The Pareto Diagram

The Pareto Diagram (or Pareto Chart) is a practical method for identifying problem areas and systematically finding solutions.
It is based on the Pareto Principle, also known as the 80/20 rule, which suggests that roughly 80% of problems come from 20% of causes.

Using this diagram, you can visualize which factors have the greatest impact on performance and where to focus your efforts for maximum improvement.

Types of Pareto Diagrams

1. By Results — identifies the key problem areas affecting overall performance.
   
2. By Causes — highlights the root causes that generate the majority of issues.
   

Steps to Build a Pareto Diagram

1. Define the Problem
   Clearly formulate the issue you’re analyzing.
   
2. List the Causes
   Create a complete list of potential causes or factors contributing to the problem.
   
3. Count Frequency
   Record how often each cause occurs over a specific time period.
   
4. Organize the Data
   Create a table where all causes are listed in descending order of significance.
   
5. Plot the Data
   On the graph:
   
   • The X-axis shows the list of causes (from most to least significant).
     
   • The Y-axis shows the magnitude or frequency of each cause.
     
6. Build the Diagram
   Draw vertical bars for each cause.
   The bars should decrease in height from left to right, showing which causes have the biggest impact.
   
7. Analyze the Results
   Identify the vital few causes that create the majority of the problem — and focus your corrective actions there.
   

💡 The Pareto Diagram helps you separate the “vital few” from the “trivial many” — turning data into focused action.