Pareto Analysis
Introduction
Pareto chart identify the vital few and trivial many (e.g. ABC analysis )and highlights problems that should be given attention. This is graphical picture of the relative frequencies of different types of quality problem with the most frequent problem type obtaining clear visibility. Pareto analysis is a very simple technique that helps you to choose the most effective changes to make.

It uses the Pareto principle the idea that by doing 20% of work you can generate 80% of the advantage of doing the entire job*. Pareto analysis is a formal technique for finding the changes that will give the biggest benefits. It is useful where many possible courses of action are competing for your attention.

To start using the tool, write out a list of the changes you could make. If you have a long list, group it into related changes.

Then score the items or groups. The scoring method you use depends on the sort of problem you are trying to solve. For example, if you are trying to improve profitability, you would score options on the basis of the profit each group might generate. If you are trying to improve customer satisfaction, you might score on the basis of the number of complaints eliminated by each change.

The first change to tackle is the one that has the highest score. This one will give you the biggest benefit if you solve it.

The options with the lowest scores will probably not even be worth bothering with solving these problems may cost you more than the solutions are worth.

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