What is Pareto Analysis (Pareto Chart) and the 80/20 rule?
A Pareto chart is one of the seven basic tools of quality management. It simplifies decision-making by visually representing the Pareto principle, known as the 80/20 rule. In practice, this principle states that 80 percent of consequences (e.g., nonconformities, scrap, or downtime) stem from just 20 percent of the causes.
When to use a Pareto chart?
- When analyzing claims and creating 8D reports (especially in steps D2 and D4) in the automotive industry.
- When you need to prioritize problems and find out which defect is costing you the most money.
- When implementing corrective actions – you first address the defects that make up the top 80% on the reference curve.
How to create a Pareto chart (calculation)
Instead of the complex dual-axis setup in Excel, our online generator does the heavy lifting for you. For the correct calculation, the input data is first sorted in descending order by frequency. The resulting chart then combines a standard bar chart (decreasing defect counts) and a line chart (a curve showing the cumulative percentage).