The Importance of Concept FMEA in Capital Projects: Identifying and Mitigating Potential Failures 


The Importance of Concept FMEA in Capital Projects: Identifying and Mitigating Potential Failures 


Capital projects are initiatives that involve significant financial investments and usually have a substantial impact on the organization. In such projects, ensuring excellence in execution is crucial. The Failure Mode and Effects Analysis (FMEA) Workshop is an organized approach to identifying and preventing potential problems that may compromise the project’s success.

In this article, we will explore the importance of the FMEA Workshop, explaining how this approach can predict and resolve potential failures. By addressing FMEA concepts, from identification to risk mitigation, this strategy becomes an advantage for project teams, contributing to Excellence in Capital Projects.

What is FMEA?

Failure Mode and Effects Analysis (FMEA) is a systematic and preventive approach used in project management to identify potential failures in processes, products, or systems. This methodology aims to anticipate problems by assessing the potential causes and effects of failures, allowing project teams to implement corrective measures before they have a real impact.

Terminology used in FMEA

For a comprehensive understanding of FMEA, it is fundamental to recognize the specific terminology. Here are the essential terms:

  • Failure Mode: Refers to how a component, assembly, or process might fail to perform its intended function. It describes what might go wrong.
  • Failure Effect: The consequence or result arising from the occurrence of a specific failure mode. This effect describes the impact of the failure on the system, operation, function, performance, safety, or any other relevant aspect.
  • Failure Cause: The reason or root cause behind the failure mode. Investigating the factors that contribute to potential failure is crucial to preventing the failure mode from occurring.
  • Severity (of the failure effect, scale of 1 to 10): Potential impact or seriousness of the consequences resulting from a specific failure mode. It assesses how much the failure would affect the product, process, system, or end-user.
  • Occurrence (of the failure cause, on a scale of 1 to 10): Evaluate the probability or frequency of a specific failure mode occurring.
  • Detection (of the failure cause/mode, on a scale of 1 to 10): Assesses the likelihood of detecting a failure mode before it reaches the customer or causes damage. It considers the effectiveness of existing controls and detection mechanisms.
  • Risk Priority Number (RPN): This is a calculated value derived from multiplying the Severity, Occurrence, and Detection ratings. The RPN helps prioritize and rank potential failure modes based on the seriousness of their effects, the occurrence likelihood, and failure detection.
 Terminology of the FMEA methodology

What are the objectives of the Concept FMEA Workshop?

The Concept FMEA Workshop plays a central role in managing capital projects, minimizing project risks and promoting excellence:

  • Proactively Identify Risks: The Workshop seeks to anticipate potential failures, promoting proactive risk identification. By analyzing possible failure modes in detail, teams can mitigate threats before they become more significant.
  • Improved Project Understanding: It provides a valuable opportunity for the team to understand the process/system better. Participants gain a better overview by examining failure modes and underlying causes and effects in detail, allowing for a more robust and informed approach.
  • Effective Risk Prioritizing: The Workshop uses tools to categorize and prioritize failure modes. Efforts are focused on areas with the highest potential impact, optimizing resources and ensuring a targeted approach.
  • Develop Mitigation Plans: The Concept FMEA Workshop helps devise robust mitigation plans based on the analyses conducted. Hence, it is possible to take preventive measures, and teams can develop effective strategies to avoid or reduce the severity of potential failures.
  • Promote Collaboration and Communication: By bringing together members from different areas and specialties, the Workshop fosters collaboration and communication among participants. This contributes to a shared risk understanding, strengthening teamwork and ensuring everyone contributes to mitigation objectives.  

By embracing these goals, this Workshop is a strategic tool for managing capital projects, empowering teams to overcome challenges and proactively achieve higher success and efficiency.

Concept FMEA Workshop Step-by-Step

The Concept FMEA Workshop provides a systematic framework for thoroughly analyzing possible failure modes. We introduce below a step-by-step, providing a detailed and guided view of its major stages.

Concept FMEA Workshop step-by-step

1. Define the scope 

The first step in the Concept FMEA process is clearly defining the scope of the analysis. This involves outlining which processes/systems will be covered by the analysis. This step sets boundaries, providing a clear starting point for identifying and assessing potential failure modes. It is essential to use a process flowchart to identify the process phases to be analyzed in the following steps.

2. Identify Items to Analyze and Requirements

In the second step, we identify the elements to analyze and the associated requirements. The item describes the component, system, or subsystem being analyzed, ranging from a complete system to a specific component. The function is expressed as a “Verb + Noun” and describes what the item does, and there may be multiple functions for the same item. Finally, the requirements are identified, generally defined, and must be measurable.

The first opportunity to define an action to be implemented at this stage may lie in exploring and clarifying requirements, avoiding unwanted efforts in design. Ensuring requirements’ clarity and quantifiability from the outset is essential for efficient development and avoiding rework resulting from vagueness.

3. List Potential Failure Modes

In the third step, potential failure modes are identified and listed. Failure modes correspond to unmet requirements, indicating possible vulnerabilities in the system, subsystem, or component being analyzed.    

Conducting a detailed and comprehensive analysis is crucial to identify how an item can fail. Each possible situation of requirement non-compliance should be logged, giving an understanding of potential challenges.

By listing potential failure modes, the team creates an overview of possible areas of concern, laying the groundwork for a more in-depth risk analysis to be carried out in the following steps.

4. Identify Failure Mode Effects

In the fourth step, we identify the effects of each previously listed potential failure mode. Each failure mode can trigger several consequences. They should be listed in the same cell or grouped with the corresponding failure mode. This structure helps understand the results of each potential failure, allowing the project team to assess the entire impact on the system or subsystem being analyzed.

Detailed identification of the failure mode effects provides critical information for assessing the severity of these effects. This is crucial for setting priorities and developing appropriate mitigation strategies.

5. Evaluate Failure Mode Severity

In this step, we evaluate the severity of each effect. Severity is defined based on the perceived impact/danger.

A severity index is assigned on a scale of 1 to 10, where the highest value indicates the most significant impact. The highest severity effect assigned to a failure mode is chosen and inserted in the corresponding column in the analysis.

If an effect is classed as 9 or 10 in terms of severity, actions to be implemented can be identified. These actions may involve design changes to mitigate the associated impact or danger.

6. Identify Potential Causes or Mechanisms of Failure

In the sixth step, we focus on identifying potential failure causes and mechanisms associated with each previously analyzed failure mode.

Causes are defined to explain why a particular failure mode may occur. Support tools can be used to identify them. They may be related to regulations or equipment wear, material or raw materials, operating conditions, labor, and energy, among many others.

Identifying these specific causes is crucial for understanding the failure modes’ source and guiding the team in implementing practical preventive or corrective actions. This in-depth analysis significantly contributes to the project’s success and risk mitigation.

7. Identify Possible Checks for Failure Prevention

In the seventh step, we focus on identifying checks to prevent failures. The prevention strategy set by the engineering team when planning a new system reduces the occurrence of failure.

The stronger the prevention strategy, the more evidence there is that the cause can be removed by design. Identifying actions to improve failure prevention capability may be needed.  

Such actions are logged in the table to strengthen prevention checks and ensure the process is resilient against possible failure modes.

8. Establish the Occurrence Probability

The eighth step defines the occurrence probability associated with each failure mode. The associated rating is an estimate. This rating seeks to assess how likely a particular failure mode will occur. The team considers available information, experience, and other relevant sources to estimate the odds of each potential failure occurring. A scale of 1 to 10 is used, where 1 is the lowest and 10 is the highest likelihood.

Actions can be defined to counter failure causes with a high occurrence probability. Particular attention should be given to items rated 9 or 10, ensuring the analysis thoroughly addresses the most critical failure modes.

9. Identify Possible Checks for Fault Detection

In the ninth step, we focus on identifying possible checks to detect a fault. Activities carried out to confirm the design’s safety and performance are logged in the detection controls column. Specific tests should be defined when the risks are in the highest range (9-10).

This step ensures there are reliable methods for detecting failures if they happen, providing an additional layer of safety and risk mitigation.

Creating actions to improve fault detection capability may be necessary, and these actions should be documented in the table.

10. Assess the Likelihood of Detecting Each Failure Mode

In step 10, we assess the likelihood of detecting each failure mode. Detection ratings are assigned to each test based on the type of test/assessment technique and the timing of the FMEA.

The detection probability is weighed on a scale of 1 to 10, where 1 is the highest and 10 is the lowest, meaning it would be undetectable. This is essential to ensure that detection systems effectively identify failures when they occur.

11. Calculate the Risk Priority Number (RPN) and Prioritize Failure Modes

In this step, the Risk Priority Number (RPN) is calculated, and the failure modes are then prioritized. The RPN is obtained by multiplying the three following ratings: Severity x Occurrence x Detection.

Note that RPN limits should not be set to define if an action is needed. There is no RPN threshold above which action must be taken or below which a team is exempt from taking corrective actions. Instead, the analysis should be holistic, considering the seriousness, the occurrence likelihood, and the detection capability in an integrated manner.

12. Identify and Implement Improvements

The focus of this particular step is to spot and execute improvements. The column for recommended actions is where all potential improvements are documented. Throughout the previous steps, teams have already been filling in this column. It is just a matter of reviewing and checking if additional action is needed. All actions must have an assigned owner and a due date.  

The objectives of the actions include:

  • Eliminating Failure Modes with Severity 9 or 10: Efforts to eliminate failure modes with higher severity ratings.
  • Reducing causes through anti-errors, variability reduction, or other means.
  • Improving detection with specific improvements in tests: Actions directed to improve detection capability through specific test improvements.

The implemented actions or test results should be recorded.

It is important to mention that the FMEA should result in actions that reduce the highest risks to an acceptable level. The main objective is to reduce high risks to a level that can be more easily managed.

13. Reassess and Update

In the final step, the team should reassess and update the analysis. The reviewed RPN should be compared with the original. The aim is to reduce this value.

The residual risk may remain too high even after the actions taken. In that case, a new line of action should be developed. This process is repeated until an acceptable residual risk is achieved.

This step emphasizes the iterative nature of the FMEA process, ensuring that implemented improvements effectively reduce identified risks.


The Concept FMEA Workshop is an great tool for capital projects, offering a structured and proactive approach to identifying and mitigating potential failures. Focusing on proactive risk identification, efficient prioritization, and continuous mitigation planning strengthens the project’s resilience and promotes a continuous improvement culture within project teams.

By implementing the actions derived from the Concept FMEA Workshop, teams have the opportunity not only to eliminate or significantly reduce critical failure modes but also to improve processes continuously. This type of analysis is essential, whether for designing a new line, purchasing new equipment, or setting up a new factory or warehouse. Ultimately, the Concept FMEA Workshop is a key piece in achieving excellence in capital project execution, empowering teams to proactively overcome challenges and achieve higher levels of success and efficiency.

Still have questions about Concept FMEA Workshop?

What is FMEA?

FMEA stands for “Failure Mode and Effect Analysis.” It is a systematic methodology for identifying, analyzing, and prioritizing potential failure modes in a process, system, design, or product and assessing their effects. The goal is proactively addressing and mitigating potential risks before they cause significant problems.

Who should take part in FMEA?

The FMEA analysis should involve a cross-functional team representing diverse perspectives and areas of expertise related to the process. Typical participants include Project Engineers, Process Engineers, Quality Specialists, Maintenance Specialists, Suppliers, Customer Representatives, Safety Experts, and Project Managers.

The diversity of perspectives and experiences helps ensure a comprehensive analysis of potential failure modes and their effects, allowing the team to take preventive or corrective measures effectively. Collaboration is key to achieving success in the FMEA analysis.

See more on Capital Project Excellence

  Find out more about improving this business area

Get the latest news about Kaizen Institute