Coming to this fourth tool in the list which is a Pareto Chart, pareto chart is based on 80:20 principle 2
and which tells that 80 percent of the problems are caused by 20 percent causes. 3
So to improve quality if you just work on those 20 percent causes you can solve 80 percent problems. 4
In the example which we took earlier regarding water bottles there were a number of problems lose caps, 5
scratch. 6
But if you look at the problems you will see that there are a few problems which are happening more 7
number of times. 8
So what you need to do is you just need to focus on those problems which are happening too frequently. 9
So once you solve those two problems for example out of that six you would be able to reduce let's say 10
80 percent of your problems. 11
So this helps you in prioritizing your problem solving. Pareto chart will help you in 12
identifying that where 13
all you need to give your priority. 14
So basically this helps you in sorting out the "vital few" from "trivial many". 15
So instead of working on trivial many items you just work on vital few items. 16
And that way you can improve quality faster. 17
So when I say Pareto chart is a type of bar chart. 18
The immediate thought in your mind would be OK histogram was also type of bar chart. 19
What's the difference between histogram and pareto chart. If you look at the X axis of a histogram 20
X axis of the histogram would be a number a numeric value, numeric value could be let's say the range of 21
volumes. We talked about the volume of water bottle we will have one bar which will be related to 1000 22
to 150 milliliters. 23
Another bar would be 1050 to 1100 millimeters, so these bars will be related to a specific number 24
on the x axis whereas when we talk a bar chart, in the bar chart on the x axis you will not have numbers 25
you'll have the categories. 26
Categories such a loose cap, scratch those are not the numbers. 27
So that's the difference between a bar chart and the histogram. Pareto chart is a bar chart where these 28
bars are arranged in a descending order. 29
The biggest bar is on the left. 30
And as you move to the right the height of the bar keeps on reducing basically that will help us in 31
identifying the key problems. 32
All the bars which are on the left side which have a higher height. 33
Basically that's where we will be attending to. 34
That's where we will be focusing our attention. 35
Let's look at an example of pareto chart on the 36
next Slide to have a better understanding of what Pareto Chart looks like.