W10_Nasser_PARETO Analysis
1-
Problem Recognition
During the life of a
project, there are some problems may the project faces and it could affect its
life cycle. Most of these problems is different from one to another depends on
the followings:
- causes of the problems themselves
- The effect of the problem
- The size of its impact on the specific phase and the whole project.
To look at the causes
and impacts of any problem, the decision maker needs to use an effective tool
and technique. One main that can be used in identifying the main causes and impacts
of any problem is the PARETO Analysis.
In this blog 10, I am
going to use the PARETO tool to analyze one main problem that my department
faces some months while processing the monthly invoice which is the accuracy of
the plant model- Fuel Demand Model (FDM) while running it- which is used in
calculating the Fuel charge.
2-
Feasible alternative
The Pareto Analysis,
also known as the Pareto principle or 80/20 rule, assumes that the large
majority of problems (80%) are determined by a few important causes 20%).The
founder of this analysis, Italian economist Vilfredo Pareto,
discovered this when he was carrying out a study at the end of the 18th century
in which he ascertained that 20% of the Italian population owned 80% of the
property.
In order to use the
PARETO analysis, it is important to the frequency of occurrence of each cause
(the number of time that the department face this cause), and the impact of
such cause on the result of the FDM Run (increase in the figure of that
specified technical element (X figure) - technical data used in calculating the
FC), which may cause huge deduction on the charge.
Picture from: http://www.engineeredgains.com/pareto-principle-bodybuilding/
3-
Development of the outcome of Alternative
In the above the case,
in order to solve the problem and get accurate results from the plant model and
then get accurate calculations in the monthly invoice without facing any
difficulties and to avoid may be any deduction because of the non-accurate
results from the model, it is important to identifying and determining the main
causes and issues that develop this problem. Because identifying and solving
the small causes will help in mitigation or avoiding the occurrence of the
large problem. The main causes of the mentioned problem are:
- Problem A: Accuracy of additional data- Gross data for each GTs, and STs of the whole plant- that is used as inputs data to the model. (Input data).
- Problem B: Accuracy of -Net data for each GTs, and STs of the whole plant- provided in the invoice that used as input data
- Problem C: Accuracy of equations developed in the Model.
- Problem D: design of the model.
4-
Selection Criteria
There are number of
issues that cause the main problem which is the Non-Accurate Results from the
FDM as I mentioned above. The major issues that cause 90% of all the
non-accurate FDM result will be listed in tables and Pareto Chart. The rest of
the issues are minor and affecting the performance by 10%.
5-
Analysis and comparison of the Alternative
Table 1 shows the main
issues that cause the non-accurate FDM results which affects on the calculation
of one specific charge in the invoice.
Table1: RANDOM data (for
the purpose of explanation only)
PARETO Chart 1: represent the data mentioned in table
1
Below is Table 2 shows
the main issues that cause the non-accurate FDM results which affects on the
calculation of one specific charge in the invoice. It shows more calculations
on the percentage of occurrence of each issue and the percentage of cumulative
of issues:
Table2: RANDOM data (for the purpose of explanation
only)
PARETO Chart 2: represent the data mentioned in table
2
6-
Selection of the preferred Alternative
From the above chart,
it clear that the first 2 issues which they are ( non- accurate Gross Data of
the units in the plant (GTS, STs), and the non-accurate NET data of the units
and ambient conditions), have the highest percentage, which indicate that they
are the main causes of the occurrence of the problem. So the one way that can
be used in order to mitigate or avoid the huge deduction which is because of
the non-accurate FDM results is to provide the accurate data of Gross and Net
Production of each unit, and accurate data of the ambient conditions. That mean
these data shall be checked and reviewed before submitted to the FDM.
7-
Performance Monitoring and the Post Evaluation
of result
PARETO analysis tool
is very helpful technique which helps the projects manager or the team member
(who is responsible of doing such small projects) to identify the causes of
most of the problems the process is facing. By identifying the causes of the
problem, this will help in reducing the occurrence of the problem or avoiding
the occurrence at all.
8- Reference:
- Fahad Usmani (2017), What is a Pareto Chart?, Retrieved 25 November 2017, from https://pmstudycircle.com/2015/06/pareto-chart/
- Pareto Analysis Diagram including an example and template | ToolsHero. (2017). ToolsHero. Retrieved 25 November 2017, from https://www.toolshero.com/problem-solving/pareto-analysis/
- GUILD OF PROJECT CONTROLS COMPENDIUM and REFERENCE (CaR) | Project Controls - planning, scheduling, cost management and forensic analysis (Planning Planet). (2017). Planningplanet.com. Retrieved 20 November 2017, from http://www.planningplanet.com/guild/gpccar/risk-opportunity-monitoring-and-control
????? Sorry Nasser but where is your CASE STUDY? You did a great job telling us about Pareto but what this blog is about is where you get to showcase to me how you are using this tool/technique in your day to day working environment.
ReplyDeleteBad news.... I have to reject your posting with the suggestion that you find a REAL PROBLEM in your working environment and then show us how you are going to use Pareto to help you solve this problem.
BR,
Dr. PDG, Jakarta