The Aspects of Quality
It is difficult to gauge the extent to which the 80 - 20 principle is already known in business. You can find several hundred articles referring to the use of 80 - 20 in all kinds of businesses, all over the world. Many successful firms and individuals swear by the use of the 80-20 Principle.
The quality revolution which took place between 1950 and 1990 transformed the quality and value of branded consumer goods and other manufactures. The quality movement has been a crusade to obtain consistently higher quality at lower cost, by the application of statistical and behavioral techniques.
The objective, now almost reached with many products, is to obtain a zero rate of product defects. It is possible to argue that the quality movement has been the most significant driver of higher living standards throughout the world since 1950. The 80 - 20 Principle was one of the key building blocks of the quality movement. It was applied to statistical quality control. The approach is to identify the problems causing lack of quality and to rank them from the most important—the 20 per cent of defects causing 80 per cent of quality problems—to the least important.
Once the ‘vital few’ sources of off-quality product have been identified, effort is focused on dealing with these issues, rather than trying to tackle all the problems at once. As the quality movement has progressed from an emphasis on quality ‘control through to the view that quality must be built into products in the first place, by all operators, and to total quality management and increasingly sophisticated use of software, the emphasis on 80 - 20 techniques has grown, so that today almost all quality practitioners are familiar with 80 - 20. Out of 1,000 customer complaints roughly 800 can be eliminated by correcting only 20 per cent of the causes. The 80 - 20 Principle is also being increasingly applied to product design and development. For example, a review of the use that the Pentagon has made of total quality management explains that: Decisions made early in the development process fix the majority of life cycle costs. The 80 – 20 rule describes this outcome, since 80 percent of the life-cycle costs are usually locked in after only 20 percent of the development time.
The impact of the quality revolution on customer satisfaction and value, and on the competitive positions of individual firms and indeed of whole nations, has been little noted but is truly massive. The 80 - 20 Principle was clearly one of the ‘vital few’ inputs to the quality revolution. But the underground influence of the 80 - 20 Principle does not stop there. It also played a key role in a second revolution that combined with the first to create today’s global consumer society.