# Pareto Analysis What it is

Pareto Analysis is used to record and analyse data relating to a problem in such a way as to highlight the most significant areas, inputs or issues. Pareto Analysis often reveals that a small number of failures are responsible for the bulk of quality costs, a phenomenon called the ‘Pareto Principle.’ This pattern is also called the ‘80/20 rule’ and shows itself in many ways. For example: • 80% of sales are generated by 20% of customers. • 80% of Quality costs are caused by 20% of the problems. • 20% of stock lines will account for 80% of the value of the stock. A Pareto diagram allows data to be displayed as a bar chart and enables the main contributors to a problem to be highlighted. As a basic Quality Improvement tool, Pareto Analysis can: • define categories of defects which cause a particular output (product, service, unit) to be defective; • count the frequency of occurrence of each defect; • display graphically as a bar chart, sorted in descending order, by frequency of defect; • use a second y axis to show the cumulative % of defects .

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Pareto Analysis v2.ppt

Example 3 • Minitab gives an extra dimension to Pareto Analysis . using Check Sheets or Brainstorming.Example 2 • Recognise the 80: 20 principle but if the original Pareto is very flat be prepared to cut the defects in a different way. 3. Gather facts about the problem. as an industry standard. etc) as a bar chart. Rank the contributions to the problem in order of frequency. Draw the value (errors. use Minitab’s version.refer to Example 1 in this section • Use a series of Pareto charts to drill down to more detail .ppt . 5. rather than creating one in Excel . 2. 4. It can also be helpful to add a line showing the cumulative percentage of errors as each category is added. This helps to identify the categories contributing to 80% of the problem. Review the chart – if an 80/20 combination is not obvious.Pareto Analysis How to use it 1. you may need to redefine your classifications and go back to Stage 1 or 2.Example 4 2 Pareto Analysis v2. Examples • When possible. depending on the availability of information. facts. say 40:60 .

l ir e d ec d epa ova lan ed oar y r ed ed Sp ed Fault ing .ppt Percent Count 11 1 .Pareto Analysis Examples • Example 1 : Minitab’s version of Pareto is used as an industry standard. Joint lder eatp is f itt gh B ds s f itte ic R Rem blem hort ec to tion s s p El a is om ry ag nt o g H t M ou a o Le e M on na Pr er S Conn amin ther am ne t Mis Com eet rmed ot S hin en thr D ol O t c ng ir ld pt mpo Cmp ng ot M ef o nts n ouc pon not Lo k W nd E autio Thiok So aulty Con o D Joi t T om gs Cm Co F Wr pt n Lin ey o Pr ec p C Le m m 1 1 1 1 C11 11 11C 1 1 11 11 11 11 11 B 11 11 11 11 11 1 1 1 11 Defect Count Percent Cum % 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 1 11 3 Pareto Analysis v2. Fitt ec t. It gives summary information and starts the cumulative % count at the top of the first bar: Pareto of D1Small Engine Card Faults 11 1 11 1 11 1 1 1 1 1 1 1 1 1 1 11 1 11 1 11 1 1 .

1 1 11 . 1 11 1. 11 11 . Design Faults 11 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ec nn Co t le du Mo e r qu To tor Mo s ld Co rt Sta n Tra u sd od rM ce ule IC AS n atio libr Ca IOP n Imo Percent Count 1 1 1 1 1 1 1 Defect Count Percent Cum % 1 1 1. 11 11 . 11 11 . 11 11 .1 1 11 . 11 11 .1 1 1 1.1 1 11 .1 1 1. 11 11 . 4 Pareto Analysis v2. 11 . 11 .1 1 11 . 1 11 1.Pareto Analysis Examples • Example 2 : a series of Pareto charts drill down to more detail: Fault by Main Cause 11 1 1 1 1 1 1 1 1 1 1 n s ig De t en on mp Co ild Bu er Oth 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1st level Analysis gives “Design” as main cause of failure 2nd level Analysis gives breakdown of “Design” Defect Count Percent Cum % 1 1 1.1 1 11 .ppt Percent Count .1 1 1.1 1 1 1. 11 .

But of 238 data points.1 1 .most are “S-clip” problems (links between ICs and PCB) 5 Pareto Analysis v2.1 1 -1 CC CC CC CC CC CC 11 Oth 1 KD KD KD KD KD KD 11 .1 1 11 1 11 1 .1 11 11 . 11 .1 11 11 . this looks unhelpful.1 ers 1 11 . 11 . most were counts of 1 or 2. .1 11 11 .Pareto Analysis Examples • Example 3 : if the original Pareto is very flat.1 1 . Therefore after the first cumulative 42% of defects (100) .1 11 11 . 11 11 . A full Pareto would be very flat. be prepared to cut the defects in a different way.1 1 . 11 .ppt Percent Count . the balance of defects (138) are blocked together as “others”. 11 11 1 11 .1 11 11 11 11 1 1 11 11 11 11 1 1 .1 11 11 1 1 Defect Count Percent Cum % 11 11 . here. 11 . 11 . 11 .1 1 11 . 11 . This enables us to see that a “top 9” of defects can be analysed . it is 40:60 Pareto Chart for Child11 11 1 11 1 1 1 1 1 11 1 1 1 1 1 1 1 E 1 1 1 1 1 .1 1 11 . 11 . At first glance.

cut defects across another variable .Pareto Analysis Examples • Example 4 : an extra dimension to Pareto charts .eg work shift: Pareto Chart for Flaws Day 1 1 1 1 Evening Scratch Count 1 1 Count Peel 1 1 1 1 Other 1 1 Night 1 1 Count 1 1 1 1 Count 1 1 1 1 1 1 Weekend Smudge 6 Pareto Analysis v2.ppt .

4 : Measure /Analyse .Effect Revisited 7 Pareto Analysis v2. • identify major causes and effects. HINT ! The most frequent is not always the most important! Be aware of the impact of other causes on Customers or goals. References • ASG aTQ training module 7.Pareto Analysis How it helps Pareto Analysis is a useful tool to: • identify and prioritise major problem areas based on frequency of occurrence.ppt . The technique is often used in conjunction with Brainstorming and Cause and Effect Analysis.Pareto & Cause. • separate the ‘vital few’ from the ‘useful many’ things to do.

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