Applicability of 3/4 measures

Why is there a “3/4 petrol tank” rule that all Singapore drivers need to assiduously observe when crossing into Malaysia using Singapore registered cars? Other than the obvious fiscal and political background to the rationale of the policy, do you ever wonder, how this “3/4” measure, not a dab more or a pinch less, was decided?

Ideally, Singapore Customs would love to implement a full tank measure but the impracticability of maintaining a filled tank and cross the checkpoint after a long queue, is both a fools’ errand and mere wishful thinking.

So a more pragmatic compromise of “3/4 tank”, which without fail work, all fuel indicators reflect and is simply confirmed via a cursory glance with minimal effort is a happy compromise. Simply a short form of 3/4 tank, like a handful or a finger length is universally understood, irrespective of individual digit length or palm surface, sufficient to get a common middle ground.

80:20 versus 75:25

In Business, 3/4 measures, while easy to calculate are detrimental to costing or as overhead matrices. Other than numbers divisible by 2, 5 and the numbers themselves, we end up with decimal numbers pdq.

The Praeto principle recommends an 80:20 split instead. The Pareto principle states that 80% of effects arise from 20% of the causes – or simply – 20% of your actions/activities will account for 80% of your results/outcomes.

How to

Pareto analysis is a ranked comparison of factors related to a quality problem and is a statistical decision-making technique used for the selection of a limited number of tasks that produce a significant overall effect. It helps to identify and focus on the vital few factors.

Pareto diagrams and tables are presentation techniques used to show the facts and separate the vital few from the useful many. They are widely used to help project teams and steering committees make key decisions at various points in the RCCA sequence.

A Pareto diagram displays the relative impact each contributing factor has on the overall problem. It ranks the sources from largest to smallest and shows the total cumulative impact for the two largest, three largest, etc.

Essentially, the Pareto Principle states that sources of a problem can be divided into two categories:

• The vital few: A small number of sources that account for most of the problem.

• The useful many: The large number of remaining sources that individually and collectively account for a relatively small part of the entire problem.

The Awkward zone is when there is not a clear breakpoint between the vital few and useful many.

When diagnosing the cause, it makes sense to look for the vital few and not to become distracted by the useful many. A Pareto diagram is helpful at this point. By ranking the impact of several factors on a given effect, it reveals the most significant sources of a quality problem. These sources should be investigated further.

Regardless of the form chosen, well-constructed Pareto diagrams and tables include three basic elements:

1.             The contributors to the total effect, ranked by the magnitude of their contribution

2.             The magnitude of the contribution of each expressed numerically

3.             The cumulative-percent-of-total effect of the ranked contributors

Summary

Pareto analysis leads a project team to focus on the vital few problems or causes of problems that have the greatest impact on the quality effect that the team is trying to improve. In Pareto analysis, facts are gathered and attempt to find the highest concentration of RCCA potential in the fewest projects or remedies. These offer the greatest potential gain for the least amount of managerial and investigative effort.