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How Pareto Chart Analysis Can Improve Your Project

This document discusses how Pareto chart analysis can be used to improve projects. It explains that Pareto charts are a type of histogram that visualizes the Pareto principle - that 80% of outputs often come from 20% of inputs. The document provides an example of how identifying the few most important causes of issues using a Pareto chart could reduce total issues by over 40%. It also outlines other ways Pareto analysis could be applied to projects, such as breaking down major causes or comparing charts before and after changes.

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Maria Teresa Mendoza
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40 views12 pages

How Pareto Chart Analysis Can Improve Your Project

This document discusses how Pareto chart analysis can be used to improve projects. It explains that Pareto charts are a type of histogram that visualizes the Pareto principle - that 80% of outputs often come from 20% of inputs. The document provides an example of how identifying the few most important causes of issues using a Pareto chart could reduce total issues by over 40%. It also outlines other ways Pareto analysis could be applied to projects, such as breaking down major causes or comparing charts before and after changes.

Uploaded by

Maria Teresa Mendoza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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How Pareto Chart Analysis

Can Improve Your Project


IE 502 IE Design Project 1
IE 506 IE Design Project 2
IE 507 Facilities Design
PARETO CHART
• It is a special type of histogram that helps to
visualize a "rule" known as the Pareto
Principle.
What is the Pareto Principle?
• The Pareto Principle was discovered by a 19th
century Italian economist and sociologist
named Vilfredo Pareto (1848 - 1923).
• When he was researching the distribution of
wealth in society, he found that 80% of the
wealth was held by 20% of the population.
Pareto Principle
• Even more interesting was that he was able to see
similar distributions outside of economics.
• For example, in his own garden he found that 80%
of his peas were produced by only 20% of the
peapods he had planted.
• Because of this particular distribution, this
principle is also known as the 80/20 Rule and the
Pareto Distribution. It can be generalized with the
following statement...
• 80% of the outputs result from 20% of the inputs
Pareto Principle
• The main idea is that there are usually only a
few inputs that generate most of the outputs.
• A Pareto Diagram can help you identify these
"vital few" inputs.
PARETO DIAGRAM

• A Pareto Diagram has several key benefits...


• • Helps the project team focus on the inputs
that will have the greatest impact
• • Displays in order of importance the inputs
that matter in a simple, visual format
• • Provides an easy way to compare before
and after snapshots to verify that any process
changes had the desired result
The Pareto Chart Makes it Clear
• The chart lists the inputs along the horizontal
axis in descending order of output frequency.
• The left vertical axis measures the number or
frequency of the output for each input and is
charted using a bar graph.
• The right vertical axis measures the cumulative
percentage of the outputs and is charted using
a line graph.
Pareto Chart of Project Issues
PARETO ANALYSIS
• Based on this Pareto analysis, if you focused
your efforts on addressing just the Installation
issues, you would have the potential to cut
your total issues by more than 40%!
Using Pareto Analysis to Improve
Your Project
• In addition to the basic Pareto diagram, there
are other variations that you could use...
• • Major Cause Breakdown: The "tallest bar"
can be broken down into subcauses using a
second Pareto diagram
• • Before and After: After a change has been
made, create a second chart to show in a side-
by-side comparison with the original chart
Using Pareto Analysis to Improve
Your Project
• Change the Data Source: Analyze the same
problem from different perspectives. For
example, from different departments,
locations, equipment, and so on
• • Change the Measurement Scale: Use the
same inputs, but measure the outputs
differently. For example, one chart can
measure frequency and another chart can
measure cost.
REFERENCE
• https://www.project-management-
skills.com/pareto-chart.html

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