A Pareto chart is used to prioritize or narrow own the important quality issues for necessary corrective and preventive actions
Pareto Chart based on Pareto 80-20 rule i.e. 80% of the quality issues/problems are caused by 20% of the few major causes which called as as “Vital Few”.
And the 20% of the quality issues/problems are comes from 80% of many minor causes which called as “Trivial Many”.
This tool is one of the important basic 7 QC Tools and is extensively used in Problem Solving Techniques such as 8D, PDCA and Six Sigma.
Table of Contents
Pareto Principle
Principle is based on Pareto 80-20 Rule i.e. 80% of Quality Issues comes from 20% of the problems.
Separates “Vital few” from “Trivial many”.
About “Pareto Chart“
- “Pareto Chart” also called as “Pareto Diagram“.
- Named after Italian Economist Wilfredo Pareto.
- 80 % of issues comes from 20% of the problems.
- Shows focus area to get most gains.
- Bar chart arranged in descending order of height.
- Bars on left side relatively important than those in right.
- Separates “Vital few” from “Trivial many”.
Purpose I Use of “Pareto chart”
- Solve work related Problem.
- Grasp the problem.
- Narrow problem area.
- To prioritize high impact issues – where to focus?
- Break big problems into smaller problems.
- To help in root cause analysis and decision-making.
- Systematic analysis of causes based on magnitude.
- To confirm the improvement results.
Key Features of a Pareto Chart
- Vertical Bars: Represent the frequency of problems or causes (for example: number of defects).
- Categories (X-axis): Different defects or causes or issues, arranged from the major/most to the minor/least significant.
- Cumulative Line: A line graph (secondary Y-axis) represent the cumulative percentage of the total frequency.
How to make a “Pareto Chart“?
- Step 1: Record the data – Refer Check Sheet.
- Step 2: Order the data.
- Step 3: Label the vertical axis.
- Step 4: Label the Horizontal axis.
- Step 5: Plot the Bars.
- Step 6: Add up the counts.
- Step 7: Add a cumulative line.
- Step 8: Add title and Legends.
- Step 9: Analyze the Chart.
- Step 10: Interpret the results.
Benefits of Pareto Diagram or Pareto Analysis
- Identifies ‘Major Few’ problems for necessary measures.
- Provide visual clarity i.e. easily identifies the “vital few” from the “trivial many.”
- Improves team performance & effectiveness.
- Helps to analyze Weighted cost of problem.
- Helps in continuous improvement projects like Six Sigma and Lean Manufacturing.
- Helps in decision-making.
