What is the Pareto principle?
Named after economist Vilfredo Pareto, the principle says that for many outcomes, a minority of inputs (the “vital few”) produce the majority of results, while the majority (the “trivial many”) produce little. Joseph Juran brought it into quality management.
How to do a Pareto analysis
- Pick the outcome — revenue, complaints, defects, costs.
- Group by cause or category.
- Sort from largest to smallest.
- Calculate cumulative percentages.
- Draw the Pareto chart (bars + cumulative line).
- Focus effort on the categories that make up ~80%.
80/20 in practice
- 20% of customers often generate ~80% of profit.
- A few product lines drive most of the wastage.
- Three complaint types make up most complaints.
- A handful of suppliers cause most late deliveries.
Common mistakes to avoid
- Treating 80/20 as an exact ratio.
- Ignoring the trivial many entirely — some may be strategic.
- Analysing once instead of regularly.
How DOOfy helps
Pareto analysis is quick when data is connected. AIMOS One can rank customers, products, costs and issues automatically, so the vital few are always visible.
Frequently asked questions
Is the 80/20 rule always exactly 80 and 20?
No. It's a pattern of imbalance — it could be 70/30 or 90/10. The point is that a few causes matter most.
What is a Pareto chart?
A bar chart sorted from largest to smallest, with a line showing the cumulative percentage, used to identify the vital few causes.