When performing Kaizen events as well as the traditional DMAIC processes, I have used Pareto analysis for multiple activities. I have also used it for daily report outs and period reviews on project status. The idea of focusing on the largest issue or those that constitute 80% of the output is a great tool to get a team up to speed and work on the biggest impact items. I have found that it is not always the best tool. In the three (3) types of uses above, there are other considerations that need to be taken into account.

Kaizen Events are critical to kick-start a process improvement. Going to the process and walking it, there is no better way to see the process in the quickest time possible. When it comes down to pick the best site to run the event, I run a Pareto Analysis on sites with the biggest opportunity or biggest volume or “most important” to the business. Using this criteria, you would think you could find the best place to run the project. What I also look at is the culture of the site and the team ready to make the potential changes. Without the site willing to move in a direction, it really won’t matter the “opportunity.”

The Analyze phase of DMAIC creates a priority list of root causes that are directly related to the goal. This is a classic use of Pareto and this will give you a good representation of the y is a function of x. What I find is that while this is good for the team to see and review the information / knowledge, there is also another aspect that needs to be thought through. This is the aspect of what can be implemented. I have had numerous occasions where the largest little x was so difficult for the organization to move on, that the root cause or potential benefit had to be curtailed and the Improve phase was dealing with the diminished returns on the top items and mitigating the overall project impact by adding smaller items to get the majority of improvement.

When reporting out results on a project or just informing the team on progress, the Pareto Analysis can show improvement and changes to the process easier than other tools and graphs can. Sometimes, though, depending on the data set, you need to scrub the data before the chart is run. This is because the “other” category overwhelms the other items. Until this is dealt with, the chart is of limited value.

Pareto Analysis is one of the best ways to represent data and help a team decide what to work on. One needs to be careful and follow some basic rules to using this tool effectively and ensure the tool doesn’t lead you down a path that doesn’t lead to real continuous improvement.

 

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