Pareto analysis management

I have seen this type of analysis used in supply chain management in several ways. One is to determine which material should be looked at for consolidation or replacement. The products are selected and then the chart can be drawn up in pounds and/or dollars to determine the priorities. I have used both so that I can see any significant changes in the charts. This is a very useful tool to help with managing costs as well. The costs that make up a product price can be analyzed by Pareto analysis to see which are the major ones and then you can begin to look at reduction possibilities. 

Figure 2.15 Pareto Analysis of Production Cost and Manufacturing Expenditure Source Nagashlma, S., 100 Management Charts (1987), Tokyo Asian Productivity Organisation.

Tools and Techniques for Operations and Production Management 181 49. Pareto Analysis... 

The Pareto chart is an established tool for problem analysis and problem solving. The 80/20 rule holds in chemical processing as well as in hard-goods operations. Using this simple tool can improve your problem-solving skills as an engineer or manager. After all, if we can become better... 

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