How can Failure Mode and Effects Analysis reduce risk?

The Failure Mode and Effects Analysis tool can be used to prevent process and production failures within SAP ERP systems, writes Jawad Akhtar.

As a part of their ongoing efforts to improve business processes, companies are always looking for new ways to prevent or eliminate all types of failures. These failures can be in the manufacturing of products or can be in the existing business processes. Failure Mode and Effects Analysis, a tool in the Quality Management (QM) component of the SAP ERP system available from enhancement package 3.0 and above, can help with production and process failures.

Failure Mode and Effects Analysis (FMEA) in SAP categorizes risk of failure across three categories: occurrence (how likely failure is to occur), severity (how big an impact it would have) and detection (how likely the failure is to be detected as soon as it occurs). FMEA uses a one to 10 ranking for each, with 10 being very likely to occur, have a significant impact or be detected.

Risk Priority Number (RPN) = severity x occurrence x detection

FMEA multiplies the three individual rankings of those three factors to come up with a Risk Priority Number (RPN).

The value of the RPN can be in the range of one to 1,000. The higher the RPN value, the greater the possibility failure will occur in that production or business process. Companies must then reduce the RPN as much as possible to prevent or eliminate failures. Companies can use FMEA to lower their RPN by taking preventative measures in the following six areas:

  • Characteristic: The specific production or process attribute that the company wants to monitor for possible failure
  • Cause: The factors that can cause failure of characteristic
  • Effect: How the failure will impact the production or business process
  • Detection Action: What detection mechanism is in place to detect failure
  • Preventive Action: What preventive action can prevent failure of product or business process
  • Severity: The severity of failure to production or business process

For more on SAP ERP:

Get the most out of SAP ERP reports and features

Understand the performance tradeoffs when it comes to database integration

Safeguard the master data creation with SAP ECM

The team that manages the FMEA predefines the valuation (on the scale of one to 10) for each of above six elements and the RPN benchmark that it wants to achieve. The FMEA team then undertakes practical actions, such as making design changes, placing visual signboards, pasting labels to educate the production or process users to adhere to given guidelines or conducting technical skills enhancement trainings. After performing these actions, the FMEA team updates the valuation of each of the six elements and the system automatically recalculates the RPN. If the RPN is reduced to the benchmark level, the FMEA team can claim success. If not, another round of practical actions is put in place and the process to calculate a new RPN starts all over again.

Jawad Akhtar is the author of the SAP PRESS book Production Planning and Control with SAP ERP. He is the head of SAP delivery in AbacusConsulting, where he focuses on logistics and SCM issues.

Dig Deeper on SAP ERP software and modules