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Tools and Techniques Paper

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Tools and Techniques Paper MGT/350 Critical Thinking Group Number LM04BSM01 Introduction A Pareto Chart is a series of bars whose heights reflect the frequency or impact of problems. The bars are arranged in descending order of height from left to right. The tall bars on the left are more significant than the small bars on the right. Pareto analysis is a very simple technique that does not require any statistics to use. Pareto analysis helps you choose the most effective changes to make no matter what problem you are having. The Pareto principle is known as the 80 / 20 rule, since 20 percent of something is always are responsible for 80 percent of the results. Project Managers know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of your time and resources. Pareto analysis is a formal technique for finding the changes that will give the biggest bang for the buck. It separates the "vital few" from the "trivial many". It is useful where many possible courses of action are competing for your attention. ...read more.


Again there is an action list of what is being done to correct the scrap condition on the top 20% with name and date. Pareto analysis not only shows you the most important problem to solve, it also gives you a score showing how severe the problem is. Above is an example of how we used Pareto analysis at my last company to determine where our biggest problems were. This chart shows the number of rejection tags over a period of time and the department that was responsible for the problem. It is very easy to see that Engineering is far and away the largest contributor of problems resulting in rejection tags. When information is presented to a group in this format there can be little doubt in anybody's mind what to attach first. The next question to answer is what kind of problems is the Engineering department having. This is a perfect opportunity to investigate the 35 rejection tags that Engineering was responsible for and see if they can be categorized into groups and then create a Pareto Chart. ...read more.


Conclusion Pareto Charts should be used whenever you need to break a big problem into smaller pieces. It can help you get the most improvement with the resources available by focusing the effort. The 80/20 Rule can be applied to almost anything, from the science of management to the physical world. Pareto Charts are a good tool to use when the process you are investigating produces data that is broken down into categories, and you can count the number of times each category occurs. No matter where you are in your process improvement efforts, Pareto Charts can be helpful. Early on they will help identify which problem should be studied, and later to narrow down which causes of the problem to address first. The Pareto Principle is not always the right tool to use however. Data can always be ranked and made into a Pareto diagram, but sometimes no single bar is dramatically different from the others. In those situations, you need to look for another way to categorize the data. Overall I find Pareto Charts to be one of the most valuable tools in problem solving. They are easy to construct and easy to communicate effectively what you want to achieve. ...read more.

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