Building and Using Pareto Charts

Building and Using Pareto Charts

You may have heard of the 80/20 rule. The idea is that 80% of the wealth is held by 20% of the population. As an Italian economist, Vilfredo Pareto made this observation that became generalized as the

Pareto Principle: 80% of outcomes are due to 20% of causes

For field returns, for example, we may surmise that 80% of the failures are due to 20% of the components, for example. This principle helps us to focus our work to reduce field failures by address the vital few causes that lead to the most, or most expensive, failures.

Gather the data

The Pareto Principle applies to observed data. The first step is to find the data. Field return data may be found in customer service, call centers, repair centers, etc depending on your product and organization. In a factory, the CMMS or other system may include a listing of downing events by type of equipment.

What we’re looking for is a count by category. For example, let’s say we recently launched our newest desktop computer the Model X. Over the period of the first month, we received 248 returns for various reasons.

The best data for an example like this is after thorough failure analysis. Be suspect of a listing of just what has…