SUCCESS ENGINEERING
Prioritization of supply chain risks
FMEA
An FMEA (or a series of FMEAs) is usually indicated when a new product or process is underway…If existing designs or processes are changed, FMEAs may be needed to ensure the changes are safe, reliable, and cost-effective. There is no standard method for the sequence of steps (Jensen et al 2012); however, many experienced FMEA teams use the following strategy:
1. Enter all the primary functions for the item under analysis.
2. Beginning with the first function, enter all the failure modes and corresponding effects, with severity rankings for the most serious effect of each failure mode.
3. For each failure mode, enter all of the causes, with occurrence rankings for each cause.
4. For each cause, enter prevention-type controls and detection-type controls, with detection rankings for the best detection-type control.
5. Enter the next function and continue until all the functions are analysed through Risk Priority Numbers (RPNs).
6. Review the high severities and high RPNs, and develop all needed recommended actions that will reduce risk to an acceptable level.

FMEA procedure

Suggested FMEA table
Categories
Two External factors
There are two factors which affect most to external stakeholders. These external stakeholders must be understood as suppliers and customers. Therefore, two extensive categories can be defined according to the interests of the already mentioned stakeholders: ‘Supply Security’ and ‘Customer Satisfaction’
The FMEA should be updated periodically and when a major change affect to any of the categories. Examples of big changes can be the acquisition of a new supplier, a new monitoring control or an increase in the price of supplied components.
Supply Security (SS)
This category encloses all the activities required for the procurement of raw materials, pieces and other resources to guarantee the precise operation of SMEs processes. The override subcategories to be checked are the followings:
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Reliability of suppliers (including suitability of supplied components and spares)
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Availability of resources
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Price stability
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Geographical location of suppliers
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Flexibility (including quantities and lead time)
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Grade of communication with your supplier (from personal friendship to very low contact)
Each supplier will probably have special characteristics, hence is important to check every subcategory according to the individualities of these suppliers.
Customer Satisfaction (CS)
This category encloses all the mandatory activities for the satisfaction of ALL the requirements imposed by customers. The override subcategories to be checked are the followings:
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Suitability of the price
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On-time deliveries
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Sales monitoring and accurate forecast
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Quality of the product
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Complaints treatment
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Presentation of the product
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Overall satisfaction
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Grade of communication with your customer (from personal friendship to very low contact)
Each customer will probably have special characteristics, hence is important to check every subcategory according to the individualities of these customers.
Two Internal factors
There are two factors which affect most to internal stakeholders. These internal stakeholders must be understood as employees and people involved in the production process. Therefore, two extensive categories can be defined according to the interests of the already mentioned stakeholders: ‘Working facilities and production management’ and ‘Equipment’
The FMEA should be updated periodically and when a major change affect to any of the categories. Examples of big changes can be the introduction of new equipment, a new equipment layout and the implementation of optimisation tools.
Working Facilities and Production Management (WF & PM)
This category encloses the management of the SC basic components within the production plant. The override subcategories to be checked are the followings:
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Required space for the equipment operation
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Grade of Efficiency and effectiveness
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Satisfaction of the staff with the facilities
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Fire and other protection against hazardous events
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Implementation and correct utilisation of security measures
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Quality control
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Standard satisfaction (if applies)
Each production plan will probably have special characteristics, hence is important to check every subcategory according to the individualities of these plants.
Equipment (E)
This category encloses the management of the machinery and the technical aspects of the production plant. The override subcategories to be checked are the followings:
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Equipment maintenance
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Machinery depreciation
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Suitability of the equipment
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Availability of data in the frequency and severity of working interruptions
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A comparison with processes carried on by similar competitors
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Variety in the process
Each key component of the equipment will probably have special characteristics, hence is important to check every subcategory according to the individualities of these mechanisms.
Two factors that affects both internal and external
There are two factors which affect both internal and external stakeholders. Two extensive categories can be defined according to the interests of the already mentioned stakeholders: ‘Team quality’ and ‘Decision making’.
The FMEA should be updated periodically and when a major change affect to any of the categories. Examples of big changes can be the retirement of a key component of the team, the introduction of new bureaucracy and the reorganization of department/projects.
Team quality (TQ)
This category encloses all the activities which safeguard the suitability for a task, the required formation and the diffusion of know-how among the workmates. The override subcategories to be checked are the followings:
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Employees satisfaction
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Suitable-for-the-job-position employee availability
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Formation and recycling of the staff
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Easy flow of knowledge across the company
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Diversification of know-how across all the members of the team, without any process dependent in a sole working man
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Effective communication between departments/processes
Each department or project will probably have special characteristics, hence is important to check every subcategory according to the individualities of these departments/projects.
Decision-Making (DM)
This category encloses the way in which decisions are taken, plans are designed and tools are implemented. The override subcategories to be checked are the followings:
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Reactivity towards problems
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Agility to find clever solutions
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Accuracy in the implementation of plans
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Procedure to assume the responsibility and manage the DM
Each decision unit will probably have special characteristics, hence is important to check every subcategory according to the individualities of these units.
Pros and cons of a FMEA in a SME

Advantages and disadvantages of the implementation of a systematic FMEA in a SME