Tool 130: Pareto Chart

AKA

Pareto Analysis, Pareto Principle

Classification

Analyzing/Irending (AT)

Tool description

The Pareto chart is a bar chart arranged in a descending order of size or importance from left to right to separate and display the critical few from the trivial many causes of a problem. It is named after Vilfredo Pareto who, in the late 1800s, postulated the 80/20 role, which states that 80 percent of the trouble is due to 20 percent of the causes. The Pareto chart will also show the cumulative percentage for each cause on the chart.

Typical application

• To prioritize potential causes of a problem.

• To establish and verify cause and effect.

• To reach consensus on what needs to be addressed first.

• To identify improvement opportunities.

• To measure success of corrective action.

Problem-solving phase

→	Select and define problem or opportunity
→	Identify and analyze causes or potential change
	Develop and plan possible solutions or change
→	Implement and evaluate solution or change
→	Measure and report solution or change results
	Recognize and reward team efforts

Typically used by

	Research/statistics
	Creativity/innovation
	Engineering
	Project management
2	Manufacturing
5	Marketing/sales
	Administration/documentation
3	Servicing/support
4	Customer/quality metrics
1	Change management

links to other tools

before

• Checksheet

• Data Collection Strategy

• Sampling Methods

• Frequency Distribution

• Yield Chart

after

• Problem Specification

• Process Analysis

• Problem Analysis

• Process Mapping

• Action Plan

Notes and key points

Step-by-step procedure

• STEP 1 Identify the data source. See example Tape Unit Assembly Defects.

• STEP 2 Calculate percentages for totals of each type of defect.

• STEP 3 Draw a Pareto chart as shown in the notes and key points above.

• STEP 4 Designate left and right vertical scales.

• STEP 5 Draw the bars in accordance with total defects per type.

• STEP 6 Construct the cumulative line (left to right) by adding the respective percentage for each defect type and connect plots with straight lines, as shown in the example.

• STEP 7 Title the Pareto chart; include time period covered and source of data.

Example of tool application

Tape Unit Assembly Defects

Tape Unit Assembly Defects (April)	Quantity	%[*]
A - Unit surface (scars/scratches)	70	47
B - Sub-assembly (defective)	12	8
C - Mounting parts (incorrect/missing)	8	5
D - Insulators (cracked/missing)	23	15
E - Wire (incorrect lenght)	10	7
F - Assembling (incorrect)	7	5
G - Soldering (% fill rejects)	15	10
H - Labeling (missing/incorrect)	5	3
	—	—
	150	100
[*]Rounded