Using Pareto for Supply Chain employees.
Back in 1906 ,in the land of Pasta and Pizza, known as Italy, lived a business economist called Vilfredo Pareto and thru doing what economist do, he discovered some pretty interesting ideas.
Such as, that 80% of Italy was owned by 20% of the people and found this to be true for the rest of Europe.
He even found that 20% peas he grew in his garden gave him 80% of his yield.
And so the idea of the 80:20 mathematical rule was born, or as Vilfredo called it, “the vital few and the trivial many”.
He also had an awesome beard!
(To watch video version please click here http://productiveminds.com.au/2015/07/pareto/ )
40 year’s later the Pareto Principle prompted Joseph Juran an Engineer and Business Consultant to see if this 80:20 theory could be applied to business.
So he began to apply this theory to quality issues that occurred in businesses, for example, 80% of a problem is caused by 20% of the causes.
So if we are talking about managing people in the logistics or warehousing industry then and we used the Pareto or 80:20 rule then it follows that about 20% of your staff are going to cause you 80% of your day to day pain in the butt problems!
Like, how much fun is it turning up to work on Monday morning to find out that once again, Jimbo’s forklift has remoulded the air curtain doorway…and not in a nice energy conserving way!
Or what about that evening shift supervisor who once again didn’t provide staff sick leave backfill for that “big” order due this morning…and your phones already ringing from Boris at the security gate about stuffed up entrance passes for suppliers!
And while it seems to make perfect sense to focus your problem solving skills on these employees lets not forget the other key ingredient of Joseph Juan’s new improved Pareto Principle-… applying the human relations aspect to quality management…Such as not to totally ignore the rest of the workforce or the “vital few” in management’s attention. 
Good “people management” will use a variety of negative and positive behaviour reinforcers and will be as effective as the workplace culture will allow.
So if 20% of your employees are generating 80% of your productivity then they may welcome some company love and be recognized for it!
It just might prompt some of your Eighty percenters to move up to that elite club as well…which can’t be such a bad thing for all concerned!
And you don’t have to grow a bushy beard or plant peas to prove it!
Love peas,
Chris Richardson
