FMEA's - Risk Management in major projects
Sunday 14th August 2011 - By Leo Alarcon Share
How many projects do you know where "unforseen" delays, expenditures and problems have caused substantial financial impacts to the project budget and/or the business' bottom line?
I am amazed at how many world class businesses rush from the conceptual stage of a project to the execution without considering the potential risks involved and the impact to the returns of the project, profitability and cash position of the business. Many managers fail to develop a full scope of the work required to complete the project, consultation with relevant stakeholders, correct costing and enough allowances for budget over spends early in the project concept stage.
FMEA's are a great risk analysis and prevention tool which should be completed prior to engaging any major project. They are used extensively in the automotive and aviation industry where failure of components can have severe impacts on product quality, consumer safety, and business profitability. The different stages of an FMEA promote brainstorming of potential failure modes or things which could go wrong and what the effects of these will be followed by the causes to arrive at preventive checks and actions to avoid these failure occurring.
FMEA's can usually be done relating to different scopes on the same project or product such as design FMEA, production/construction FMEA, commissioning FMEA, and operation FMEA's. Business risk in new ventures, projects or products can usually be controlled and potential negative impacts reduced by using risk analysis frameworks such as an FMEA, which might require time and planning, but will yield a smoother journey from project concept to execution.