**3. FMEA risk analysis**

situation and is increasingly seen as an opportunity for accessibility. Therefore, risk management may mean the elimination of the negative effects of a dangerous situation, but there may also be a chance to develop accessibility [5, 6]. The essence of risk management determines the maximum utilization of benefits by the com-

The meaning of words often raises doubts, and it is impossible to change clearly. Defining keywords on the basis of various sciences and theories, such as economics, law, psychology, statistics, probability theory, systems theory, or behavioral sciences, and then explicitly worded contents of the word risk, extremely difficult

The risk mainly applies to everyone and situations that should be avoided. It is also identified with chance, courage, and fate. It is a collection of activities that cause material losses and damage to the body or cause other losses. It is primarily associated with human activity and behavior [8]. Processing the definition of risk associated with the risk of positive or negative effects, expected values, uncertainty

The failure mode and effects analysis (FMEA) method is used to identify nonconformities together with the risk of their occurrence. The method is used to determine the risk assessment arising during production, management, organization planning, etc. of given products or processes. The FMEA method works best during implementation processes, planning processes, optimization elements, or improving unstable processes. The goal of the FMEA method is to systematically identify and recognize likely product or process incompatibilities. Then, take a step that minimizes the risks associated with them, and identify the factors that most

The FMEA method is designed to detect defects at the earliest stages of the process. The FMEA method is based on the analysis of factors that may affect the process under investigation and relate to process methods, instrumentation, and environmental impact along with the definition of control measures [12, 13]. The first stage of the FMEA method concerns the selection of operations that should be analyzed along with the definition of the scope of the analysis. The number of parts and levels of the method depends on the complexity of the

The second stage consists in specifying the activities related to the FMEA analy-

The final stage of risk analysis using the FMEA method describes the elements in

Research is based on the use of FMEA risk analysis in supply chain management in the heavy industry sector. The research lasted from 2016 to 2019. Nine business entities involved in steel production, trade, and processing were subject to examination. The entities were divided into three groups, and each group included three economic entities. The first group concerned steel companies. The headquarters of the enterprises are located in Poland, the Netherlands, and Germany. The next group concerned enterprises dealing in steel trade in Poland. The last group of enterprises is engaged in steel processing. Based on the industry analysis and intel-

sis. First of all, potential defects that can occur in the analyzed case should be defined. After determining the sequence of events, cause-defect-effect, each defect should be assessed with an integer ranging from 1 to 10, taking into account three

ligence in business entities, FMEA risk analysis has been developed [14].

criteria: risk, possible occurrence of a defect, and cause [15].

which changes should be made to reduce the risk of defects.

pany while minimizing possible losses [7].

threaten the success of the product/process [11].

**2. Research goal and methodology**

process [14].

**28**

of achieving the goal [9, 10].

*Risk Management and Assessment*

tasks.

The FMEA analysis (**Table 1**) covers such areas of activity of the heavy industry sector as technological, time, location, political and legal, economic, social, and environmental area. Determinants affecting supply chains in the heavy industry sector were subjected to risk analysis.

**Table 1** presents all aspects that may affect supply chain management in the heavy industry sector. In the table above, individual areas of activity of business entities involved in the flow of goods in the heavy industry sector have been analyzed. The potential type of defect was defined along with its effect. The probability of occurrence of a defect is determined on a scale of 1–10. The value of 1 is assigned to an unlikely situation, while 10 to a very likely situation. The details of the value assignment are set out in **Table 2**.

The next step is to determine the cause of the defect along with determining its value. Also in this case, the cause of the defect is determined on a scale of 1–10. The value of 1 is assigned to an improbable situation and 10 to a very likely situation. The details of the value assignment are set out in **Table 3**.

In the next step, you need to specify preventive measures and estimate the detection parameters, based on **Table 4**.

The final stage of FMEA analysis is the assignment of the RPN parameter. Assigning the above parameters to the FMEA spreadsheet allows you to specify the priority number of RPN risk, which is calculated according to the following formula:

$$\text{RPN} = \text{Meaning (I)} \times \text{Occurrence (P)} \times \text{Detection (D)} \tag{1}$$

RPN makes it possible to determine which threats carry the highest risk and the hierarchy in which order preventive actions should start.

FMEA analysis is a method of identifying and preventing problems related to the analyzed process before its implementation. It is focused on preventing process or product defects, increasing process security, financial security of the project, work safety, and environmental protection [14]. FMEA analysis is carried out at the design stage of the process or product to avoid the biggest threats and flaws in the implementation phase. This is an important technique for identifying and eliminating potential defects and errors in processes and products.

### **4. Conclusion**

The research aimed to show the sources of risk in supply chain management in the heavy industry sector. During the analysis, RPN = 100 was determined below which the impact of factors on supply chain management is insignificant. For the industry studied, the greatest impact of risk on supply chain management has social aspects, primarily related to the lack of qualified staff, an increase in labor costs and social benefits, and the need to meet staffing needs with foreign personnel. Further aspects affecting supply chain risk management include an increase in energy and raw material prices, business relationships with customers, expansion of emerging markets, and reduction of spatial barriers.


**31**

*Supply Chain FMEA Risk Analysis for the Heavy Industry Sector*

*DOI: http://dx.doi.org/10.5772/intechopen.91042*


#### *Supply Chain FMEA Risk Analysis for the Heavy Industry Sector DOI: http://dx.doi.org/10.5772/intechopen.91042*

**30**

*Risk Management and Assessment*


**33**

*Supply Chain FMEA Risk Analysis for the Heavy Industry Sector*

*DOI: http://dx.doi.org/10.5772/intechopen.91042*


#### *Supply Chain FMEA Risk Analysis for the Heavy Industry Sector DOI: http://dx.doi.org/10.5772/intechopen.91042*

**32**

*Risk Management and Assessment*


**Table 1.** *FMEA analysis sheet for the industry studied [own*

 *study].*

Risk analysis has been created for a specific industry. Based on the analysis, the values included in **Table 1** have emerged. The RPN value presented in **Table 1** identifies the greatest threats to the process under study. A detailed analysis of all RPN values above 100 identifies the greatest threat to supply chain management in the heavy industry sector. At the same time, analyzing the results contained in **Table 1**, you can simultaneously create and implement appropriate preventive measures described in the column "Current preventive measures in the process." Disregarding the results of risk analysis using the FMEA method may lead to negative effects on the functioning of enterprises operating within the analyzed

3–4 Large The chances of detecting a defect are high, a test or functional check is used

**I Importance FMEA services/constructions**

*DOI: http://dx.doi.org/10.5772/intechopen.91042*

9–10 Extremely important

**P Probability of occurrence of a defect**

**Table 2.**

**Table 3.**

**Table 4.**

1 Unbelievable An imperceptible impact on the service

*Supply Chain FMEA Risk Analysis for the Heavy Industry Sector*

4–6 Average Average defect, felt customer dissatisfaction

contrary to the law

dissatisfaction

*Determining the significance of the occurrence of a defect [own study].*

1 Unbelievable No defect can occur

7–8 High Disadvantages occur very often 9–10 Very high Very high probability of a defect

*Determining the probability of occurrence of a defect [own study].*

1–2 Very big Some defect detection

7–8 Small Defect detection difficult

*Determining the probability of detection [own study].*

**D Detection FMEA service/construction/process**

5–6 Average Defect control can detect average detectability

9–10 Very small Detection of a defect is difficult or impossible to detect

2–3 Little The defect is small and has little impact on customer satisfaction

7–8 Important The defect happens cyclically and has a big impact on customer

An extremely important defect, which affects further work, safety and is

**FMEA service/construction/process**

2 Very low Very low probability of occurrence of a defect. Defects occur individually and very rarely

3 Low Low probability of occurrence of individual defects 4–6 Average Defects occur on average in small quantities

The FMEA risk analysis itself can be used for different cases. The studied problem concerns threats and uncertainty in the supply chain in the heavy industry sector. Each risk analysis based on a given problem is individual. Risk factors may vary on each enterprise that is technologically similar, and it is not possible to use risk analysis prepared for entity A for entity B. Even more, the risk analysis

supply chain.

**35**


#### **Table 2.**

*Determining the significance of the occurrence of a defect [own study].*


#### **Table 3.**

*Determining the probability of occurrence of a defect [own study].*


#### **Table 4.**

*Determining the probability of detection [own study].*

Risk analysis has been created for a specific industry. Based on the analysis, the values included in **Table 1** have emerged. The RPN value presented in **Table 1** identifies the greatest threats to the process under study. A detailed analysis of all RPN values above 100 identifies the greatest threat to supply chain management in the heavy industry sector. At the same time, analyzing the results contained in **Table 1**, you can simultaneously create and implement appropriate preventive measures described in the column "Current preventive measures in the process." Disregarding the results of risk analysis using the FMEA method may lead to negative effects on the functioning of enterprises operating within the analyzed supply chain.

The FMEA risk analysis itself can be used for different cases. The studied problem concerns threats and uncertainty in the supply chain in the heavy industry sector. Each risk analysis based on a given problem is individual. Risk factors may vary on each enterprise that is technologically similar, and it is not possible to use risk analysis prepared for entity A for entity B. Even more, the risk analysis

**Table 1.**

**34**

*Risk Management and Assessment*

*FMEA analysis sheet for the industry studied [own study].* considered in the context of one industry may differ for other industries. The impact of risk factors may be the same in some respects, but it will be different even if it is personal or environmental. Risk analysis is always created with a specific enterprise, process, product, or industry in mind. The scheme of risk analysis using the FMEA method can be used for each individual problem.

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