Our guest blogger, Steve Allen from ACL, looks at how to apply the Pareto Principle’s 80:20 rule in your business practices
"There is nothing quite so useless, as doing with great efficiency, something that should not be done at all."—Peter Drucker
|Italian Economist Vilfredo Pareto|
The original 80:20 observation is attributed to Italian economist Vilfredo Pareto who, in 1906, noticed that 80% of Italy's land was owned by 20% of the population. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied. He and others later discovered that this principle is proven in many other areas of interest:
- 80% of results come from 20% of effort
- 20% of your customers will account for 80% of your profit
- 80% of your sales come from only 20% of your total product line
The same is true of time expended for results achieved. Think of the benefits of applying the Pareto Principle to your time management and personal and business productivity!
Which one of these statements rings true for your business?
- 80% of your business comes from 20% of your customers
- 20% of your product or service range contributes 80% of your sales and likely 90% of profits
- 80% of customer complaints originate from 20% of the causes
- 80% of your business productivity loss results from 20% of the causes
- 80% of the value in the business is generated by 20% of the processes
It’s not just about working smarter—it's about working smarter on the right things that will get you the best results. Pareto rules allow us to launch the products we know our customers need (such as the industry top-selling items offered in our new PCB Electronics Rework/Repair Production Chemicals line), and that our key distributor partners and sales teams can effectively sell. 80:20 gives us insight into developing value-added products that solve real problems for our customers.
Q Source, once again, thanks ACL Staticide’s Steve Allen for his Guest Blog contributions to The Q Source Resource.
For information about ACL Staticide products, please visit our ACL Staticide Department at QSource.com. You may also contact us via email or phone at 800-966-6020 and one of our associates will be happy to answer your questions or assist you with an order.
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Steve Allen's Previous Guest Blogs