Procurement Glossary
FMEA: Failure mode and effects analysis in Procurement
November 19, 2025
Failure mode and effects analysis (FMEA) is a systematic method for preventive risk analysis in procurement processes. It enables purchasers to identify potential sources of error in suppliers and products at an early stage and to develop appropriate countermeasures. Find out below what FMEA is, how it works and what advantages it offers for quality management in Procurement .
Key Facts
- FMEA stands for Failure Mode and Effects Analysis
- Systematic evaluation of errors based on the criteria of probability of occurrence, significance and probability of detection
- Risk priority number (RPN) as a key figure for prioritizing improvement measures
- Preventive method for avoiding errors before the start of series production or supplier approval
- Team-based approach with interdisciplinary collaboration between Procurement, quality and technology
Contents
What is FMEA?
FMEA is a structured analysis method for the systematic identification and evaluation of potential sources of error in products, processes or systems.
Basic principles of FMEA
The FMEA is based on the systematic evaluation of three main criteria:
- Probability of occurrence (A): How likely is an error to occur?
- Significance (B): What impact does the error have on the customer or process?
- Probability of detection (E): How likely is the fault to be detected before delivery?
FMEA vs. other quality methods
In contrast to reactive methods such as the 8D report, FMEA works preventively. While SPC monitors ongoing processes, FMEA analyzes potential risks as early as the planning phase.
Importance of FMEA in Procurement
For buyers, FMEA is a central tool for supplier evaluation and risk minimization. It supports the quality assurance agreement and helps with the implementation of quality gates in the supply chain.
Procedure: How FMEA works
The FMEA follows a structured procedure in several phases that enables a systematic risk analysis.
Preparation and team building
The FMEA begins with the formation of an interdisciplinary team from Procurement, Quality, Technology and, if necessary, Suppliers. The team defines the scope of the analysis and collects relevant information about products, processes or systems. A clear definition of the object of analysis is crucial for success.
Structural analysis and functional determination
In the second step, the system is broken down into its components and their functions are defined. Possible types of faults are identified for each part of the system and their potential causes and effects are analyzed. This structuring forms the basis for the subsequent evaluation.
Risk assessment and derivation of measures
Each identified defect is rated on a scale of 1-10 using the three criteria A, B and E. The risk priority number (RPN = A × B × E) determines the urgency of improvement measures. Measures are prioritized and assigned responsibilities and deadlines to ensure effective implementation.
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Important KPIs and targets
The effectiveness of FMEA analyses is measured by specific key figures that enable continuous improvements.
Risk priority number (RPN)
The RPN is the central key figure of the FMEA and is calculated from the product of probability of occurrence, significance and probability of detection (RPN = A × B × E). Values above 125 generally require immediate action. The reduction of the average RPN after the implementation of measures shows the improvement of the risk level.
Effectiveness of measures
The effectiveness of implemented measures is measured by the reduction in RPN values. A target value of at least 50% RPN reduction for critical defects is considered successful. In addition, the costs of the measures are compared with the avoided quality costs in order to assess economic efficiency.
Process quality of the FMEA
The completeness of the FMEA is measured by the number of identified failure modes per system component. Benchmarks from similar projects help with the evaluation. Adherence to deadlines in the implementation of measures and the involvement of relevant specialist departments are further important quality indicators for the FMEA process.
Risks, dependencies and countermeasures
When using FMEA, various risks can arise that impair the effectiveness of the analysis.
Subjectivity of the evaluation
The evaluation of criteria A, B and E is often based on subjective assessments, which can lead to inconsistent results. Different team members can evaluate the same errors completely differently. Standardized evaluation criteria and regular calibration rounds help to reduce this subjectivity and improve evaluation quality.
Incomplete risk identification
FMEA teams often overlook rare or complex failure scenarios, especially with innovative products or processes. Systematic checklists and the integration of lessons learned from past projects can close these gaps. External experts or benchmarking studies broaden the analysis horizon.
Lack of implementation of measures
Many FMEA analyses remain without concrete implementation of the identified improvement measures. Clear responsibilities, realistic deadlines and systematic follow-up are crucial. Integration into existing audit programs ensures sustainable implementation.
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Practical example
An automotive supplier carries out a process FMEA for the painting of plastic parts. The interdisciplinary team identifies "color deviations" as a critical defect with high significance (B=9) for customer satisfaction. The probability of occurrence is assessed as A=6, the probability of detection as E=4. The resulting RPN of 216 requires immediate action.
- Implementation of automatic color measurements to reduce the probability of detection to E=2
- Optimization of the painting parameters to reduce the probability of occurrence to A=3
- New RPN: 3 × 9 × 2 = 54 (reduction by 75%)
Current developments and effects
FMEA is constantly evolving and integrating new technologies and methodological approaches to improve risk analysis.
Digitalization and AI integration
Modern FMEA software uses artificial intelligence for automated fault detection and assessment. Machine learning algorithms analyze historical data and identify patterns that human analysts might overlook. This development increases precision and significantly reduces the time required for FMEA analyses.
Harmonization of FMEA standards
The new AIAG-VDA FMEA methodology harmonizes American and European approaches and creates a uniform global standard. This standardization facilitates cooperation with international suppliers and improves the comparability of analysis results. This simplifies integration into APQP processes.
Preventive quality assurance
FMEA is increasingly being integrated into early development phases and linked to other quality methods such as control plans. This proactive approach reduces quality costs and sustainably improves supplier performance.
Conclusion
FMEA is an indispensable tool for preventive quality management in Procurement, enabling systematic risk analysis and assessment. The method supports purchasers in sound supplier evaluation and contributes to the sustainable reduction of quality risks. Thanks to the continuous further development and integration of digital technologies, FMEA will remain a central component of successful procurement strategies in the future. Consistent application leads to measurable improvements in quality, costs and delivery performance.
FAQ
What does FMEA mean and what is it used for?
FMEA stands for Failure Mode and Effects Analysis. It is a systematic method for the preventive identification and evaluation of potential sources of error in products, processes or systems. In Procurement , FMEA is used for supplier evaluation, risk minimization and quality assurance.
How is the risk priority number (RPN) calculated?
The RPN is calculated from the product of the three evaluation criteria: RPN = probability of occurrence (A) × significance (B) × probability of detection (E). Each criterion is rated on a scale of 1-10. RPN values above 125 generally require immediate improvement measures to reduce the risk.
What types of FMEA are there in Procurement?
Three main types of FMEA are used in Procurement : System FMEA for complex supplier systems, design FMEA for product developments with suppliers and process FMEA for manufacturing processes at the supplier. Each type focuses on specific risk areas and requires adapted analysis methods.
How often should an FMEA be updated?
FMEA is a living document that should be updated in the event of significant changes to the product, process or supplier. A review is recommended at least once a year or in the event of critical quality problems. New findings from complaints or audits are continuously incorporated into the FMEA update.
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