Pareto Charts

The Pareto chart is based on the 80/20 rule, which states that 80% of outcomes come from 20% of causes.

A Pareto chart is a specific type of bar & line combo chart where the bars are always arranged in descending order based on their frequency and a line graph is overlaid to show the cumulative percentage of the data and highlight the most significant contributors to a problem.

What is the difference between a Pareto Chart and a standard Bar & Line Combo Chart?

A Pareto chart is a specific type of bar & line combo chart where the bars are always arranged in descending order based on their frequency, and a line graph is overlaid to show the cumulative percentage of the data, highlighting the most significant contributors to a problem, while a standard bar & line combo chart can have the bars arranged in any order and the line may represent a different data set altogether, not necessarily cumulative percentages.

KEY DIFFERENCES
1. Bar Order: Pareto = always ordered from highest to lowest frequency, whereas Bar & Line Combo charts the order of the bars can be based on any criteria (e.g. alphabetical).
2. Line Function: The line in a Pareto chart represents the cumulative percentage of the data, allowing you to easily identify the "80/20" rule where a small percentage of factors contribute to a large percentage of the problem. A standard combo chart's line may represent a completely different data set.

When to Use a Pareto Chart

• When you need to identify the most significant factors in a dataset
• Analyzing frequent problems or defects in a process to prioritize improvements
• For quality management
• For process improvement

When to Avoid Using a Pareto Chart

• If your data doesn't have a clear hierarchy of importance (e.g. all categories are roughly equal)
• If your data cannot be easily categorized into measurable issues
• If you are trying to analyze trends over time

Example Use Cases for Pareto Charts

1. Analyzing customer complaints
2. Showing order distribution between various product lines
3. Quality control: identifying the most frequent defects in a manufacturing process
4. Project management: identifying the most common causes for project delays

Set-up Instructions

Below are the chart settings used to create the example Bubble chart shown above. 

1. Select which fields to include in the chart: 

2. Under the "Format" tab, select the fields to be represented on the Horizontal(x) and Vertical (y) axes. In this example, the Incident field is used for the x-axis and the "Group by this field" checkbox is checked, and the auto counter field is selected for the y-axis with the option of "Count the values":

3. Under the "Customize" tab, you can enter a title for the chart and edit the labels of the axes if needed:

4. If you want to change the colors of your chart, you can do so by navigating to the chart view, then clicking on the View Menu and selecting "Change Colors":

Related articles: 
Charts Overview
Bar & Line Combo Charts
Line Charts