Concentration Curves : Tool for Resource Optimization

Every organization in these times is working against odds. One of the major actions of organizations during tough times is Ephemeralization or  "Do more with less"

During these tough times, organizations need to constantly evaluate their resource utilization and undertake  Optimization of the process so that you can really "Do more with less".

To me, resource Optimization is not cutting resources. It’s putting resources to good use.

This principle holds good not only for organizations but also individuals who are attempting to optimize resources available to them. All you need to do is identify is the resources!

There are many tools to undertake work towards Resource optimization. One of the easiest and fastest is creating "Concentration curves".

Once you understand the basic concept, you can use it with Resources and Outcomes like Sales Vs. People deployed,  Sales Vs. Expenses Sales Vs. Time invested etc.

Concentration curves are simply a Graphical representation of Cumulated Outcomes Vs Cumulated Resources. In the graph,
     ~ The Vertical axis(Y-Axis)holds Cumulated Outcomes and
     ~ Horizontal Axis (X-Axis) holds Cumulated Resources.

So at a given point on the graph, you know exactly how much is the Outcome Vs. Resources were used to generate the Outcome. Take a look at this example on concentration curves of GDP of  181 countries and their contribution to World GDP. You can observe that 35 Countries Contribute to 90% of the World GDP and the Rest of the 146 countries contribute to a mere 10% of the World GDP.

So the information you get will be something like this.

~ 20% of the field force give us about 80% of the sales

~ 40% of the money spent  on the brand gave us 95% of the sales

~ 25% of Territories are responsible for 70% of the Sales generated
~ 20 Members out of 125 salesforces produce 75% of the Sales.

Does that ring a bell?  Yes.. 

It's akin to Pareto Chart,  Lorenz Curves  for Gini Calculations.

You may refer to my earlier post: What is GINI ? for more information

Coming back to concentration curves, Here is an example. 
This demonstrates World GDP with GDP of countries on Y-Axis  Vs  No. of Countries on X-Axis.
I have created a Template for you. You can create concentration curves using your own data.

Here are 3 simple steps

  1.Paste data in coloured cells. The rest of the computations are automatic.(In fact computations are simple)

  2.Tweak the slider to match your data (Shown in downloadable excel file)

  3.Read values at each data point by using the slider. 

Download the Concentration Curves Tool  Here

This is a DOCOMO stuff! (Download,Copy and Modify at your will...You can find them @Downloads