The 80/20 rule suggests that what percentage of defects comes from a small number of causes?

The 80/20 rule, also known as the Pareto Principle, indicates that a substantial majority of problems or defects (in this case, 80%) often arise from a small fraction of causes (20%). This principle highlights the importance of identifying and addressing those critical few causes that contribute disproportionately to the overall issue. In supply chain and operations management, applying this rule can help in focusing efforts on the most impactful aspects of a process, thereby enhancing efficiency and quality.

For example, if a manufacturer finds that 80% of defects in their production come from just 20% of the processes or suppliers, by analyzing and improving those specific areas, they can significantly reduce the total number of defects. This approach provides a pathway for cost savings and performance improvement, making the understanding of the 80/20 rule essential in decision-making within operations management.