Pareto Charts are a specialized Histogram of count data. It arranges the Bins or Cells in largest to smallest counts and gives you an accumulation line as seen below. It is one of the Seven Basic Quality Tools.

The Pareto Chart gets its name from the use of the Pareto Principle which states “ 80% of the effect comes from 20% of the causes”. Vilfredo Pareto, an Italian economist, originated this principle by determining that 80% of the land inItalyis owned by 20% of the population. Later it was found to hold true in many things and help us focus on the critical few. With a chart like this a team can decide where to place its priority and focus ( the big hitters). This is extremely helpful when time and money is limited as it is in most cases.

## How to create a Pareto (Example in Bold)

Creating a Pareto chart is slightly more difficult than a histogram but is do able to build.

- Decide what the problem is that you want to chart.
**Damaged Fruit** - Collect the data on the problem over a good amount of time to insure a representative sample size.
- Determine the classification (categories) to group the data into.
- Group the data by category an determine the total for each category.
**Bruised 100; Undersized 87; Rotten 235; Under Ripe 9; Wrong Variety 7; Wormy 3** - Determine the total over all the categories.
**100+87+235+9+7+3= 441** - Calculate the percentage for each category.
**Bruised 22.7%; Undersized 19.7%; Rotten 53.3%; Under Ripe 2.0%; Wrong Variety 1.6; Wormy .7%** - Rank order the categories from the largest to the smallest
**. Rotten; Bruised; Undersized; Under Ripe; Wrong Variety; Wormy** - Calculate the cumulative percentage at each category starting from the largest and going to the smallest.
**Rotten 53.3%; Bruised 76.0%; Undersized****95.7%; Under Ripe 97.7%; Wrong Variety 99.3%; Wormy100.0%** - Construct a chart
- With the left scale the count starting at 0 and going to the over all total count.
**Scale 0 – 441** - With the right scale the percentage starting a
**0% and going to 100%** - The Horizontal axis will be labeled with the categories starting on the left with the largest and going to the smallest. Many times we will add up all the categories that have only 1 item in them and label it other. But you do not want this category to be the biggest. If it is you need to group some of them in to new categories.
**Rotten; Bruised; Undersized; Under Ripe; Wrong Variety; Wormy** - Draw the bars to show the count for each category listed.
- Draw a line to show the cumulative percentage for each bar. Start with the left most bar (the largest) and draw it to the right.

Well there you have a short article on how to construct a Pareto Chart. If, you have questions or comments please feel free to contact me by leaving a comment below, emailing me, calling me, or leaving a comment on my website.

Bersbach Consulting

Peter Bersbach

Six Sigma Master Black Belt

http://sixsigmatrainingconsulting.com

peter@bersbach.com

1.520.829.0090

## Reviews on training and coaching from students of the Pyzdek Institute

Friday, January 27th, 2012If you are or were a student of mine in the Pyzdek Institute please feel free to write a review and send it to me at peter@bersbach.com and I will include it here:

I liked the format of this on-line course. The video “”lectures”” were great. Concise yet thorough. The assignments made a big difference. If I had not done the assignments, I would have left with an incomplete understanding of the subject matter. The fact that Peter also held me to a high standard was important. The mini lectures on various topics using Minitab and Excel, for example, were also very helpful. They saved me a lot time yet pointed me to the right location in the application. I did get stumped on the modules dealing with distributions. It took a couple of weeks (!) to feel comfortable with that subject. 1/26/12 Lean Six Sigma Black Belt Student

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