007 Pareto Analysis

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Pareto AnalysisPareto Analysis

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Pareto AnalysisPareto Analysis

Contents

• What is a Pareto Diagram?

• Constructing a Pareto Diagram

• Interpreting a Pareto Diagram

• Uses of Pareto Diagrams

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Pareto Analysis - Learning ObjectivesPareto Analysis - Learning Objectives

After completing this module, you will be able to…

1. Construct Pareto Diagrams.

2. Interpret Pareto Diagrams.

3. Use Pareto Analysis to identify the “vital few” items on which to focus.

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Six Sigma Roadmap - Pareto AnalysisSix Sigma Roadmap - Pareto Analysis

BreakthroughStrategy

Characterization

Optimization

Measure

Analyze

Improve

Control

Define

To establish projectfocus.

To identify the “vitalfew” items impactingthe CTQ.

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What Is A Pareto Diagram? What Is A Pareto Diagram?

A Pareto diagram is a bar chart organized with the largest bar to the left and the smaller bars to the right in order of frequency.

Diameter

Position

Dimension

Notes

Hidden vie

ws

Sections

60

50

40

30

20

10

0

100

80

60

40

20

0

Defect

Per

cent

Co u

nt

Pareto Chart for Type

A Pareto diagram allows a team to:discover what type of categories relate to the problemfocus on the most important items

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What Is A Useful Pareto Diagram? What Is A Useful Pareto Diagram?

A diagram that shows 20% of the inputs (Xs) cause 80% of the problems with dependent process outputs (Ys)

Diameter

Position

Dimension

Notes

Hidden vie

ws

Sections

60

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20

10

0

100

80

60

40

20

0

Defect

Per

cent

Co u

nt


In this case, two Xs contribute 87.7% of the problem!

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Constructing a ParetoConstructing a Pareto

1. Decide on the process you want to know more about.

2. Choose the causes or problems that will be monitored, compared and rank ordered by: • brainstorming (what are the issues?) • using existing data (what issues surfaced in the last

month?)

3. Choose the most meaningful unit of measurement:a. frequencyb.costc. both

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Constructing a Pareto Diagram (Cont)Constructing a Pareto Diagram (Cont)

4. Select a time period for study that is long enough to accurately represent the situation:

a. Look at volume and variety in the data

b. Make sure scheduled time is “typical” to allow for seasonality or different work patterns within a given day or week.

5. Use a check sheet or other method to gather “real time” or historical data on each problem category.

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The chosen measurement units (e.g. frequency, cost) are shown on the vertical axis

The chosen problem categories are shown on the horizontal axis

Wrong Quantity

Wrong Part

Late Shipment

Wrong Carrier

Duplicate Shipment

WrongAddress

Lost inTransit

10

80

70

60

50

40

30

20

6. Label the Axes.

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List the problem categories in descending order from left to right on the horizontal axis.

ABC Electronics - Shipment Problems

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10

20

30

40

50

60

70

80

WrongQuantity

Wrong Part LateShipment

WrongCarrier

DuplicateShipment

WrongAddress

Lost inTransit

7. Construct the bar graph.

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8. If desired, convert the frequency or cost for each item into a % of the total.

Calculate the percentages for the items from left to right, and cumulate from left to right.

Plot the cumulative percentages.

ABC Electronics - Shipment Problems

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10

20

30

40

50

60

70

80

WrongQuantity

Wrong Part LateShipment

WrongCarrier

DuplicateShipment

WrongAddress

Lost inTransit

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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InterpretationInterpretation

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_

_

_

_

_

_

_

Def

ect A

Def

ect B

D

efec

t C

Def

ect D

D

efec

t E

Def

ect F

D

efec

t G

Def

ect H

Oth

er

Vertical axis shows

counts (or cost)

These bars account for 80% of the problem.

Items are rank ordered from

left to right

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Interpretation (Cont)Interpretation (Cont)

The cumulative percentages…

show how much of the total problem will be fixed by addressing the vital few.

Indicate whether the Pareto Diagram is useful.

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Example - Defects vs OperatorsExample - Defects vs Operators

There are defects on drawings. A group of engineers use Pareto Diagrams. First, they plot defect against CAD operator.

What should they conclude?

JoshJakeJoe

JoanneJillJo

hn

9 91012121313.813.815.418.518.520.0

100.0 86.2 72.3 56.9 38.5 20.0

60

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0

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80

60

40

20

0

Defect

CountPercentCum %

Per

cent

Cou

nt

Pareto Chart for Operators

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Conclusion - Defects vs OperatorsConclusion - Defects vs Operators

Since none of the bars stand out from the rest, they conclude that defects are not related to differences among operators.

What shouldthey do next?

JoshJakeJoe

JoanneJillJo

hn

9 91012121313.813.815.418.518.520.0

100.0 86.2 72.3 56.9 38.5 20.0

60

50

40

30

20

10

0

100

80

60

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0

Defect

CountPercentCum %

Per

cent

Cou

nt

Pareto Chart for Operators

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Example - Defects vs ProductsExample - Defects vs Products

Someone suggests they look at product type versus defects.

What should they conclude?

Trim Cover

SeatFoam

FrameRecline

rTra

ck

2 311131422 3.1 4.616.920.021.533.8

100.0 96.9 92.3 75.4 55.4 33.8

60

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0

100

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Defect

CountPercentCum %

Per

cen

t

Cou

nt

Pareto Chart for Product

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Conclusion - Defects vs ProductsConclusion - Defects vs Products

They conclude that defects are not related to difference among products.

What should they do next?

Trim Cover

SeatFoam

FrameRecline

rTra

ck

2 311131422 3.1 4.616.920.021.533.8

100.0 96.9 92.3 75.4 55.4 33.8

60

50

40

30

20

10

0

100

80

60

40

20

0

Defect

CountPercentCum %

Per

cen

t

Cou

nt

Pareto Chart for Product

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Example - Defects vs Drawing Feature TypeExample - Defects vs Drawing Feature Type

Someone suggests they look at drawing feature type versus defects.They conclude most defects occur on section views.

Now they can do something!

Diameter

Position

Dimensio

n

Notes

Hidden views

Sections

1 2 2 3 651 1.5 3.1 3.1 4.6 9.278.5

100.0 98.5 95.4 92.3 87.7 78.5

60

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100

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Defect

CountPercentCum %

Per

cent

Cou

nt


This Pareto Diagram is useful!

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Uses of Pareto DiagramsUses of Pareto Diagrams Major Cause Breakdown (Drill-Down Pareto)

– Shows the “tallest” bar broken down into sub-causes in a second, linked pareto (see example on next slide)

Before and After – Shows “New” bars drawn side-by-side with the original to show the effect

of change (Caution: sample sizes of “Before” and “After” must be identical!)

Change Source Data – Data is collected on the same problem from different source locations,

equipment, etc., and shown on side-by-side Paretos

Change Measurement Scale – The same data is used, but measured differently. Typically cost and

frequency are alternated.

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Example: Drill-Down ParetoExample: Drill-Down Pareto

M9100 MECHANICAL TEST FAILURESW9739

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1

2

3

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8

9

top plate not staked missing or wronggears

tight gears no apparent fault damaged gears

failure mode

freq

uen

cy

M9100 FAILURE SUMMARYW9739

0

10

20

30

40

50

60

MECH T

EST

MAN/PW

A ASSY.

ELEC

TES

T

ROBOTIC G

EAR A

SSY.

PACKOUT

PIN C

OININ

G

SPRIN

G WIN

D

TOP

PLATE

PLA

CE/STA

KE

PIN G

REASIN

G

failure location

SP Watertown Plant M9100 Failure Data

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Exercise 12.1 – Pareto DiagramExercise 12.1 – Pareto Diagram

1. Refer to your workbook.

2. Construct a Pareto Diagram for the example provided.

3. What information does the Pareto Diagram provide?

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Exercise 12.2 – Exercise 12.2 – Pareto Diagram Using MinitabPareto Diagram Using Minitab®®

1. Refer to your workbook.

2. Follow along with the instructor to create a Pareto Diagram on the “Past Due Invoices” example using Minitab®.

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Remember!Remember!

Pareto diagrams are typically used to prioritize competing or conflicting problems and to distinguish the “vital few” from the “trivial many.”

Pareto diagrams determine which of several classifications have the most count or cost associated with them.

The base data gathered must be in terms of either counts or costs.

Do not use terms that can't be added, such as percent yields or error rates.

Remember to use Pareto Diagrams creatively.

If the first one doesn’t show an 80-20 pattern, then reconsider the problem and try again.

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Next StepsNext StepsCreate the process map

Collect data (Y’s) and prioritize

Checksheet Pareto

0

20

40

60

80 • Process Capability

PPM/DMPO

Sigma Level

Identify potential causes (X’s) of variation and defects

Cause & Effect MatrixCause & Effect Diagram

MeasurePhase

007 Pareto Analysis

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