What is a Pareto chart?

    Short answer

    A Pareto chart is a bar chart in which categories, such as defect types or downtime causes, are sorted from the most frequent to the least, with a line showing the cumulative percentage. It applies the Pareto principle, that roughly 80 per cent of the effect comes from 20 per cent of the causes, so a team can see which few problems to solve first.

    Last updated · TeamAssurance

    How to make a Pareto chart

    1. Choose the measure and the categories. Defects by type, downtime by cause, complaints by product, actions by area.
    2. Collect the data over a representative period, usually with a check sheet.
    3. Sort the categories from largest to smallest.
    4. Draw the bars in that order, with the count or cost on the left axis.
    5. Add the cumulative line, with percentage on the right axis.
    6. Read the break point where the line flattens: the categories to the left are the vital few.

    Reading it

    The chart does not tell you the cause of the biggest bar; it tells you where to look. The next step is a fishbone diagram or five whys on the top category. A second-level Pareto, breaking the biggest bar into its own sub-causes, is often more useful than the first.

    Count is not always the right measure. Ranking defects by cost, or downtime by minutes rather than occurrences, can change the order completely.

    Common mistakes

    • Too many categories, so no bar stands out: group the small ones as Other.
    • A period too short for the pattern to be stable.
    • Treating the biggest bar as the root cause rather than the symptom to investigate.
    • Never redrawing it after the countermeasure, so nobody knows if it worked.

    Pareto charts and daily management

    A Pareto of the last month's problems is the natural input to the Tier 2 meeting's choice of improvement projects. Daily issue raising feeds the data; the chart turns a long list of problems into a short list of priorities; and redrawing it after the fix is the check step of PDCA.

    How TeamAssurance helps

    In TeamAssurance, issues, defects and downtime raised daily are categorised as they are recorded, so Pareto views of the top causes by area and period are available to the Tier 2 meeting, and the improvement project raised against the largest category is linked back to the measure to show whether it moved.

    Frequently asked questions

    What is the Pareto principle?

    The observation that most of an effect comes from a minority of causes, often stated as 80/20. The exact ratio varies; the point is that causes are unequal and the biggest few deserve the attention.

    What is the difference between a Pareto chart and a histogram?

    A histogram shows the distribution of one continuous measure. A Pareto chart ranks discrete categories by frequency or cost.

    Is a Pareto chart one of the seven quality tools?

    Yes, alongside check sheets, fishbone diagrams, control charts, histograms, scatter diagrams and flowcharts.