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The Pareto Chart is used to show the relative importance of a set of measurements.  When to use it: Situations when it is useful.  How to understand.

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Presentation on theme: "The Pareto Chart is used to show the relative importance of a set of measurements.  When to use it: Situations when it is useful.  How to understand."— Presentation transcript:

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2 The Pareto Chart is used to show the relative importance of a set of measurements.  When to use it: Situations when it is useful.  How to understand it : Details of how it works.  Examples : Some examples of usage.

3  Use it when selecting the most important things on which to focus, thus differentiating between the 'vital few' and the 'trivial many'.  Use it after improving a process, to show the relative change in a measured item.  Use it when sorting a set of measurements, to visually emphasize their relative sizes.  Use it, rather than a Bar Chart or Pie Chart to show the relative priority of a set of numeric measurements.

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5  Given a set of recurring problems, it is unlikely that each problem will occur the same number of times in any one period. In fact, it is common that a few problems will occur far more often than the rest put together. This unequal distribution occurs in many situations and can be used to single out the 'vital few' from the 'trivial many'.  The Pareto Chart is simply a Bar Chart in which the bars sorted into size order, with the highest bar on the left, as below.

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7  This not only shows the absolute priority of each bar, through its position in the chart, but also its relative priority, through its height as compared with the other bars.  As the Pareto Chart is often used for decision making, it is an important parts of building a Pareto Chart to identify the right item to measure and show on the chart, as different measures may well result in the bars be ordered quite differently.  In a stable process, the order of the bars may be expected to remain constant. Thus, if the order of the bars changes with successive measurements, this may indicate an unstable process (or an insufficient number of measurements). Improvements (i.e. changes in the process) will often result in the order of the bars changing. If the improvements are maintained, the new bar order will remain stable.  Pareto Charts may have different overall 'shapes' as shown in the table below. The 'spiky' Pareto Chart is the most useful, as it enables an easy selection of items to carry forwards for further action.

8  A purchasing department often wasted time going back to managers who gave them order forms which could not be used for some reason or another. So they recorded the problems over one month and plotted a Pareto Chart. A clear majority of problems were due to missing information. To narrow down the cause, they did a survey of managers, asking why they missed out information. The replies fell into four categories, which were plotted in a second Pareto Chart (see Fig. ). As a result, they produced two order forms. One suited most purposes, and was very clear and simple. The other was more complex, but was needed by only a few people.

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10 The Cause-Effect Diagram is used to identify and structure the causes of a given effect.  When to use it: Situations when it is useful.  How to understand it : Details of how it works.  Examples : Some examples of usage.

11  Use it when investigating a problem, to identify and select key problem causes to investigate or address.  Use it when the primary symptom (or effect) of a problem is known, but possible causes are not all clear.  Use it when working in a group, to gain a common understanding of problem causes and their relationship.  Use it to find other causal relationships, such as potential risks or causes of desired effects.  Use it in preference to a Relations Diagram where there is one problem and causes are mostly hierarchical (this will be most cases).

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13 Solutions to problems are often not easy to find, and those that at first appear to be obvious may address only symptoms rather than the true cause of the problem. Identifying causes as an intermediate step makes solutions both easier to find and also more likely to address the problem fully. Causes tend to appear in chains (Fig. 1), where one cause is caused by another, and so on. Thus an accident may be caused by a puncture, which is caused by a weak tire wall, which is caused by imperfections in the rubber, etc. One cause may also be caused by a combination of other causes. Thus the puncture may be caused by a rough road surface and by sudden braking, as well as a weak tire, as illustrated.

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15 The Cause-Effect Diagram uses a specific layout to display the hierarchy of causes, as illustrated. The angled lines enable more detail to be added than lines at right angles to one another, especially in an informal situation where causes are being added 'on the fly'. Each line indicates either a named cause or a cause area which contributes to the cause line to which it is attached. A cause area is not a cause, but may contain causes. For example, a tire may be a cause area but may not be a cause of an accident. A smooth or punctured tire can be a cause. Cause areas tend to be nouns, whilst causes tend to use verbs. When determining causes of a problem, the important causes that need to be addressed are seldom all known, let alone the effects of individual causes on the problem and on one another. The Cause-Effect Diagram is often used to address this by acting as an organizing structure within a Brainstorming session, in which case the causes on the final diagram may be a combination of known, suspected and other possible causes. The Cause-Effect Diagram is often the result of divergent thinking about causes, and must be followed by convergence into the key causes which are to be addressed by further action. To prevent ineffective solutions, these need to be verified as being actual causes before finding solutions for them. Root causes are those at the ends of chains of causes, and which consequently do not have any sub-causes. Root causes of key causes are often worth addressing.

16 A lopsided diagram can indicate an over-focus in one area, a lack of knowledge in other areas, or it can simply indicate that the causes are focused in the denser area. A sparse diagram may indicate a lack of general understanding of the problem or just a problem with few possible causes.

17  The managing director of a weighing machine company received a number of irate letters, complaining of slow service and a constantly engaged telephone. Rather surprised, he asked his support and marketing managers to look into it. With two other people, they first defined the key symptom as 'lack of responsiveness to customers' and then met to brainstorm possible causes, using a Cause-Effect Diagram, as illustrated.  They used the 'Four Ms' (Manpower, Methods, Machines and Materials) as primary cause areas, and then added secondary cause areas before adding actual causes, thus helping to ensure that all possible causes were considered. Causes common to several areas were flagged with capital letters, and key causes to verify and address were circled.  On further investigation, they found that service visits were not well organized; engineers just picked up a pile of calls and did them in order. They consequently set up regions by engineer and sorted calls; this significantly reduced traveling time and increased service turnaround time. They also improved the telephone system and recommended a review of suppliers' quality procedures.

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