Posts Tagged contingency plan
The advanced risk and contingency plan: FMEA
Yesterday, I briefly introduced the risk and contingency plan. Today I want to discuss the slightly more advanced and more proactive version.
Ford Co invested something called FMEA, which stands for Failure Mode Engineering Analysis. It is a way to manage the prevention and development of proactive containment of problems. After problems are listed and before solutions developed they are ranked in three areas from 1 to 10. The areas are frequency of occurrence (more likely the higher the number), detectability (harder to detect, the higher the number), and the cost. Cost could be in money or human life or both with the higher the likelihood the higher the number.
These three numbers are multiplied together and then all the problems ranked. The higher ones are addressed first in prevention or in developing containment systems. The exceptions to the ranking are that anything with a cost of life of 9 or 10 are automatically put to the top.
Risk and Contingency Plans made simple
What is a risk and contingency plan?
Simple answer:
It is a list of preventions and alternatives to expected and unexpected problems.
The simplest way to do this is to make a table with three columns. In the first column you list everything that could go wrong with your project. In the second column you show for each problem the steps you are taking to prevent that from happening. In the third column you show what you do when it happens.
This simple device is a great way to show people (customers, vendors, investors, all stakeholders, etc.) that you are on top of the situation, plan ahead, and ultimately, are the right person to make their product. Surprisingly, very few people do this. Instead, they react to problems. Reactions often waste time and money and go down the wrong path.
Be proactive and come up with your own risk and contingency plan.