublesome to critical. The American Society of Civil Engineers, in its 2021 Infrastructure Report Card, determined that the average U.S. water network pipe is 45 years old, with some cast iron pipes dating back more than a century2. Nearly 300,000 water main breaks occur every year — a rate of one every two minutes, as reported by the Utah State University’s Buried Structures Laboratory in its 2018 report3. Ruptures put additional strain on maintenance crews that are already overworked; the same survey found that 47 percent of all maintenance is due to reactive breakdowns.
Because utilities typically work with original equipment manufacturers (OEMs) for supplies and parts, long lead times are often necessary — yet COVID-19 has caused disruptions no one could have anticipated just a couple years ago. Operators sometimes look to contractors to assume supply risk, especially when major improvement projects are involved. But the issue is not that simple; when contractors face supply delays, it’s a domino effect that affects everyone.
What the industry is facing is both inescapable and unprecedented. A perfect storm of manufacturing delays, workforce reductions, excessive demands, and logistical disruptions, has turned three- to six-month wait times into multiyear headaches. Water utilities are in dire need of predictive analytics and optimized solutions.
Analytics Deliver Perspectives And Options
The problem is widespread, but not without hope for optimized solutions. Technologies are helping to identify and mitigate risk, particularly software that helps decision-makers see their way through the kinds of unexpected events that currently plague supply chains.
Some of these solutions are well known to water companies. EAM (Enterprise Asset Management) systems, the most common management software in use by utilities, help prioritize and schedule daily operational maintenance activities. APM (Asset Performance Management) solutions move a bit further along the analytical scale, using data from a variety of sources to identify and predict where maintenance activity should be strategically directed.
The most advanced enterprise software, however, has capabilities that uniquely address challenges like disrupted supply chains. This is where AIP (Asset Investment Planning) solutions some in, since they are designed for long-term capital planning, along with risk and constraint analysis. AIP solutions help utilities manage finite resources, e.g., workforce and finance limitations; moreover, they accommodate priorities that differ from one utility to the next. Some operators emphasize cost, while for others, risk reduction or resilience take precedence. Using data-driven simulations, AIP solutions generate simulations that help companies direct their investments in a sustainable and strategic manner.
AIP solutions can tailor analyses to fit any specific organizational need. Some can synchronize with other projects, e.g., road improvements, to identify cost reduction opportunities. Others can digitalize decision policies and subject matter expertise to retain knowledge and experience along with aging workforce and turnover factors.
While APM and AIP systems are less widespread than traditional EAM platforms, they fit an era when every public dollar and contingency must be carefully weighed and accounted for. Furthermore, they operate independently; APM, for example, is not a prerequisite for AIP.
A Sandbox For Building And Testing Strategies
At a time when supply chains are front and center in the minds of water utility decision-makers, AIP helps uncover opportunities and reset priorities. When disruptions occur, price is often replaced by risk and value assessment as primary factors. AIP software can quickly help anticipate and accommodate for any contingencies through “what-if” analysis.
“What-if” analysis enables planners and operational managers to base their purchase schedules, not only on required levels of service, but also on shifting delivery or availability circumstances. Lead times are a critical factor in planning. What was once a two-year purchase horizon may suddenly change to three or four years. “What-if” analysis allows utilities to anticipate unexpected or dire situations and collaborate with OEMs to ensure an adequate flow of supplies.
Another application is portfolio optimization. AIP enables the user to reexamine current inventories for changing needs such as emergencies, or when projected supply chain issues adversely affect maintenance or replacement schedules. Portfolio optimization makes it easier to divert a portion of existing resources into operational maintenance over the short-term to extend the life of a network section, thus enabling the utility to better weather a supply chain delay.
Rapid Implementation And Available Funds
Because asset management platforms are typically cloud-based, they can be up and running very quickly — often within 8 to 12 weeks — to help with imminent challenges. Even if the amount of available data is limited, an agile approach to implementation will allow users to begin the process of scenario-building and allocation planning.
With the recent passage of the U.S. infrastructure bill, utilities can look to federal dollars to help cover new forms of technical infrastructure. Analytical software fits into the larger data information infrastructure that organizations are building to become smarter and more efficient and sustainable. Their addition will allow utilities to accelerate the journey to a more robust and well-maintained system.
Analytics Technology Optimizes Solutions
By all indications, supply chain backlogs will be a reality for some time to come. Planning ranges will need to lengthen; with infrastructure aging quickly, the need for material to support replacements, repairs, maintenance and construction will all increase. Operators will need to be mindful of this new reality, and plan for it both directly and indirectly with their partner ecosystems.
Building resilience, however, can help sustain quality of service under challenging circumstances. Using advanced software, utilities can run stress tests on their inventory and purchasing systems, hypothesize for extreme events, and quickly shift resource commitments. They can consider and compare different strategies, quantify the likelihood of adverse impacts, and become more agile in a chaotic supply chain environment.
AIP software has been proven to save 20 to 30 percent in annual CAPEX and OPEX expenditures, demonstrating both its financial and decision-making value. By adding AIP to their asset management resources, water utilities can visualize and optimize solutions for an improved flow of supplies in their networks for the short-, medium-, and long-term.
1 “COVID Water Sector Impact Survey 5 (Oct 2021), American Water Works Association.
2 “Report Card for America’s Infrastructure,” American Society of Civil Engineers (ASCE), www.infrastructurereportcard.org.
3 Folkman, Steven, "Water Main Break Rates in the USA and Canada: A Comprehensive Study" (2018). Mechanical and Aerospace Engineering Faculty Publications. Paper 174. https://digitalcommons.usu.edu/mae_facpub/174.
DIDEM CATALOGLU is Chief Executive Officer of DIREXYON Technologies.