{"id":18449,"date":"2025-02-05T10:00:19","date_gmt":"2025-02-05T09:00:19","guid":{"rendered":"https:\/\/ezfactory.nl\/?p=18449"},"modified":"2026-04-13T09:50:34","modified_gmt":"2026-04-13T08:50:34","slug":"pareto-analysis-process-optimization-with-the-80-20-rule","status":"publish","type":"post","link":"https:\/\/ezfactory.nl\/en\/knowledge-base\/pareto-analysis-process-optimization-with-the-80-20-rule\/","title":{"rendered":"Pareto analysis: Process optimization with the 80\/20 rule"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text]The Pareto analysis is one of the most important analyses to perform if you aim for process optimization. Many factories are already familiar with this term. But what exactly is a Pareto analysis? And how can you perform one yourself? In this blog, we will guide you through the steps!<\/span><\/p>\n

What is the Pareto analysis?<\/span><\/h2>\n

The Pareto analysis, developed by Vilfredo Pareto and later refined by Joseph M. Juran, focuses on the relationship between causes and problems. The essence of Pareto analysis is to look closely at the causes of problems using the 80\/20 rule. This rule states that 80% of problems can be traced back to 20% of the key causes. By using this analysis, you can solve a large proportion of problems by addressing a small number of critical causes, making it easier to eliminate major issues by focusing on a few root causes.<\/span><\/p>\n

Why use the 80\/20 rule?<\/span><\/h2>\n

The 80\/20 rule derived from Pareto analysis is often used to set better priorities and work more efficiently, especially in process improvement and <\/span>process confirmation<\/b><\/a>. By focusing on the 20% of causes that lead to the majority of problems, you can achieve the greatest impact with the least effort. The benefits of the 80\/20 rule can be summarized in terms of efficiency, time savings, and focus \u2013 all interconnected aspects. By tackling the most important tasks first, you maximize results and avoid wasting time and resources on less significant causes. Additionally, you can bring more effective focus to the process, acting strategically on the factors most crucial for rapid improvements. Thus, the Pareto principle can be applied for various reasons but will always lead to greater efficiency, time savings, and focus for the organization.<\/span><\/p>\n

How to perform a Pareto analysis?<\/span><\/h2>\n

To dive deeper into the Pareto principle and make the most of a Pareto analysis, there are a few standard steps to follow. These four steps ensure that you use the Pareto analysis effectively in practice. You can easily perform a Pareto analysis yourself by following these basic steps:<\/span><\/p>\n

1. Identify the problems<\/span><\/h3>\n

Gather as much input as possible that reflects potential problems. This can be done through interviews, reports, and observations by yourself or employees. By listing all the problems, you can start grouping them by type and cause. Include a cause-effect theory in this step to get a complete picture.<\/span><\/p>\n

2. Determine the order of urgency<\/span><\/h3>\n

Use a Pareto chart to organize all problems and causes in a way that the most significant cause of the biggest problem is at the top. A Pareto chart (bar graph) allows you to quickly see which cause is associated with which problem. Arrange the bars from high to low to establish prioritization.<\/span><\/p>\n

3. Assign a score to each problem<\/span><\/h3>\n

Once all problems are identified, and causes are prioritized using the Pareto chart, you can assign a score to each problem. Do this in a way that problems heavily impacting the company’s success receive the highest score. For example, look at how a problem affects profitability or customer satisfaction. The problem with the most significant impact will receive the highest score on the Pareto chart.<\/span><\/p>\n

4. Group problems and sum the scores<\/span><\/h3>\n

Combine all causes that lead to the same problem into a group. Then, sum the scores of the different groups to identify which group has the highest score \u2013 and thus the highest priority. This is where the most gains can be achieved when it comes to process optimization.<\/span><\/p>\n

Example of a Pareto analysis<\/span><\/h2>\n

If performing a Pareto analysis for your organization seems like a good idea, but you are unsure what it looks like in practice, the following example can provide inspiration:<\/span><\/p>\n

In a factory that produces metal parts, frequent production errors have been causing extra time and costs. These errors are identified during <\/span>audits<\/b><\/a> but have also been noticed by customers. The management initiates an investigation following the Pareto principle to determine the causes of these errors. The Pareto analysis reveals that 80% of the errors indeed stem from just 20% of the causes. After collecting all data in a Pareto chart, the most common causes appear to be:<\/span><\/p>\n