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PRESENTATION BY;
MOHD. NORIZAM MD. SALLEH
IC NO: 670703-01-6045
STUDENT ID:CGS00534317
LECTURER;DR HARIKRISHNAN KANTHEN
EMQM 5103
- Pareto Chart
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INTRODUCTION
In 1879, the famous Italian economist
Vilfredo Federico Damaso Pareto, noticedthrough studies that 80% of Italys wealthwas controlled by 20% of the population.He is also an engineer, sociologist andphilosopher
Subsequently, people in various disciplinesand professions noticed that the same80/20 rules can be applied in a broader
way, to a wide range of phenomena. Dr.Joseph Juran then generalized this conceptto many fields. He used the term vital fewand trival many.
http://en.wikipedia.org/wiki/Engineerhttp://en.wikipedia.org/wiki/Sociologisthttp://en.wikipedia.org/wiki/Philosopherhttp://en.wikipedia.org/wiki/Philosopherhttp://en.wikipedia.org/wiki/Sociologisthttp://en.wikipedia.org/wiki/Engineer -
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.
ITS A GREAT MANAGEMENT TOOL ..THAT
ALSO KNOWN AS FOLLOWS;
The Pareto Principle
The Law of The Vital Few
and the Trivial Many
The Power Law
Participation Inequality
The 80 20 Rule
ABC Analysis Technique
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THE PARETO PRINCIPLETHE 80 20 RULE
The
VITAL FEW
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EXAMPLES OF
PARETO PRINCIPLE / 80 20
RULE
Input Output
Products
Effect
Cause
Efforts
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ONE MONTH DOORS FAULT/ DEFECTS RECORD
Day Defects Detected Each DayWindow Discolor Handle Hinges Rough Glass Warped
1 1 3 2 7 1 4
2 2 2 3 33 2 1 4 4 1
4 2 3 3 1 1 1 1
5 1 2
6 2 2 4 1 1
8 1 1 1 3
9 1 2
10 2 3 2
11 5
12 1 1 4 4 1
13 1 4
15 2
16 2
17 2 2 1
18 1
19 6 3
20 3 2
22 2 123 3
24 1 2 1
25 2 2 3 2 1 2
26 1 2 3 4
27 2 3 2 1
29 1 2 3
30 2
315
Total 6 24 28 60 24 12 14
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CREATE THE PARETO CHART FORTHE DOOR FREQUENCY DEFECTS
The Steps =
1. Convert the Number of each faulty to
% of total Defects & calculate the
Cumulative % of Defects.
2. Create a Bar Chart that Show the % of
Individual Defects (Tallest on the Left
Descending formation) AND
3. Include the Cumulative % of the Defectsin the Chart THEN
4. Draw a line that joins the tops of each
Cumulative % Bars (That Curved Line
is the Pareto Curve
#
%
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PARETO FREQUENCY OFDEFECTS
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PARETO % DEFECTS FREQUENCYCHART
#of
Defects
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PARETO % DEFECTS FREQUENCY, CUMULATIVE %CURVE & VITAL FEW (FOR # DEFECT/FAULT) CHART.
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PARETO CHART (INCLUDESCOST)
The MOST IMPORTANT fault/defects to be
corrected cannotbe identified from the
Pareto Chart produced using the frequency
data alone!!!
Thefore we need to consider the total cost
required to eliminate each defect!!!
For Total Cost Pareto Chart - same process
will be applied.
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PARETO TOTAL COST CHART
This Diagram can display the costs of various faults/
defects, so we can focus our attention on the most
important problems.
- To eliminate the most expensive faults.
ASSUMEthe following costs are the cost to repair each
type of defect;
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COMPARISON OF COST OF EACHDEFECT & DEFECT FREQUENCY %
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FAULTS
PARETO CHART TOTAL COSTS %
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PARETO CHART - TOTAL COSTS %DEFECTS
PARETO % TOTAL COST DEFECTS
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PARETO % TOTAL COST DEFECTS,CUMULATIVE % CURVE & VITAL FEW (TOTALCOST) CHART
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CONCLUSION
Pareto charts are used to identify and prioritize
problems to be solved. In this case hinges, warped& glass faults need to be eliminated firstas they
are the actual vital few!!! for this case.
Eliminated them, 80% of the problem solvedPareto Chart Helps to identify priorities.
Remember the 80/20 rule states that APPROXIMATELY
80% of the problems are created by APPROXIMATELY
20% of the causes.
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THANK YOU