PARETO CHART. We have what it takes! Continuous quality improvement - our tool for delivering... service of greater worth.

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1 TMC Quality Improvement Program Self-Instructional Modules We have what it takes! THE PDCA CYCLE SERIES Continuous quality improvement - our tool for delivering... service of greater worth. PARETO CHART Join TMC s Quality Improvement Program now! 12 Published by the Medical Quality Improvement Office

2 Resources: 1. Benchbook on Performance Improvement of Health Services, PhilHealth, 2. A Toolbox for Quality Improvement and Problem Solving, by David Staker, 3. Continuous Improvement Tools Vol 2, by Richard Chang and Matthew Niedzwiecki, 1993: Wheeler Publishing (website of the American Society for Quality)

3 What is a Pareto Chart? 3 - If the bars are almost all similar sizes or more than half of the categories are needed to make up the needed 6%, try a different breakdown of categories that might be more appropriate. A Pareto Chart is a bar graph showing the frequency of problems or events. The bar graph is easy to read because the bars are arranged in descending order so that the more frequent problems or events can easily be seen Why is a Pareto chart called a Pareto chart? The Pareto Chart was named after Vilfrido Frederigo Samaso Pareto, a turn-of-the-century Italian economist. He studied the distribution of wealth in different countries and concluded that a fairly consistent minority - about 2% of the population - controlled the large majority - about 8% - of society s wealth. This same distribution has been observed in many areas and has been termed the Pareto effect or Pareto Principle. The quality juru, Joseph Juran, rephrased it to mean that 8% of the problems come from 2% of the causes, thus separating the vital few from the trivial many when solving quality-related problems. 1 3

4 When to use a Pareto Chart? A Pareto is the appropriate tool when - You need to prioritize problems that should be addressed first 2 - If no clear change in slope, look for the items that make up at least 6% of the cumulative percentage. You need to identify the most significant factors or causes of a problem You need to allow better use of limited resources In addition, you can also use a Pareto when tracking improvements before and after interventions

5 Things to look for in a Pareto Chart Parts of a Pareto Chart 1 - Look for the breakpoint in the cumulative percentage line. This is the point where the slope of the line begins to flatten out. The items under the steepest part of the slope are the most important ones. Bars are sorted and arranged in descending order Cumulative percentage is drawn by a line graph Counts or frequencies are placed on the left vertical axis 1 5 c d b a e Categories are placed the horizontal or X axis. Items are meaningfully categorized and labeled Cumulative percentage is placed on the right vertical axis 8 5

6 How is a Pareto Chart constructed? Pareto Chart is basically a data presentation tool. Therefore, you need to start with a set of data which you have previously collected and categorized. Your data should be meaningful and feasible to compare. Data generated from check sheets are usually and commonly translated to Pareto charts. From your data: 1. List each category and corresponding count or frequency. Order the data from the item with the largest count to the one with the smallest count. 2. Construct a table of four columns: Category Frequency % of total Cumulative Percentage Item1 Item2... Total Write the categories and corresponding frequencies and percentages. REMEMBER: ITEMS ARE LISTED IN DECREASING ORDER. Compute for the cumulative percentage and write in the appropriate column. Construct you Pareto chart 3. Assign the categories on the horizontal or X axis. 4. Assign the count or percentage on the left vertical or Y axis. 5. Draw the cumulative percentage line. 6. Analyze your Pareto Chart. TIP: A Pareto-like chart is automatically generated using the Excel (line-column type). The two series are the count or frequency and the cumulative percentage. 6 7