Pareto analysis in construction
Pareto analysis is a statistical decision-making technique that identifies a limited number of input factors as having a greater impact on outcomes, whether they are positive or negative. It is based on the Pareto Principle, popularly known as the ‘80/20 rule’, that stipulates that 80% of the outputs result from 20% of the inputs.
The principle was developed by Vilfredo Pareto, a 19th century Italian economist and sociologist who was researching wealth distribution. He subsequently discovered the 80/20 rule applied to areas outside of economics, for example, 80% of the peas in his garden were produced by only 20% of the peapods planted.
Pareto analysis can also be used as a project management tool. For example, the majority of problems (80%) are produced by relatively few causes (20%); and 80% of the project’s benefits are delivered through 20% of the work.
Put simply, Pareto analysis shows that a disproportionate improvement can be made by ranking the various causes of a problem and allocating resources to tackling those that have the largest impact.
In construction, there may be a problem with the project programme that is the result of a large number of causes. Through observation and the collection of data, it might be determined that there are 8 causes. Pareto analysis may show that 80% of the problems result from the top 2 or 3 causes. The project management team can then plan an appropriate response, targeting resources at those 2 or 3 causes, rather than all 8.
A Pareto diagram (or chart) can be used to present the analysis, helping the project team to focus on the inputs with the greatest impact.
Inputs are listed along the horizontal ‘y’ axis in descending order of output frequency (using the cumulative percentage of the outputs), and uses a line graph to chart them. The vertical ‘x’ axis measures the frequency of the output for each input, and uses a bar graph to chart them.
In the example diagram, it can be seen that 42% of the issues are related to installation, and that three of the categories; installation, software faults, and shipping, account for 79% of the issues.
[edit] Related articles on Designing Buildings
- Acceleration.
- Benchmarking.
- Contingency theory.
- Critical path method.
- Gantt chart.
- Key performance indicators.
- Line of balance (LOB).
- Milestones.
- Plan, Do, Check, Act (PDCA).
- Project crashing.
- Project manager.
- Project quality plan PQP.
- Quality in construction projects.
- Quality Management System.
- Resource leveling.
- Time-location chart.
- Time management.
- Value management.
- Work breakdown structure
[edit]
Featured articles and news
Quality Planning for Micro and Small to Medium Sized Enterprises
A CIOB Academy Technical Information sheet.
A briefing on fall protection systems for designers
A legal requirement and an ethical must.
CIOB Ireland launches manifesto for 2024 General Election
A vision for a sustainable, high-quality built environment that benefits all members of society.
Local leaders gain new powers to support local high streets
High Street Rental Auctions to be introduced from December.
Infrastructure sector posts second gain for October
With a boost for housebuilder and commercial developer contract awards.
Sustainable construction design teams survey
Shaping the Future of Sustainable Design: Your Voice Matters.
COP29; impacts of construction and updates
Amid criticism, open letters and calls for reform.
The properties of conservation rooflights
Things to consider when choosing the right product.
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.