FMEA in Business Operations

Failure Mode and Effects Analysis (FMEA)

• FMEA is a method used to identify and mitigate risks associated with product or process design
• It involves identifying potential failure modes, evaluating the severity of their effects, determining their likelihood of occurrence, and assessing the effectiveness of current controls.
• It can be performed at various stages of product development, including design, production, and service.
• It helps prioritize areas for improvement, reduce the likelihood of failures, and enhance overall product or process reliability.
• Widely used across industries such as automotive, healthcare, aerospace, and manufacturing.

Using FMEA in Business Operations

• A bank conducted an FMEA process on its ATM system.
• They identified that the majority of customer complaints focused on the "dispensing cash" function.
• "Machine jams" and "heavy computer network traffic" were identified as the top two highest risks.
• The bank was able to identify the severity, occurrence, and detectability of these issues.
• The team used their expertise and judgement, along with the relevant FMEA data to determine priorities.
• This resulted in a table listing potential failure modes, their effects, root causes, actions to take, and an assigned risk priority number (RPN).

Six Sigma

• Six Sigma is a data-driven methodology used to improve processes and reduce defects
• It uses the DMAIC (Define, Measure, Analyze, Improve, Control) approach
• BPI (Bank of the Philippine Islands) utilized Six Sigma to identify areas for improvement, gather data, analyze root causes of problems, implement solutions, and maintain improvements
• BPI experienced cost savings, increased productivity, and higher customer retention due to the implementation of Six Sigma

Benefits of Using Six Sigma

• Risk Reduction: Six Sigma identifies and mitigates potential risks in processes, reducing the likelihood of errors, accidents, and failures
• Competitive Advantage: Six Sigma ensures consistent quality and customer satisfaction, differentiating organizations in the market
• Employee Engagement: Six Sigma involves employee training in problem-solving techniques and statistical tools, improving their skills and engagement
• Data-Driven Decision Making: Six Sigma relies on data-driven analysis and tools, promoting informed decision-making based on actual data and facts
• Customer Satisfaction: Six Sigma emphasizes understanding customer requirements and aligning processes accordingly, driving the business towards perfection and constant improvement

Lean Management Principles (LMP)

• Ayala Land Incorporated uses lean management principles to improve efficiency and reduce waste in its construction processes
• They implement lean construction methods like Just-in-Time (JIT) delivery of materials, which ensures materials are delivered only when needed
• They utilize Value Stream Mapping (VSM) to identify and eliminate non-value-added activities, improving workflow and reducing lead times

Benefits of Using LMP

• Sustainability: LMP focuses on reducing waste and conserving resources
• Flexibility and Adaptability: LMP promotes a flexible and adaptable work environment
• Improved Efficiency: LMP eliminates waste and streamlines processes, increasing efficiency and productivity
• Cost Reduction: LMP reduces costs associated with unnecessary inventory, overproduction, and over-processing

Pareto Analysis

• Pareto analysis prioritizes and focuses on the most important factors based on the 80/20 rule (80% of the effects come from 20% of the causes)

Kaizen

• Kaizen is a continuous improvement approach based on the idea of making small, incremental changes to processes
• Supervisors' Role: Develop plans, improve communication, maintain morale, provide coaching for teamwork activities, and solicit Kaizen suggestions from employees
• Employees' Role: Participate in teamwork activities, engage in continual self-improvement activities, and enhance job skills through education and training

How to Use Kaizen

• Identify problems: Identify specific areas or processes that can be improved
• Analyze current processes: Gather data, observe the process, and understand the root causes of issues
• Create Solutions: Develop a detailed plan for improvement
• Test the Solutions: Implement the proposed improvements
• Measure and Analyze Result: Review the results to determine if the desired outcome has been achieved
• Standardize the Solution: Establish standard procedures and practices based on the successful changes made

Design of Experiments (DOE)

• DOE is a structured approach to experimentation for identifying and analyzing the factors that influence a process or product
• Coca-Cola utilizes DOE to optimize its products' formulation and production processes, reducing costs and enhancing quality

How to Use DOE

• Identify the problem or question you want to investigate
• Determine the factors that may influence the outcome of the experiment
• Define the levels or settings for each factor
• Select the appropriate DOE design
• Randomize the order or sequence of experiments
• Conduct the experiments according to the selected design
• Collect and record the data
• Analyze the data using statistical methods
• Identify significant factors and their effects on the outcome
• Conclude and make recommendations based on the results of the experiment

Benefits of Using DOE

• Faster problem-solving: DOE accelerates the problem-solving process by identifying significant factors and their interactions
• Predictive capability: DOE enables the development of predictive models for process or product behavior
• Efficient troubleshooting: DOE systematically identifies the root causes of issues and guides corrective actions
• Improved insight: DOE provides a systematic approach to understand the impact of multiple factors on a process or product

Quality Function Deployment (QFD)

• QFD is a structured approach to product development that ensures customer needs and expectations are met
• QFD translates customer requirements into specific design elements and production processes
• QFD has been widely used in industries such as manufacturing, automotive, and consumer goods to enhance customer focus and product quality

How to Use QFD

• Identify customer needs and expectations
• Identify product features that correspond to customer needs
• Prioritize customer needs and product features
• Develop a relationship matrix to link customer needs with product features
• Evaluate technical requirements for each product feature
• Develop a house of quality to translate customer needs into specific technical requirements
• Design products or services based on the house of quality
• Continuously update and refine the QFD process based on feedback and new information