You may know it as “the Pareto principle,” “the 80/20 rule,” or “the vital few and the trivial many.” Whatever you call it, this concept can save you time and money.

Funny thing is, it wasn’t really created by that guy named Pareto, a 19th century Italian economist to whom it is often attributed. Pareto calculated that about 20 percent of the people had about 80 percent of the wealth. Now you will find the concept generalized far beyond what its namesake intended.

In the world of quality control, the concept is applied to defects: A small percentage of root causes are responsible for the majority of the defects. This generalization beyond economics was popularized by J.M Juran, a pioneer in quality control.

Juran wrote: "Years ago I gave the name Pareto to this principle of the 'vital few and trivial many.' On subsequent challenge, I was forced to confess that I had mistakenly applied the wrong name to the principle. This confession changed nothing — the name Pareto principle has continued in force, and seems destined to become a permanent label for the phenomenon."

Data on how often problems occur can be tracked 
using a bar chart.

Making it work for you

How can it save you time and money? By helping you, your co-workers and your staff focus on what’s most important and ignoring the distractions.

Suppose your pressroom is experiencing an unacceptable amount of downtime in the form of press stops and delays. You’ve looked at the causes and there are many. Where do you start to solve the problem? Gather your data. You need to find the “vital few” causes of downtime, so you eliminate those causes. In this case, your pressroom reports are a good source of data. They have data about press delays, press stops, their durations and causes.

Look at how often the problems occur in a month, then gather the data in a bar chart.

A more accurate assessment will consider not just the number of press stops, but the total downtime and the cost of newsprint wasted. The labor cost is a function of downtime and the newsprint wasted on restarts is mainly a function of the number of stops. By adding how many copies are wasted during a press restart to your page count and newsprint costs, you can calculate an average cost per restart. Put the labor and the material cost together in a simple, sorted bar chart, often called a Pareto chart, such as the chart above.

Obviously, web breaks deserve attention. In this example, web breaks alone make up a majority of the labor and newsprint costs associated with downtime measured over the sample month. Color registration problems add another substantial percentage.

In looking for solutions to the problem of web breaks, use the Pareto principle again to analyze and prioritize the root causes for the web breaks. Look at manpower, materials, measurement, methods and machinery — the traditional “5 Ms” — to find the root causes. Again, these can be prioritized by cost and you usually find a large percentage of costs associated with a small percentage of causes. Of course, things that can be immediately fixed should be, but when investment alternatives must be chosen, the Pareto principle, used with quality costs, can guide you.

Beauty is simplicity

This simple example is familiar to most pressroom managers, and certainly many newspapers have very rigorous quality improvement programs in the pressroom that go far beyond these techniques. But what about the rest of the newspaper? The beauty of using the Pareto technique is simplicity, and it can be applied in any part of the newspaper.

For example, suppose you need to reduce credits to advertisers due to ad errors. You need to identify the vital few causes that lead to the greatest cost of errors. Start by gathering your data. In this case, you may have access to historical data about what errors were the causes for credits to advertisers. It’s common to see reasons like these: errors in the text of an ad, ads not authorized by the customer, poor printing quality, wrong size and so on.

Once the defects are categorized and counted, a picture begins to emerge. Again, there are costs besides labor to consider. In this case, the amount of money credited back to the advertisers can be very significant, so that should be used in ranking the severity of the problems. Draw a simple, sorted bar chart to show the results. This makes the problems obvious and can focus energy toward the most valuable solutions.

Tom Arnold is a managing partner of Summit Media Partners L.L.C., a management consulting firm serving media companies. Send comments and queries to tarnold@smpllc.com or visit www.summitmediapartners.com.