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Pareto Chart: Cause Analysis Tools

A Pareto chart is a type of bar graph that arranges data in descending order of frequency or cost, with the largest categories on the left. It is used to identify the vital few categories that are most significant out of many possible problems or causes. The chart visually depicts the distribution of problems or causes to help focus improvement efforts on the categories with the greatest impact. An example shows customer complaint categories arranged by frequency, identifying documents as the largest source of issues. A second example then breaks down document complaints into more specific subcategories.

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85 views3 pages

Pareto Chart: Cause Analysis Tools

A Pareto chart is a type of bar graph that arranges data in descending order of frequency or cost, with the largest categories on the left. It is used to identify the vital few categories that are most significant out of many possible problems or causes. The chart visually depicts the distribution of problems or causes to help focus improvement efforts on the categories with the greatest impact. An example shows customer complaint categories arranged by frequency, identifying documents as the largest source of issues. A second example then breaks down document complaints into more specific subcategories.

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Cause Analysis Tools

• Pareto Chart
Also called: Pareto diagram, Pareto analysis

Variations: weighted Pareto chart, comparative Pareto charts

Description

A Pareto chart is a bar graph. The lengths of the bars represent


frequency or cost (time or money), and are arranged with longest
bars on the left and the shortest to the right. In this way the chart
visually depicts which situations are more significant.

When to Use a Pareto Chart

• When analyzing data about the frequency of problems or


causes in a process.
• When there are many problems or causes and you want to
focus on the most significant.
• When analyzing broad causes by looking at their specific
components.
• When communicating with others about your data.

Pareto Chart Procedure

1. Decide what categories you will use to group items.


2. Decide what measurement is appropriate. Common
measurements are frequency, quantity, cost and time.
3. Decide what period of time the Pareto chart will cover: One
work cycle? One full day? A week?
4. Collect the data, recording the category each time. (Or
assemble data that already exist.)
5. Subtotal the measurements for each category.
6. Determine the appropriate scale for the measurements you
have collected. The maximum value will be the largest
subtotal from step 5. (If you will do optional steps 8 and 9
below, the maximum value will be the sum of all subtotals
from step 5.) Mark the scale on the left side of the chart.
7. Construct and label bars for each category. Place the tallest at
the far left, then the next tallest to its right and so on. If there
are many categories with small measurements, they can be
grouped as “other.”

Steps 8 and 9 are optional but are useful for analysis and
communication.

8. Calculate the percentage for each category: the subtotal for


that category divided by the total for all categories. Draw a
right vertical axis and label it with percentages. Be sure the
two scales match: For example, the left measurement that
corresponds to one-half should be exactly opposite 50% on
the right scale.
9. Calculate and draw cumulative sums: Add the subtotals for
the first and second categories, and place a dot above the
second bar indicating that sum. To that sum add the subtotal
for the third category, and place a dot above the third bar for
that new sum. Continue the process for all the bars. Connect
the dots, starting at the top of the first bar. The last dot should
reach 100 percent on the right scale.

Pareto Chart Examples

Example #1 shows how many customer complaints were received in


each of five categories.

Example #2 takes the largest category, “documents,” from Example


#1, breaks it down into six categories of document-related
complaints, and shows cumulative values.

If all complaints cause equal distress to the customer, working on


eliminating document-related complaints would have the most
impact, and of those, working on quality certificates should be most
fruitful.

Example #1
Example #2

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