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Understanding the attached sample Pareto Chart for Customer Complaint

B

biboy2012

#1
Hi Covers, I am trying to understand the attached sample Pareto chart for customer compliant from Vertex42. It appears that there are 1o causes of problem and certain percentage of defect per cause. According to Wikipedia the purpose of the Pareto chart is to highlight the most important among a (typically large) set of factors. The way I understand it is that the specific sample Pereto chart tells us that some complaints are more serious and require urgent action than the others. This is my first time to use Pareto analysis. The problem I'm having here is basically how they arrived at the value of cumulative %. I'm not so good in excel but I think my problem can be solved using excel + hopefuly some help from Covers.

Any help would be appreciated.
 
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N

NumberCruncher

#4
Re: Understanding Pareto chart?

Hi biboy

You have a total of 108 defects. The cumulative calculation works like this.

50/108 = 46.3% [damaged in transit]
(50 + 30)/108 = 74.1% [damaged in transit + late delivery]
(50 + 30 + 15) = 88% [damaged in transit + late delivery + over delivery]

and so on.

NC
 
B

biboy2012

#5
Re: Understanding Pareto chart?

Hi biboy

You have a total of 108 defects. The cumulative calculation works like this.

50/108 = 46.3% [damaged in transit]
(50 + 30)/108 = 74.1% [damaged in transit + late delivery]
(50 + 30 + 15) = 88% [damaged in transit + late delivery + over delivery]

and so on.

NC
NumberCruncher, many thanks for teaching me the formula in few minutes that I failed to learn from my own in almost a day. Your assistance has been invaluable to me in completing the cumulative calculation for the 9 causes of defects.
 
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G

gbcqc

#7
I worked for a company that we did the same for our suppliers. What was looked at was about 80% of the problems come from about 20% of the issues. If you fix that 20% to start instead of all the problems at once, you have just solved 80% of all you non-conforming product.

We use the same to help the supplier if we were part of the problem. (not that it ever happen):notme::sarcasm:

We found it to be a very use full tool when there were multiple issues and getting our hands around them.

Goodluck,

Greg
 

Jim Wynne

Staff member
Admin
#8
I worked for a company that we did the same for our suppliers. What was looked at was about 80% of the problems come from about 20% of the issues. If you fix that 20% to start instead of all the problems at once, you have just solved 80% of all you non-conforming product.

We use the same to help the supplier if we were part of the problem. (not that it ever happen):notme::sarcasm:

We found it to be a very use full tool when there were multiple issues and getting our hands around them.

Goodluck,

Greg
The idea in Pareto analysis is (or should be) that 80% of loss in terms of money is caused by 20% of the problems. That ratio isn't hard and fast by any means, but it ususally stands up in a general sense. As was pointed out earlier, it could be that a single instance of problem "A" is more costly than 100 iterations of problem "B." Follow the money.
 
J

JaxQC

#10
One item to also consider now that you’ve identified your main area of concern “Damaged in Transit”, with the Pareto is to add additional breakout to fully understand it.

Damaged in Transit=forklift damage, dropped (package damage), poor packaging (package undamaged but parts inside are), wet or weather protection damage.

Obviously the area of focus could now shift from many areas.
 
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