Pareto Analysis and Charts

• Various problem-solving tools are available for project selection

Pareto Analysis

• Developed by economist Vilfredo Pareto to explain wealth concentration.
• A methods analyst focuses on the few jobs causing most problems.
• Items of interest are identified, measured on a common scale, and ordered in descending order, creating a cumulative distribution.
• The 80-20 rule typically applies, where 20% of ranked items account for 80% or more of the total activity.
• 80% of total inventory is often found in just 20% of inventory items.
• Approximately 80% of accidents are attributed to 20% of jobs.

Pareto Charts

• A bar chart with the horizontal axis representing categories instead of a continuous scale.
• Categories often represent defects, errors, or the sources/causes of defects/errors.
• Bar height indicates the count or percentage of errors/defects.
• Bar height can also indicate the impact in terms of delays, rework, or cost
• Pareto charts help analysts identify categories with the biggest potential gains if addressed.
• Pareto charts helps analysts identify minor contributors to the problem.

Creating a Pareto Chart

• Collect data on different types or categories of problems.
• Tabulate scores to determine the total number of observed problems or total impact.
• Determine the counts or impact for each category.
• Combine small or infrequent problems into an "other" category, if applicable.
• Sort the problems by frequency or level of impact.
• Draw bars for each category, starting with the largest and working downwards.
• The "other" category should always be last, even if it's the shortest bar.
• Add the cumulative percentage line.
• Interpret the results

Interpreting a Pareto Chart

• Clear Pareto Effect shows a few problem categories accounting for most occurrences or impact.
• When present, improvement efforts should be focused on those key categories.
• No Pareto Effect indicates that no single cause or category is more important than any other.

Fish Diagrams

• Fish diagrams, also known as cause-and-effect diagrams, were developed by Ishikawa in the early 1950s.
• The diagram represents the effect as the "fish head" and the causes as the "fish bones."
• They spark creative thinking about the causes of observed problems.
• The emphasis is on thinking broadly about the process.
• They act as a method for identifying root causes of problems.
• Causes should ensure that everyone involved has a common understanding what that cause means.
• Major cause categories include Environment, Methods, Materials, Administrative, Machine, and Human.
• Ask "why does this outcome occur?" and then "why does that occur?" for each identified reason to get to the potential root cause.
• You should stop when the team has reached a potential cause that can be acted on.

Creating a Fishbone Diagram (FBD)

• Name the problem or effect of interest as specifically as possible.
• Write the problem at the fishbone "skeleton" head.
• Identify/Decide on the major categories for causes.
• Typical are the 6Ms: Manpower (personnel), Machines, Materials, Methods, Measurements, and Mother Nature (environment).
• Brainstorm more detailed causes and create the diagram.
• Review the diagram for completeness.
• Discuss the final diagram and identify the most critical causes for follow-up investigation.

Gantt Charts

• The Gantt chart was the first project planning and control technique developed in the 1940s.
• It emerged in response to the need to manage complex defense projects and systems better.
• A Gantt chart shows the anticipated completion times for various project activities as bars.
• Project activities are plotted against time on the horizontal axis.
• Actual completion times should be shown by appropriately shading the bars.
• Comparing the date against the line makes easy to determine which project components are ahead of or behind schedule
• Gantt charts forces the project planner to develop a plan ahead of time.
• Gantt Charts help show the progress of the project at any given time.
• Gantt charts are also useful for sequencing machine activity on the plant floor.
• Machine-based charts can include repair or maintenance activity.
• Machine-based charts represent scheduled downtime by crossing out the time period on the chart.

Job/Worksite Analysis Guides

• Job/worksite analysis guides are a method to identify any problems within a specific area, department, or worksite
• Before collecting quantitative data, the analyst should first walk through the area.
• This will determine the worker, the task, the workplace and the surrounding working environment.

PERT Charting

• PERT stands for Program Evaluation and Review Technique.
• A PERT chart, also called a network diagram or critical path method, is a planning and control tool.
• It graphically portrays the optimum way to attain some predetermined objective, generally in terms of time.
• Methods analysts use PERT charting to improve scheduling of tasks
• This is done through cost reduction or customer satisfaction.
• On a PERT chart, events (represented by nodes) show the start/completion of an operation/group of operations
• Each operation/group of operations in a department is defined as an activity, called an arc.
• Each arc has an attached number representing the time needed to complete said activity(days/weeks/months).
• Activities using no time/cost yet necessary to maintain correct sequence are called dummy activities
• Dummy activities are shown as dotted lines
• The minimum time to complete the entire project corresponds to the longest path from the initial to final node.
• This is termed as the critical path.
• Activities not on the critical path have some time flexibility, or freedom, which is the float.
• Float is defined as the amount of time a noncritical activity can be lengthened without delaying the project's finish.
• Crashing is when intent is to reduce projects completion time by concentrating on activities that lie on the critical path