Pareto Chart

Gizem YILDIZGÖR – 2014432116İbrahim ULU - 2500432040

Quality Control Tools in Problem Solving

What does the problem word tell us?

First we define the problem means;

‘The problem is the situations that need to be resolved, whichcan prevent or hinder the achievement of the targeted results.’

History

Named after Vilfredo Pareto –an Italian economist

He observed in 1906 that 20% of the Italian population owned 80% of Italy’s wealth.

What Is It? One of the 7 tools of Quality Management

Statistical technique in decision making for selection of limited tasks which havesignificant overall impact.

Pareto Principle Doing 20% of work generates advantage of 80% of

entire job

Focus on identifying the ‘vital few’ from the ‘trivialmany’

The exact percentages may vary in each situation.

However, most of the activity is caused by relativelyfew of its factors.

Helps focusing on what really matters.

In terms of quality improvement, large majority of problems (80%) are created by a few key causes(20%).

‘PARETO CHART’ A Pareto Chart is a series of bars whose heights reflect the frequency or impact of

problems.

Normally plots the frequencies of categorical data:• Such as defect and errors.

The most frequent activities are placed in order from left to right.

The horizontal axis represents the types of activities:• Such as issues,problems or causes.

The vertical axis represents the frequencies of those activities.

Separates the vital from the trival

Purpose of the Pareto Chart;

In the problems or conditions, identifying uncertain situationsidentifying critical elements

Topics that can be explained with pareto diagram

1)which cause / factor is most important and what is the significancelevel,

2) within all the reasons, what each cause is,

3) which cause must be resolved to make the most effective kaizen,

Kai is change and Zen even better

The aim of Kaizen: the primary objective is to make theprocess in production better with small but effectivechanges.

How to Construct a Pareto Chart: Define the problem. Identify the possible causes of the problem(using brainstorming or

similar technique) Collect then record the data. Calculate the frequencies of the identified causes. Draw a vertical bar for each cause or cause group. Sort them by frequency in descending order. Calculate then draw the cumulative percentage line. If you observe a Pareto effect,focuses your improvement efforts on

those few factors.

Pareto chart is simple but it is extremely effective technique in the diagnosis and analysis of the problem.

The Pareto Principle in Work-Lİfe

Problem Solving

To-Do List of the day

Passion

Relationship

Cut the Clutter

Pareto Chart example;

If a business was investigating the delay associatedwith processing credit card applications,the data could be grouped into the following categories: nosignature,residential address not valid, non-legiblehandwriting, already a customer, and other.

Step 1:Record the raw data

Category Frequency

No Address 9

Non- legible writing 22

Current Customer 15

No Signature 40

Other 8

Step 2: Order the Data

Category Frequency

No Signature 40

Non-legible writing 22

Current Customer 15

No Address 9

Other 8

Step 3:Determine the Percentage That Each Category Represents

Category Frequency Percentage

No Signature 40 43%

Non-legible Writing 22 23%

Current Customer 15 16%

No Address 9 10%

Other 8 8%

Step 4: Determine the Percentage That Each Category Represents

Category Frequency Percentage CumulativePercentage

No Signature 40 43% 43%

Non-legible Writing 22 23% 66%

Current Customer 15 16% 82%

No Address 9 10% 92%

Others 8 8% 100%