The pareto principle
The pareto principle is about the idea that about 80% of results can be related to 20% of the causes. The principle comes from Joseph Juran, who based his work on Vilfredo Laredo. He saw that the 80-20 rules apples to a lot of different situations in life, work and at home. This principle is of course not a law of nature. So it will not always be true. But it is a very helpful way of prioritizing which root causes to tackle first. When you are doing a root cause analysis with Kepner-Tregoe or an Ishikawa diagram you may end up with an endless amount of root causes. With the 80-20 principle you can start making choices about what to do and avoid being distracted by causes with little effect. You can also use the pareto first and then use Kepner-Tregoe or the Ishikawa diagram to dive deeper into the most important root causes. Which way you work will depend on the complexity of the problem and personal preference.
When you understand the basic principle you can then use it in analysis by following these steps:
- 1Start identifying and measuring the root causes of the problem. You can use the root cause analysis tools and if necessary a data collection plan. Put the root causes in a table.
- 2Sort the root causes in descending order of importance. The first row contains the root cause with the biggest effect on the problem. The second row contains the root cause with the second biggest effect on the problem etc.
- 3Give a score to each of the root causes based on how much they contribute to the problem. You base the score on the measurements you have. The first column of the table is the root cause, the second column contains the score regarding the root cause and the third column you add the scores to a cumulative score until you reach 100% (or close to it).
- 4Group the root causes that belong together in the same category. Make sure the categories group together relevant root causes, without making the category too big (everything HR related in one category). A good rule of thumb is to divide the root causes based on wether they can be solved in the same kaizen. You can now visualize the results in the well known chart.