Pareto Chart

Intro

A Pareto Chart ranks causes from most to least significant, based on the Pareto principle. In improvement work, it focuses effort on the few causes driving most effects.

Key points:

• Highlights the vital few versus trivial many.
• Supports data‑driven prioritization.
• Common use cases across EA/BPM/Data/App/Tech include defect analysis, incident drivers, and cost reduction.
• Pitfall: assuming 80/20 without validating with data.

Examples:

• Top error codes causing most service tickets.
• Primary root causes of order delays.
• Few applications consuming most run costs.

In practice:

Collect frequency data, sort descending, and plot cumulative percentage to target the biggest wins first.

Related terms: Key Performance Indicator; Root Cause Analysis; Lean

FAQs:

Q: Is 80/20 always exact?
A: No; it’s a heuristic—use actual distributions.

Q: Can Pareto apply to costs?
A: Yes; sort costs by driver and analyze cumulatives.

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