Service-Oriented FMEA and Grey Relational Analysis Based Approach To Service Reliability Assessment

Service-Oriented FMEA and Grey Relational Analysis Based Approach to
Service Reliability Assessment

1
Hyung Sool Oh,
2
Seung Ki Moon,
3
Jung Sang Yoo

1, First Author
Dept. of Industrial and Management Engineering, Kangwon National University,
hsoh@kangwon.ac.kr
*2, Corresponding Author
School of Mechanical and Aerospace Engineering, Nanyang Technological University,
skmoon@ntu.edu.sg
3
Dept. of Industrial and Management Engineering, Gachon University, jsyou@gachon.ac.kr

Abstract
Failure mode and effect analysis (FMEA) is a systematic approach for identifying potential failures
before they occur, with the intent to minimize the risk associated with them. It has been widely used in
the various manufacturing industries as a solution to reliability problems. As the importance of the
service sector is increasing, however, it has been recently extended to some applications in services.
Despite these attempts, FMEA cannot be directly applied to the reliability problems in a service
industry. Due to the heterogeneity and customer participation in service process, we cannot perfectly
prevent service failures. For this reason, we suggest a new risk priority number with three input
parameters that consist of severity, probability of occurrence, and recoverability. In this paper, we
propose an approach for assessing service risk and service reliability using the service-oriented risk
priority number (S-RPN). An example regarding a hypermarket service process is used to demonstrate
the proposed approach.

Keywords: Service Failure, Service Reliability, Service-Oriented RPN, Fuzzy FMEA, Grey
Relational Analysis

1. Introduction

To survive in todays competitive market environment, most of companies are increasingly focusing
on utilizing services to satisfy customers needs and offer differentiated products [1]. The value of
services depends on service reliability that is identified by satisfaction derived from the relationship
between customer needs and service providers. The reliability corresponds directly to the service
outcome and is mentioned as the most important dimension of assessing service quality [2]. The
service reliability can be measured by its processes reliabilities, since a service consists of many
processes. The service reliability is described as two delivery levels according to the promised
performance dependably and accurately [3, 4]. And, the reliability of a service process can be defined
as the capability of satisfying the specified performance requirements in a given period of time.
Products and systems usually have continuous distribution functions in terms of reliability and failure.
While service processes have discrete distribution functions and are independent from time. Therefore,
failure types or the numbers of failures can be considered as more important events than their
occurrence time or period [5]. Due to the characteristics of the services that are different from products,
methods or methodologies for analyzing the reliability of product are hard to apply in service reliability
analysis [5].
The objective of this paper is to propose an approach for assessing service risk and service
reliability using the service-oriented risk priority number based on fuzzy failure mode effects analysis
(FMEA) and grey relational analysis. The service reliability can be considered as mode and effects that
can be occurred at each step of the service process. Because the failure modes of services are distinct
from the failure modes of tangible systems, we need to develop a novel notion of a failure in a service
delivery process. We use an event-based process model to facilitate service design and represent the
relationships between functions and failures in a service. We define the failure mode of service as
interaction ways that can be failed in a service delivery process. The basic unit of a service is a
transaction which is a specific single instance of delivery of the service. In this paper, the fuzzy set
theory is used to define the frequency of failures in service processes and characterize service
Service-Oriented FMEA and Grey Relational Analysis Based Approach to Service Reliability Assessment
Hyung Sool Oh, Seung Ki Moon, Jung Sang Yoo
International Journal of Advancements in Computing Technology(IJACT)
Volume 5, Number 12, August 2013
225
reliability based on linguistic terms during FMEA. Grey theory is employed to determine the degree of
relation and ranking among risk factors that are represented as potential failure causes.
The remainder of this paper is organized as follows. Section 2 reviews the relevant researches of
service reliability. Section 3 describes the proposed approach to assess service reliability. Section 4
gives a case study a hypermarket service process. Closing remarks and future work are presented in
Section 5.

2. Literature Review

In general, reliability is defined as the persistence of ability to perform and maintain its functions or
quality over time under stated conditions. The role of the passage of time is the essential characteristic
in the definition of reliability [6]. The major concern of failure analysis in manufacturing industries is
to emphasize the prevention of problems linked to the proactive treatment of the system rather than
finding a solution after the failure happens [7].
Even though there are many definitions for a service, a service can be defined as a transaction or
process that delivers service contents from service providers to customers. From the definitions on a
service and reliability, service reliability can be described in terms of the success or failure of
transactions that is occurred at various times [6]. A service failure occurs when customers expectations
are not meet [8, 9] or service performance falls below a customers expectation [10, 11]. Customer
perception is a major factor that determines whether a service failure occurred even if the company has
the best strategic plans and the tightest quality control procedures [8, 12].
FMEA is widely used to handle the failures of manufacturing industries and its goal is to identify
potential failures before they occur, with the intention to minimize the risk associated with them [13,
14]. Though FMEA has been extended to some applications in service sector in recent years [8, 15],
these researches used the traditional risk priority number (RPN) of FMEA for evaluating the risk
priority of each failure mode. Risk prioritization is particularly important in service industries where
the characteristics of services should be considered. Many researchers have been conducted to provide
methodologies considering the multilateral perspective of a service such as fuzzy logic, grey theory [16,
17], and so on. These methods are, however, still limited to the manufacturing sector. In the next
session, we propose a new systematic approach for risk prioritization of service failures that considers
recovery strategies and actions.

3. Service-Oriented FMEA

3.1 Risk and the Risk Priority Number of FMEA

In the traditional FMEA, the risk priority number (RPN) is calculated by the multiplication of three
risk factors, severity, occurrence and detection, and each factor can be described as the following [18]:
1) Severity (S): Result generated from failure
2) Occurrence (O): Opportunity or probability of a failure
3) Detection (D): Opportunity for an unidentified failure because of the difficulty in detection

The traditional risk prioritization ignores that three factors may have different weights in system,
and especially occurrence is a key factor in non-repairable system. Patrick et al. [18] emphasize that the
severity and the occurrence are two key items which should be used in FMEA priority analysis rather
than the item of the detection.
A service failure in service industries is a problematic outcome causing significant damage to
customer satisfaction [19, 20, 21]. The RPN of FMEA is used to identify potential failures before they
occur to minimize the risk associated with them. However, some researchers have been raised different
views on the appropriateness of the RPN [17].
The notion of risk has both uncertainty and some kind of loss or damage that might be received.
The risk is understood to someone as a subjective thing, because a risk depends on who are looking
[22]. In analyzing risk, we are attempting to envision how the future will turn out if we undertake a
certain course of action. Fundamentally, a risk analysis consists of an answer to the following three
questions:
226
1) What can happen? (i.e., what can go wrong?)
2) How likely will it happen?
3) If it does happen, what are the consequences?

The first question is related with a failure mode, and the second and third question can be
interpreted as the occurrence and severity of the RPN.
If it is possible to reduce the risk at small cost, then the risk is unacceptable. Conversely, a much
larger risk may be perfectly acceptable if it brings with it the substantially reduced cost or increased
benefit [22]. Thus one of the factors related with the questions cannot talk about the risk in isolation
and the risk can be evaluated by product of severity, occurrence and detection.

3.2 Service-Oriented Risk Priority Number(S-RPN)

The detection of the traditional FMEA is important for maintainability control in a repairable system.
The failures which can be detected by the maintenance crew or by some diagnostic process may
involve dormant failure modes or latent failure like a metal growing crack. However, the ultimate
outcome of a service failure in services is revealed as customers behaviors; stay or leave [23].
In the service sector, customers are one of the most importance sources in service failures [15]. A
customer may stay after service failure if the customer is satisfied with a service recovery process.
However, the customer may leave if the recovery efforts are poor, causing the customer to be even
more dissatisfied [23]. And so, a service failure will be finally decided if the customer is not satisfied
with the recovery efforts. Due to the heterogeneity and the customer participation in a service delivery
process, we cannot perfectly prevent service failures in advance. For the reason, recovery efforts and
processes are more important than a detection process.
Service failure may vary considerably across the dimensions of timing, severity, and occurrence
[24]. We propose a new RPN with three input parameters that consist of severity (S), probability of
occurrence (O), and recoverability (R). The new RPN named as service-oriented risk priority number
(S-RPN) is determined by the multiplication of three indexes as equation (1).

S-RPN = Severity Occurrence Recoverability (1)

The term recoverability means that the committed transactions have not read data written by the
aborted transactions in software engineering. However, we define the recoverability in S-RPN as the
definition of NASA report [25]: Recoverability is the ability to restore correct service delivery after
experiencing a failure. The recoverability also falls into the context of maintainability, which includes
physical replacement and repair of system components. For our research, the recoverability is the
complement of reliability and is measured as the probability that the service is recovered within a
specified time interval after the occurrence of a failure.
Figure 1 shows the proposed approach for assessing service reliability based on failure modes and
service processes. The proposed method consists of four phases: (1) identify failure modes, (2) define
FMEA parameters using S-RPN, (3) defuzzify the defined FMEA parameters, and (4) determine the
degree of grey relation and ranking. In the initial phase, service processes are modeled and analyzed to
identify the failure modes of services using service blueprint. For any service, a blueprint can trace
processing steps and information flows between a customer and a provider. We can identify service
processes and isolate fail points in the service through designing a blueprint. The second phase is to
determine three input parameters, i.e., severity(S), probability of occurrence (O), and recoverability (R),
which are used in the proposed service-oriented FMEA. Each parameter will be described as five
linguistic terms. Then, these parameters are fuzzified using a membership function to determine degree
of membership in each parameter. The expertise of many experts is used to construct the membership
function. The interpretations of these linguistic terms used in this paper are given in Table 1 and the
triangular membership functions are as shown in Figure 2. After determining the degree of grey
relation and ranking using grey theory, service reliability is evaluated based on the generated service
processes.
227

Figure 1. The proposed method for service reliability evaluation

Table 1. Implementations of the linguistic terms
Linguistic
term
Severity
Probability of
occurrence
Recoverability Rating
Remote

Low

Moderate

High

Very
high
A failure has no effect on
customer satisfaction

A failure that would lead
slight dissatisfaction to
customer
noticeable dissatisfaction
to customer
significant dissatisfaction
to customer
serious dissatisfaction to
customer
Failure is unlikely

Few failures

Occasional
failures

Repeated failures

Failure is almost
inevitable
The chance that a failure can
be successfully recovered is
very high
high
moderate
low
remote
1

2, 3

4, 5, 6, 7

8, 9

10

Figure 2. Membership function for the linguistic terms
228

3.3 Defuzzification

Usually, an assessment of the three indices is subjective and qualitatively described as natural
language. The disadvantage of the traditional FMEA is that various sets of the indices may produce an
identical value of RPN. Therefore, the risk implication may be totally different [26, 27]. The other
disadvantage of the RPN raking method is that it neglects the relative importance between the indices.
Some researchers have applied fuzzy set theory to deal with these problems [16, 28, 29]. Xu et al. [28]
presented a fuzzy logic based method and an assessment expert system for the FMEA of a diesel
engine turbo charger system. Pillay and Wang [16] used a fuzzy rules base and grey relation theory to
determine RPN by multiplying the factor scores of S, O, and D. The defuzzified values of each of the
linguistic terms are used to generate the defuzzification of the membership functions. Defuzzification is
used to obtain the crisp number of a fuzzy set and can be calculated by Equation (2) which is proposed
by Chen et al. [29].

K(x) =
(b
i
- c)
n
i=0
(b
i
-c)- (u
i
-d)
n
i=0
n
i=0
(2)

Where K(x) is the defuzzified crisp number.

3.4 Grey Relational Analysis

Grey theory is used to define relationships between discrete quantitative and qualitative series and
solve a decision-making problem which is characterized by incomplete and partially known
information. Grey theory has been widely applied to various fields, such as optimization, engineering,
economy, history, geography, traffic, and management [16]. Chang et al. [17] applied grey theory to
develop a FMEA framework for determining a risk priority number by assigning relative weighting
coefficient. The procedures of determining the degree of relation and ranking are as follows [30]:

(i) Establish comparative series: comparative (information) series, {x
1
, x
2
, , x
n
], are failure
modes and represented as various linguistic terms.

X = _
x
1
x
2
x
n
_ = _
x
1
(1)x
1
(2) x
1
(k)
x
2
(1)x
2
(2) x
2
(k)

x
n
(1)x
n
(2) x
n
(k)
_ (3)

The linguistic terms describe each decision factors of the failure mode.
(ii) Establish standard series: The standard series, x
0
= |x
0
(1), x
0
(2), , x
0
(k)] , is an
objective series that reflects the ideal of desired level of all the decision factors.
(iii) Obtain the difference between the comparative and standard series: The difference between
the two series,
0
, is calculated to determine the degree of grey relationship as following:

0
= _
01
(1)
01
(2)
01
(k)
02
(1)
02
(2)
02
(k)

0n
(1)
0n
(2)
0n
(k)
_ (4)

Where,
0]
(k) = [x
0
(k) x
]
(k)[.
(iv) Compute a grey relational coefficient: A grey relational coefficient is determined to compare
the decision factors with standard series as following.

y(x
0
(k), x
]
(k)) =
A
m in
+ {A
m cx
0]
(k)+ {A
m cx
(5)

229
0]
(k) = |x
0
(k) x
]
(k)| ,
m n
= mi n
]
mi n
k
|x
0
(k) x
]
(k)| ,
m ux
= mox
]
mox
k
|x
0
(k) x
]
(k)|

Where x
0
(k) is a minimum or maximum value in the standard series, and x
]
(k) is a minimum or
maximum value in the comparative series, and an identifier, (u, 1) only affecting the relative
value of risk without changing the priority.
(v) Determine the degree of relation: The degree of relation (x
, x
]
)denotes the relationship
between the potential cause and the optimal value of decision factors and is represented by:

(x
, x
]
) = [
k
y|x
(k), x
]
(k)|
n
k=1
(6)

Where [
k
is the weighting coefficient of the decision factors and [
k
= 1
n
k=1
.
(vi) Determine the ranking of the relational series: The relational series represent the relationship
between potential causes and optimal value of the decision factors in FMEA. As increasing the value of
the degree of relation, the effect of the cause is decreased. We can determine the ranking of the
relational series based on the degree of relation by identifying the risk priority of potential failure
causes.
In the next section, the proposed method is applied to evaluate service reliability using a case study
of a typical automotive service operation.

4. Case Study

To demonstrate the usefulness of the proposed approach, we performed a case study with an
example regarding a hypermarket service process. The service blueprint in Figure 3 shows a simplified
version of the standard service, starting when the customer arrives at parking space and finishing when
the customer leaves the market [8].
The results of Service-Oriented FMEA at each stage and the linguistic terms generated by the
experts are summarized in Table 2. In Table 2, three indices (S, O, R) are described linguistically as
Remote, Low, Moderate, High, and Very high. For the service process in a hypermarket, we adopt the
guidelines as described in Table 1 and the membership function for the linguistic terms as shown in
Figure 2. These linguistic terms are defuzzified using equation (2) to produce a crisp number and the
results are listed in Table 3. The comparative series is represented in a matrix based on the linguistic
terms that are assigned to each failure, and then converted to numerical values by defuzzification as
shown in Table 3.
In Service-Oriented FMEA, the standard series should consist of the lowest level of linguistic term,
Remote, in the case study, since the small value of RPN represents the less risk. The defuzzified value
of Remote is 0.136, which represents the average value. To compute the grey relation coefficient using
equation (5), the difference of the standard and comparative series is calculated using equation (4). In
this paper, we assume that = u.S. The weighting coefficient for the linguistic terms, assigned in
equation (6) for calculating the degree of relation, will have a large influence on the final ranking of
failure modes. The objective of this research is to apply FMEA to service process for identifying the
failure modes which seriously impact customers satisfaction. The coefficient should be decided
depending on the objective of the analysis and the reliability of the data available. To evaluate how the
results of FMEA are different according to the weighting coefficient, we assume that the values of
S
,
O
, and
R
are (0.4, 0.2, 0.4) and (0.4, 0.4, 0.2) for the case 1 and 2 respectively. The grey relational
coefficients for the first failure (f1) in case 1,
S
,
O
, and
R
are calculated as following:

S
=
u + |(u.S)(u.79S)]
u.u68 + |(u.S)(u.79S)]
= u.S72
O
=
u + |(u.S)(u.79S)]
u.147 + |(u.S)(u.79S)]
= u.7Su
R
=
u +|(u.S)(u.79S)]
u.79S + |(u.S)(u.79S)]
= u.SSS
230

And, then the degree of relation for the first failure was calculated by Equation (6) as following:

(x
, x
]
) = {(u.4)(u.S72) +(u.2)(u.7Su) + (u.4)(u.SSS)] = u.4S

Figure 3. Service blueprint for a hypermarket (Adapted from [8])

Table 2. Comparative series and defuzzified crisp value for a hypermarket
Participant Failure modes
Linguistic terms assigned to each failure and defuzzified value
Severity Occurrence Recoverability

Resources

Front-line
servers

Sub-
system
f1
f2
f3

f5

f4

f6

f7

f8
f9
f10

f11

Insufficient parking space
Shopping cart malfunction
Air conditioning malfunction
Escalator malfunction
Sales floor is not clean
Wrong price tag

Goods quality is not good
No goods on sales shelf
Unable to find front-line server
Unkindness of front-line server
Slow processing speed of cashier
Unfriendly attitude of cashier
Calculation mistake of cashier
Inappropriate complaints adjust-
ment
Inappropriate refund/returned
policy

Forecasting error of goods
Unstable supply of goods
Incoming inspection failure
Inconsistency between actual
and book inventory
Wrong location of warehousing
goods
Wrong replenishment of goods
in sales shelf
High
Low
Moderate
Moderate
Moderate
High

Very high
High
High
Very high
Moderate

Very high
High
Very high

Very high

High
Very high
Very high
Very high

Very high

High
0.804
0.283
0.540
0.540
0.540
0.804

0.929
0.804
0.804
0.929
0.540

0.929
0.804
0.929

0.929

0.804
0.929
0.929
0.929

0.929

0.804
Low
Remote
Remote
Remote
Low
Remote

Low
Remote
Moderate
Moderate
Low

Low
Remote
Low

Low

Remote
Low
Low
Remote

Low

Remote
0.283
0.136
0.136
0.136
0.283
0.136

0.283
0.136
0.540
0.540
0.283

0.283
0.136
0.283

0.283

0.136
0.283
0.283
0.136

0.283

0.136
Very high
Remote
Low
Moderate
Moderate
High

High
Low
Low
Very high
Moderate

High
High
Very high

Very high

Moderate
High
Very high
Very high

Very high

High
0.929
0.136
0.283
0.540
0.540
0.804

0.804
0.283
0.283
0.929
0.540

0.804
0.804
0.929

0.929

0.540
0.804
0.929
0.929

0.929

0.804

231
Table 4 shows the results of the proposed approach for the case study. The rankings of the failure
modes can be affected to service reliability based on the risk priority of potential failure causes. In
particular, the results from the two cases showed different rankings for f1, f4 (unable to find front-line
server), and f11 according to the weighting coefficient values of the occurrence and recoverability. The
failure modes of f4 and f11 were considered as the more critical failure modes under the situation
which the occurrence is more critical rather than the recoverability, because f4 and f11 were affected
from failure occurrences rather than their recoverability. The failure mode of f1 can be considered as a
critical failure, if its recoverability is more urgent situations. Therefore, a critical failure such as
insufficient parking space should have priority for increasing customer satisfaction and service
reliability.
Through the case study, we demonstrated that the proposed approach can be applied to identify
critical failures that are hard to define their delectability and the probability of occurrence using the
existing FMEA. And the proposed approach is more suitable to design service processes including
failures that cannot be prevented inherently

Table 4. Results of the proposed approach for the case study
Participant Failure modes
Defuzzified value and grey relational value for S,O, and R Degree of relation & Ranking
S y
S
O y
0
R y
R
Case1 Rank Case2 Rank

Resources

Front-line
servers

Sub-
system
f1
f2

f3

f5

f4

f6

f7

f8

f9

f10

f11

Insufficient parking space
Shopping cart malfunction

Air conditioning malfunction
Escalator malfunction
Sales floor is not clean

Wrong price tag

Goods quality is not good
No goods on sales shelf
Unable to find front-line server
Unkindness of front-line server

Slow processing speed of cashier
Unfriendly attitude of cashier
Calculation mistake of cashier

Inappropriate complaints adjust-
ment
Inappropriate refund/returned
policy

Forecasting error of goods

Unstable supply of goods
Incoming inspection failure

Inconsistency between actual and
book inventory
Wrong location of warehousing
goods

Wrong replenishment of goods in
sales shelf
0.804
0.283

0.540
0.540
0.540

0.804

0.929
0.804
0.804
0.929

0.540
0.929
0.804

0.929

0.929

0.804

0.929
0.929

0.929

0.929

0.804
0.372
0.730

0.495
0.495
0.495

0.372

0.333
0.372
0.372
0.333

0.495
0.333
0.372

0.333

0.333

0.372

0.333
0.333

0.333

0.333

0.372
0.283
0.136

0.136
0.136
0.283

0.136

0.283
0.136
0.540
0.540

0.283
0.283
0.136

0.283

0.283

0.136

0.283
0.283

0.136

0.283

0.136
0.730
1.000

1.000
1.000
0.730

1.000

0.730
1.000
0.495
0.495

0.730
0.730
1.000

0.730

0.730

1.000

0.730
0.730

1.000

0.730

1.000
0.929
0.136

0.283
0.540
0.540

0.804

0.804
0.283
0.283
0.929

0.540
0.804
0.804

0.929

0.929

0.540

0.804
0.929

0.929

0.929

0.804
0.333
1.000

0.730
0.495
0.495

0.372

0.372
0.730
0.730
0.333

0.495
0.372
0.372

0.333

0.333

0.495

0.372
0.333

0.333

0.333

0.372
0.43
0.89

0.69
0.60
0.54

0.50

0.43
0.64
0.54
0.37

0.54
0.43
0.50

0.41

0.41

0.55

0.43
0.41

0.47

0.41

0.50
6
21

20
18
15

11

6
19
14
1

15
6
11

2

2

17

6
2

10

2

9

0.51
0.89

0.74
0.70
0.59

0.62

0.50
0.69
0.49
0.40

0.59
0.50
0.62

0.49

0.49

0.65

0.50
0.49

0.60

0.49

0.62
10
21

20
19
11

14

7
18
6
1

11
7
14

2

2

17

7
2

13

2

4

5. Conclusion

In this paper, we proposed an approach for assessing service reliability by extending concepts from
the failure modes and effects analysis of tangible systems to services. We introduced service-oriented
FMEA with service-oriented risk priority number (S-RPN) that consists of severity (S), probability of
occurrence (O), and recoverability (R). Service processes were modeled and analyzed to identify the
failure modes of services using service blueprint. The fuzzy set theory was used to characterize service
232
reliability based on linguistic terms during the service-oriented FMEA. Additionally, grey theory was
employed to determine the degree of relation and ranking among risk factors that are represented as
potential failure causes. Through the case study involving a hypermarket service process, we
demonstrated that the proposed approach can help access service reliability by identifying significant
service failures. The proposed approach can provide a quantitative method to support service process
design by understanding failure modes that are affected to service reliability.
To improve the proposed approach, we need to develop a method to better identify failure modes
based on service processes and customers satisfaction. Additionally, since service reliability are
sensitive to human errors in a service, future research efforts will be focused on evaluating human
errors in the service reliability. Also, the proposed approach will be compared to other decision-making
methods for accessing service reliability.

6. References

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service design, Journal of Operations Management, Elsevier, vol. 20, no. 2, pp. 159-174, 2002.
[3] Parasuraman, A., Zeithaml, V.A., Berry, L.L., SERVQUAL: a multiple item scale for measuring
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