how to create a pareto chart
a common part of pareto analysis is to graphically depict the occurrence of each variable being tracked this depiction is called a pareto chart and it organizes and displays information to show the relative importance of various problems or causes of problems it is similar to a vertical bar graph in that it puts items in order from the highest to the lowest relative to some measurable effect of interest frequency cost or time here is the process of making a pareto chart the final step is analysis you can analyze a pareto chart by identifying those items that appear to account for most of the difficulty in the example below the institute for healthcare improvement identified three vital types of errors discovered during surgical setup advantages and disadvantages of pareto analysisin the most general sense the advantage of pareto analysis is that it helps to identify and determine the root causes of defects or problems this in theory should also help to save time in business the most important resource is time due to time the goals usually are not to eliminate or maximize but rather to optimize and the pareto rule helps with optimization with this technique businesses can resolve defects or errors with the highest priority first pareto charts can specifically help determine the cumulative impact of a problem cumulative impact results from effects caused by a problem happening over a long period of time pareto charts are especially useful for businesses or organizations because they can use them to plan the measures or actions that need to be taken in order to amend the problems for this reason pareto charts can sharpen problem solving and decision making skills problems related to a defect or error can be distilled into cohesive facts pareto analysis does not provide solutions to issues but only helps businesses to identify and narrow down the most significant causes of the majority of their problems once the causes have been identified the company must then create strategies to address those problems the main disadvantage of pareto analysis is that it does not provide solutions to issues it is only helpful for determining or identifying the root causes of a problem s in addition pareto analysis only focuses on past data while information about past errors or problems is useful there s no guarantee that it will be relevant in future scenarios a final disadvantage of pareto charts is that they can only show qualitative data that can be observed they cannot be used to represent quantitative data for example pareto charts cannot be used to calculate the mean the standard deviation or the average of the data its variability or changes in the measured attribute over time helps to identify and determine the root causes of defects or problems save time and resolve defects or errors with the highest priority first determine the cumulative impact of a problem plan what measures or actions need to be taken in order to amend problems can sharpen problem solving and decision making skills 