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Pareto diagrams

HOMEPAGE

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Pareto Diagram. Pareto diagrams are named after Vilfredo Pareto, an Italian sociologist and economist, who invented this method of information presentation toward the end of the 19th century. The chart appears much the same as a histogram or bar chart, except that the bars are arranged in decreasing order from left to right along the abscissa. The fundamental idea of use of Pareto diagrams for quality improvement is the ordering of factors that contribute to a quality function.

Pareto Chart

Definition:
A bar graph used to arrange information in such a way that priorities for process improvement can be established.

Purposes:
To display the relative importance of data.
To direct efforts to the biggest improvement opportunity by highlighting the vital few in contrast to the useful many.

How to Construct:

• Determine the categories and the units for comparison of the data, such as: frequency, cost or time.
• Total the raw data in each category, then determine the grand total by adding totals of each category.
• Re-order the categories from largest to smallest.
• Determine the cumulative percent of each category, (the sum of each category plus all categories that precede it in the rank order, divided by the grand total and multiplied by 100.)
• Draw and label the left-hand vertical axis with the unit of comparison, such as frequency, cost or time.
• Draw and label the horizontal axis with the categories. List from left to right in rank order.
• Draw and label the horizontal axis from 0 to 100 percent. the 100 percent should line up with the grand total on the left-hand vertical axis.
• Beginning with the largest category, draw in bars for each category representing the cumulative present of the total.
• Draw a line graph beginning at the right-hand corner of the first bar to represent the total as measured on the left-hand axis.
• Analyze the chart. A break-point in the cumulative percent line can indicate the vital few from the awkward zone and the useful many.

Tips:

• Create before and after comparisons of Pareto charts to show impact of improvement efforts.
• Construct Pareto charts using different measurement scales, frequency, cost or time.
• Pareto charts are useful displays of data for presentations.
• Use objective data to perform Pareto analysis rather than team members opinions.
• if the data does not indicate a clear distinction among the categories -- if all bars are roughly the same height or half of the categories are required to account for 60 percent of the effect -- consider organizing the data in a different manner and repeating Pareto analysis.
• Pareto analysis is most effective when KQC is defined in terms of shrinking the PV to a customer target. For example, reducing defects or elimination the non-value added time in a process.

 

Exercise (to do on your own): Construct a Pareto chart from the data above.  Check the answer for yourself after you have finished.

Table of contents

Pareto diagrams

HOMEPAGE

back to Ishikawa Diagrams

go on to Das Audit