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Interpreting
a Pareto Chart
The left vertical axis of
the Pareto has "counts" or "cost" depending on the data
used. Each vertical bar represents the contribution to the total from a
given "problem" area. The bars are placed on the graph in rank
order, that is the bar at the left has the highest contribution to counts
or cost. The right vertical axis has percent demarcations. A cumulative
line is used to add the percentages from each bar, starting at the left
(highest cost or count) bar. Thus, we can see which bars contribute the
most problems, and with the cumulative line, determine how much of the total
problem will be fixed by addressing the highest few.
Remember that the purpose
of the Pareto is to distinguish the "vital few from the trivial many."
Therefore, we would like only a few bars on the left side of the Pareto
that account for most, say 80%, of the problems. Then it's clear which areas
we should address. We can also look at the cumulative line to tell us if
our Pareto is working well. The cumulative line should be steep, with a
lot of arch to it, implying that the first few problem areas rapidly add
to a high percentage of the total problems. If the cumulative line is straight,
it is telling us that the contribution from each successive bar (after the
first) is about even. These bars, then, should be about the same height.
This says that no problems stand out as being more bothersome than the rest,
which doesn't help much for problem solving.
We can get "flat"
Pareto Diagrams just by the way we gather our data. If we separate major
problem areas into many small problem areas, than each bar won't have much
in it, hence a flat shape. We might consider regrouping the problems into
meaningful, larger problem areas.
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