Rethinking the 80–20 Rule

There’s a better approach for prioritizing projects

Everyone in the quality world is familiar with the famous 80–20 rule for corrective action project prioritization. The “rule” suggests that 20 percent of the causes result in 80 percent of the effects or in technical terms, the principal of factor sparsity. For the engineer this can be thought of as an admonition to focus corrective action efforts on “the vital few and not the trivial many.”

Joseph Juran was the first person to popularize this idea, which he inferred from what he called the Pareto principal. Vilfredo Pareto was a 19th-century Italian economist whose study of the distribution of wealth in Europe showed that wealth was concentrated in the hand of a few, and that 80 percent of the land in Italy was owned by 20 percent of the people.

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Comments

25 or 6 to 4 (Chicago)

Or: "Money, Money, Money". Do we ever think of "a SOUL of a project"? People working at it are not only identified and measured by means of USD income, they are "people", in the first place: the success of a project doesn't only depend on the amount of money - or time - that's put in it. There's another weight on its balance, a weight that's rather heavy: the weight of the "belief" the people working at the project have in it. You may say it's almost a question of "faith": yes, it is. History tells us that the most daring - and successful - projects were, and are, a question of "heart", rather than a question of charting data. And Mr. Pareto himself, as far as I know, developed his 80-20 (or 90-10) theory out of "feelings", rather than numerical data. Thank you.

Juran/Gryna

Juran and Gryna wrote a book on Quality Planning that covers the use of the Pareto analysis to dig into the data for the most important projects. They used an example from a paper mill trying to reduce "broke" (off-quality paper) due to many reasons on several grades of paper.

dazed and confused....

I am confused by the tagline of this article. I had read and reread looking for a better approach than a Pareto analysis. Is perhaps the theme of this article more that many people and organizations look only to occurance when there are perhaps more suitable measures of performance?

In my experience, occurance has been the least favorable measure of any problem. I have found that the best measures are a balance of multiple facets (both quantitative and qualitative) and the combination of those facets, collectively, makes for a great basis to perform a Pareto analysis to truly lead a company in the direction it wants to go.