FMEA: Risk Analysis and Management

Identifying risks and initiating mitigating actions early to reduce their probability or severity of the impact is a core responsibility of management and must be part of each larger project.

Industry standard of risk analysis is the FMEA method (Failure Mode and Effects Analysis), which we offer as a software tool complemented by training and execution support.

A list of risks is compiled, e.g. during a brainstorming session of the project team. Following a specific description, the risk is then being assessed based on three factors:

  • Probability (P) – How likely is the issue to occur? 1-2 extremely unlikely, 3-4 remote, 5-6 occasional, 7-8 reasonably possible, 9-10 frequent
  • Severity (S) – How severe are the implications if the risk materializes? 1-3 very minor; 4-6 = minor, low damage, 7-8 critical, 9-10 catastrophic
  • Detection (D) – Risk to not detect the issue; 10 = high and 1 = low.
The more often a defect occurs, the more severe its impact, and the less likely it will be detected the higher the risk for the company, its employees, customers and partner.

To prioritize the risk mitigation actions those three factors are multiplied resulting in a „Risk Prioritization Number“ (RPN) – the higher the number, the more urgently action is to be taken.

It is important to understand the logarithmic scale of this metrics. While the maximum of a RPN is 1,000 a score of 125 represents already 50% probability of all three factors (5 x 5 x 5). While the score may appear relatively low, it must be dealt with.

FMEA like any kind of analysis or reporting is targeted to develop actions and drive their execution. In this case to reduce the risk for your company by improving the three factors:

  • Reduce the probability of occurrence, e.g. by adding incoming inspections, training of employees, improved product and process design.
  • Limit the severity in case the risk materializes, e.g. by implementing fire protection, avoid toxic or flammable materials, or adding serial numbers, but also contract insurances for financial coverage.
  • Increase the detectability of incidents, so that an issue can be detected quickly and early, e.g. by frequent quality inspections, visual management of production, or using capabilities of sensors throughout the processes.

As a working tool for this we offer a classic FMEA-overview complemented by a risk analysis application for individual processes, which likely is required by your quality mgmt. system.

Both are part of our software tool box as well as the Quality Mgmt application. Those are (private-) cloud-based and immediately deployable across your enterprise. If required, the application can easily be individualized and enhanced.

Interested? Our offer can be found HERE.