Today’s post is a continuation of our blog series on Joseph Juran, “Architect of Quality.”1 We’re going to take a look at the Pareto principle, which is one of Juran’s most widely used contributions to quality management.
Juran developed the Pareto principle after studying the work of Vilfredo Pareto. Pareto was an Italian economist, who observed that 80% of the land in Italy was owned by 20% of the population, and the continuation of his research showed that global distribution of wealth followed the same pattern.2 Juran was the first to apply this concept to the field of quality management, and he named the principle after Pareto.3 The Pareto principle, also known as the 80-20 rule or the law of the vital few, states that approximately 80% of the consequences result from 20% of the causes.4 Other useful ways of applying this principle to business are that 80% of a business’s profits likely come from about 20% of its customers, or that roughly 80% of complaints are voiced by 20% of customers. Juran referred to these populations as “the vital few and the trivial many.”3 He later realized that the other 80% of causes (or customers, etc.) should not be ignored, and that there was still useful knowledge to be gained by investigating them. He then began to refer to them as “the vital few and the useful many.”3
The Pareto principle has become a central tenet of quality management. It is the foundation for the Pareto chart which is used in quality control and Six Sigma practices. This principle has broader applications as well, including prevention of occupational safety hazards in a manufacturing environment and resolving errors in product development. I’ve even read about it being used in research regarding healthcare reform and criminology. Have you used (or heard about someone using) the Pareto principle in a unique way?
- Juran, Joseph M. (2004), Architect of Quality: The Autobiography of Dr. Joseph M. Juran (1 ed.), New York City: McGraw-Hill.
- Phillips-Donaldson, Debbie (May 2004), "100 Years Of Juran", Quality Progress (Milwaukee, WI: American Society for Quality) 37 (5): 25–39.
- Stephens, Kenneth S. (2005), Juran, Quality, and a Century of Improvement, Milwaukee, WI: American Society for Quality, 72.
- Bunkley, Nick (2008-03-03), "Joseph Juran, 103, Pioneer in Quality Control, Dies", New York Times.