Pareto Chart

Overview

A Pareto chart is essentially a bar chart showing how often different categories of events/incidents take place. The most common is ordered to the left, and the least common is ordered to the right. It also includes a line showing the cumulative frequency (adding each column’s value to the previous ones in turn). A Pareto chart follows the 80/20 principle developed by Vilfredo Pareto, an Italian economist in the early 20th century.

The 80/20 principle asserts that for many events, roughly 80% of the effects come from 20% of the causes. This then allows you to focus on where improvement projects are needed most and will have the biggest impact.

Characteristics of a Pareto chart

• On the X axis you have the area of interest (categories) e.g. as ward names.
• On the left Y axis you have the number of events e.g. number of falls.
• On the right Y axis you have the cumulative frequency.
• Essentially, a Pareto chart is a bar and line graph combined. The bars display the number of events per area of interest whilst the line displays the cumulative % of events.
• Categories contributing to 80% of the problems are often referred to as the ‘vital few’ whereas the others are labelled the ‘useful many’.

Key points about a Pareto chart

• They work best with 30 observations across the categories. Smalls numbers of data can be misleading due to random change.
• The classification by categories is only a guide to where to focus attention of your improvement project.
• Identifying categories where 80% of the problems are occurring is not the only thing to consider when deciding where to focus improvement efforts.
• Pareto charts don’t explain what sort of variation is being observed. To distinguish random (common cause) and non-random (special cause) variation you need to use either a run chart or control charts.

The Science of Improvement on a Whiteboard with Robert Lloyd, Vice President, Institute for Healthcare Improvement

Learn how to create an Pareto chart using Microsoft Excel