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80/20 Rule (aka 80:20 Rule or 80 20 Rule)

 
 

By Kerri Simon

Vilfredo Pareto was an economist who is credited with establishing what is now widely known as the Pareto Principle or 80/20 rule. When he discovered the principle, it established that 80% of the land in Italy was owned by 20% of the population. Later, he discovered that the pareto principle was valid in other parts of his life, such as gardening: 80% of his garden peas were produced by 20% of the peapods.

Some Sample 80/20 Rule Applications

  • 80% of process defects arise from 20% of the process issues.
  • 20% of your sales force produces 80% of your company revenues.
  • 80% of delays in schedule arise from 20% of the possible causes of the delays.
  • 80% of customer complaints arise from 20% of your products or services.
    (The above examples are rough estimates.)

    Related References

  • Vilfredo Pareto History
  • Pareto Chart

     

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    About iSixSigma Military

    The purpose of this iSixSigma Military channel is to document the transformation of the United States Armed Services through the use of Lean Six Sigma and related process improvement methodologies.

    Ronald E. Rezek, special assistant to the acting secretary of the Army, has said the goal of the Army's Lean Six Sigma deployment is to "make the business side of the Army as efficient as the war-fighting side is effective." Leaders of the other armed services echo that sentiment and transformation objective.

    This portal will serve as a central community for everyone associated with the business transformation of the U.S. military. It will provide communication updates on deployments, the opportunity for military leaders at all levels to learn new skills, advance their careers and contribute to the success of their organizations.