by Terrence O'Hanlon, Publisher and CEO Reliabilityweb.com and Uptime Magazine
“Moneyball:
The Art of Winning an Unfair Game (ISBN 0-393-05765-8) is a book by Michael
Lewis, published in 2003, about the Oakland Athletics baseball team and its
general manager Billy Beane.
Its focus is the team's analytical, evidence-based,
sabermetric approach to assembling a competitive baseball team, despite
Oakland's disadvantaged revenue situation. A film based on the book starring
Brad Pitt was released in 2011.”1
The basic idea is using stats like On Base percentage and
Slugging percentage, the A’s built title contending teams with 1/10th
the player budget as teams like the Yankees and Red Sox whose rosters were
filled with drama educing Home Run hero’s.
Like the A's Moneyball techniques, there are many reliability statistical methods available for
you to guide your actions and activities.
“You must work on the vital few
things that influence results while ignoring the trivial many things that do
not materially alter performance. You must know the vital few things to
correct to get big improvements for your operations. This concept is true
for reducing cost, improving quality, or solving business problems. Build
your list using dollars not the number of
problems.
Solving
problems requires a breakthrough in your thinking to get improvements.
You must separate the vital few details from the trivial many items.
Vital problems are difficult to solve and produce good results. Trivial
problems are fun to solve, never put your reputation at stake, and produce few
results.”2
J. W. Anson said:
Fixing major problems on the
Pareto list requires effort, time, and perseverance. Solving vital
problems puts your reputation at stake on high profile tasks for big
gains. Winners work on the vital few problems.
Losers work on trivial problems
without getting big gains.
Working on trivial problems makes pretty exhibits without chances for
failure. Pareto distributions assign eye-catching activities on trivial
problems into last place.
Working on the vital few
problems results in major gains on the most important projects! This
is an important competitive key for any manufacturing operation.
Use the Pareto principle with
these action steps:
- Sort problems in descending order from the most important to the least important—use $’s cost whenever possible.
- Start work on the top 10% to 20% of the things which produce the vitally important improvements.
- Ignore 60% to 80% of the things on the bottom of the lists—they’re the trivial problems producing few gains.
- Solve the really big problems at the top of the $ list—then sort the list again to revise the priorities.
- Use continuous improvement programs to chip away at the big ticket items for a never ending stream of changes.
Fix the
vital few problems for important gains.
Pareto principles result in: Ranking
problems in the order of their importance (use money rather than occurrences)
for establishing work priorities. Winners in an organization work on the
vital few problems that change the results for the business. Losers in an
organization work on the trivial few problems, which produces no gains.
Set-up your breakthrough plans and make important changes for improvements in
your area using Pareto principles. 2
Here is an example of a Pareto Chart
Here is an example of a Pareto Chart
Will you use Moneyball techniques (like Pareto’s 80/20 rule)
to become a reliability contender or will you count on your hero’s to deliver
the results?
Footnotes:
2) H. Paul Barringer, Pareto Principle http://www.barringer1.com/anvil_files/anvil04.htm
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