Pareto Charts

The Pareto chart can be used to display categories of problems graphically so they can be properly prioritized. The Pareto chart is named by Juran for a 19th century Italian economist who postulated that a small minority (20%) of the people owned a great proportion (80%) of the wealth in the land.

There are often many different aspects of a process or system that can be improved, such as the number of defective products, time allocation or cost savings. Each aspect usually contains many smaller problems, making it difficult to determine how to approach the issue. A Pareto chart or diagram indicates which problem to tackle first by showing

the proportion of the total problem that each of the smaller problems comprise. This is based on the Pareto principle: 20% of the sources cause 80% of the problem.

The Statit Count Pareto chart is a vertical bar graph displaying rank in descending rder of importance for the categories of problems, defects or opportunities. Generally, you gain more by working on the problem identified by the tallest bar than trying to deal with the smaller bars. However, you should ask yourself what item on the chart has the greatest impact on the goals of your business, because sometimes the most frequent problem as shown by the Pareto chart is not always the most important. CQI is a tool to be used by people with experience and common sense as their guide.