Sample Pareto Form Template
Pareto Diagram
What is it?
The Pareto diagram is a graphical overview of process problems in ranking order from the most
frequent, down to the least frequent. It illustrates the frequency of fault or defect types. Using a
Pareto, you can decide which is the most serious or frequent offender.
The principle was developed by Vilfredo Pareto, an Italian economist and sociologist who conducted
a study in Europe in the early 1900s on wealth and poverty. He found that wealth was concentrated
in the hands of the few and poverty in the hands of the many. The Pareto principle is based on the
unequal distribution of things in the universe.
The basic underlying rule behind the Pareto principle is that in almost every case, 80% of the total
problems incurred are caused by 20% of the problem causes. Therefore, by concentrating on the
major problems first, you can eliminate the majority of your problems. The few problems that occur
most often result in the majority of your defects. You may also have many occasional problems that
cause the occasional defect. This is called the "vital few over the trivial many" rule. Quite often,
once you cure several of the "big hitters" you also eliminate some of the smaller problems at the
same time.
When is it used?
Use a Pareto diagram when you can answer "yes" to both these questions:
1.
Can data be arranged into categories?
2.
Is the rank of each category important?
What does it look like?
An example of a Pareto diagram is shown below.
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