2. Problem leads to loss

3. Most of the loss will be due
to a very few types of
defects, and these defects
can attribute to a very small
number of causes.

4. Pareto principle
The Pareto Principle, also known as the 80/20 Rule
For many events, 80% of the effects come from 20% of the
causes.

6. How to make Pareto Diagram ?
Step 1: Decide what problem are to be investigated and how to
collect the data.
1. Decide what kind of problems you want to investigate.
2. Decide what data will be necessary and how to classify them.
3. Determine the method of collecting the data and the period
during which it is to be collected.

7. Step 2 : Design a data tally sheet listing the items,
with space to record theirs totals.

8. Step 3: Fill out. the tally sheet and calculate the
totals.
Step 4: Make a pareto data sheet listing the
items:
 Individual totals
 Cumulative totals
 Percentage of overall total
 Cumulative percentages

10. Step 5: Arrange the item in the order of quantity, and
fill out the data sheet.
Step 6: Draw two verticle axis and a horizontal axis.
Step 7: Construct a bar diagram.
Step 8: Draw the cumulative curve (pareto curve).
Step 9: Write any necessary item on the diagram.

12. Pareto diagrams are of two types.
 Pareto Diagram by phenomena.
a) Quality
b) Cost
c) Delivery
d) Safety
 Pareto Diagram by causes.
a) Operator
b) Machine
c) Raw material
d) Operation method