Pareto Chart Usage in an Organization

 

Pareto Chart Usage in an Organization:

 

The Pareto Principal (80/20 Rule)

1. Just the observation, not the law.
2. 20 and 80 must not necessarily add to 100.
3. The 80/20 Rule states that in anything a few (20%) are vital and many (80%) are trivial.
4. 20% of the input creates 80% of the result
5. In a company, 80 percent of the sales will come from 20 percent of the sales staff.
6. 20% of the persons will cause 80% of the problems, but another 20% of the Persons will provide 80% of the production. It works bidirectional.
7. E) Serve as a daily reminder to focus 80 percent of our time and energy on the 20 percent of our work that is important.

 

How is 80/20 Rule Useful in an organization?

 

1. Reminds us to focus on the 20 percent that matters because those 20 percent produces 80 percent of the desired result.
2. 20% of workers contribute 80% of results: Focus on rewarding these employees.
3. 20% of bugs contribute 80% of crashes: Focus on fixing these bugs first.
4. 20% of customers contribute 80% of revenue: Focus on satisfying these customers.
5. The concern is to realize that you can just concentrate on your effort upon the 20% that makes a big difference, instead of the 80% that doesn’t add much value to the process.

 

Introduction to Pareto Analysis Diagram:

1. Graphical overview of the process problems.
2. Ranking order – most frequent, down to the least frequent.
3. Bar charts are arranged in descending order of height from left to right which carries the cumulative frequency.
4. Bars on left relatively more important than those on right.
5. Illustrates the frequency of fault types.
6. It Separates the 20% “vital few” from the 80% “trivial many”.
7. Breaks a big problem into smaller pieces and identifies the biggest contributors.
8. Based on pareto principle- 80% of the output in a given situation or system is produced by 20% of the input.

 

Example : Machine Repair Instances- Which is the highest repaired machine?

 

 

 

Steps Followed to use pareto :

 

1.Identification of major causes/reasons leading to Machine Repairs.

2. Observe the Frequency of occurrence of each and every cause.
3. Calculation is done to obtain Cumulative Frequency from the frequencies happened.
4. Computation of Cumulative Percentage

 

 

 

 

 

Through this data Pareto Chart can be made

 

1. On X-axis, reasons are plotted.
2. On Y-axis Ë Right sided axis depicts Frequency.
3. Represented using Bars.
4. Left sided axis depicts Cumulative Percentage
5. Represented using dotted lines.

 

Causes that accounts for 80% of the Problems are: Which are the 20% Machines which are mostly repaired.

 

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   Neurostim 4ch. EMG Console

From This Pareto Learning is:

1. The Pareto Principle helps us to realize that the majority of results come from a minority of inputs in any process or in any organization.
2. Help us to put our effort on 20% that makes a difference, rather than on 80% that don’t add much.
3. Assist us to resolve factors which do not require as much attention and time as others.
4. For instance, while preparing a report, it is the drafting process that contributes the most. Although the report will be tagged ‘complete’ only after final fair copy has been prepared, but it is the content that is of value which is assembled while preparing draft

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