Failure Mode and Effects Analysis (FMEA) - is a risk assessment tool that helps in identifying 'what all can go wrong' with a process/product/service. In addition to identifying the failures that have already occurred, it also helps in identifying the failures that have not occurred so far but have a potential to occur. This provides chances for mistake proofing and preventive actions to be implemented.
FMEA is a team activity and is performed at each step of a process. It gives a severity rating basis the impact of the failure, occurrence rating basis the frequency and a detection rating basis the ability to detect the failure. The three ratings together provide the Risk Priority Number (RPN) at each step. Higher the RPN, greater is the risk. A review of the high RPNs provide us improvement opportunities.
RPN = Severity x Occurrence x Detection.
An application oriented question on the topic along with responses can be seen below. The best answer was provided by Anirudh Kund on 23rd November 2017.