Manufacturing Improvement and the 80% Solution

When evaluating opportunities for Improvement, there is a surprisingly simple mathematical principle that might help make some selections easier.

The 80/20 principle is likely something that you already use or have heard about. It is based on a conclusion that a mathematician named Pareto came up with more than a hundred years ago that claims for many events, roughly 80% of the effects come from about 20% of the causes.

The Pareto Principle seems to work well in many manufacturing situations, and it is simple to confirm. For example, if looking at removing wasted time from a setup operation, a Pareto chart can show the distribution of causes that have the largest impact. If the principle holds true for your data, then roughly 20% of the causes will be the prime candidates for improvement. The example below shows that 20% (3 out of 15 causes) represent almost 80% of the delays.  A data export from your manufacturing system can provide this kind of data, provided that actual times are being captured in the system. The Pareto Chart is a standard report in Excel or Minitab.

A Pareto Analysis is a method that can be used to help determine where the critical 20% for improvement might be. With good manufacturing data, conducting a Pareto Analysis is straight forward and could help to visualize the impact of the most significant causes that contribute to your KPI’s.

Give it a try sometime...!

Matt.