© The Quality Web, authored by Frank E. Armstrong, Making Sense Chronicles - 2003 - 2016

Lesson #5 - Tool #2 - Pareto Diagram

Tool #2 - Pareto Diagram
The Pareto diagram is a graphical overview of the process problems, in ranking order of the most frequent, down to
the least frequent, in descending order from left to right. Thus, the Pareto diagram illustrates the frequency of fault
types. Using a Pareto, you can decide which fault is the most serious or most frequent offender.
The basic underlying rule behind Pareto's law is that in almost every case, 80% of the total problems incurred are
caused by 20% of the problem cause types; such as people, machines, parts, processes, and other factors related to
the production of the product. Therefore, by concentrating on the major problems first, you can eliminate the
majority of your problems. The few items that have the largest amount of occurrence is your more frequent
problem, than are the many items that only happen once in a while. 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.
So then, what exactly is a Pareto diagram? The Pareto prioritizes problem areas. Sometimes a quality problem is so
cluttered with so many smaller problems, it is difficult to know just where to begin the solving process. Let's take an
example. Below is a table from a manufacturing process that charted all of their quality problems. While the original
defect chart listed many problems at various stages of the process, the overall problems were grouped into five
main process areas. In the left column is the name of the process where the defects occur. In the next column is the
amount of defects recorded from their daily check sheets, recorded during a one week period. In the third column is
the percent of defectives from the overall production (N = 2165). In the fourth and final column, is the percent of the
total defects. That is, for example, of all the defects recorded (416), poor Caulking is 47.6% of the entire problem. It
should be obvious then, where the primary problem is and what should be focused upon first.
Figure 1
From the chart above (figure 1), you can now create a Pareto chart in which you can graphically display the quality
problems. There is special software on the market that makes Pareto diagrams, however, an Excel barchart will
basically create the same display. The below bar chart reflects the above information charted in Excel.
The left vertical axis (border) shows the number of defects for each defective category, and the right vertical axis
shows the percentage of each defect of the total defects. The horizontal axis (bottom) lists the defective items
starting with the most frequent one on the left (Caulking), progressing over to the least frequent occurrence on the
right side (Torque). Therefore, the Pareto diagram visually indicates which problem should be solved first, or in this
case, the Caulking problem. With this bar graph, it is easier to see which defects are most important of all the
defects that exist. If we solve all or most of the problems in Caulking, it could affect some of the problems observed
in connecting, gapping, fitting, and torque.
During the "brain-storming" session (we'll cover this later), it is wise to ask, "Does the Caulking problem have any
impact on the other problems listed?" In some cases it might. If there was proper caulking, would part of the
"Gapping" problem be eliminated?" If there were proper caulking, would the "Torque" have a better value and thus
not be part of the defects? Sometimes your major problems have impact on the smaller problems. Several problem
areas may all be attributed to ONE ROOT CAUSE, even though several failure modes are observed. For this reason, it
is always wise to choose the most frequent problem first.
HOW TO MAKE A PARETO DIAGRAM
STEP #1 - Determine the category classifications that you are going to use to group your defect data by. Use your
check sheets to collect the data for the Pareto.
STEP #2 - Decide on the time period to be used to record your information. One week, a month, etc. It is best to be
consistent so that you have a standard to compare to if the data collection exercise is to be repeated again. You
can't measure results achieved accurately without consistent measurement periods.
STEP #3 - From the Check Sheet, total the occurrence of each item for the period measured. Each total will be
represented by the length of a vertical bar, much like the Pareto chart example above.
STEP #4 - (It is easier to keep your scale accuracy correct if you use graph paper). Draw horizontal and vertical axes
on graph paper; or if no graph paper available, use a ruler to measure and draw evenly scaled vertical and
horizontal lines that meet evenly (see figure 2 below).
Figure 2
STEP #5 - Make your scale units at even multiples, such as 10, 20, etc. so as to have an even scale system (see figure
3 below).
Figure 3
STEP #6 - Draw in the bars that correspond to the total numbers collected from your Check Sheet, starting on the far
left, with the most frequent (highest number recorded) defective item. It is recommended that you leave a gap
between each item bar for reading clarity. (Note: If you have several defective items with very small quantities, you
can group them together in a category called "other", as long as their total is less than the previous bar heighth).
Notice the figure 4 below.
Figure 4
STEP #7 - Under the horizontal axis (line), label each of the bars so that you know which defect is represented by
which bar.
STEP #8 - Draw another vertical line and label the percentage scale in the same manner that you did on the left side
(see figure 5 below)
Figure 5
STEP #9 - Plot a dot for each item on the graph, starting from the left side, on or above the bar corresponding to the
related percentage of defectives for each item. Once each dot is plotted, use a ruler and connect the line graph from
dot-to-dot, as shown in the "Pareto example" up above.
STEP #10 - Title the graph and briefly write the source of the data below the graph, that describes the data and
method used to gather. Include all pertinent facts which will define the method of observation (for example, time
period, production line, and whether this was before or after any modifications to the line). Recording this data on
the bottom of your chart, will help further analysis as well as to provide a record of what was done on this date, for
consideration in future studies.
Test Your Learning - Class Exercise
It is now time for you to try and make a Pareto Chart to practice your new knowledge. Again, it is really best if you
use graph paper. We will use the Production Defect Check Sheet from the "Check Sheet" lesson, to build your
Pareto. For your convenience, that chart can be found at Production Defect Check Sheet.
From the Production Defect Check Sheet above, you will need to total the number of occurrences (N) then divide
each individual defect by (N) to determine the percentage of overall defects, that each defective item represents.
When you are finished, check your answers against "Check Your Work" below.
There is one more important item I need to explain to you. There are really two styles of Pareto charts used out in
the field. The method explained above in this lesson is the same in either form, with the exception of the percentage
line on the graph itself. The difference is in how the graph is represented. If you look at the Pareto Example above,
you will see that the percentage of each defect is represented individually, and thus the trend goes downward from
left to right.
The true form, or most correct form, for the Pareto is to have your percentage curve be an accummulation of total
percentage at each bar. That is, the total of the first defect and the total of the second defect would be the plotted
amount above the second bar; the total of the first, second and third, would be plotted above the third bar, and so
on. Therefore, as you went from left to right, your curve would be getting larger until you reached 100% of the total
defects. In this way, you can see that from items 1 - 2, or from 1 - 3, it would represent the total percentage of those
few items, in relation to all the defects produced. So that you can understand further, Click Here to see an example.
CHECK YOUR WORK
Hopefully, you actually did spend the time and tried to make a Pareto chart. The best way to understand it, is to
actually create one yourself. You Learn Best by Doing it Yourself!!
Your figure calculations and your finished Pareto Chart should resemble the final product I have prepared for you.
Click HERE to check your final product.

.

© The Quality Web, authored by Frank E. Armstrong, Making Sense
Chronicles - 2003 - 2016

Lesson #5 - Tool #2 - Pareto Diagram

Tool #2 - Pareto Diagram
The Pareto diagram is a graphical overview of the process
problems, in ranking order of the most frequent, down to
the least frequent, in descending order from left to right.
Thus, the Pareto diagram illustrates the frequency of fault
types. Using a Pareto, you can decide which fault is the
most serious or most frequent offender.
The basic underlying rule behind Pareto's law is that in
almost every case, 80% of the total problems incurred are
caused by 20% of the problem cause types; such as
people, machines, parts, processes, and other factors
related to the production of the product. Therefore, by
concentrating on the major problems first, you can
eliminate the majority of your problems. The few items
that have the largest amount of occurrence is your more
frequent problem, than are the many items that only
happen once in a while. 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.
So then, what exactly is a Pareto diagram? The Pareto
prioritizes problem areas. Sometimes a quality problem is
so cluttered with so many smaller problems, it is difficult
to know just where to begin the solving process. Let's take
an example. Below is a table from a manufacturing
process that charted all of their quality problems. While
the original defect chart listed many problems at various
stages of the process, the overall problems were grouped
into five main process areas. In the left column is the
name of the process where the defects occur. In the next
column is the amount of defects recorded from their daily
check sheets, recorded during a one week period. In the
third column is the percent of defectives from the overall
production (N = 2165). In the fourth and final column, is
the percent of the total defects. That is, for example, of all
the defects recorded (416), poor Caulking is 47.6% of the
entire problem. It should be obvious then, where the
primary problem is and what should be focused upon first.
Figure 1
From the chart above (figure 1), you can now create a
Pareto chart in which you can graphically display the
quality problems. There is special software on the market
that makes Pareto diagrams, however, an Excel barchart
will basically create the same display. The below bar chart
reflects the above information charted in Excel.
The left vertical axis (border) shows the number of defects
for each defective category, and the right vertical axis
shows the percentage of each defect of the total defects.
The horizontal axis (bottom) lists the defective items
starting with the most frequent one on the left (Caulking),
progressing over to the least frequent occurrence on the
right side (Torque). Therefore, the Pareto diagram visually
indicates which problem should be solved first, or in this
case, the Caulking problem. With this bar graph, it is easier
to see which defects are most important of all the defects
that exist. If we solve all or most of the problems in
Caulking, it could affect some of the problems observed in
connecting, gapping, fitting, and torque.
During the "brain-storming" session (we'll cover this later),
it is wise to ask, "Does the Caulking problem have any
impact on the other problems listed?" In some cases it
might. If there was proper caulking, would part of the
"Gapping" problem be eliminated?" If there were proper
caulking, would the "Torque" have a better value and thus
not be part of the defects? Sometimes your major
problems have impact on the smaller problems. Several
problem areas may all be attributed to ONE ROOT CAUSE,
even though several failure modes are observed. For this
reason, it is always wise to choose the most frequent
problem first.
HOW TO MAKE A PARETO DIAGRAM
STEP #1 - Determine the category classifications that you
are going to use to group your defect data by. Use your
check sheets to collect the data for the Pareto.
STEP #2 - Decide on the time period to be used to record
your information. One week, a month, etc. It is best to be
consistent so that you have a standard to compare to if
the data collection exercise is to be repeated again. You
can't measure results achieved accurately without
consistent measurement periods.
STEP #3 - From the Check Sheet, total the occurrence of
each item for the period measured. Each total will be
represented by the length of a vertical bar, much like the
Pareto chart example above.
STEP #4 - (It is easier to keep your scale accuracy correct if
you use graph paper). Draw horizontal and vertical axes on
graph paper; or if no graph paper available, use a ruler to
measure and draw evenly scaled vertical and horizontal
lines that meet evenly (see figure 2 below).
Figure 2
STEP #5 - Make your scale units at even multiples, such as
10, 20, etc. so as to have an even scale system (see figure 3
below).
Figure 3
STEP #6 - Draw in the bars that correspond to the total
numbers collected from your Check Sheet, starting on the
far left, with the most frequent (highest number recorded)
defective item. It is recommended that you leave a gap
between each item bar for reading clarity. (Note: If you
have several defective items with very small quantities,
you can group them together in a category called "other",
as long as their total is less than the previous bar heighth).
Notice the figure 4 below.
Figure 4
STEP #7 - Under the horizontal axis (line), label each of the
bars so that you know which defect is represented by
which bar.
STEP #8 - Draw another vertical line and label the
percentage scale in the same manner that you did on the
left side (see figure 5 below)
Figure 5
STEP #9 - Plot a dot for each item on the graph, starting
from the left side, on or above the bar corresponding to
the related percentage of defectives for each item. Once
each dot is plotted, use a ruler and connect the line graph
from dot-to-dot, as shown in the "Pareto example" up
above.
STEP #10 - Title the graph and briefly write the source of
the data below the graph, that describes the data and
method used to gather. Include all pertinent facts which
will define the method of observation (for example, time
period, production line, and whether this was before or
after any modifications to the line). Recording this data on
the bottom of your chart, will help further analysis as well
as to provide a record of what was done on this date, for
consideration in future studies.
Test Your Learning - Class Exercise
It is now time for you to try and make a Pareto Chart to
practice your new knowledge. Again, it is really best if you
use graph paper. We will use the Production Defect Check
Sheet from the "Check Sheet" lesson, to build your Pareto.
For your convenience, that chart can be found at
Production Defect Check Sheet.
From the Production Defect Check Sheet above, you will
need to total the number of occurrences (N) then divide
each individual defect by (N) to determine the percentage
of overall defects, that each defective item represents.
When you are finished, check your answers against "Check
Your Work" below.
There is one more important item I need to explain to you.
There are really two styles of Pareto charts used out in the
field. The method explained above in this lesson is the
same in either form, with the exception of the percentage
line on the graph itself. The difference is in how the graph
is represented. If you look at the Pareto Example above,
you will see that the percentage of each defect is
represented individually, and thus the trend goes
downward from left to right.
The true form, or most correct form, for the Pareto is to
have your percentage curve be an accummulation of total
percentage at each bar. That is, the total of the first defect
and the total of the second defect would be the plotted
amount above the second bar; the total of the first, second
and third, would be plotted above the third bar, and so on.
Therefore, as you went from left to right, your curve would
be getting larger until you reached 100% of the total
defects. In this way, you can see that from items 1 - 2, or
from 1 - 3, it would represent the total percentage of those
few items, in relation to all the defects produced. So that
you can understand further, Click Here to see an example.
CHECK YOUR WORK
Hopefully, you actually did spend the time and tried to
make a Pareto chart. The best way to understand it, is to
actually create one yourself. You Learn Best by Doing it
Yourself!!
Your figure calculations and your finished Pareto Chart
should resemble the final product I have prepared for you.
Click HERE to check your final product.