FMEA Based Framework for Cost Risk Mitigation in Building Construction Projects

Abstract

High  rise building projects are inherently exposed to complex cost-related risks that can lead to budget overruns, project delays, and a decline in construction quality. This study seeks to analyze cost risks in building construction by applying the Failure Mode and Effect Analysis (FMEA) method. The research was carried out on the construction of the Product Testing and Animal Disease Inspection Laboratory in Medan, involving ten respondents representing different professional roles within the project. Using the FMEA approach, each risk was evaluated according to three parameters: Severity (S), Occurrence (O), and Detection (D). These values were then multiplied to obtain the Risk Priority Number (RPN). The results showed that the most critical risks were unit price inflation (RPN = 374.63), logistic disruptions (RPN = 295.58), delays in material delivery (RPN = 258.20), inaccurate initial cost estimation (RPN = 237.80), delayed payments from the project owner (RPN = 219.98), and licensing issues (RPN = 205.72). To ensure the validity of the instrument, a reliability test was conducted using SPSS, which produced a Cronbach’s Alpha value of 0.960, indicating a very high level of internal consistency. These findings provide meaningful insights for construction practitioners to formulate effective risk mitigation strategies, enhance cost efficiency, and minimize potential financial losses in building construction projects.