How Do You Make A Pareto Diagram?
A Pareto chart is used to graphically illustrate a complex set of data. It is based on the Pareto Principle, which says that 80 percent of the effects come from 20 percent of the causes. A Pareto chart is often used to determine major issues or causes in quality-control situations or when the data can be placed into categories that are easily counted. Gather the raw data that will be used to create the diagram. This data should be easy to sort into at least three categories. For this example we will use the number of times a Form W9 is incomplete and prevents processing for an accounting department. Count the number of incomplete W9’s received in a specific period of time and determine what was wrong with each of them. Record this data. Create an analysis spreadsheet. This is as simple as a spreadsheet with the following column headers: category, frequency, percentage. List the categories of data in the first column. For this example the categories could be: no signature, company name
