Pareto Chart is a useful technique to understand what the most effecting area of the problems is and where we need to put our efforts.
A success of a project from the problem resolution perspective would not be judged by how many problems we have removed successfully, rather it would be judged by how effectively and successfully we find out about heavy hitter recurring product/service effecting problems and works to remove them.
One important point is that these problems contribute to the remaining most of the problems. Let’s imagine we are investing efforts for the resolution of problems that are in the environment due to other problems which are actually source of these recurring problems, then what will happen? Obviously, these problems will surface again.
What actually I meant to point out here is that it is recommended to discover Vital Few of the problems which are contributing to most of the problems in the environment, Pareto Chart is the tool used to achieve this objective of vital Few identification of problems.
Development of Pareto Chart is directly based on Pareto Principles, which is also known as 80-20 rule.
Pareto Principle states that roughly 80% of the effects come from 20% of causes.
Visualizing and understanding 80% of the problems are relatively easy and sometimes these problems seem too big to hold in our mind and we seek respite to solve them. These are distractions from the real issue which is actually blocking the progress and later these problems would surface again as we didn’t rooted out the source of problems, and still in the environment.
Analysis of Pareto chart is a tool to understand the vital few of the problems and give us a direction to put efforts effectively.
Pareto Chart analysis is performed after generating Pareto diagram and then brainstorming is carried out to understand and recover from vital few.