What is a Pareto Chart?

1. Decide what categories you will use to group items.
2. Decide what measurement is appropriate. Common measurements are frequency, quantity, cost and time.
3. Decide what period of time the Pareto chart will cover: One work cycle? One full day? A week?
4. Collect the data, recording the category each time, or assemble data that already exist.
5. Subtotal the measurements for each category.
6. Determine the appropriate scale for the measurements you have collected. The maximum value will be the largest subtotal from step 5. (If you will do optional steps 8 and 9 below, the maximum value will be the sum of all subtotals from step 5.) Mark the scale on the left side of the chart.
7. Construct and label bars for each category. Place the tallest at the far left, then the next tallest to its right, and so on. If there are many categories with small measurements, they can be grouped as “other.”

Note: Steps 8 and 9 are optional but are useful for analysis and communication.

8. Calculate the percentage for each category: the subtotal for that category divided by the total for all categories. Draw a right vertical axis and label it with percentages. Be sure the two scales match. For example, the left measurement that corresponds to one-half should be exactly opposite 50% on the right scale.
9. Calculate and draw cumulative sums: add the subtotals for the first and second categories, and place a dot above the second bar indicating that sum. To that sum add the subtotal for the third category, and place a dot above the third bar for that new sum. Continue the process for all the bars. Connect the dots, starting at the top of the first bar. The last dot should reach 100% on the right scale.

Figure 1 shows how many customer complaints were received in each of five categories.

Figure 2 takes the largest category, “documents,” from Figure 1, breaks it down into six categories of document-related complaints, and shows cumulative values.

If all complaints cause equal distress to the customer, working on eliminating document-related complaints would have the most impact, and of those, working on quality certificates should be most fruitful.

Figure 1: Pareto Chart, Customer Complaints

Figure 2: Pareto Chart, Document Complaints

Create a PARETO CHART

Use the Pareto chart template (Excel) to create a Pareto chart and analyze the occurrences of up to 10 defects by entering the defects on the check sheet. 

Pareto Chart Template Example

You can also search articles, case studies, and publications for Pareto chart resources.

Books

The Quality Toolbox

Articles

Don’t Misuse The Pareto Principle (Six Sigma Forum Magazine) Four commonly held misconceptions of the Pareto principle are discussed that have prevented some companies from realizing the true potential of the principle.

The 3-D Pareto Chart (Quality Progress) This article discusses the traditional Pareto chart, a version called the trending Pareto chart, and the extension of the data from a trending Pareto chart to a 3-D format.

Case Studies

Budgetary Bandage (Quality Progress) Faced with rising costs of delivering wound care to patients, a public healthcare system in Canada launched an improvement project to find savings, utilizing DMAIC, Pareto charts, and other Six Sigma methodologies.

Courses

ASQ Quality Tools – Pareto Chart

QTools™ Suite

Webcasts

An Introduction To The Seven Basic Quality Tools Webcast In this introduction to one of ASQ’s most popular series of webcasts, Dr. Jack ReVelle provides a brief description and example of each of the seven basic quality control tools: data tables, Pareto charts, scatter analysis, cause and effect analysis, trend analysis, histograms, and control charts.

Adapted from The Quality Toolbox, ASQ Quality Press.