Pareto Principle

Information about Pareto Principle

Published on July 15, 2014

Author: moraspius

Source: authorstream.com

Content

Pareto Principle : Pareto Principle “The Vital Few and Trivial Many Rule” “Predictable Imbalance” “80:20 Rule” Named after Vilfredo Pareto -an Italian economist : Named after Vilfredo Pareto -an Italian economist He observed in 1906 that 20% of the Italian population owned 80% of Italy's wealth He then noticed that 20% of the pea pods in his garden accounted for 80% of his pea crop each year The Pareto Principle: The Pareto Principle A small number of causes is responsible for a large percentage of the effect - -usually a 20-percent to 80-percent ratio. This basic principle translates well into quality problems - most quality problems result from a small number of causes. You can apply this ratio to almost anything , from the science of management to the physical world PowerPoint Presentation: Addressing the most troublesome 20% of the problem will solve 80% of it.   Within your process, 20% of the individuals will cause 80% of your headaches .   Of all the solutions you identify, about 20% are likely to remain viable after adequate analysis. 80% of the work is usually done by 20% of the people . The Pareto Principle PowerPoint Presentation: 80% of the quality can be gotten in 20% of the time -- perfection takes 5 times longer 20% of the defects cause 80% of the problems. Project Managers know that 20% of the work (the first 10% and the last 10%) consume 80% of the time and resources . The Pareto Principle PowerPoint Presentation: A Pareto chart is a useful tool for graphically depicting these and other relationships It is a simple graph that ranks problems in order of magnitude to determine the priorities for improvement activities The goal is to target the largest potential improvement area then move on to the next, then next, and in so doing address the area of most benefit first The chart can help show you where allocating time, human, and financial resources will yield the best results. The Pareto Principle PowerPoint Presentation: While the rule is not an absolute, one should use it as a guide and reference point to ask whether or not you are truly focusing on: 20% - The Vital Few or 80% - The Trivial Many True progress results from a consistent focus on the 20% most critical objectives. the The Pareto Principle PowerPoint Presentation: The simplicity of the Pareto concept makes it prone to be underestimated and overlooked as a key tool for quality improvement . Generally, individuals tend to think they know the important problem areas requiring attention…… if they really know, why do problem areas still exist? The Pareto Principle Although the idea is quite simple, to gain a working knowledge of the Pareto Principle and its application, it is necessary to understand the basic elements. : Although the idea is quite simple, to gain a working knowledge of the Pareto Principle and its application, it is necessary to understand the basic elements. The Pareto Principle Pareto Analysis : Pareto Analysis Creating an tabular array of representative sample data that ranks the parts to the whole with the objective to use the facts to find the highest concentration of quality improvement potential in the fewest number of projects or remedies Thus achieving the highest return for the investment. Pareto Diagram Analysis: Pareto Diagram Analysis Pareto analysis provides the mechanism to control and direct effort by fact, not by emotion. It helps to clearly establish top priorities and to identify both profitable and unprofitable targets. In addition to selecting and defining key quality improvement programs: PowerPoint Presentation: Prioritize problems, goals, and objectives Identify root causes Select key customer relations and service programs Select key employee relations improvement programs Select and define key performance improvement programs Address the Vital Few and the Trivial Many causes of nonconformance Maximize research and product development time Verify operating procedures and manufacturing processes Product or services sales and distribution Allocate physical, financial and human resources The Pareto Principle PowerPoint Presentation: The value of the Pareto Principle is that it focuses efforts on the 20 percent that matters. Of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results. Identify and focus on those things . For a General Manager The Pareto Principle

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