A Pareto Chart is an incredibly useful tool for anyone looking to discover the frequency of defects and the impact they have on any process. After learning what Pareto graphs are and how they can help you in the future, you’ll find that you regularly return to using this type of chart. Keep reading as we answer the question of what is a Pareto Chart used for to help you discover the benefits of this type of chart.
What is a Pareto Chart Used For?
A Pareto Chart aims to measure the frequency of defects and the impact they will have over time. These charts are often used to discover what order you should prioritize current defects to make improvements within processes or businesses. As far as how Pareto graphs look, they are a combination of a line graph and a bar graph. You’ll notice both bars and a line on the charts, which offer you information to make continuous improvements.
The bars on Pareto Charts represent each defect or problem you are experiencing. The height of the bar on the chart will showcase the unit you are looking to measure, which is most commonly the cost or the frequency that the issue occurs. When creating a Pareto Chart, the bars are placed in descending order, starting with the tallest and working down to the shortest. It’s quick and easy to figure out which defects are the most common, just by taking a quick glance at the Pareto graph.
Apart from the bars, you’ll also see a line. This shows the cumulative percentage of the defects you are measuring. When the line is steep, then there is a significant impact on the operation due to these defects. Businesses should work to find the root cause of these issues and then do their best to resolve them to flatten the line. As the line begins to flatten, it’s clear that the changes you make are taking effect, and less attention is needed on them at the current time. You can return to this type of chart over and over again to track your improvements, hopefully seeing a difference after making tweaks to your operations.
Quality Management and Pareto Charts
One of the most common applications of Pareto graphs is within manufacturing. They can be used as a tool for quality management, which helps organizations to analyze their current issues. From there, you are able to prioritize the order in which to resolve these problems, making constant improvements to the quality and efficiency of your operation. No matter what type of operation you run, you can use this chart and the Pareto principle we’ll share below to make changes within your business.
The main concept of the Pareto Chart is that by identifying the most significant defects, you can help to overcome the overall problem you are experiencing. The tallest bars indicate the most common defects, but the cumulative percentage line can also show you where to put more time and effort into improvements.
The Pareto Principle
When discussing the question of what is a Pareto Chart used for, the Pareto principle can help you to analyze your charts. This is sometimes referred to as the 80/20 rule, which suggests that 80% of your results come about as a results of 20% of the causes of defects. From there, you can try to find the 20% of the defects which cause this high percentage of the total defects. When companies remove just one or two defects, they can then see a huge improvement to their overall operation. This is why a Pareto graph can be such a valuable tool to companies who are looking to make continuous improvements to their quality management.
A Pareto Chart is something incredibly useful for businesses within the manufacturing industry. That being said, there are many applications for Pareto graphs, which is why they are so well regarded by experts in many industries. We highly encourage you to use this type of chart when you are looking at ways to manage quality within your organization. By learning how to read and analyze a Pareto Chart, you can be sure that you’ll identify the key defects which are causing the majority of issues for your business. After rectifying these issues, you’ll be back on track to keep improving your operations and start running a more profitable business in the future.