AdvancedQualityManagement

Pareto Analysis

Free Quality Assignment

Hani Alsharari
November 21, 2013
Advanced Quality Management
IME 5080

Pareto Analysis

AdvancedQualityManagement

Pareto analysis is defined as a quality tool which is going to help in solving the most crucial parts. It
makes a process more effective by eliminating defects. It is most commonly used in brainstorming
sessions in order to find out the most crucial hurdle in any process or project. It is the most important
tool which has limitless goals.
Pareto analysis was first defined by an Italian economist Vilfredo Pareto. He was born in 1848. The
actual concept of Pareto analysis is defined as the 80% of the wealth is controlled by 20% of the people
.it is mainly used for quality control. The actual definition explains that 80% of the problems in the
deliverables are caused by 20% of the problems in manufacturing process. It recommends going with
the concept of vital few from trivial many.
Pareto analysis consists of tour phases in orders to find out and rectify the defects the first phase is
conducted through Brainstorming surveys etc.
Implementing the tool
Step 1:
Firstly identify to sort down the problems: firstly evaluate the list of problems that are to be rectified.
Communicate with the customers employees and sort out the inputs which are obtained from them
Step 2: Conducting root cause analysis:
In this stage, the Root cause for each listed problem is identified through brainstorming, Root cause
analysis etc.
Step 3: computing the percentages of each problem:
These computing methods are very from problem to problem. It varies from improving a service to
accruing profits. If the Pareto analysis is being implemented for acquiring and dealing with the
computing Method on how much they cast. If the Pareto is being implemented for improving the
quality of service there by acquiring customers satisfaction by 100 percentage, than the

Pareto Analysis

AdvancedQualityManagement

No: of complaints listed for every problem which was identified in order to. This helps in calculating
the percentage of each defect identified.
Step 4: combine the problems together depending upon on the root cause:
In this we try to group up the problems which are caused due to a particular Root cause.
For example, if the amount of waiting time before the treatment is due to unavoidability of staff,
Similarly of time taken to solve the problem and also dissatisfied treatment is due to lack of staff
segregate all of these into the same group.
Step 5: computing the sconces of each group:
In this step after adding up the complaint for each specified group. The highest priority would be given
the order of addressing the problem will be the group with highest number of complaints.
Step 6: implement the solution from the results obtained:
According to the priority level obtained from the Pareto chart solve the causes for the problems listed.
It is very important to understand that group with least priority is not worth addressing as the solution
may be costly than the problem effects.

[4]

Pareto Analysis

AdvancedQualityManagement

In the first phase, the main thing is it identifies the causes for poor quality. Which may be caused due to
poor production processes improper packaging etc. For example we consider the example of Pareto
analysis implemented in a medical center. Here in this case, the medical center has problems with the
quality of service as the customers are not satisfied. This problem can be rectified by implementing
Pareto analysis. In this first stage of Pareto analysis, it involves to identify the possible causes for the
problem occurred. This can be done through customer satisfaction surveys or brainstorming sessions
etc. through these, we can find out the causes for poor quality of service.
On implementing and considering the cause and effect analysis etc. The causes responsible for poor
quality were identified.
The following are the results of customer satisfaction surveys.
Improper information provided by the staff or improper behavior of the staff.
Amount of waited time before attending the patient.
Ample numbers of formalities which cause the patient in convince.
Dissatisfied treatment.
The amount of time taken to solve the problem.
Defects
Improper information or Improper behavior of the
staff

Number of Complaints
30

Amount of waiting time before the treatment

20

Dissatisfactory treatment
Ample number of formalities
Time taken to solve the problem

10
80
90

AdvancedQualityManagement

Pareto Analysis

The above table indicates the results of the customer satisfaction survey and brainstorming
sessions.
The second phase of Pareto analysis deals with the amount of time over which we have decided to
conduct the analysis.
Some measures may be implemented which are classified as seasonal, biannual. The process of
this analysis is continued until a particular desired amount of time after which the results of the analysis
are subtotaled than continue with the rent stage.

The third phase is designed to summarize the results obtained in the first phase. After summing up the
number of complaints for each cause, the total number of complaints is obtained by adding them all
together. Therefore, as we have to obtain the percentage for each cause, the following method is
implemented. Each of number of defects and then it is multiplied by 100 in order to obtain the
percentage. As we obtain the percentage of the frequency of defects, a histogram is to be constructed
with the defects of x-axes and the percentage on the y-axes. The causes or the defects are listed such
that they are in order of left to sight such that the most often occurring defect on the left most, and this
follows the order.
Here for our example we implement third stage as follows.
- As explained above, the percentages are calculated and are used to construct the histogram. The defect
which occurs most often is represented on the left most. The following method is

Category
Improper information or
Improper behavior of staff
Amount of waiting time
Dissatisfied treatment
Ample number of formalities

No. of Complaints
30
20
10
80

Percentage
16%
11%
5.2%
42%

AdvancedQualityManagement

Pareto Analysis
Time to Solve

50

26%

Total number of complaints is: 30 + 20 + 10 + 80 + 50 = 190

Then we calculate the percentages of these numbers for each category:
Improper information or improper behavior of the staff
30 / 190 = 0.157 * 100 = 16%
Amount of waiting time 20 / 190 = 0.108 * 100 = 11 %
Dissatisfied treatment 10 / 190 = 0.052 * 100 = 5.2 %
Ample number of formalities 80 / 190 = 0.42 * 100 = 42%

The fourth phase which is the final stage deals with interpreting and implementing the results from the
above stages. The line graph which is developed from the histogram depicts the percentage of the total
defects.

Pareto Analysis

AdvancedQualityManagement

Here the actual definition comes into play which say that 80 percent of the causes.
After the left most problems are dealt, the Pareto analysis is implemented again as the percentage of
other defects various with the number of complaints.
Here in our example, the results of the above phases interpreted and are analyzed. As we know that the
problem which has occurred most is represented on the left most corner. Therefore in this case, the
most occurred problem is number of formalities. Therefore, this problem is dealt first and the Pareto
analysis is conducted again to more on to the next problem.

Pareto Analysis

AdvancedQualityManagement

References
[1] Pareto Analysis. Retrived from
https://depts.washington.edu/oei/resources/toolsTemplates/pareto_principle.pdf

[2] Pareto Analysis.Retrived from

http://www.improhealth.org/fileadmin/Documents/Improvement_Tools/Pareto_Analysis.pdf

[3] PowerShow.com. (2012).Pareto Analysis. Retrieved from http://www.powershow.com/view/86c6cNGM0Y/Pareto_Analysis_powerpoint_ppt_presentation

[4] Pareto chart (Pareto distribution diagram), (2011). Retrieved from:
http://whatis.techtarget.com/definition/Pareto-chart-Pareto-distribution-diagram