From the course: Quality Management Foundations
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
Pareto analysis
- Most of us have heard of the 80/20 rule. In most companies 80% of profits are made by only 20% of the products. Formally this is called the Pareto Principle, which states that approximately 80% of effects come from 20% of the causes. For example, customers often complain, and most of those complaints come from a small group of the customers. From a quality standpoint, those few customers are much more important than the others. Total customer satisfaction can be greatly improved by identifying those few customers, researching the exact reasons for their complaints, and eliminating those issues. You can also use this rule in factory operations to find quality issues and improve performance. There's a handout in the exercise files, and I'll use it to explain Pareto analysis. In this example we're trying to find out whether most of quality problems in a particular factory are coming from a few specific machines, or if there's a bigger issue at hand. Now, this is what Pareto analysis…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.