Pareto Chart
A Pareto chart is a special type of bar chart
where the values being plotted are arranged in descending order. The graph is
accompanied by a line graph which shows the cumulative totals of each category,
left to right. The chart is named after
Vilfredo Pareto, and its use in quality assurance was popularized by
Joseph M.
Juran and
Kaoru
Ishikawa.
The Pareto chart is one of the seven basic tools of quality control, which
include the histogram, Pareto chart, check sheet, control chart,
cause-and-effect diagram, flowchart, and scatter diagram. See glossary of
quality management.
Typically on the left vertical axis is frequency of occurrence, but it can
alternatively represent cost or other important unit of measure. The right
vertical axis is the cumulative percentage of the total number of occurrences,
total cost, or total of the particular unit of measure. The purpose is to
highlight the most important among a (typically large) set of factors. In
quality control, the Pareto chart often represents the most common sources of
defects, the highest occurring type of defect, or the most frequent reasons for
customer complaints, etc.
Their use gives rise to the 80-20 Rule � that 80 percent of the problems stem
from 20 percent of the causes.
Pareto chart is also called: Pareto diagram,
Pareto analysis
Variations are 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
Excerpted from Nancy R. Tague�s The Quality Toolbox, Second Edition, ASQ Quality
Press, 2004, pages 376-378.
References
http://www.asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html
http://en.wikipedia.org/wiki/Pareto_chart
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