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
New Great British Energy partnership launched
Crown estate help to turbocharge energy independence.
ECA Industry Awards 2024 shortlist revealed
22 leading businesses from across the electrotechnical and engineering services sector.
Government unveils Skills England strategy
Skills England to transform opportunities and drive growth.
New Government Hub for York Given Planning Green Light
For up to 2,600 civil servants, due for completion by 2028.
Construction Skills Certification Scheme cards
July update on Professionally Qualified and Academically Qualified Person Cards.
BSRIA Briefing 2024, November 22
Sustainable Futures: Redefining Retrofit for Net Zero Living.
The CLC on driving competency in the retrofit sector
Previously published roadmap on skills for net zero.
The first labour government King's speech in fifteen years
Construction industry reactions, support and some concern.
CIOB Retrofit of Buildings Technical Information Sheet
What retrofit is, the approach to be taken and processes to be followed.
Adapting Historic Buildings for Energy and Carbon Efficiency
Historic England advice note 18, free download published.
10 retrofit projects revisited 10 years after completion.
Information orders, building liability orders and SPVs
Key BSA terms and how they impact special purpose vehicles.
Listed despite problems with its design.
Zen and the art of cycling exploration.
Design Council Homes Taskforce launched
To support government 1.5 million homes target within UK climate commitments.