Re: Deming's 80/20 Rule

[David_Davis@mail.bankone.com]

The Pareto diagram is named after Vilfredo Pareto, a 19th-century Italian
economist who postulated that
a large share of wealth is owned by a small percentage of the population.

As Ian has stated, actual figures do not exactly meet the 'principle' but, in
general it applies to nearly all
areas of life:
     80% of the wear on a carpet is in 20% of the area it covers on the floor
     20% of the items in inventory produce 80% of the orders | 80% of the value
of the entire inventory
     20% of all recipes you know constitute 80% of the meals you eat...

The value is in the concept that you don't need to 'boil the ocean' to get much
closer to the solution you
want to achieve and an appropriate analysis of your problem and the causal
factors will generally lead
you to a few highly significant factors that can changed to achieve your goal.

A web site that you might want to refer to is:

http://www.dartmouth.edu/~ogehome/CQI/Pareto.html

The reference from Deming may be:  "The Deming Management Method" pp105-107.

Dave Davis
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