(in the photo Morphis 3D, not the least expensive simulator)

F. Scott Fitzgerald once said, “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function”. In a business context this idea can be used to maximize preparation for optimal outcomes, minimizing expenditure of time and utilizing the information already available. Therefore, we could say, that the implementation of this idea makes a business intelligent!

In order to evaluate possible scenarios clearly, we must require precise and clear input on all relevant conditions impacting the process, which leads to the desired outcome. When opinions are presented which are often based on assumptions and if those opinions are used in assisting business decisions, we are already off the mark. On the other hand, a structured approach can provide great insight into possible outcomes before any action is executed. Further, a structured approach can offer a platform for subject matter experts to consolidate their expert opinions in an effort to achieve a description of the scenarios as close to reality as possible.

A great tool used for this very same purpose is a Failure Modes and Effects Analysis (FMEA). An FMEA is simply a list of every possible state in which a process step or a product feature may be found and what the consequences might be in each of those scenarios with the current design. The idea is to “brainstorm” regarding all possible scenarios, and thereby thoroughly evaluate before any design changes are implemented. FMEA also enables us to foresee side effects of proposed design changes so that possible damages may be avoided.

FMEA is actually a simple simulator. As is the case with any simulator, the user who facilitates the discussion implementing FMEA is attempting to navigate through various “real life” scenarios. In each scenario an existing design feature is described which is then considered along with possible ways of failure. The focus then progresses to what might happen if such a failure occurs. Of course, in a room full of subject matter experts, especially if these individuals are from varying disciplines or tasked with different parts of the process, the list of scenarios can be quickly populated. The key fields to populate for each scenario are:

  • item or function, a reference to a specific part of the process of product;
  • potential failure mode, a reference to a description of the failed state of the item or function; or
  • potential effects of the failure, a reference to the consequences of the failure as the outcome of this process step.

Serving as a structured brainstorming platform, the tool also asks for potential causes of failure. This key information enables the determination of the likelihood of such a scenario occurring in real life, thereby providing a key piece of information when assigning priorities.

Once a satisfactory list is created which encompasses all likely scenarios and possibilities of a failed outcome may be observed, the list is scored in a consistent manner for the purpose of prioritizing the efforts for improvements. Each design feature requires questions related to the design controls, which exist around it. This refers to any factor already in place, which may prevent the circumstances that lead to such failure.

At this point, each scenario, depicted in single rows, is evaluated based on “Severity”, “Occurrence” and “Detection”. Please refer to the figure below for a sample template of FMEA.


FMEA chart


Once each scenario is scored based on pre-determined measurable criteria, each row, or scenario, gets assigned a Risk Priority Number (RPN), which is the product of SEV, OCC and DET. In this way efforts can be focused on the riskiest and most likely occurrences, which could lead to the most damaging possible scenarios.

FMEA doesn’t end there; it continues to create and develop an action plan based on all the information collected and all the prioritization done in the first phase of the discussion. Since most companies operate with limited resources, highest RPN scenarios will be the focus of initial improvement efforts. An action is assigned for each scenario. This can be a fix and improvement eliminating the negative scenario by elimination of conditions allowing it. A team member takes on the responsibility; and once the task is completed, new actions are added for the purpose of creating a score that is based on existing criteria. Considering the new state of the item or process step, the facilitator asks the same questions once again, which are related to the severity and likelihood of detection by the customer. A new RPN is calculated and FMEA continues to build on itself for as many iterations as are necessary. The example below shows the second phase column headers as example.


FMEA chart

You may download an FMEA template from this link.


It’s a powerful tool providing a simple way to make one’s thought process visible and offering subject matter experts to present their ideas in a collaborative fashion.

Eventually, the completed FMEA form remains and serves as a record that may be revisited in the future as reference material for what was improved and why. It can also be reevaluated based on changing circumstances surrounding the process or the product. Since all decisions are done in a calculated manner and the entire decision process is laid out from start to finish, it minimizes efforts needed to run a simulation all over again from scratch, the next time this process may require review.

In most cases, the only cost of FMEA is the time invested by subject matter experts, which is almost always significantly outweighed by the time and favored by the positive financial impact as a result of many avoided potential defects, failures, only by the use of this forward thinking.


Intelligence is achieved by combining bits of information.


Note: FMEA charts and definitions of terminology may vary from institution to institution. On the other hand, the underlying concepts and the purpose of use remain the same.

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