I faced this problem when I was doing process FMEA for an electronic component.
The product has to be checked 100% for its inductance, resistance and high voltage values before dispatch to customer. As per my understanding, Process FMEA is done with the intent to prevent the process based failure modes prior to the production run. It is done to anticipate and resolve process monitor problems which could lead to a deviation from the design requirements.
However, in this particular case, doing FMEA and improving the processes do not really help in reducing / eliminating the 100 % inspection, as the 100% check for inductance, resistance, etc., in an auto test equipment (highly sophisticated) is a customer specific requirement.
Therefore, the supplier feels that doing process FMEA in this particular case will remain a mere paper work and not going to help in reducing his inspection efforts.
If 100% inspection is required, so be it. But improvement to severity and occurrence would then become the focal point of the pfmea process.
Also consider that with 100% inspection there is still going to be defective products that are not caught. Can you improve on the systems used for 100% inspection? New technology? Improved MSA techniques? etc...
I understand, improvement is possible in occurence and severity.
100% inspection, is done using an auto test equipment, which directly says PASS or FAIL. So there is no subjectivity.
One more interesting point is that as a customer I am not going to pay for the supplier's internal rejections. Therefore, the supplier says he will have his own way of doing rejection analysis and improve upon the process. Really, I am not able to sell the concept of FMEA.