Pareto Chart

A powerful tool to identify the "vital few" causes from the "trivial many".

About Pareto Charts

The Pareto Chart is a type of bar chart that uses the Pareto Principle (80/20 rule) to help identify the most significant factors in a data set. It's used in the Measure and Analyze phases of DMAIC to focus improvement efforts on the areas that will have the greatest impact.

Benefits:

  • Helps prioritize improvement efforts
  • Visually highlights the most significant factors
  • Combines both bar chart and line graph elements
  • Focuses attention on the "vital few" rather than the "trivial many"
  • Provides clear direction for problem-solving

The Pareto Principle:

Named after Italian economist Vilfredo Pareto, this principle suggests that approximately 80% of effects come from 20% of causes. In process improvement:

  • 80% of defects often come from 20% of process issues
  • 80% of customer complaints often stem from 20% of product/service issues
  • 80% of process delays often result from 20% of possible causes

Pareto Chart Builder

Enter data and generate chart
Category / Cause Frequency / Count Actions

Tip: Enter your categories or causes in the left column and their corresponding frequencies or counts in the right column. The chart will automatically sort the data in descending order.

How to Use Pareto Analysis

Step-by-Step Guide

  1. Identify and list all the problems or causes you want to analyze
  2. Establish a consistent unit of measure (frequency, cost, time, etc.)
  3. Collect and measure data for each problem/cause
  4. Sort the data in descending order (highest to lowest)
  5. Calculate cumulative percentages for each item
  6. Create the Pareto chart with bars and cumulative line
  7. Analyze the chart to identify the "vital few" (typically those that account for approximately 80% of the cumulative percentage)
  8. Focus improvement efforts on these high-impact areas

Interpreting Pareto Charts

A Pareto chart includes both bars and a line graph:

  • Bars: Represent the count or frequency of each category, arranged in descending order
  • Line: Shows the cumulative percentage of the total

Key points to look for:

  • The steepest part of the curve indicates the "vital few" causes
  • Look for the point where the line begins to flatten (often around 80% cumulative)
  • Items to the left of this point should be your priority for improvement
  • If no clear "vital few" emerge (flat curve), you may need to recategorize or collect more specific data

Common Applications

Quality Improvement

Example: Analyzing types of defects in a manufacturing process
Measure: Frequency of each defect type
Outcome: Identified that 3 of 12 defect types accounted for 82% of all defects, allowing focused improvement efforts

Customer Service

Example: Analyzing customer complaint categories
Measure: Number of complaints in each category
Outcome: Discovered that delivery delays and product packaging issues accounted for 75% of all complaints

Process Optimization

Example: Analyzing causes of project delays
Measure: Hours of delay attributed to each cause
Outcome: Found that resource availability and requirement changes caused 80% of total delay time