From the course: Problem-Solving Techniques
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Conduct a Pareto analysis
From the course: Problem-Solving Techniques
Conduct a Pareto analysis
Now there's another big name in the world of problem-solving and that's Vilfredo Perito. Most people have heard of the 80-20 principle which is also known as the Perito principle, which started with the observation that 80 percent of the land in Italy was owned by 20 percent of the people. And this 80-20 rule applies to a lot of other things due to some maths that we won't go into here. For example 80% of your problems probably come from 20% of your customers and 80% of your problems will come from 20% of the causes. In other words there are a few underlying causes that are causing most of your problems. But what's the use of knowing this? Well the point is that if you focus on eradicating just 20% of your problems you'll save 80% of the cost, 80% of the time and money that they are costing you. So the first step is to work out what they are. You make a list of all your problems and work out the cost of each and then tackle the top ones. Examples of this will be to log all the reasons…
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