Enterprise Cost/Benefit Risk Analysis Using FMEA

Enterprise Cost/Benefit Risk Analysis Using FMEA

Maria Manuela Cunha (Polytechnic Institute of Cávado and Ave Higher School of Technology, Portugal) and Goran D. Putnik (University of Minho, Portugal)
Copyright: © 2008 |Pages: 8
DOI: 10.4018/978-1-59904-885-7.ch064
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A large body of knowledge covering enterprise integration architectures, modelling, and methodologies (EIAM&M) has been developed covering various types of enterprises. Most viewpoints have been either static or cycle based, with the major drivers being design and implementation of computer integrated manufacturing (CIM) plant and major engineering projects including virtual enterprises (Bernus & Nemes, 1996, p. 377- 450; Whitman & Huff, 1997; Williams, Rathwell, & Li, 2001).

Key Terms in this Chapter

Business Risk: The level of risk is determined by: Risk = probability of failure x severity of effects

PERA: Originating an engineering collaboration between Fluor Daniel and Purdue University engineering faculty, the Purdue Enterprise reference architecture (PERA) has evolved and expanded to contain a wide set of tools and concepts covering life cycle based engineering.

FMEA: Originating in engineering design, failure mode and effects analysis (FMEA) and the associated failure mode risk analysis (FMRA) are methodologies designed to identify potential failure modes for a product, process or system, to assess the risk associated with those failure modes, to rank the issues in terms of importance and to identify and carry out corrective actions to address the most serious concerns.

FMRA: A failure mode risk analysis (FMRA) assessment is prepared, based on the FMEA and summarized as a list with high probability/ high severity items at the top to low probability / low severity items at the bottom. The assessment summary should also list the corrective measures required to reduce the frequency of failure or to mitigate the consequences

Risk Mitigation and Management: Items in the FMRA list are actioned, or risk mitigation steps taken, from the top (most serious effects) of the list downward, as resources (funds, staff, material, etc.) are available. It is also possible for management to decide not to continue below a certain level on the list, as the costs would outweigh any benefits. Corrective actions could include changes in design, procedures, or organizational arrangements. For example, the addition of redundant processes and failure detection methods or a change in policy may be suggested.

GERAM: Generalized reference architecture and methodologies (GERAM) is a formal, general framework for enterprise architecture and modeling. It is an ISO standard--ISO 15704.

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