Pareto Chart and Six Sigma

Posted by: meikah | 5 March 2007 | 3:41 am

If your organization is going though some quality improvement, I’m sure you have asked the following questions:

• What is the largest issue facing your company or organization?
• What 20% of sources are causing 80% of the problems?
• Where should we focus our efforts to achieve the greatest improvements?

These questions can be answered by using a Pareto chart, also called the 80/20 Rule. The assumption is that most of the results in any situation are determined by a small number of causes.

For example, 80% of process defects arise from 20% of the process issues or 80% of delays in schedule arise from 20% of the possible causes of the delays.

BusinessKnowledgeSource.com shares that a Pareto chart:

…is a type of bar chart where the values being plotted are arranged in descending order.

…graphically summarizes and displays the importance of the differences between different groups of data.

…is constructed by splitting your data into groups. These groups are also known as segments, bins or categories. The left-side vertical axis of the Pareto chart is then labeled Frequency, Cost or some other unit of measure depending on your data.

Continue reading…

Source:
BusinessKnowledgeSource.com Manufacturing Info, “What is a Pareto chart and how is it used in Six Sigma” with link provided by Six Sigma Zone

 Filed under: Tools/Toolkits, Data, Statistics, Pareto chart | |