Newcastle University School of Chemical Engineering and Advanced Materials
What is SPC ?
Tools for SPC
Flow charts
  Run charts
  Pareto charts
  Cause and effect diagrams
  Frequency histograms
  Control charts
common cause variations
    special cause variations
    how they work
    types of charts
    properties of the normal PDF
    hypothesis testing
    run rules for Shewhart charts
    CUSUM charts
    relative merits
Process Capability
  relative capability
  capability index
  performance index
  the message
Copyright Information


SPC Tools - Pareto charts
The 20% Rule
Vilfredo Pareto (1848-1923) discovered that:
  • 80% of the wealth in Italy was held by 20% of the population;
  • 20% of customers accounted for 80% of sales;
  • 20% of parts accounted for 80% of cost, etc.

These observations were confirmed by Juran (1960) and resulted in what is known as the Pareto Principle.

Pareto Principle
The Pareto Principle states that:

"Not all of the causes of a particular phenomenon occur with the same frequency or with the same impact"

Such characteristics can be highlighted using Pareto Charts

Pareto charts and analysis
  • Pareto charts show the most frequently occurring factors
  • Analysis of Pareto charts help to make best use of limited resources by targeting the most important problems to tackle

For example,

  • Products may suffer from different defects, but
    • the defects occur at different frequency
    • only a few account for most of the defects present
    • different defects incur different costs

So a product line may experience a range of defects (A, B, C ... J). Plotting the percentage contribution of each type to total number of faults, gives the bar-plots in the following diagram. Next if, each of these contributions are sequentially summed, a cummulative line plot is obtained. These two plots together make up the Pareto Chart.

Example of Pareto Chart

From the information on the chart, the manufacturer could for example,

  • concentrate on reducing defects A, B and C since they make up 75% of all defects
  • focus on eliminating defect E, if defect E causes 40% of monetary loss


    Written by: M. Tham