What is Pareto Chart ? A Basic Quality Tool of Problem Solving.

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.

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.