PARETO PRINCIPLE

Economist Vilfredo Pareto

Principle states that
20% of investment input is responsible for
80% of the result obtained
FIELD 20% 80%
SAFETY HAZARD INJURY
HAZARD/SAFETY CAUSES CONSEQUENCES
HUMAN RESOURCE STAFF WORK
ECONOMY POPULATION WEALTH
PROPERTY PEOPLE LAND
PROFESSIONAL CLIENT TIME

PRODUCTION PEA PEAPOD

BUSINESS CAUSE PROBLEM
BUSINESS CUSTOMER COMPLAIN
BUSINESS PRODUCT REVENUE
BUSINESS CUSTOMER SALE
BUSINESS ITEM SALE
FIELD 20% 80%
• SAFETY HAZARD INJURY
• HAZARD CAUSES CONSEQUENCES
• HUMAN RESOURCE STAFF WORK
• ECONOMY POPULATION WEALTH
• PROPERTY PEOPLE LAND
• PROFESSIONAL CLIENT TIME
• PRODUCTION PEA PEAPOD
• BUSINESS CAUSE PROBLEM
• BUSINESS CUSTOMER COMPLAIN
 FIELD 20% 80%

• BUSINESS PRODUCT REVENUE

• BUSINESS CUSTOMER SALE
• BUSINESS ITEM SALE
• HEALTH PATIENT HEALTH CARE RESOURCE
• CRIME COMMITMET CRIMINAL CRIME
• TRAINING EXERCISE & HABITS IMPACT
• GAME COMPETITION SPORTMEN
• GAME SPORSMEN AWARD
• ROAD TRAFFIC TIME TRAFFIC
FIELD 20% 80%
HEALTH PATIENT HEALTH CARE
RESOURCE
CRIME COMMITMET CRIMINAL CRIME
TRAINING EXERCISE & HABITS IMPACT
GAME COMPETITION SPORTMEN
GAME SPORSMEN AWARD
ROAD TRAFFIC TIME TRAFFIC
 PRINCIPLE OF PARETO
80/20 RULE
• Risk is an issue identification and prioritisation tool
– Highlights critical items or processes within operation
– Prioritisation by risk allows better allocation of resources (Pareto
principle 80 20 rule)
• Spend money/effort where needed – maximum return
• Allows required speed of response to be identified
– High Risk – Immediate - NOW
– Low Risk - when convenient
– Prediction and Planning
• Inspection Programmes and Shutdown plans
• Maintenance Planning and Spares Policy
• Retirement, Replacement and Overhaul