Page 54 - E-Patrika 3rd Edition English

e-Patrika Postal Training Centre, Vadodara

THE 80/20 PRINCIPLE
THE 80/20 PRINCIPLE

The 80/20 Principle is named after an Italian economist Vilfredo Pareto. The
80/20 Rule or The Pareto Principle is the observation that 80% of effects and

outcomes come from 20% of causes and inputs. In 1896 Vilfredo Pareto
observed that about 80% of Italy's land was owned by 20% of the population
and similarly he saw that 20% of his plants produced 80% of his fruits. This is
how the principle of Pareto or The 80/20 Rule was introduced to the world.

This principle is applied and used in various fields such as Economics,
Computing, Occupational Health and Safety, Engeneering and Quality Control,
Health and Social Outcomes. For eg. In businesses and corporates 20% of

customers generate the 80% of the company's revenue, In computing 20% of
the bugs in the software is responsible for 80% of system crashes, similarly in
an individual's productivity 20% of his/her daily tasks might contribute to 80%
of the achievements. Hence this principle helps to understand that by

identifying and focusing on the 20% important factors can result in achieving
80% of the results.

The main objective of this principle is to leave certain actions behind, do

some quiet and focused thinking, gather small and precious pieces of insight
and then act selectively on a few objectives. This will help to produce amazing
results with minimum resources.

Shashin Shil Kumar Bajaj
(Postal Assistant)
Ahmedabad, Gujarat Circle

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