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We doff our hat to Vilfredo Pareto

The Pareto Principle is most commonly known as the 80-20 rule. You can read the history and details about it here. It takes little research, and even less experience, to know that old Vilfredo was onto something. Like it or not 80% of break/fix circumstances come from 20% of your customer base, or 20% of your equipment fleet. But which 20%?

You see, it's easy enough to measure your break/fix activities for a period and draw line under the 20% of machines that caused so much work. But let's look at it another way.

Just because 20% of the equipment under your service responsibility creates 80% of your work, does not mean that that particular 20% should receive priority attention. What is a better response is to take a second measurement. What 20% of equipment creates 80% of our income? That's the 20% to prioritise.

Now we all know that to focus on the squeaky wheel is only good as a short term solution, and such a policy is not sustainable in the long term, but keep this in mind.

With net profit for many service businesses and departments running at single digit percentages, it makes good business sense to ensure the income producing equipment gets the priority when it comes to workshop times and availability of service personnel. After all, there is no point having a perfect service record for equipment that does not make a substantial contribution to the bottom line, while essential machinery lies idle waiting for its scheduled rest in the workshop.

You may think that this is a ludicrous situation and no thinking service supervisor would allow this to happen, but this is precisely the risk if we allow our CMMS to govern our every-day activities without keeping a broader view in mind.

Posted by Mark Chimes
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