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A Brief History
Structured risk analysis as a project management tool started in the 1940s. The earliest form of risk analysis entailed defining all potential hazards with no consideration on probability of such hazards happening. Such traditional risk analysis methods suffered from inadequate definitions of some steps, high uncertainty, and decision-making failures throughout the procedure.
Learning from each mistake being a costly affair, the US Armed Forces first introduced Failure Modes and Effects Analysis (FMEA) in the late 1940s as a proactive tool to identify, evaluate, and prevent product or process failures. FMEA received a major push in the 1960s when the Apollo Space Program incorporated it in its HACCP program. In the late 1970s, the Ford Motor Company introduced FMEA to the automotive industry for safety and regulatory consideration.
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The FMEA Process
Traditional risk analysis follows three basic steps:
- Identifying the various steps of a project
- Identifying potential threats such as human, operational, procedural, financial, technical, natural, political, procedural, etc.
- Estimating the level of risk or the likelihood of such threats and preparing contingencies for each of the risks.
Failure Modes and Effects Analysis (FMEA) is a marked improvement over the traditional risk analysis methods. Comparing traditional risk analysis versus FMEA, traditional risk analysis treats each event in isolation whereas FMEA risk assessment interlinks each device or system. FMEA mandates a detailed examination of each device to consider how each of them might fail and analyze the effect of such individual failure on the system.
The design FMEA process includes:
- Pre-work robustness analysis from interface matrices, boundary diagrams, and parameter diagrams
- Description of system and function, simplified through a block diagram, that offers an overview of the major components or process steps that contain logical relation.
- Detailed consideration on possible failure of each component and impact of such failure on system operation
FMEA is more time-consuming and requires more sophisticated technical input than traditional risk analysis.
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Versus FMEA Application
FMEA is an improvement on the traditional risk application method. FMEA not only identifies factors that jeopardize success, but also classifies the severity and likelihood of such failures. The FMEA application helps identify potential failure modes based on experience, enabling the team to eliminate such failure possibilities in the design stage itself with minimum effort, and resource expenditure.
FMEA ranks failures by assigning a risk priority number to each risk. The risk priority number is the combination of the severity of the consequences (severity number), frequency of occurrence (probability number), and ease of detectability (detection number).
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A Broad Scope
Comparing traditional risk analysis versus FMEA, although the primary purpose of FMEA is risk analysis, FMEA is broad in scope. The FMEA process documents current knowledge and actions about risks or failures that find use in continuous improvement. Application of FMEA at design stage helps in avoiding future failures and application of FMEA during the operations process aids in process control.
The superiority of FMEA in identifying risks notwithstanding, the success of FMEA, like traditional risk analysis methods, depend upon the experience of the project team in identifying the key events and processes.
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- Bluvband, Zigmund, & Grabov, Pavel (2009). Failure Analysis of FMEA. Advanced Logistics Development.
- MDI Consultants. Risk Management: Hazard Analysis and FMEA. Insight Report No II, Vol. 4.
- Mindtools.com. Risk Analysis & Risk Management
- Wold, Geoffrey H. & Shriver, Robert F. Risk Analysis Techniques. Disaster Recovery Journal.
Image Credit: Dieter Vandeun, wikimedia commons.