Anticlue

How to create a Pareto Chart

Pareto Charts are commonly used to identify the source of chronic problems / common causes in a process. The Pareto principal commonly states that 80 % of the trouble comes from 20 % of the problems. A Pareto chart is a graphical technique which quantifies problems in order to position efforts to be expended in fixing the "vital few" causes versus to the trivial many.

The process to create a Pareto Chart or Diagram is as follows:

1. Define the problem and process characteristics to be illustrated in the diagram.
2. Define the period of time analyzed within the diagram. For example, was a month worth of errors analyzed or week's worth.
3. Count the number of times each cause of error occurred.
4. List the causes of error in descending order. Remember the extremely trivial errors are commonly categorized as other, and listed in a legend of the diagram.
5. Find the sum of all errors by adding together the counts of the causes of errors.
6. Calculate the individual percentage for each cause of error.
7. The next step in creating a Pareto chart is to calculate cumulative percentages.
8. Begin drawing a histogram with a numeric scale on the left. Add a bar to the diagram for each category. The height of each bar on the histogram indicates the frequency of errors in each category. Label each bar with the name of the category it represents.
9. Plot a line that shows the cumulative frequency of errors. Draw a scale on the right side of the Pareto diagram to measure cumulative percent. The scale should always range from 0 to 100 percent.
10. The last step, identifying the vital few causes of error, involves completing the histogram by using the cumulative percentages calculated in step 2, and plotting data points to represent the cumulative percentage of each category. Align the data points with the right edge of the corresponding bars. Connect the data points with a line. This completes the Pareto diagram.

The causes of errors that comprise 80% of the errors are vital errors.