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Chapter 18. Essential Tools > Pareto Diagrams

Pareto Diagrams

While studying the distribution of Italian wealth in the 1800s, economist Vilfredo Pareto found that 20 percent of the families held 80 percent of the wealth. Similar distributions were observed elsewhere until the phenomena eventually became known as the 80–20 principle. This phenomenon of the “critical few” can be applied to many of the quality issues that work teams face. For example, other manifestations of the Pareto effect are:

About 20% of our employees account for 80% of absences.

About 20% of quality issues account for 80% of quality mistakes.

About 20% of our products account for 80% of our revenues.


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