Pareto Diagram Flashcards
is a technique used for business decision-making, but it also has applications in several different fields from welfare economics to quality control.
Pareto analysis
Pareto analysis based largely on the
“80-20 rule.”
statistically separates a limited number of input factors—either desirable or undesirable—which have the greatest impact on an outcome.
Pareto analysis
is premised on the idea that 80% of a project’s benefit can be achieved by doing 20% of the work—or, conversely, 80% of problems can be traced to 20% of the causes.
Pareto analysis
is a powerful quality and decision-making tool.
Pareto analysis
Italian economist
Vilfredo Pareto
who discovered that 80% of the land in Italy was owned by just 20% of the people in the country.
Vilfredo Pareto
was formally defined as follows: The top 20% of a country’s population accounts for an estimated 80% of the country’s wealth or total income..
80-20 rule
Romanian-American business theorist
Joseph Juran
discovered Pareto’s research in 1937
Joseph Juran
Juran proceeded to rename the 80-20 rule as
“Pareto’s Principle of Unequal Distribution.”
used to determine which issues cause the most problems within different departments, organizations, or sectors of a business.
Modern-day applications of Pareto analysis
to save the most scarce resource in the business, which is time, in the area of solving problems.
Pareto analysis
Here is a basic breakdown of the steps of Pareto analysis:
1.Identify the problem or problems
2.List or identify the cause of the issues or problems, noting that there could be multiple causes
3.Score the problems by assigning a number to each one that prioritizes the problem based on the level of negative impact on the company
4.Organize the problems into groups, such as customer service or system issues
5.Develop and implement an action plan, focusing on the higher-scored problems first, in order to solve the problems
product design and quality defect prevention to identify potential factors causing an overall effect.
Ishikawa diagram
diagram is named after its creator(Ishikawa Diagram)
Kaoru Ishikawa.
diagram’s structure resembles the
skeleton of a fish.
represent the causes of an event
ribs
indicates the outcome.
skeleton’s head
Ishikawa diagrams are sometimes referred to as
fishbone diagrams
They are also referred to as
Fishikawa, herringbone diagrams, or cause and effect diagrams
organizes information into six categories: man, machine, material, method, mother nature, and measurement.
6M diagram
6M diagram six categories
man,
machine,
material,
method,
mother nature, and
measurement.
it could be used to identify bottlenecks slowing down the manufacturing process in a candle business.
6M diagram
organizes information into
eight categories: procedures, policies, place, product, people, processes, price, and promotion.
8P diagram
8P diagram eight categories
procedures,
policies,
place,
product,
people,
processes,
price, and
promotion
It is most commonly used in the manufacturing industry
6M diagram
It is most commonly used in the service industry.
8P diagram
organizes information into
four categories:
suppliers,
systems,
surroundings, and
Skills.
4S diagram
4S diagram four categories:
suppliers,
systems,
surroundings, and
Skills.
It is most commonly used in the service industry.
4S diagram
For instance, a restaurant could use it to determine why the number of customers has declined over the past year.
4S diagram
How to make an Ishikawa diagram
Identify and agree on the exact problem
Document the problem.
Brainstorm the major categories of causes.
Identify potential causes of the problem.
Analyze the diagram.
represents the problem statement
fish’s head
horizontal line resembles the
fish’s spine
