Construction of Pareto chart. Pareto chart in practice

No one wants to waste energy in vain. We strive to improve the efficiency of his subordinate, enterprise, technology in the end. And no matter at what cost do we achieve this. One of the most simple and intuitive methods of assessment of effectiveness are recognized as the construction of a Pareto chart.

History of the “magic” proportions

In the late nineteenth century someone Vilfredo Pareto, engaged in the study of Economics, decided to investigate the structure of the distribution of wealth among the British. The result of his stunned: it turned out that 20% of the UK population own 80% wealth of the whole country. Deeper research showed that the principle of ‘minority belongs to a larger" extended to the remaining 20% of the wealth: 5% owns 50% of the capital, and 10% - 65% of all wealth. Amazed, the scientist began to test his theory on people in other European countries, and came to the same results - the construction of a Pareto chart gave the same frequency distribution.

However, to generalize the obtained data and formulate some regularity, he failed. So the theory went unnoticed. Again appealed to her in 1949. George K. Zipf, Harvard Professor, discovered the law, according to which about 80% of the results give only 20% effort. At the same time, the American Joseph Juran, working on the problem of release of defective products, has again obtained the proportion of 80/20. Publishing the results of their research, Yuran formulated the law “little of importance”. Thus, the Pareto law was rediscovered and received a clear statement.

However, U.S. Industrialists were not ready to adopt a rule of Pareto and Juran went with lectures in Japan. There are heads of the enterprises agreed with the conclusions of the scientist and the notion of “Pareto chart in quality management”. It should be noted that before the 70-ies of XX century this technique was used only in Japan. And only after almost 20 years, when the products produced in Japan, became a serious competitive threat to American goods, Yurana invited US to get acquainted with the theory of Pareto.

The Pareto principle and life

Having made the statement that 20% of efforts bring 80% result, you can rethink what is happening. Most of us think that the more movements (efforts) we make, the more success you will achieve in life. We believe that all our friends were equally important (and necessary) for us, that all customers bring equal income and, accordingly, must be expended the same effort to contact everyone.

However, on reflection and after studying the data the Pareto chart, we come to different conclusions. We redistribute efforts and literally become freer and happier. The work does not seem so exhausting, and chat with buddies – painful. Studying the causal relationships of their actions, we come to the conclusion that a very small part of the activity gave a truly significant result. And all the rest – superficial and unnecessary.

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The Pareto principle in marketing

In the early 60-ies of XX century the staff of IBM it was discovered that most of the time the computers spend in processing the minimum number of operations. The identification of these expensive from the point of view of time a task will significantly increase the performance of the equipment. This means that the Pareto chart, an example of which was the basis of the techniques from IBM, allowed to beat the competition and increase sales.

Generally, when managers accept the fact that the maximum profit comes from a small number of clients, the company began visibly to progress - and, in terms of sales growth and for the improvement of staff loyalty (the recognition of the fact that not every client is the same, it releases a lot of energy managers). In addition, a study of the Pareto chart allows you to direct efforts on those products and industries which will give the maximum increase of income will enable the company to win competitive in all wars.

To put up and take

As we have already noted, the most difficult – to accept the truth the fact that 80% of our actions does not bring the expected result. Heads of companies often require their managers exactly the same relations to all customers, but the analysis of the Pareto chart will give the usual sales the result: the bulk of clients are provided with active managers, but not the income of the company.

Therefore I say that leaders must come to terms with the idea of “free time” employees. Should unify the work of the majority of our customers, to develop common principles of communication with them and service their orders. This will allow you to focus on larger customers and significantly increase sales.

Analysis of the quality of production

In 1979 the Japanese Union of scientists and engineers has completed the list of recommended methods of quality control of the enterprise the analysis of Pareto charts. Practitioners developed two types of analysis: the results of activities and causes problems.

The First is used when the task is to identify the main problems leading to undesirable results. The second is designed to search for the mainthe reasons for the poor performance of the company. In both cases, you need to build a Pareto chart for a visual understanding of what is happening in the enterprise processes and efficient resource allocation.

Actually, the analysis requires a little bit: clearly articulate the problem, to identify all the factors and collecting specific statistical data, to name the root cause of the problem. For clarity, all statistics are displayed in chart form. Next, you need to take measures to eliminate (change) the negative element.

Theory into practice

Easy to say – apply the Pareto method. But what steps should I do where to start to really effectively analyze the situation? How to build a Pareto chart? Here not to do without experience and intuition, but the beginner should not be afraid to analyze. The first step is to understand what issues (problems, causes) to explore; how to classify them and what information to collect.

At this stage the inexperienced analysts appear fears: but all I have considered, and how significant will be the information collected, etc. But by applying the Pareto principle to your activities, remember: 80% of activity gives 20% of results. So do not be afraid, and at first should be as detailed as possible to fix all the reasons why. Over time you will learn to intuitively select the really big sources of problems.

Having made the decision to gather information necessary to develop the registration card statistics. This is usually a questionnaire or table in which are recorded data, recorded with certain time intervals. This data is then summarized and plotted in the plane as points. For acceleration to be still at the stage of processing the received information to integrate (merge) the most similar results.

Transfer the information on paper

To build the Pareto chart, you need to prepare the table to which to make Ranzhirovanie research results. Taking into account the frequency of the appearing of the sign. The data in the table should be entered in descending order (again, to speed up the process).

The Training plane plotting involves applying two vertical scales and one horizontal. The left vertical axis determines the number of manifestations of one or another factor, and the right describes the percentage. On the horizontal axis in descending order of frequencies is applied to all factors. In the end, there should be a bar chart.

Then you should conduct a cumulative curve – to connect the dots above the bars determining the percentage factor (focusing on the right axis) curve. Pareto chart built! Next, you analyze the results, identify the “little of importance” and optimize the activities of the company.

Important

• You Need to increase only by several parameters; it is not necessary to grasp all at once.
• You first need to engage the resources (factors) that have the greatest impact on the productivity of the company.

  

• Throughout the process of building a chart to do the analysis, trying to discard all irrelevant. Even with no experience, the analyst's intuitive understanding of what is really important and what – not.

The Pareto Law can be used everywhere

The Modern theory argue that there is no universal method of evaluation «everything» - the Pareto chart. Sample of company in any field is no surprise. Modern professionals have suffered the proportion of 80/20 in all spheres of our life.

In the self, for example, it is recommended to deal with the fact that it is simple and easy. These minimum efforts can give maximum results. Time management offers to perform his busy day and reveal “useless” actions. You will really be surprised to find a lot of free time.

Even more interesting to apply the Pareto principle in your personal life. Viewing the contacts list in your phone, you will easily be able to identify those 20% and need interesting people who help you grow. Psychologists recommend to get rid of the other 80% of the bonds. And what can we say about the things that surround us in everyday life! The view that a thing not demanded within the year, will never come in handy – is not new.

Use the Pareto law – and life will become more interesting and more colorful!