Pareto Analysis Chart Excel Template, Pareto Chart Generator
Why a Pareto Analysis Template?
We are all familiar with the 80/20 rule. The 80/20 rule uses the Pareto Principle.
Pareto analysis is based on the idea that 80% of a project's benefit can be achieved by doing 20% of the work or
80% of the problems can be overcome by focusing on 20% of the causes.
In its simplest terms, Pareto analysis will typically show that a disproportionate improvement (approx. 80%)
can be achieved by ranking various causes of a problem and by concentrating on those solutions or items (approx. 20%) with the largest impact.
Typical examples of where the Pareto analysis is applicable are:
- Sales; 20% of customers account for 80% of sales and/or 20% of products generate for 80% of sales revenue
- Inventory; 20% of inventory items account for 80% of inventory value
- Quality; 80% of problems can be traced to 20% of the causes.
Pareto analysis allows organisations to concentrate more detailed attention on the high value/important items.
The Pareto analysis template is used to carry out this prioritisation, to analyse the data input and to graphically present the results,
and as a result target those items/tasks that will deliver 80% of the benefit.
Using the Pareto Analysis Template
To use the Pareto analysis template the user generates a table listing the items/causes and their frequency
e.g. cause A occurred 20 times, cause B occurred 15 times, etc.
The causes and their frequency are entered in decreasing order of frequency in the template input form.
The analysis is automatically generated and the Pareto chart (see image above) is produced.
The bar chart shows the impact of the causes in descending order while the cumulative curve (in red in the image above)
shows the cumulative impact of fixing the most important causes first.
The chart also shows the cut-off point (in blue in the image above). The default cut-off point is 80%. However, the user can reset it at any time.
Check out the Pareto Analysis Chart Template for Excel User Guide for full details of all the feature.
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