FMEA- Failure Mode and Effects Analysis is a formalized, structured approach that lets engineers and other employees define the possibility of error, estimate potential errors, and prevent the error from occurring in the process. The overall goal of FMEA is to prevent the occurrence of a mistake before it happens. FMEA was formalized for the first time by NASA in the spacecraft industry during the Apollo missions, and in 1974 American Navy developed the MIL-STD-1629 standard for FMEA application. In the late 70s of the twentieth centuries, after the oil crisis, the car industry faced high expenses due to error responsibilities, so management of the car industry started implementing FMEA. So, since 1988 Ford Motors has required from its suppliers the mandatory use of the FMEA method. Ford Motors example is followed by many companies working with dangerous materials or using potentially dangerous processes in 1990 and they start using principles of FMEA based on risk management. International Standardization Organization - ISO recommended, in 1994, the use of two FMEA methods: design and process. This was preceded by the fact that AIAG - Automotive Industry Action Group made the first relevant standard for the FMEA method. This article stresses applying the innovative Failure Mode and Effects Analysis in a company from the automotive industry in Bosnia and Herzegovina.