- Problem Recognition
A relative has owned a barber shop for quite some time now and he has noticed that all though the business was picking up in the first couple of years it is now in a downhill trend. He set out to find out why and what could be done to flip this around. He setup a survey to figure out what were the key reasons that his customers weren’t coming back.
- Development the Feasible Alternative
The following key complaints were collected and categorized through the survey he had setup.
- Hygiene level
- Friendliness of the employees
- Efficiency of employees
- Wait time
- Other complaints
- Development of the Outcome for Alternative
|Number of complaints||Cumulative number||Cumulative percentage|
|Friendliness of the employees||24||24||32|
|Efficiency of employees||16||40||54|
Table-1 categorized customer’s complaints with cumulative No. & percentage
- Selection of Criteria
Pareto principle, also known as the 80-20 rule, this rule can be further explained as that most things in life are not distributed evenly. It can mean all of the following things:
- 20% of the input creates 80% of the result
- 20% of the workers produce 80% of the result
- 20% of the customers create 80% of the revenue
- 20% of the bugs cause 80% of the crashes
- 20% of the features cause 80% of the usage
- Analysis and Comparison of the Alternative
Figure-1 Pareto Chart
- Selection of the Preferred Alternative
From Pareto chart, by focusing at the employees’ friendliness and their efficiency he can solve 80% of customers’ complaints.
- Performance Monitoring and the Post Evaluation of Result
Implementing the Pareto chart is not a one stage operation the business owner should look at making the changes concluded from the first assessment and then hold another assessment to see if those changes have affected the results or more actions need to be taken in order to resolve the customer complaints.
- How To… Create a Pareto Chart in Excel 2010, retrieved on August 2014http://www.youtube.com/watch?v=TBtGI2z8V48
- Pareto Analysis, retrieved on August 2014 http://www.mindtools.com/pages/article/newTED_01.htm
- Bassard, Michael & Riter, Diane (2010). The Memory Jogger 2nd Edition, Canada, GOAL/QPC
- Pareto Chart, retrieved on August 2014 http://www.excel-easy.com/examples/pareto-chart.html