Yesterday I wrote about developing a more comprehensive plan for risk and contingency using the FMEA program.  The challenge is that FMEA was developed for the Ford Company. How would you apply this in your company when maybe the cost of life, and the other categories do not apply?

 Come up with your own three categories, but apply the same logic.

 One category addresses how often the problem may occur.  Create a scale of 1 to 10, with 10 happening very frequently (every day), and 1 happening once in the lifetime of the project.

 The second category addresses how easy it is to detect.  Detectability is important to use because something that is very dangerous and impossible to detect (and occurs frequently) could destroy not only your product, but also your company (not to mention harm lives).  Once again, create a scale from 1 to 10 that shows at each point what that detectability might mean. 1 might mean that it will be detected as soon as the problem occurs.  10 might mean that it would only be detected much later after the part breaks in the effect the breakage creates on other parts or other elements of the business.

 The third category is typically the cost.  If your part does not affect lives, then look at it as cost in replacement, or cost in lost sales, or cost in repairs. Once again, create your own scale to represent 1 being a very low cost and 10 having significant impact to your company (possible shutting the company or product line down permanently).  Of course, if it does affect human life, 10 means death, and 9 means serious injury.

 This approach is relatively simple and lends itself to directing the efforts and resources of the company. Furthermore, it creates a quantitative list that shows that you are thinking about how to manage your resources carefully. It shows a level of management skill that investors hope you have. Finally, this tool allows you to communicate that you are being proactive and are developing systems to manage the company through rough times (which WILL happen).