Manufacturing Breakthrough Blog

How To Prioritize an Attack Plan

Wednesday March 25, 2015

The Pareto Chart

In my last posting,  Solving Production Problems through Brainstorming, I said we will discuss another very useful tool in the Six Sigma tool kit, the Pareto Chart.  I told you that like the Causal Chain and the C & E Diagram, the Pareto Chart is a very useful tool for solving problems.  The real usefulness is that it helps you identify the order in which to “attack” potential root causes of problems.  The chart provides a graphic depiction of something referred to as the Pareto Principle which simply states that 80% of the output in a given situation or system is produced by 20% of the input. Another way of saying this is 80% of your problems come from only 20% of your potential causes.  By identifying that 20%, you can focus your improvement efforts directly on it and theoretically remove 80% of your problems.

An Example

Suppose you are responsible for manufacturing a product in a company that produces 24 x 7 yet is still not able to meet the demands in the market place. You call a meeting of your supervisors and engineers in an effort to rectify this market demand problem.  As you go around the table, you hear five different potential causes that all relate back to production stoppages.  For example, production stops because of machine breakdowns, maintenance work, labor problems, raw material supply, quality issues, etc.  You conclude right away that if you are ever going to satisfy the demands of the market, you must reduce these unwanted stoppages of production.  Because there isn’t agreement as to what causes the most problem with production stoppages, you decide to track the reasons for their excessive equipment downtime and the number of hours of downtime for one month.

After one month, you collect and arrange the data into the following table format.  The reason for the downtime is in column one and the hours of production stoppage the reason caused are in column two.

Downtime Reason

Hours

Equip. breakdown

25

Manpower

14

Raw material shortages

4.8

Rework

2.7

Scheduled maintenance.

2.6

Scrap

1

You then decide to plot the data on a graph to make it easy for everyone to see and to leave no doubt about which problem your employees must focus on.

There are two very distinct reasons for production stoppages: equipment breakdowns and manpower issues.  In fact, of the five reasons that this company tracked, these two accounted for 79.4% of the total downtime.  So by using the Pareto Chart, it is clear to everyone that if they can “attack” equipment downtime and manpower shortage issues and solve them, then they will gain significantly more production capacity to meet the demands of the market place.

So which machine should be attacked first, then second, and so on?  By creating a lower level Pareto Chart, this becomes an easy question to answer. 

Machine E

15

Machine A

5

Machine D

2.5

Machine C

2

Machine B

0.5

As can be seen in the data table and the Pareto Chart, Machine E should be the first priority followed by Machine A since they account for 80% of the total machine breakdown time.  If you wanted to get even more specific, you could create an even lower level Pareto Chart for Machine E’s reasons for breakdowns.

The Pareto Chart is a very effective way to determine where to focus your improvement efforts if you just remember the basic premise of the Pareto Principle in that 80% of your problems come from 20% of your potential root causes.  Even things like absenteeism can be measured using this principle—where typically 80% of absenteeism comes from 20% of your people.

Next Time

In my next posting we will discuss another very useful tool in the Six Sigma tool kit, the Run Chart.  Like the Causal Chain, C & E Diagram, and the Pareto Chart, the Run Chart is a very useful tool for solving problems.  As you will see, the Run Chart helps you identify when a problem started so that you can zero-in on things that might have changed and caused the problem.  As always, if you have any questions or comments about any of my postings, just leave me a message and I will respond. 

Until next time.

Bob Sproull

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