Post on 03-Jan-2016
description
transcript
Pareto Principle
“The Vital Few and Trivial Many Rule”
“Predictable Imbalance”
“80:20 Rule”
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
• 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
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.
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.
A Pareto chart is a useful tool for graphically depicting these and other relationships
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 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.
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 Fewor
80% - The Trivial Many
True progress results from a consistent focus on the 20% most critical objectives.
the
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?
Although the idea is quite simple, to gain a working knowledge of the Pareto Principle and its application, it is necessary to understand the following basic elements:
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.
Defect Press
22x28
Press
38” 2-C
Press 77” 5-C
Press
77” 4-C
Total
Defects
Color
Variation
550 430 234 476 1690
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
Pareto Analysis of Printing Defects
Pareto Diagram
The Category Contribution, the causes of whatever is being investigated, are listed across the bottom, and a percentage is assigned for each (Relative Frequency) to total 100%. A vertical bar chart is constructed, from left to right, in order of magnitude, using the percentages for each category.
Pareto Diagram is a combined bar chart and line diagram 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
Pareto Diagram of Total Printing Defects
0
500
1000
1500
2000
2500
Col
or v
aria
tion
Mis
regi
ster
Hic
keys
Oth
er
Scu
ffin
g
Exc
ess
Spr
ay
Defect
To
tal
def
ects
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
100
200
300
400
500
600
700
800
Col
or v
aria
tion
Mis
regi
ster
Hic
keys
Oth
er
Exc
ess
Spr
ay
Scu
ffin
g
Defect
Pre
ss 2
2x28
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
100
200
300
400
500
Col
or v
aria
tion
Hic
keys
Oth
er
Mis
regi
ster
Exc
ess
Spr
ay
Scu
ffin
g
Defect
Pre
ss 3
8' 2
-C
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
50
100
150
200
250
300
350
Col
or v
aria
tion
Hic
keys
Mis
regi
ster
Exc
ess
Spr
ay
Oth
er
Scu
ffin
g
Defect
Pre
ss 7
7" 5
-C
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
100
200
300
400
500
600
700
800
Col
or v
aria
tion
Mis
regi
ster
Scu
ffin
g
Oth
er
Hic
keys
Exc
ess
Spr
ay
Defect
Pre
ss 7
7" 4
-C
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Relative Frequency
[(Category Contribution) / (Total of all Categories)] x 100 expressed in bar chart form.
Cumulative Frequency
[(Relative Frequency of Category Contribution) + (Previous Cumulative Frequency)] expressed as a line graph
Break Point
The percentage point on the line graph for Cumulative Frequency at which there is a significant decrease in the slope of the plotted line
Vital Few
Category Contributions that appear to the left of the Break Point account for the bulk of the effect
Trivial Many
Category Contributions that appear to the right of the Break Point, which account for the least of the effect.
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:
• 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 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
To Create a Pareto Chart:
Select the items (problems, issues, actions, defects, 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.
Draw a bar graph where the height is the
measurement you selected.