Risk Management and Process Failure Mode and Effects Analysis 2015 PSU PM conference Ed Lu 1

PSU PM Conference 2015 Abstract To minimize a project failure probability a project manager must have a process to manage project risks. This process is normally developed in the manager’s head depending on his or her experience in the project. This proposal is to present a formalized risk management process that offers a tool to improve risk management. The result of this improvement is just like having an experienced project manager on the team. FMEA, Failure Mode and Effects Analysis, has been widely used in engineering designs and manufacturing processes. FMEA helps to identify potential failure modes and the consequences of those failures, and formulate improvement solutions. The same principle is applicable in project management. As we all know understanding and minimizing the project risks is one of the key responsibilities for a project manager. One must know how to manage projects by managing their risks. Therefore, this formalized approach for project risk abatement will offer a useful tool during the entire life of the project.

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Risk - Uncertainty Schedule

Budget

Risk / Uncertainty Scope

Resources

Quality 3

Experience Building A Learning Process by Traditional Thinking Not Exactly?

Time

Less Mistakes / Risks

Mistakes / Risks

More Mistakes / Risks

Risk Management Project Reality • Project Failures – Time/Schedule, Resources/Cost, Quality/Scope-failed to deliver required results. • Mismanagement of Unplanned Events - Major reason for project failures Why Risk Management? • Risk Management - deals with uncertainty • Mitigate Risks - do not let them become issues for the Project • Communication Channels – Design an Early Warning System

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Areas of Risk

Risk Management

Business • Cost Increase, Changing Market/Regulatory Environment, Business Commitment Planning • Resource Availability, Project/Process Complexity, Development Time, Management Experience Organizational • Cross-Functional Involvement, Process Ownership, Multiple Locations for Implementation, Process Change Issues Technical • Technology Experience, Design Complexity, Scope Changes, Knowledge of Business Processes, Quality Methods Skills, Experience and Invention to Schedule. External • Vendor/Contractor Experience and Support, Multiple Vendors/ Contractors, Dependence on Vendors, Recruitment Issues 6/

Risk Management Risk -

The Impact of a Negative Event Coupled With The Probability of Occurrence

Risk Management - Specific Actions Identified and Implemented to Reduce or Eliminate Risk How Is Risk Managed?
Basic Process: Identify Analyze

Plan

Execute

Control


Tools: PFMEA or others
Communication Channels to Support Risk Management 7/

Failure Mode and Effects Analysis (FMEA)

FMEA is a formal analysis tool to evaluate the Risk for a design, DFMEA or a process, PFMEA. In other words we want to Manage Projects by Managing their Risks. Three basic elements of Risk • The effects of the failure mode • Probability of occurrence that causes the failure mode • The detection of the cause of the failure mode before effects of the failure are felt - An Early Warning System with our Communication Channels

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Failure Mode and Effects Analysis (FMEA) Risk Elements Severity, Probability, Detectability Rating • Subjectively, we assign a score to each element but use it objectively. • The greater the problem, the higher the score. • Each failure mode has three different scores. • Multiply three scores together and produce an “aggregated score”. • Compare the aggregated scores • Address the worst failure modes 9

Process Failure Mode and Effects Analysis (PFMEA)

1. List the process steps

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Process Failure Mode and Effects Analysis (PFMEA)

2. Identify Failure Modes

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Process Failure Mode and Effects Analysis (PFMEA)

3. Describe potential end effect(s) of each failure mode.

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Process Failure Mode and Effects Analysis (PFMEA)

4. Rate the Severity of the failure mode.

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Example of Severity Ratings (PFMEA) Effect

Rank Criteria

Minor

2

Unreasonable to expect that the minor nature of this failure will cause any noticeable effect – the project team does not notice the failure

Low

4

Due to the nature of this failure, the project team experiences only slight annoyance. .

Moderate

6

Failure causes project team’s dissatisfaction such as rework for poor quality

High

8

High degree of project team’s dissatisfaction due to the nature of the failure, such as missing project milestone date

Very High

10

Failure affects safety/death or incompliance to government regulations.

Use project team experience to define the Severity 14

Process Failure Mode and Effects Analysis (PFMEA)

5. Identify the Potential Cause(s) of the failure mode.

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Process Failure Mode and Effects Analysis (PFMEA)

6. Rate the likelihood of the occurences.

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Example of Occurrence Ratings (PFMEA) Occurrence

Criteria

Remote

Failure is unlikely.

2

0.01%>

Low

Relatively few failures

4

0.1%

Moderate

Occasional failures

6

1%

High

Repeated failures

8

10%

Very High

Failure is almost inevitable

10

>50%failure

Rank

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Failure Prob.

Process Failure Mode and Effects Analysis (PFMEA)

7. The current process to Detect or Prevent the failure mode. Any early warning system in place?

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Process Failure Mode and Effects Analysis (PFMEA)

8. How likely that we are able to detect the failure mode?

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Example of Detection Ratings (PFMEA) Detect or Eliminate the failure mode • • •

Avoid or Eliminate Failure Cause(s) Identify or Detect Failure Earlier Reduce Impacts/Consequences of Failure

Detection

Rank

Criteria

Very High

2

Almost certain to detect the failure mode. Process automatically prevents further processing.

High

4

Have a good chance of detecting failure mode. Process has a good chance to automatically detect failure.

Moderate

6

May detect the existence of a failure mode.

Low

8

Have a poor chance of detecting the existence of failure mode.

None

10

Can not detect the existence of a failure mode. No known process available to detect failure mode.

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Process Failure Mode and Effects Analysis (PFMEA)

9. Multiply three ratings to calculate Risk Priority Number. (RPN)

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Calculating the Risk Priority Number (RPN) RPN = Severity x Occurrence x Detection

Example of RPN Criteria 1. Severity = 8 2. RPN > 100 depending on the project • Improvement in the process reduce RPN or Severity to an acceptable level

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Process Failure Mode and Effects Analysis (PFMEA)

10. Use the RPN to identify failure modes for improvement.

Goal: Reduce the overall project risk 23

PFMEA Example

Drink water from a water bottle

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STEP 1

drink water from a water bottle

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STEP 1

…how to drink from a water bottle 10

4

2

6

3 9 7 1

5 11 8 26

STEP 2

PFMEA Analysis Worksheet Team : Process Step Potential Failure Mode

Potential Effects of Failure

SEV

Potential Mechanism of Failure

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Current Detection/ OCCUR Preventive Approaches DETECT

RPN

Recommended Actions

STEP 3

PFMEA Analysis Worksheet Team : A1

Process Step Pick up Bottle Unscrew cap Lift bottle to your mouth Open mouth Raise base of bottle to release water Drink water Close mouth Lower base of bottle Lower bottle from your mouth Screw on cap Set bottle down

Cannot pick up bottle Cannot drink water Cannot remove cap from bottle Cannot drink water

Potential Mechanism of Failure Bottle too slick from Condensation Cap on bottle too tightly with damaged threads

Cap does not stay attached to bottle

Cap on bottle too lose with damaged threads

Potential Failure Mode

Potential Effects of Failure

SEV

Cannot close bottle

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OCCUR

Current Detection/ Preventive Approaches Refrigeration Operator error during previous use

Operator error during previous use

STEP 4

PFMEA Analysis Worksheet Team : A1

Process Step

Potential Failure Mode

Potential Effects of Failure

Pick up Bottle Cannot pick up bottle Cannot drink water Cannot remove cap from Unscrew cap bottle Cannot drink water Lift bottle to your mouth Open mouth Raise base of bottle to release water Drink water Close mouth Lower base of bottle Lower bottle from your mouth Screw on cap

Cap does not stay attached to bottle

Cannot close bottle

8

Potential Mechanism of Failure Bottle too slick from Condensation Cap on bottle too tightly with damaged threads

8

Cap on bottle too lose with damaged threads

SEV 6

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Current Detection/ OCCUR Preventive Approaches DETECT 2 4

Refrigeration Operator error during previous use

4

Operator error during previous use

RPN

4

48

6

192

6

192

STEP 5

PFMEA Analysis Worksheet Team : A1

Process Step Pick up Bottle Unscrew cap Lift bottle to your mouth Open mouth Raise base of bottle to release water Drink water Close mouth Lower base of bottle Lower bottle from your mouth Screw on cap Set bottle down

Potential Failure Mode

Potential Effects of Failure

Cannot pick up bottle Cannot drink water Cannot remove cap from bottle Cannot drink water

Cap does not stay attached to bottle

Cannot close bottle

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Potential Mechanism of Current Detection/ DETE Failure OCCUR Preventive Approaches CT Bottle too slick from Condensation 2 Refrigeration 4 Cap on bottle too tightly Operator error during with damaged threads 4 previous use 6

8

Cap on bottle too lose with damaged threads

SEV 6

30

4

Operator error during previous use

6

RPN 48

Recommended Actions

192

Wipe bottle before use Ensure screw on cap correctly after each use

192

Ensure screw on cap correctly after each use