Tuesday, March 31, 2009

Pareto Chart

The Pareto chart is a special type of histogram, used to view causes of a problem in order of severity from largest to smallest. It is a simple statistical tool that graphically shows the 20-80 rules where 20% of the sources cause 80% of the problems. Joseph Juran refers to this Pareto principle as the separation of the “vital few” from the “trivial many”.

A Pareto chart is typically used early in the continuous improvement process when there is a need to order or rank problems or causes by frequency. The vital few problems and their respective root causes can then be the focus. This technique provides the ability to:

• Categorize items, usually by content (type of defect, position, process, time, etc.) or cause (materials, operating methods, manpower, measurement, etc.) factors
• Identify the causes or characteristics that contribute most to a problem
• Decide which basic causes of a problem to work on first
• Understand the effectiveness of the improvement by doing pre and post-improvement charts