Pareto chart helps to Narrow problem area or prioritize the significant problems for corrective measures.
Pareto Chart based on Pareto 80-20 rule. It means that 80 percent of the problems/failures are caused by 20 percent of the few major causes/factors which are often referred as Vital Few.
And the remaining 20 percent of the problems are caused by 80 percent of many minor causes which are referred as Trivial Many. Hence, it gives us information about Vital few from 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”.
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.
-Systematic analysis of causes based on magnitude.
-To confirm the improvement results.
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.
Improves team performance & effectiveness.
Helps to analyse Weighted cost of problem.
