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All you need to know about the Pareto principle and the 80/20 rule.

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What is Pareto Principle?

The original observation of the Pareto Principle was linked to the relationship between wealth and population. According to what Pareto observed, 80% of the land in Italy was owned by 20% of the population. After surveying a number of other countries, he found the same applied abroad. For the most part, the Pareto Principle is an observation that things in life are not always distributed evenly.[1]

The Pareto Principle helps to prioritize the problems which have been determined after conducting root cause analysis. It can be applied in various fields however it may not apply in some cases.

The 80/20 rule:

According to Pareto’s principle, The 80/20 rule can be applied to most business fields yet on a personal level:

  • 80% of customer complaints arise from 20% of your products and services.
  • 80% of delays in the schedule result from 20% of the possible causes of the delays.
  • 20% of your products and services account for 80% of your profit.
  • 20% of your sales force produces 80% of your company revenues.
  • 20% of a systems defects cause 80% of its problems.

The Pareto Principle has many applications in quality control. It is the basis for the Pareto diagram, one of the key tools used in total quality control and Six Sigma.

Applying Pareto Principle in business:[2]

Here are eight steps to identifying the principal causes you should focus on, using Pareto Analysis:

  1. Create a vertical bar chart with causes on the x-axis and count (number of occurrences) on the y-axis.
  2. Arrange the bar chart in descending order of cause importance that is, the cause with the highest count first.
  3. Calculate the cumulative count for each cause in descending order.
  4. Calculate the cumulative count percentage for each cause in descending order. Percentage calculation: {Individual Cause Count} / {Total Causes Count}*100
  5. Create a second y-axis with percentages descending in increments of 10 from 100% to 0%.
  6. Plot the cumulative count percentage of each cause on the x-axis.
  7. Join the points to form a curve.
  8. Draw a line at 80% on the y-axis running parallel to the x-axis. Then drop the line at the point of intersection with the curve on the x-axis. This point on the x-axis separates the important causes on the left (vital few) from the less important causes on the right (trivial many).

Example:

The following example outlines the number of causes which led to customers’ complaints during a period of 12 months:


[1] Chappelow  Jim, Pareto principle, 29 August 2019, Investopedia,dot-dash,  4 April 2020, https://www.investopedia.com/terms/p/paretoprinciple.asp

[2] Duncan Haughey, Pareto analysis step by step, 8 March 2020,  www.projectsmart.co.uk.

Mahmoud was born in March 1986 in Cairo, Egypt. Growing up with a passion for learning and helping others with the knowledge he earns and that led him to earn a bachelor of law in 2007 then a masters degree in public administration in 2012 followed by a doctorate degree in business administration in 2017, along with his exciting learning journey and dedicative career as a police officer he made his first step in the field training and development in 2012 with a momentum of learning and sharing knowledge with others. Therefore he has trained hundreds on all levels on managerial topics and administrative functions, also he has trained people from 50 nationalities during his service as a peacekeeper; that made him more open to other cultures and more embracive to diversity as another form of power along with knowledge which motivated him to found skilltecs.com as another milestone in his career as a researcher, learner, and trainer. With a mission to help and serve and a vision that skilltecs reaches the whole world and become a leading institution in knowledge production and delivery.

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4 Comments

4 Comments

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  2. skyhub

    January 20, 2023 at 10:13 am

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  3. seobanda

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  4. Natalia

    January 25, 2024 at 10:58 am

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Management Tools

The Ultimate Time Management System for Busy People

Manage your time effectively with this step-by-step system. Learn how to manage your time more efficiently so you can accomplish what matters most.

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Time management is an important skill for anyone who wants to succeed in life. This article will teach you how to use time wisely and effectively.

Time Management
The Ultimate Time Management System for Busy People

Set Goals.

If you want to become successful at anything, you need to set goals. You also need to make lists and prioritize tasks. These three steps are essential to managing your time well.

To be a better manager of time is setting goals. You should set goals for yourself every day. If you want to be successful at something, you must know what you want to accomplish. When you set goals, you are able to focus on one thing at a time. For example, if you want to lose weight, then you should set a goal to eat less than 1,500 calories per day. By focusing on one goal at a time, you will be able to achieve success.

Prioritize Tasks.

The first step to becoming a better time manager is to prioritize tasks. You should always be working towards accomplishing one task at a time. If you try to accomplish too many things at once, you won’t get anything done. When you work on multiple projects simultaneously, you end up spending less time on each project than if you had focused on one thing at a time.

To start, you should identify your top priorities. Then, make a list of everything else you need to do. Finally, set realistic deadlines for each task. This will help you stay focused and avoid procrastination.

Break Down Big Projects into Smaller Steps.

If you have a big project to complete, break it down into smaller steps. You can use a calendar to keep track of when tasks must be completed. Also, try to work on one thing at a time. It will help you focus on one goal instead of getting distracted by other things.

For example, if you want to write a book, you should first decide what chapters you want to include. Once you know which chapters you want to include, you can then determine how many pages each chapter will contain. You can then divide those pages into sections, and finally, you can create a table of contents. By breaking down your project into smaller steps, you will be able to accomplish much more than if you had simply started writing without planning ahead.

Plan Ahead.

To make sure you stay organized, plan out your day and week ahead of time. This helps you avoid procrastination because you know exactly what needs to be done.

You should plan ahead and set goals for yourself. When you know what you want to accomplish, you can better organize your day and get things done efficiently.

If you know what you want to accomplish during a certain period of time, then you can better manage your time. For example, if you plan to study for an exam, you should set aside enough time to complete the task. You should also be aware of the amount of time required to complete each assignment.

*Learn: How to manage Unplanned and Sudden Tasks in 6 Steps like a Master? – SKILLTECS

*Also learn more about planning here: All You Need to Know About Planning – YouTube

Create a To Do List.

Start by creating a list of everything you need to do today. Then prioritize each task based on its importance and urgency. If something isn’t urgent, put it off until later.

The most important step to creating a productive schedule is to create a to-do list. A to-do list helps you stay organized and focused on what needs to be done. You should write down everything that you want to accomplish during the day.

If you find yourself procrastinating, then you might want to add some tasks to your list. For example, if you know that you tend to put off cleaning until the last minute, then you could add cleaning to your list. Once you have created your list, try to stick to it. Don’t let other things distract you from accomplishing your goals.

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Business

5 Quality Management Principles Every Manager Must Understand

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People planning for quality management

Quality management is an approach that helps companies improve the products and services they offer. It focuses on improving processes, procedures, and systems in order to ensure that customers receive high-quality products and services.

However, Quality control is one of the most important aspects of business. If you want to be successful, you must focus on quality. You should always strive to provide the best product possible. Here are

The Five Ws of Quality Management

There are five key elements of quality management: what, who, when, where, and why. These five elements help define the quality of a company’s products and services.

What: What does the company produce? This includes its products and services.
Who: Who is responsible for producing the product or providing the service?
When: When do they need to deliver the product or provide the service?
Where: Where will the product or service be delivered?
Why: Why should people buy the product or use the service?

Six Sigma

Six Sigma is an approach to improving business processes by using statistical methods. It focuses on eliminating defects and reducing variation in production.

The goal of quality management is to eliminate defects from the manufacturing process. Defects occur when there is something wrong with the product or service.

For example, if a customer receives a defective car, then the manufacturer has failed to meet the customer’s expectations. In contrast, a defect-free car would be one where the customer received what he or she expected.

The Deming Cycle

Deming was one of the first people to apply the scientific method to manufacturing. He developed the concept of “quality circles” as a means of improving quality through teamwork. His work led to the development of the six-sigma process improvement methodology. It’s also known as Deming wheel or PDCA which stands for: Plan, Do, Check, and Act.

The Five S’s of Quality Management

The five s’s of quality management are:
1) Standardize – Make sure everything is consistent across your organization.
2) Simplify – Eliminate unnecessary steps and processes.
3) Speed up – Reduce the number of steps required to complete tasks.
4) Systematize – Create an organized system for managing your business.
5) Share knowledge – Provide training to employees so everyone knows how to do their jobs correctly.

The Six Ps of Quality Control

These six principles are used by companies to ensure that products meet customer expectations. They also help to improve the efficiency of operations and reduce costs.

These six Ps include planning, production, packaging, promotion, pricing, and post-sale service.

Planning is essential because if you don’t plan, then you won’t know what needs to be done. Without planning, you won’t know where to start. When you plan, you set goals and objectives. These goals help you determine what you want to accomplish. Once you’ve determined what you want to accomplish, you can create a plan to reach those goals. A plan includes specific steps that you’ll take to get there. For example, if you want to increase sales, you might write down five things you could do to increase sales. Each step has a purpose. Some steps will lead you closer to your goal while others will move you further away from it.

The second P stands for production. This includes the processes of transforming the raw material or data to an outcome or a product. A company cannot succeed without following proper processes. Without them, there would be chaos. For example, if a company does not plan properly, then it could end up wasting resources. Also, if a company does something wrong during production, then it could cause problems. Therefore, it is very important to follow proper processes.

Packaging is the how the company delivers its product to the customer. This step is crucial due to its impact on customers’ impression and their decision to buy the product. Packagin adds a value to the product and defines its image.

Promotion is a set of policies that interact and integrate with each other through the so-called promotion mix, which includes a number of
activities, which are:
– Advertising.
– Personal selling.
– Sales promotion.
– Publishing.
– Public relations. 

Pricing policy is intended to determine the appropriate price of a product in
accordance with the variables of supply and demand in the market, as well as the
ability of customers to purchase that product.
Post-sale service: it is as important as the production, as it may include setting up the product, maintenance, periodic service and even returns.
These factors’ quality should be well controlled and determined through strict standards.

Learn about marketing 8 Ps here: Fundamentals of Marketing and Promotion. – SKILLTECS and here: The 4 Ps and 8 Ps of Marketing – A Marketing Mix – YouTube

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Business

The Top 5 NASA’s Artemis Project Management Tools to Help You Manage Projects

Project management tools can help you manage projects effectively by providing information on tasks, deadlines, resources, costs, and other aspects of a project. The NASA Artemis program is a multi-year effort to land humans on the moon and beyond.
#projectmanagement
#NASA
#ARTEMIS

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Project management tools can help you manage projects effectively by providing information on tasks, deadlines, resources, costs, and other aspects of a project. The NASA Artemis program is a multi-year effort to land humans on the moon and beyond. Here are five project management tools that are used by NASA that made the Artemis program become reality while the whole world is witnessing the countdown to launch.  

Gantt Chart: 

A Gantt chart is a type of diagram used to show the progress of a project. It shows the start date, duration, and completion dates of each task. 

The Gantt chart is one of the most popular project management tools used today. It shows the progress of a project from beginning to end. Each task has a date assigned to it, and each task is linked to the next task. You can use a Gantt chart to see what needs to be done before a deadline, and you can easily track the progress of a project. 

Task List:

If you’re looking for an easy way to manage projects, consider using a task list. This tool allows you to organize tasks into categories and subcategories so you can easily see at a glance where you stand with respect to completing them. 

The NASA Artemis project management tool provides a task list that includes everything from project goals to project milestones. You can use the task list to keep track of what needs to be done, who needs to do it, and when it needs to be completed. 

Resource Planner – An online tool that helps you plan projects by tracking resources and costs: 

Another tool that will help you manage projects more effectively is a resource planner. A resource planner is a tool that helps you track the resources needed to complete a project. It also helps you estimate the cost of those resources. 

The Resource Planner is one such tool that provides project managers with a comprehensive resource planning solution. It allows users to create a project schedule, track progress, and monitor costs. Users can also use the Resource Planner to assign tasks to team members and keep track of who has completed what. 

Work Breakdown Structure (WBS) – A method used to break down large projects into smaller chunks. 

WBS is an effective planning technique because it allows you to identify the tasks required to complete a project. This makes it easier to plan for the work involved in completing the project. 

The WBS is one such tool that helps you organize your work breakdown structure. It breaks down the project into manageable pieces, which makes it easier to plan and execute the project. 

The WBS is one such tool that helps you organize your work breakdown structure. You can use it to break down a project into manageable pieces, which makes it easier to plan and execute each task. 

Calendar:

A calendar helps you keep track of deadlines and other events. It also lets you see when something needs to happen. If you need to meet with someone at a certain time, make sure you add it to your calendar, so you won’t forget. 
The calendar tool at NASA’s website provides a visual representation of the entire project timeline. You can see what tasks are due next, which ones are completed, and which ones are currently being worked on. 
 

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