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³The Vital Few and Trivial Many Rule´

³Predictable Imbalance´

³80:20 Rule´
 °amed 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
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‡ 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.

‡ 
  V
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ÿ
from the science of management to the physical
world
Addressing the most troublesome 20% of the
problem will solve 80% of it.

Within your processÿ 20% of the individuals will

cause 80% of your headaches.

Of all the solutions you identifyÿ about 20% are

likely to remain viable after adequate analysis.

80% of the @is usually done by 20% of the



.
80% of the can be gotten in 20% of the

-- 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.
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It is a simple Histogram style 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 nextÿ then
nextÿ and in so doing address the area of most
benefit first

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The simplicity of the Pareto concept
makes it prone to be !
 


  


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Generallyÿ individuals tend to think they

know the important problem areas
requiring attention««
if they really knowÿ why do problem
areas still exist?
Although the idea is quite
simpleÿ to gain a working
knowledge of the |

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 and its applicationÿ it
is necessary to understand the
following basic elements:

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reating an tabular array of representative
sample data that ranks the parts to the
whole
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*efect Press Press Press Press Total
22x28 38´ 2- 77´ 5- 77´ 4- *efects
olor 550 430 234 476 1690
Variation
Misregister 150 27 31 265 473

Hickeys 50 45 80 10 185

Scuffing 10 14 3 60 87

Excess Spray 16 21 30 5 72

Other 30 37 21 30 118

totals 806 574 399 846 2625

% Waste 30.70 21.87 15.20 32.23 100

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#
The ategory ontributionÿ the causes of
whatever is being investigatedÿ are listed
across the bottomÿ and a percentage is
assigned for each (Relative Frequency) to
total 100%. A vertical bar chart is
constructedÿ from left to rightÿ in order of
magnitudeÿ using the percentages for each
category.
Pareto *iagram is a combined j


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based on
cumulative percentages.

80% improvement in quality or

performance can reasonably be expected
by eliminating 20% of the causes of
unacceptable quality or performance
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Ë(ategory ontribution) / (Total of all
ategories)] x 100 expressed in bar chart
form.





Ë(Relative Frequency of ategory
ontribution) + (Previous umulative
Frequency)] expressed as a line graph
'
 
The percentage point on the line graph for
umulative Frequency at which there is a
significant decrease in the slope of the
plotted line

@
ategory ontributions that appear to the
left of the Break Point account for the bulk
of the effect
u ! 
ategory ontributions that appear to the
right of the Break Pointÿ which account for
the least of the effect.

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‡ Pareto analysis provides the mechanism
to control and direct effort by factÿ 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:
‡ Prioritize problemsÿ goalsÿ 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 physicalÿ financial and human resources
For a General Manager
The value of the Pareto Principle is
that it focuses efforts on the 20 percent
that matters.

Of the things you do during your dayÿ

only 20 percent really matter. Those 20
percent produce 80 percent of your
results.

Identify and focus on those things.

To reate a Pareto hart:

Select the items (problemsÿ issuesÿ actionsÿ

defectsÿ etc.) to be compared.

Select a standard for measurement.

Gather necessary data

Arrange the items on the horizontal axis in a

descending order according to the
measurements you selected.

*raw a bar graph where the height is the

measurement you selected.