Pareto Chart | Pareto Principle | What is Pareto Chart in 7 QC Tools?

Pareto Chart | Pareto Principle | What is Pareto Chart in 7 QC Tools?

What is Pareto Chart in 7 QC Tools?

Pareto Chart was invented by Vilfredo Pareto.
→ Pareto Chart is a diagram that shows the order of the largest number of occurrences by item or by classes and the cumulative sum total.
→ It is a combination of a bar graph and line graph.
→ A bar graph is arranged in descending order of height from left to right while a line graph represents the cumulative percentage.
→ The bar graph shows the number of defects and the line graph shows the cumulative percentage of the defect.
→ It is a very important tool of Basic 7 QC Tools.


➤ History of Pareto chart and Pareto Principle:

→ Vilfredo Pareto was an Italian engineer, sociologist, economist, political scientist, and philosopher.
→ He shows an observation that is: "80% of the land in Italy was owned by about 20% of the population."
→ He introduced the concept of efficiency and helped to develop the field of microeconomics.
→ The Pareto principle was named after him.
→ He also contributed to the fields of sociology and mathematics.

History of Pareto chart and Pareto Principle

Pareto Principle in 7 QC Tools:

→ Pareto Principle is also known as the 80/20 rule, the law of the vital few or the principle of factor sparsity
→ 80% of the Problems come from 20% of the causes.
→ 80% of the Outputs come from 20% of the Input.
→ It Distinguishes between Vital Few from Trivial Many.
→ 80% of the Results come from 20% of the effort


Pareto Principle in 7 QC Tools

Five Easy Steps for Making a Pareto Chart in 7 QC Tools:

  1. Select the problem.
  2. Collect data.
  3. Sort data & calculate the cumulative frequency.
  4. Draw the axes, Construct the bars, Draw the cumulative percentage line, Title and label the chart.
  5. Identify Vital Few from the Trivial Many by using 80:20 principle & plan further action.

➤ Step 1. Select the Problem to construct chart:

 Determine the method of collecting data and a period of data collection.
 Design a separate check sheet if necessary.
 E.g. : Defect analysis.

➤ Step 2. Collection of data:

➝ The second step is data collection for the graph.

➤ Step 3. Sort data & calculate the cumulative percentage.

➝ After the collection of data, the third step in the Pareto chart is to sort out data and find the cumulative percentage of data.

Step1 Making a Pareto Chart in 7 QC Tools

➤ Step 4. Draw the axes, Construct the bars, Draw the cumulative percentage line, Give Title and labeling the chart:

➝ After sorting out data and find the cumulative percentage, Draw the axes, Construct the bars, Draw the cumulative percentage line, Give Title and labeling the chart.


Step2 Making a Pareto Chart in 7 QC Tools

➤ Step 5: Identify Vital Few from the Trivial Many by using 80:20 principle and plan further action:

→ From step 4: as per the Chart, we have  Identify Vital Few ( i.e. defect D, Defect E, Defect F and Defect A ) from the Trivial Many (i.e. All defects ) as per 80:20 Rule.
→ Now we will take action on these defect by finding the root cause of defect generation and implement preventive action on it.


Benefits of Pareto Chart in 7 QC Tools:

→ We can easily distinguish between Vital Few and Trivial Many.
→ It displays the relative importance of causes of the problem.
→ Helps the team to focus on those causes that will have the greatest impact when solved.
→ By using 20% of resources we can solve 80% of problems.
→ We can easily understand the impact of the defect on our production
→ It is very easy for analysis by this tool