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Introduction to Pareto Charts (Lean Six Sigma) | Cody Baldwin | YouTubeToText
YouTube Transcript: Introduction to Pareto Charts (Lean Six Sigma)
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in lead six sigma we often use pareto
charts to help us better understand our process
process
it shows us where the most common source
of defects are
and we want to address those now before
we jump in we mentioned if you're
interested in a free white belt
certification course
you can access one at sixsigmasociety.org
sixsigmasociety.org
now let's talk about the pareto chart so
really what it does it helps us display
and sort the causes of process defects
what are the source of those things
and it follows something called the 80
20 rule
now first let me give you a few examples
of this 80 20 rule so you get some idea of
of
what we're talking about here so 80 of traffic
traffic
tends to be on 20 of roads so there's a
small percentage of roads where most of
the traffic exists
and eighty percent of wealth is in the
hands of twenty percent of people
and eighty percent of sales come from
twenty percent of our customers
given all the revenue our company may
generate on an annual basis
the truth is that most of that comes
from a small subset of our customers
now in lean six sigma we would say that
eighty percent of our defects
come from twenty percent of our inputs
we may have lots of inputs to our process
process
but there's probably a small portion of
them that are contributing to the
defects that we're seeing
so here's an example let's say that
we're seeing shipment delays in a
shipment process
that's a defect and we're trying to
understand what's causing that what's
contributing to it
and so we track data about shipment
delays and what's causing them and this
is what we see
most of the time a shipment gets delayed
it's caused by payment issues
so with a pareto chart it's going to be sorted
sorted
by the most occurring issue on the left
and the least occurring issue on the right
right
so we've got payment issues stockouts
inspections and local traffic
that are contributing to the shipment
delays but it looks like
payment issues are the most occurring issue
issue
here's a question we could adjust our
shipment process to avoid local traffic
in this case
but would it help and so if we go back
to our pareto chart
to look at the sources of those defects
we see that local traffic is really just
a small contributor
to those shipment delay defects and so
it's probably not going to help us that much
much
operator chart helps us to think about
what our priorities should be
we ought to try to address payment
issues first to solve most of those
defects okay and i really like this cartoon
cartoon
so it's showing a pareto chart and
you can see that the biggest priorities
are actually falling on top are going to
fall on top
of the guy who's getting too caught up
in the small details the things that
just don't matter as much
some causes are just not worth our time
a pareto chart is a great way to prioritize
prioritize
where we should focus our improvements
so here's another example this is going
to be talked about in a separate video
when we walk through pareto charts in
microsoft excel let's imagine you
own properties in new york city and
you're trying to
analyze complaints submitted by your tenants
tenants
because what you want to do is try to
minimize those complaints to keep
customers and tenants coming back and to
make your
properties desirable and so you
prioritize the complaints on a pareto
chart you sort it
and you see that a good portion of the complaints
complaints
are coming from unsanitary conditions the
the
it's just not clean and issues with
paint plaster maybe there's paint that's
peeling or something like that
and so if you're trying to figure out
okay what can i do what should i start with
with
if i'm trying to address defects
minimize those complaints and make my
properties more attractive
you'd want to start with those issues on
the left-hand side
focus there first and then kind of work
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