The Pareto Principle (also known as the 80/20 Rule, the Law of the Vital Few, or the Principle of Factor Sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. 
The distribution is claimed to appear in several different aspects relevant to business. For example:
- 80% of a company’s sales come from 20% of its products
- 80% of a company’s sales are made by 20% of its sales staff
- 80% of a company’s sales are made by 20% of its clients
- 80% of a company’s profits come from 20% of its customers
- 80% of a company’s profits come from 20% of the time its staff spends
- 80% of a company’s complaints come from 20% of its customers
The reason why the Pareto Principle is relevant to the implementation of LEAN principles and concepts is due to the fact that LEAN Practioners should be applying this principle in the approach for solving problems.
LEAN Practioners Should Be Applying the Pareto Principle to Solve Problems
It is true that complex situations require multiple dynamic solutions; otherwise, they would have been solved already. Nevertheless, it is quite common that LEAN Practioners want to apply a 1-Size Fits All Solution where these problems occur – and this simply does not make sense!
On the other hand, it is quite common that LEAN Practioners want to apply multiple dynamic solutions to each and every problem. Although this would work and provide you with your desired results, the time and effort to make this happen is probably not within your current allocation of resources.
Therefore, it makes sense to apply the Pareto Principle so that you prioritize your problems and how you will solve them. By using this approach, you can then focus on resolutions and the individual changes that will most improve the overall situation, as approximately 20% of your efforts will directly affect 80% of the results.
Helpful Hints in Applying the Pareto Principle
We are often told that your products or services in your situation are unique, and there are (large) quantities that is either: specialized; made to order; customized; and/or low quantity with low frequency. And the reality of the business situation is that the Pareto Principle of the 80/20 Rule does not apply.
The simple truth is that this may be correct! Nevertheless, that does not necessarily mean the Pareto Principle does not apply in any way. In these specialized instances, look for other relationships, correlations, and/or connections that help apply this principle in your approach for solving problems:
- It could be the percentage breakdown is not 80/20, but is 70/30 or 60/40.
- Perhaps the percentage breakdown is 40/40/20
- Perhaps the percentage breakdown is not a trifecta, but in a group of 4 or 5 or more
Even in Your Unique Business Situation, Look for Opportunities to Apply the Pareto Principle in Identifying Relationships, Correlations, and Other Connections
Whatever the breakdown may be, continue to Apply PDCA  in order to find the relationships, correlations, and/or connections that will assist in the grouping of similar problem root causes. Keep in mind that one of the objectives is to maximize your efforts in order to achieve your desired results, given your limited available resources.
Insight from a Master Sensei
In the application of the Pareto Principle, I always advise people to think through the relationships as a matrix. Apply your thinking and possible solutions in the 80/20 Rule with this mind, in order to help create an approach for you and others team members to quickly see and understand.