Pareto Chart

A Pareto Chart is a chart that contains both bars and a line graph (line graph optional) that sorts data into descending order (by bars) and the cumulative total by a line. It is based on the “Pareto Principle” or the “80/20 rule” which states that roughly 80% of the results are caused by 20% of the inputs.
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REFERENCES

 

Bassard, M., Ritter, D.(2010). The Memory Jogger 2. Tools for Continuous Improvement and Effective Planning.Second Edition.Salem, NH: GOAL/QPC

Handbook for Basic Process Improvement.  Pareto Charts. http://www.au.af.mil/au/awc/awcgate/navy/bpi_manual/mod8-pareto.pdf.  Retrieved 27 June 2017

Institute for Healthcare Improvement Open School. http://www.ihi.org/education/IHIOpenSchool/resources/Pages/AudioandVideo/Whiteboard20.aspx.  Retrieved 27 June 2017

Learn About Quality. ASQ. Pareto Charts. http://asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html. Retrieved 27 June 2017

Sollecito, W. A., Johnson, J. K. (2013). Continuous Quality Improvement in Health Care Fourth Edition.Burlington, MA: Jones & Bartlett Learning.

Spath, P. L. (2013). Introduction to Healthcare Quality Management, Second Edition.Chicago, IL: Health Administration Press.

Tam, R.  Handbook for Basic Process Improvement.  10 June 1996. Website retrieved: 17 May 2017

REFERENCES

Introduction

 A Pareto Chart is a chart that contains both bars and a line graph (line graph optional) that sorts data into descending order (by bars) and the cumulative total by a line. It is based on the “Pareto Principle” or the “80/20 rule” which states that roughly 80% of the results are caused by 20% of the inputs.

Why Use it?

  • To focus improvement efforts on the problems that offer the greatest potential for improvement.
  • To concentrate efforts on the "vital few" (20%) sources of problems and not be distracted by the "trivial many" (80%).
  • Note: These percentages are used as guidelines, not hard-and-fast rules.

Materials You'll Need:

  • Data points
  • Excel spreadsheet or other electronic tools that can compute and display data
  • Calculator
  • Graph paper (of not using an electronic spreadsheet)
  • Pencils/ pens

How to Improve the Process:

Identify the Problem

Decide which problem or area you want to know more about.

Select a Team

Select a team to work on the project.

Gather Data

  • Collect enough data to provide a representative picture of the process. This helps to identify patterns and calculate results.
  • Collect data for a specified period of time; hour, shift, day, week, etc.
  • Data can be collected during "real time" or from data already collected or stored in a database.

Create a Data Table

Write the data in a table listing the major categories contributing to the problem (e.g., types of errors, types of complaints) and the magnitude of each factor (e.g., frequency of each factor, cost of each factor).

Order the Factors Largest to Smallest

Place the factors in order from largest to smallest. If there are many factors that have a low value, they can be grouped into a category labeled "Other." Note: Steps 6 and 7 are optional if you want to include a line chart.

Calculate

Calculate the percentage of the total that each factor represents.

Calculate

Working from the largest to the smallest, calculate the cumulative percentage of each category by adding each row of the cumulative percentage (Column D) with the percent (Column C) from the next line below until you reach 100%.

Example of customer complaints in a doctor's office including #6 and #7 above.

Example of customer complaints in a doctor’s office, including #6 and #7 above.

Table showing complaint types in a doctor's office with frequencies and percentages. Top complaints are Poor Customer Service (65 complaints), Dirty Lobby (50), and Parking (42), with cumulative percentages highlighting their impact.
Table displaying types and frequencies of complaints received in a doctor's office, sorted by severity and impact.

Create a Chart Using the Date from the Table


  • The "Y" axis is used for the frequency or number of complaints as well as the cumulative percentage.
  • The "X" axis is used for the type of complaint.

    Example: 

Pareto chart with complaint types on the x-axis and frequencies on the y-axis. Poor Customer Service, Dirty Lobby, and Parking are the highest-frequency complaints, with a cumulative line showing these account for over 74% of issues.
Pareto chart visualizing the frequency and cumulative impact of various complaints in a medical office setting.

Analyze the Chart


  • Generally, the tallest bars indicate the biggest contributions to the overall problem.
  • Focusing on those issues (the vital few) will likely reduce some of the other issues as well.
  • Notice that in this example, the top three complaints make up 74.1% of the issues.
  • Review the chart within the context of the overall values and goals of the organization.

 

How to Improve the Process

  • Determine areas that need correction.
  • Utilize a Process Improvement Methodology such as Plan-Do-Study-Act (PDSA) to make improvements.
  • Variations:
    • Major Cause Breakdown: Use this to "break down" the tallest bar into sub-causes. In this case, the team wants to learn more about the columns "Poor Customer Service", “Dirty Lobby”, and “Parking” and would identify the sub-causes in those categories. The following chart reveals that most issues with Customer Service are in the front desk area.
Annotated Pareto chart showing complaint types and frequencies in a doctor’s office. A green line at 80% cumulative percent separates the top three complaints—Poor Customer Service, Dirty Lobby, and Parking—as the "Vital Few" from the remaining "Trivial Many" complaints.
Pareto Chart Highlighting the “Vital Few” vs. the “Trivial Many” in Patient Complaints This annotated Pareto chart distinguishes the most impactful complaints—those contributing to over 80% of dissatisfaction—from less significant issues, guiding focused improvement.

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