As business seeks to improve processes, the concern that arises is where to focus. The Pareto Principle and the application of a Pareto Diagram is one technique that can be utilized to separate the vital few from all of the other noise in regard to data from a process.

1. The Pareto Principle: Separating
Out The Vital Few From The
Many
Rahul Laxman Iyer
ASQ Certified Quality Engineer
Mesa AZ USA
Http
http://www.linkedin.com/in/rahuliyer
11/03/2015

2. What Is The Pareto Principle?
● For many events, roughly 80% of the effects
come from 20% of the causes
● A principle applied in modern business and
quality
● Provides a methodology to separate the
noise from the data when making decisions
● Adopted in many processes, particularly in
manufacturing

3. History of The Pareto Principle
● Coined by Joseph M Juran, a Management
Consultant
● Named after economist Vilfredo Pareto,
University of Lausanne
– 1896: published a paper Cours d'économie
politique
– Showed the 80% of the land in Italy was
owned by 20% of the population
– Showed that 80% of the germinated peas in
a garden come from 20% of the peapods

4. Application of The Pareto
Principle
● Translated Into a Pareto Diagram
– Graphical Technique & Statistical Technique
– Use to Identify the vital few (20%) of causes
to focus on
– Quality Assurance & Automotive Industry
was an early adopter

5. The Pareto Diagram
● Example of a Pareto Diagram for Manufacturing &
Quality
No
Bonds
Splits/Tears
Pinching
IncorrectLength
M
issing
Clips
W
orn
0
20
40
60
80
100
120
140
0
20
40
60
80
100
Extruded Rubber Automotive Door Seals Nonconformances
Nonconformance (nonconformance)
NumberofNonconformingParts(qty)
PercentageofNonconformances(%)
The point representing 80 / 20
regarding the effects verses
causes

6. Results Achieved by Applying The
Pareto Principle
● Learn Where the Bulk of The
Nonconformances Occur in a Process
● Learn Where to Apply the Limited
Resources to Target Improvements
● Learn Where to Apply the Limited
Resources to Obtain the Greatest Return on
Investment (ROI) Regarding any Quality &
Process Improvements

7. Conclusion
● Definition of The Pareto Principle
● History of The Pareto Principle
● Application of The Pareto Principle
● The Pareto Diagram
● Results Achieved by Applying The Pareto
Principle

8. Contact Me!!!!
● I want to help your organization to Improve
Quality, Reduce Delivery Times, and Save
You Money
● Rahul Iyer, ASQ-CQE
● https://www.linkedin.com/in/rahuliyer
● 220 North 22nd Place Unit 1008
● Mesa AZ 85213-8380 USA
● Tel: +1-623-570-2848
● rahulduong@cox.net