What is Pareto diagram? Steps to use effectively

What is Pareto diagram? Steps to use effectively

PARETO DIAGRAMS:

Let’s understand it with a small example, if you have number of task to complete in a small duration to present your potential.

How you are going to tackle the situation:

I am sharing my opinion on this, I will focus on the highly potential and valuable task first and later pick second ones.

What’s your opinion?

In similar manner when we talk about handling the issues in organization we have to follow such mentality. We have to focus on the high impact issues first because we can’t do everything at one movement.

What is Pareto diagram? Steps to use effectively

It is type of bar chart in which data is arranged in descending order from left side to right side, which create more clear understanding about the data.

Basically these bars are the numbers or values which shows the impact or we can call it importance of specified items.

These bars also reflect the criteria of vital few in contrast to trivial many.

What are  the Pareto Principle?

If we talk about Pareto principle. Pareto is focus on the vital few in contrast of trivial many.

• After plotting the data in Pareto, it will shows that the 80% of issues are caused 20% of causes. It means the Majority of the issues ae due to few number of causes.
• When we ae interprets the Pareto result we have to focus on the 20% causes which re responsible for 80% of the issues.
• It means if we are able to find about the 20% causes than we can solve the 80% of our issues.
• It is the uniqueness of Pareto diagram.
• Which with focusing on small area of causes we can resolve the majority of our problem quickly.

Steps to create Pareto diagram effectively:

Uses of Pareto Diagrams:

• It helps to build categories the data
• It helps to prioritize the data
• It helps to show the impact of issues with respect to contribution
• It help to create better comparison for before and after analysis
• Easy to understand and accepted world wide

Where we can use Pareto diagram:

• It can use for defect analysis
• It can used in identifying the financial related issues
• It can help to identify the issues faced by any function
• It can help to categories the top causes for majority of the issues
• It can help to present the data with more impact

What is the difference between Pareto charts and bar charts?

As mentioned above, a Pareto chart present the data in the form of bar graph.

If we talk about bar graph it will just show the data in graphical manner because it is made for that purpose.

What is Pareto diagram? Steps to use effectively

But when we talk about Pareto diagram, it having some rule to input data and it plot the data accordingly. Which create the difference because the result show by Pareto graph is showing that the 80% of issues are causes 20% of reason. This is the main thing which create huge difference between the Pareto and normal bar graph.

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What is Pareto diagram? Steps to use effectively