Pareto analysis

Learning objectives

• Construct a Pareto chart with valid categories.
• Choose count, cost or time as the ranking measure.
• Interpret a Pareto without over-claiming causation.

Focus, not proof

A Pareto ranks categories descending and adds cumulative share. It focuses attention on the categories that dominate frequency or impact.

The tallest bar is not the root cause; it is where investigation should start after the categories themselves are validated.

Garment-factory example

A defect Pareto shows ‘skipped stitches’ dominates count while ‘shade rejection’ dominates cost; both views produce different priority lists and both are legitimate.

Method

1. Confirm categories are mutually exclusive and exhaustive.
2. Choose count, cost or time as the ranking measure.
3. Sort descending and add cumulative percentage.
4. Stratify when aggregation hides an obvious subgroup.

Common mistakes

• Comparing percentages without exposure.
• Treating the tallest bar as the confirmed root cause.