Risk assessment using Failure mode and effects analysis

Failure mode and effect analysis (FMEA) is an important tool in project management used for risk assessment. This tool is used to systematically identify and eliminate known or potential failures in complex systems to provide data and information for risk management decisions. The tool can be traced back till the 1940’s where it originated in the US military and were used for complex development projects. The tool identifies possible failure modes, causes and resulting effects in relation to either a product, process, or service. First the article will explain the purpose of risk assessment and hereby also the purpose of the tool usage. The article contains a thorough explanation of the application of the FMEA tool as well a discussion of the limitations of the tool based on when and how it is applied.

The tool is a semi-quantitative method and therefore in relation to risk assessment must provide the user with a numerical value. The way of doing this using the risk priority number (RPN), which in the aspect of risk assessment is a vital part of the FMEA. In brief the 3 parameters of the RPN are discussed: severity (the consequence of the failure happening), occurrence (probability/frequency of the failures occurrence) and detection (the likelihood that the failure is detected before the impact of it happens), these numbers can all be between 1-10. The scale of these numbers has been criticized in other articles and therefore a standard scale for evaluation of the parameters is presented. As the knowledge of the people using the tool also effects the outcome a discussion of how and what project managers should do to get the most useful outcome from the tool is explained together with the importance of diversity in relation to the tool.