Failure Mode and Effects Analysis

 

Any business in the manufacturing industry would know that anything can happen in the development stages of the product. And while you can certainly learn from each of these failures and improve the process the next time around, doing so would entail a lot of time and money.
A widely-used procedure in operations management utilised to identify and analyse potential reliability problems while still in the early stages of production is the Failure Mode and Effects Analysis (FMEA).

FMEAs help us focus on and understand the impact of possible process or product risks.

The FMEA method for quality is based largely on the traditional practice of achieving product reliability through comprehensive testing and using techniques such as probabilistic reliability modelling. To give us a better understanding of the process, let’s break it down to its two basic components ? the failure mode and the effects analysis.

Failure mode is defined as the means by which something may fail. It essentially answers the question “What could go wrong?” Failure modes are the potential flaws in a process or product that could have an impact on the end user – the customer.

Effects analysis, on the other hand, is the process by which the consequences of these failures are studied.

With the two aspects taken together, the FMEA can help:

  • Discover the possible risks that can come with a product or process;
  • Plan out courses of action to counter these risks, particularly, those with the highest potential impact; and
  • Monitor the action plan results, with emphasis on how risk was reduced.

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Spreadsheet Risks in Banks

No other industry perhaps handles such large volumes of critical financial data more than the banking industry. For decades now, spreadsheets have become permanent fixtures in the front-line reporting tool sets of banks, providing organised information when and where needed.

But as banks enter into a period of heightened credit risks, elevated levels of fraud, and greater regulatory scrutiny, many are wondering if continued reliance on spreadsheets is a wise decision for banks today.

The downfall of Lehman Brothers which eventually led to its filing for Chapter 11 bankruptcy protection on September 15, 2008, served as a wake up call for many institutions across the globe to make a serious examination of their own risk management practices. But would these reforms include evaluating the security of user developed applications (UDAs), the most common of which are spreadsheets, and putting specific guidelines as to when they can – or cannot be – used?

Banks and Spreadsheet Use

Banks have been known to utilise spreadsheets systems for many critical functions because most personnel are well-acquainted with them, and the freedom of being able to develop customised reports without needing to consult with the IT department offers flexibility and convenience. In fact, more than having a way to do financial budgeting and analysing customer profitability, even loan officers and trade managers have become reliant on spreadsheets for risk management reporting and for making underwriting decisions.

But there are more than a few drawbacks to using spreadsheets for these tasks, and the sooner bank executives realise these, the sooner they can adopt better solutions.

General Limitations

Spreadsheets are far from being data base systems and yet more often than not, they are expected to act as such, with figures constantly added and formulas edited to produce the presumably right set of reports.

In addition, data integrity is always a cause for concern as most values in spreadsheets are entered as manual inputs. Even the mere misplacement of a comma or a negative sign, or an inadvertent ?edit? to a formula can also be a source of significant changes in the outcome.

Confidentiality risk is also another drawback of the use of spreadsheets in banks as these tools do not have adequate?access controls to limit access to only authorised individuals. Pertinent financial information that fall into the wrong hands can lead to a whole new set of problems including the possibility of fraud.

Risks in Trading

For trading transactions, spreadsheets can prove to be of immense use – but only for small market volumes. As trade volumes increase and the types vary, spreadsheets are no longer a viable solution and may likely become more of a hindrance, with calculations taking longer in the face of bigger transaction amounts and growing transaction data.

And in trading, there is always the need for rigorous computational functions. Computing for the Value at Risk (VaR) for large portfolios for instance, is simply way beyond the capabilities of spreadsheets. Banks that persist in using them are increasing the risk of loss on those portfolios. Or, they can be opening up?opportunities for fraud?as Allied Irish Bank (in the case of John Rusnak – $690 million) learned the hard way.

Risks in Underwriting

Bankers who use spreadsheets as their main source of information for underwriting procedures also face certain limitations. Loan transactions require that borrowers? financial data be centralised and easily accessible to risk officers and lending officers involved in making decisions. With spreadsheets, there is no simple and secure way of doing that. Information can be pulled from different sources – individual tax returns, corporate tax documents, partnership documents, audited financial statements – hence there is difficulty in verifying that these reports adhere to underwriting policies.

Spreadsheet control and monitoring

Financial institutions which are having difficulty weaning themselves from the convenience and simplicity that spreadsheets offer are looking for possible control solutions. Essentially, they want to find ways that allow them to continue using these UDAs and yet somehow eliminate the?spreadsheet risks?and limitations involved.

Still, the debate goes back and forth on whether adequate control measures can be implemented on spreadsheets so that that the risks are mitigated. Many services have come forward to herald innovative solutions for better spreadsheet management. But at the end of the day, there really is no guarantee that such solutions would suffice.

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Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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Transformation to a process based organisation

Today’s global marketplace rewards nimble organisations that learn and reinvent themselves faster than their competition. Employees at all levels of these organisations see themselves as members of teams responsible for specific business processes, with performance measures tied to the success of the enterprise. As team members, they are “owners” of the process (or processes) to which they are assigned. They are responsible for both the day to day functioning of their process(s), and also for continuously seeking sustainable process improvements.

Transforming a traditionally designed “top down control” enterprise to a process-based organisation built around empowered teams actively engaged in business process re-engineering (BPR) has proven more difficult than many corporate leaders have expected. Poorly planned transformation efforts have resulted in both serious impacts to the bottom line, and even more serious damage to the organisation’s fabric of trust and confidence in leadership.

Tomislav Hernaus, in a publication titled “Generic Process Transformation Model: Transition to Process-based Organisation” has presented an overview of existing approaches to organisational transformation. From the sources reviewed, Heraus has synthesised a set of steps that collectively represent a framework for planning a successful organisational change effort. Key elements identified by Hernaus include:

Strategic Analysis:

The essential first step in any transformation effort must be development of a clear and practical vision of a future organisation that will be able to profitably compete under anticipated market conditions. That vision must be expected to flex and adjust as understanding of future market conditions change, but it must always be stated in terms that all organisational members can understand.

Identifying Core Business Processes:

With the strategic vision for the organisation in mind, the next step is to define the core business processes necessary for the future organisation to function. These processes may exist across the legacy organisation’s organisational structures.

Designing around Core Processes:

The next step is development of a schematic representation of the “end state” company, organised around the Core Business Processes defined in the previous step.

Transitional Organisational Forms/ Developing Support Systems:

In his transformation model, Hernaus recognises that information management systems designed for the legacy organisation may not be able to meet the needs of the process management teams in the new organisation. Interim management structures (that can function with currently available IT system outputs) may be required to allow IT professionals time to redesign the organisation’s information management system to be flexible enough to meet changing team needs.

Creating Awareness, Understanding, and Acceptance of the Process-based Organisation:

Starting immediately after the completion of the Strategic Analysis process described above, management must devote sufficient resources to assure that all organisation members, especially key managers, have a full understanding of how a process-based organisation functions. In addition, data based process management skills need to be provided to future process team members. It is not enough to schedule communication and training activities, and check them off the list as they are completed. It is critical that management set behavioural criteria for communication and training efforts that allow objective evaluation of the results of these efforts. Management must commit to continuing essential communication and training efforts until success criteria are achieved. During this effort, it may be determined that some members of the organisation are unlikely to ever accept the new roles they will be required to assume in a process-based organization. Replacement of these individuals should be seen as both an organisational necessity and a kindness to the employees affected.

Implementation of Process Teams:

After the completion of required training AND the completion of required IT system changes, process teams can be formally rolled out in a planned sequence. Providing new teams with part time support by qualified facilitators during the firsts weeks after start-up can pay valuable long term dividends.

Team Skill Development and Continuous Process Improvement:

Providing resources for on-going skill development and for providing timely and meaningful recognition of process team successes are two keys for success in a process-based organisation. Qualified individuals with responsibility for providing training and recognition must be clearly identified and provided with sufficient budgetary resources.

The Hernaus model for transformation to a process based organisation is both well thought out and clear. His paper provides an ample resource of references for further study.

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Top 10 Benefits of Using a Field Service Automation Software

The Field Service Management (FSM) Software market is growing at rates never seen before if the recent statistics are anything to go by. According to the latest estimates, the FSM market is worth $3.5 billion and is expected to hit $5.9 billion by 2024.

It’s understandable why this is happening. Technology is advancing, and we all know it’s every entrepreneur?s dream to optimise the use of the available resources while guaranteeing customer satisfaction. If technology can deliver this through automation, why not? Every business now wants to automate things, and the focus is to maximise resource output. You should, therefore, not be surprised to see the FSM software industry booming. If you just considered the field service industry, you’ll realise that there are so many software applications to help with service automation, whether full or partial.

A good example is FieldElite , which helps with the management of field workers. From your desktop or the palm of your hands, on a tablet or smartphone, you can take full control of your field workers, manage scheduled jobs, and use maps to manage work assignments for the already dispatched field workers. Not only does FieldElite help you handle tasks in an accountable manner but also provides options for accounting and reports, all managed in an easy to use dashboard.

But why would organisations need to invest in a Workforce management app? Below are some of the key benefits of using a Field Service Management software.

Field Service Software: Improves Efficiency

Improved worker efficiency is one of the main advantages of field service software like FieldElite. 

Most FSM software programs allow the administrator to send tasks directly to the field worker?s mobile. More often than not, the FSM software provides vital information, including service history, optimal route to the site, the tools required, and contact numbers, among other details.

This improves efficiency by ensuring that the client’s needs are taken care of promptly. Where it’s about machine maintenance, the downtime would be as short as possible.

Field Service Software: Enhances Professionalism

FSM software programs are known for ensuring professionalism in the manner in which business activities are conducted. Of course, professionalism is attained through several factors, including working with a team of professionals. Such a team, using FSM software, results in enhanced efficiency and excellence.

A field service software like FieldElite helps you to consolidate all your business information into a single central database. With different access levels, your employees will access only as much information as is relevant to their respective duties.

An FSM software is ideal because the stored information can be accessed from any location, meaning field workers can pick new tasks while in the field, provided they’ve got the requisite tools. Instead of having to come back to the office, the employee would access all the information and execute the necessary task.

Field Service Software: Enables Resource Optimization

Resource optimization is one of the key determinants of a company?s profitability. While businesses vary in size and purpose, they all share one thing in common ? the desire to increase productivity while ensuring the optimal usage of resources.

Besides productivity, field service software also allows for efficient utilization of the available resources to cut down on costs.

Field Service Software: Ensures Better Coordination

FSM software facilitates improved coordination with the workforce. The software streamlines the management of the entire field service life cycle, ranging from labour to work orders, returns, contracts, warranties, and equipment.

The idea is to bring all the company?s field-related operations to a central point. And now, with easy data accessibility from a central platform, improved coordination is easily achievable.

Field Service Software: Guarantees Higher Accuracy

Adopting the field service management software is more than just a way to improve efficiency. It goes a long way towards improving a company?s accuracy. When a field service management software is used to trace a company?s activities, all the tasks are tracked on the mobile device, keeping the managers informed of every step.

Besides, the technicians also have a free reign to record the diagnostics, quality information, test results, and the parts consumed. All the information can be captured using text, audio, videos, and still photos. This guarantees minimal to no instances of data manipulation.

Field Service Software: Improves Customer Satisfaction

Field service management software improves customer satisfaction. How does that happen? Well, using a field service software like FieldElite allows for quick response to customer queries. If there?s one thing that quickly turns your customers off, it’s delayed response to their requests. With the field service management software, however, you can respond to such requests quickly and effortlessly.

Moreover, your customers can also track the service engineer to ensure they’re well informed of any anticipated delays. With quick response time, customer machines have more reliable uptime, which is the desire of every client.

Field Service Software: Provides Flexibility

If there?s one thing that customers like when dealing with a company, it’s flexibility. Instinctively, customers will always want different options to choose from when using a service without appearing to be confined to one provision. Having limited options would also appear boring.

To this extent, it would be wiser to adopt advanced FSM software. Advanced FSM software is compatible with mobile phones, meaning users can easily manage their tasks from isolated locations. FSM software can either be device-agnostic or device-specific. The device-specific type supports Android, Windows, and Apple iOS. This guarantees mobile-friendly tasks where users can easily manage the assignments via mobile application..

Field Service Software: Stores Client History

The mentioned software stores client history precisely. All the past data, including order history, are stored separately and accurately. In so doing, the field technician gets easy access to the tools, specifications, and technician instructions that aid them in their operations. The result is increased productivity and on-time service delivery.

Field Service Software: Enables Asset Management

Naturally, companies offering different repair services have plenty of assets to store. Accordingly, retrieving a specific part out of the large collection would be daunting.

With a field service application like FieldElite, the staff members can track down all the products effortlessly using the GPS. Furthermore, the FSM software ensures excellent maintenance of assets.

Field Service Software: Improves Oversight of Field Workers

The FSM software comes with many useful tools, including a built-in GPS tracker. The GPS tracker oversees the operations of the on-field workers, providing precise details about their geographical location, actual arrival time, and most importantly, the distance from the job site.

While this might not be useful at all times, it comes in handy when you need to assign an urgent task to the nearby technician. Call it a classic example of dynamic scheduling.

Final Thoughts

With so much at stake, it’s increasingly compelling to include the Field Service Management Software in your business. With every industry moving towards automation, your business cannot afford to lag.

Quick and efficient service delivery through FSM software may be the difference between you and your competitors.

The FSM software is no longer the cherry on the cake but a must-have tool for your survival in the highly competitive market.

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