Page 199 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

170 Chapter Seven

and power to be unequally distributed. This observation has been refined to
the degree that it can be said that there is an 80/20 percent relationship
between similar elements.

For example, 20 percent of the parts in an assembly contain 80 percent of
the cost. This is very useful information in cost estimating; however, the
relationship holds for many diverse examples such as the following:
Twenty percent of the states use 80 percent of the fuel oil.
Twenty percent of the activities create 80 percent of the budgeted
expense.
Twenty percent of the items sold generate 80 percent of the profit.
In value engineering it is frequently necessary to select the best ideas, the
highest value functions, the highest potential projects, or any of a number of
other requirements. It has been found that the application of Pareto voting
can help to simplify the list and will, in most cases, ensure that the most
important items have been selected. It also produces results quickly and can
be incorporated into the value-engineering process to allow continuous
operations without undue disruptions.

Pareto voting is conducted by requesting each team member to select what
they believe are the items or elements that have the greatest effect on the
system. This list of items is limited to 20 percent of the total number of
items. For example, each team member would be allowed to select 6 items
out of a list of 30. The vote is taken on an individual basis to obtain as much
objectivity as possible.
The resultant lists are then compared and arranged into a new consolidated
list, in descending order, by the number of votes each item received. Usually,
several items will have been selected by two or more team members. The top
10 to 15 items are then ranked and weighted in a second step by using paired
comparisons.

Example 7.7: Pareto Voting
This example refers to the idea generation form used in Table 7.10. A team
of six people will conduct a Pareto voting on the nine ideas; each member
can only vote for two ideas, so a total of 12 votes will be received. The
number of votes for each idea will be tallied; the result is summarized in
Table 7.15.

Paired Comparisons
Paired comparisons, or numerical evaluation as it is sometimes called,
compares a list of items to rank and weights them in order of importance or