Pareto charts

A Pareto chart is a histogram, ordered by frequency of occurrence, that shows how many defects or problems were generated by each identified cause. It is based on the Pareto principle (80/20 rule), named after Vilfredo Pareto and applied to quality by Juran: about 80% of problems come from 20% of causes ("the vital few versus the trivial many"). It is one of the seven basic quality tools.

Construction

1. Identify the categories of causes or defects.
2. Collect data for a period.
3. Count the frequency of each and sort in descending order.
4. Calculate percentage and cumulative percentage.
5. Draw bars for each category (left axis: frequency), with a line for cumulative % (right axis).
6. Focus on the tallest bars.

Example data (software defects)

Count            Cum %
40 |##             100%
30 |## ##          ___----
20 |## ## ##   ---
10 |## ## ## ##
   +-----------------------
    Req Cod Des Int Oth

Uses

• Prioritise problems and decide where corrective action brings most benefit.
• Focus limited resources on the vital few causes.
• Compare before and after improvement.
• Communicate priorities to management.

Advantages and limits

Simple and visual, but based on past data and shows frequency, not necessarily severity or cost; may need weighting by cost.

Example: In the table, fixing requirement and coding errors would remove 70% of defects.