Knowledge of potential failure modes during design is critical for prevention of failures. Currently industries use procedures such as Failure Modes and Effects Analysis (FMEA), Fault Tree analysis, or Failure Modes, Effects and Criticality analysis (FMECA), as well as knowledge and experience, to determine potential failure modes. When new products are being developed there is often a lack of sufficient knowledge of potential failure mode and/or a lack of sufficient experience to identify all failure modes. This gives rise to a situation in which engineers are unable to extract maximum benefits from the above procedures. In this work we report on a new failure identification scheme and integrate it with a function-based failure identification methodology, which would act as a storehouse of information and experience, providing useful information about the potential failure modes for the design under consideration, as well as enhancing the usefulness of procedures like FMEA. As an example, the method is applied to 41 products and the benefits are illustrated.