Pareto analysis in construction
Pareto analysis is a statistical decision-making technique that identifies a limited number of input factors as having a greater impact on outcomes, whether they are positive or negative. It is based on the Pareto Principle, popularly known as the ‘80/20 rule’, that stipulates that 80% of the outputs result from 20% of the inputs.
The principle was developed by Vilfredo Pareto, a 19th century Italian economist and sociologist who was researching wealth distribution. He subsequently discovered the 80/20 rule applied to areas outside of economics, for example, 80% of the peas in his garden were produced by only 20% of the peapods planted.
Pareto analysis can also be used as a project management tool. For example, the majority of problems (80%) are produced by relatively few causes (20%); and 80% of the project’s benefits are delivered through 20% of the work.
Put simply, Pareto analysis shows that a disproportionate improvement can be made by ranking the various causes of a problem and allocating resources to tackling those that have the largest impact.
In construction, there may be a problem with the project programme that is the result of a large number of causes. Through observation and the collection of data, it might be determined that there are 8 causes. Pareto analysis may show that 80% of the problems result from the top 2 or 3 causes. The project management team can then plan an appropriate response, targeting resources at those 2 or 3 causes, rather than all 8.
A Pareto diagram (or chart) can be used to present the analysis, helping the project team to focus on the inputs with the greatest impact.
Inputs are listed along the horizontal ‘y’ axis in descending order of output frequency (using the cumulative percentage of the outputs), and uses a line graph to chart them. The vertical ‘x’ axis measures the frequency of the output for each input, and uses a bar graph to chart them.
In the example diagram, it can be seen that 42% of the issues are related to installation, and that three of the categories; installation, software faults, and shipping, account for 79% of the issues.
[edit] Related articles on Designing Buildings Wiki
- Acceleration.
- Benchmarking.
- Contingency theory.
- Critical path method.
- Gantt chart.
- Key performance indicators.
- Line of balance (LOB).
- Milestones.
- Plan, Do, Check, Act (PDCA).
- Project crashing.
- Project manager.
- Project quality plan PQP.
- Quality in construction projects.
- Quality Management System.
- Resource leveling.
- Time-location chart.
- Time management.
- Value management.
- Work breakdown structure
[edit]
Featured articles and news
Restoring Broadbent’s Bath House
A new gallery for the University of Huddersfield.
Corruption in the construction industry.
What will it take to stop it ?
To celebrate world bee day 2022 !
Just one month until the changes to part L come into effect.
Not forgetting part F and the new part overheating part O.
Heat Pump demand rises by one quarter.
As energy prices jump up in cost.
With people in the UK from Ukraine.
Industry leader Steve Murray takes on role.
An abundant and versatile building material.
How overheating complicates ending gas in the UK.
600,000 heat pump installations targeted per year by 2028.
Cost planning, control and related articles on DB.
Helping prevent those unwanted outcomes.
ICE debate Public transport - post pandemic.
How has transport changed due to Covid-19 ?
Cross-ventilation in buildings. Do you have it ?
Will you need it ? after June 15 and the new Part O ?
Share your knowledge with the industry.
Create an account and write the first of many articles.
The green jobs delivery group.
CIAT commentary after the first meeting.
Liverpool's world heritage site status
Who is to blame?
Research recommends focussing on portfolio success rather than project success.
ICE and BSI launch revised PAS 128 standard.
The revised standard for mapping underground utilities.