Pareto

Pareto Analysis as an Effective Quality Improvement Tool

Pareto dashboard example to determine which root causes provoked 80% of nonconformities using BPA Quality on Office 365 and Power BI.

In the quality improvement context, a Pareto chart is a simple tool that helps organizations identify the most frequent defects, complaints, or any other factor that can be counted and categorized. The chart takes its name from Vilfredo Pareto, originator of the “80/20 rule,” which postulates that 80 percent of the problems come from 20 percent of the causes.

You can use a Pareto chart any time you have data that are broken down into categories, and you can count how often each category occurs.

For instance, a Pareto chart can be used

  • to prioritize suppliers to evaluate (e.g. in ABC categories), based on the total cost of the purchased material/services with each supplier;
  • to identify main risks or hazards that caused 80% of incidents
  • to determine major root causes that provoked 80% of the complains or nonconformities.

Knowing major root causes that caused the biggest part of complaints and nonconformities allows an organization to prioritize actions to be taken to become more efficient.

This video presents a Pareto dashboard example to determine which root causes triggered 80% of nonconformities using BPA Quality on Office 365 and Power BI. The entire scenario was configured with no code.

The bar chart represents occurrence for each root cause in decreasing order. The curve represents the cumulated percentage of these root causes. In this case, 7 root causes triggered 80% of nonconformities, which represents a bit more than 6% of all root causes.

In summary, a Pareto analysis can be done easily for any categorized data available in your BPA Quality app. The analysis outcome allows organization to prioritize actions to become more efficient and enable continuous improvement.

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