Pareto Charts

Quality problems may be the result of any number of root causes that may be too numerous in any given situation. In such situations, it is important to prioritize the critical few causes and focus on them from time, resource, and customer perspectives. It would be beneficial to isolate areas or issues that will lead to the most significant improvements in terms of quality, schedule, and cost. Pareto charts are a series of bar charts with a cumulative line graph arranged in descending order. They indicate the diminishing importance of a series of activities or entities. They are named after 19th century Italian economist/mathematician Vilfredo Pareto, who hypothesized that 20% of the population had 80% of the wealth. He also said that even if the wealth were redistributed equitably to the whole population, a similar proportion would result over time.

A Pareto diagram may look simple, but it is an extremely useful tool. It helps users focus on big issues. As such, it can be used to address any kind of concern that can be measured, such as cost, defects, faults, failures, complaints, returned items, repairs and fixes, risks, safety, and security. You can construct a diagram based on either measurements or estimates.

Figure 6.3 shows a simple Pareto diagram with the underlying causes of defects during different phases of a software life cycle. The most common cause can be attributed to design creation. Furthermore, upstream activities constitute the bulk of the causes. However, the symptoms (effects) are manifested only downstream during testing and maintenance. The implication is that an effective solution is not to deploy an army of engineers in testing and fixing, but to design the product properly at the upstream stages. Experience shows that the strategy of focusing upstream lowers overall life-cycle costs, although the costs at individual upstream phases may go up.

Figure 6.3. A Pareto Chart

To link causes and effects, cause-and-effect diagrams are often used, as described in the next section.