1. QUICKSTARTPareto Chart

2. Pareto Chart Objectives • Understand what the Pareto law is • Understand what a Pareto diagram is • Provide Pareto analysis by level • Provide examples of Pareto diagrams • Understand how a simple tool can be very powerful in problem solving

3. Pareto Law • The Pareto law states that a small number of the causes is responsible for a large percentage of the effects. • It is also called the 80-20 rule

4. Pareto Diagram A data display tool that breaks down discrete observations into separate categories for the purpose of identifying the “vital few” and separating them from the trivial many Definition Frequency C A B E D Reason

5. Pareto Chart: examples 15 % of the customers generate 80% of the sales!

6. Pareto & Process improvement • Gathers input from all team members • To logically group potential causes for defects (x’s) • Helps to test ideas • Helps scope a project Helps to focus improvement efforts on areas where the largest gains can be made

7. Constructing a Pareto diagram • Define categories • Choose them based on impact • Assure the “other” category is small • Sort data in descending order • Plot the data • (May need several Pareto’s to hone in on potential causes)

8. first level example Pareto Chart on inspection rejections Simple and very powerful tool

9. second level Team tests ideas and/or kill ghosts: Pareto on missing screws by shift Any relationship between the numbers of missing screws and the shift?

10. Pareto Diagram – category examples

11. QUICKSTARTPareto Chart