also known as the 80/20 Rule
A Pareto chart (diagram) will help to identify problems and to
prioritise then to help decide which processes need
Pareto is a very useful tool. Often referred to as the
80/20 rule because it recognises that a small number of
problem types can account for a large percentage of the
total number of problems usually in a ratio of 80/20.
Purpose Of A Pareto Chart (diagram)
Pareto chart (diagram) is used to visually display the relative
importance of the differences between groups of data. It
helps identify improvement areas and set priorities.
Sample Pareto Chart (diagram)
Construct A Pareto Chart (diagram)
construct a chart, data needs to be collected about each
problem. Usually the data is obtained by check and tally
sheets which are used to capture details of problems
over a period of time
here to learn more). When the data is
available, the Pareto can be created:
1. Decide what categories you will use to group items.
For example, if your business was investigating the
delay associated with processing credit card
applications, you could group the data into the
following categories (which you see have been used in
the example chart above):
Residential address not valid
Already a customer
2. Construct the chart.
The left-side vertical axis of the Pareto chart is
labelled Frequency (the number of counts for each
category), the right-side vertical axis of the Pareto
chart is the cumulative percentage, and the horizontal
axis of the Pareto chart is labelled with the group
names of your response variables. The percentage is
determined by dividing the total for the category by the
total of all the categories.
Unlike the Bar chart the bars on the
Pareto chart are placed in highest
What Questions does the Pareto Chart Answer?
§ What are the largest issues (this will help you
prioritise which improvements need to be done and in
What 20% of issues are causing 80% of the problems
(e.g. 80/20 rule This will also help decide your
Where to focus your efforts to achieve
the greatest improvements
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