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Pareto Chart: What Is It?

A Pareto Chart is a tool that refers to “Pareto’s Principle”, where it is common for 80% of results to come from 20% of the effort or inputs.  While these numbers are not set in stone they are often close, with similar percentages such as 70% of your problems coming from 30% of your processes, and so on.

Pareto Charts are often used to determine where you might get the best return on your effort when doing a Lean transformation – by focusing on the item that is causing the most problem.

To use a Pareto Chart:

1. We get the data around the process or problem we are looking at and arrange it from largest to smallest in a bar chart.
2. We then take the cumulative amounts (as a percentage) and overlay these as a line chart.  This will result in the bar chart moving down, and the cumulative line moving up.

Using this, you should be able to see at a glance where you will get the most return on focusing your effort.  Many people mark the “80%” line, so they can see where the majority of problems or opportunities lie.

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