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Utilizing Fault Tree Analysis (FTA) as a Tool for Risk Management

written by: SparkKD • edited by: Jean Scheid • updated: 7/6/2011

This article explains the concept of Fault Tree Analysis (FTA) and its application as a risk management tool in projects. Risk Management is a very important part of a project and most project managers make extensive use of such risk management tools.

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    Introduction to Risk Management

    Risk Management is one of the key areas of project management and is of increased importance in these volatile times to ensure successful completion of projects.

    The various risk management alternatives available to a project manager in order to combat risk are

    • Avoid Risk,
    • Transfer Risk,
    • Assume Risk or
    • Prevent/Mitigate the risk.

    In order to prevent or mitigate the risk, the manager makes use of such risk management tools.

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    Risk Management Tools – Fault Tree Analysis

    Fault Tree Analysis is a risk management tool which takes undesirable events or faults and represents them in a tree like structure by a process of simple logic and graphical design. This helps us pinpoint the root causes or the lower level events which have resulted in this fault and thus enables us to take suitable actions to avoid or protect against it.

    Please read this article to view the Steps involved in Risk Management.

    A specific approach using Fault Tree Analysis is described below.

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    Steps Involved in Fault Tree Analysis

    1) Define the undesirable events or failure in the project

    2) Obtain a thorough understanding of the project

    3) Construct the fault tree

    4) Evaluate the fault tree and identify corrective measures to be taken

    5) Implement these measures in order to protect against the hazards

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    Example of a Fault Tree Analysis

    The below diagram represents a sample fault tree analysis

    Fault Tree 

    Here Sub-system A is the entire system which is being evaluated.

    The green cells indicate a scenario where the presence of either cause will result in a fault. Either 1 or 2 will result in a fault. (OR Logic)

    The orange cells indicate a scenario where the presence of all causes will result in a fault. (AND Logic)

    All 3 causes 3, 4 and 5 need to present to result in a fault.

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    References

    Managing uncertainty in projects is one of the tasks which most project managers overlook, and end-up paying a very high price at a later point in time.

    A planned approach using Risk Management Tools such as Fault Tree Analysis (FTA) or FMEA (Failure Modes & Effect Analysis) can help avoid such pitfalls in project management.

    An e-Book on Fault Tree Analysis can be obtained here.

    A real life example of Risk Management using Fault Tree Analysis can be viewed here.