Top Pareto Chart Examples to Boost Your Data Analysis

Driving growth and advancement is a fundamental goal in managing your business. You have to do what it takes to secure a future for your business.

So, you'll be doing an analysis now and then. You will want to identify factors that contribute to the overall business growth. Still, you can specify a few factors hindering your overall development.

Visualizing such data will be essential to obtain such insights.

Which chart will you go for?

You guessed right. A Pareto Chart will be the most suitable.

A Pareto Chart can help you identify a few factors in your business that will contribute to your maximum business development.

This blog will help you understand Pareto Chart Examples and how they apply to your business.

What is The Pareto Principle and Pareto Chart?

The Pareto Principle, commonly known as the 80/20 rule, highlights that 80% of effects come from 20% of causes. The principle states that 80% of the overall results are contributed by 20% of the work input.

On the other hand, a Pareto Chart is a visualization mix of a Line Chart and a Bar Graph. Bars illustrate distinct factors or issues and are organized from highest to lowest. The curved line represents the cumulative total of the data set.

Its primary objective is to help you identify the most frequent issues contributing to the overall effect. Thus, a Pareto Chart obeys the Pareto Principle.

Let’s take a look at Pareto Chart examples to deepen your understanding.

Pareto Chart Examples

Pareto Chart in Healthcare

In healthcare leadership, healthcare professionals can use a Pareto Chart to identify problems contributing to most patient complaints.

Pareto Chart in Healthcare can help you as a health professional to seek solutions for such problems and improve quality health service delivery.

Pareto Chart in Quality Control

Pareto Chart in Quality Control process is used as specialists use it to make decisions and prioritize the appropriate interventions to improve overall quality control.

Pareto Chart in Statistics

Statisticians use a Pareto Chart to conduct a root cause analysis for the defects with the most influence on the output.

For instance, statisticians can use a Pareto Chart to research the cause of pollution by a manufacturing company. A Pareto Chart will provide insights into the grounds, and a statistician will recommend the problem.

Some of the Pareto analysis examples are:

• 20% of the employees in your workplace contribute to 80% of their work.
• 20% of the drivers worldwide are the cause of 80% of accidents that take place annually.
• 20% of your daily time determines 80% of your work.
• 20% of the inventory in your warehouse will fill 80% of the storage space.
• Just 20% of your employees are responsible for 80% of the sick leave taken in your organization.
• 20% of the electronics in your house consume 80% of electricity.
• 20% of your favorite books will have 80% of the content that interests you the most.
• 20% of the workforce globally receives 80% of the overall income.
• You will use 20% of the tools in your toolbox for 80% of tasks.
• Approximately 20% of criminals are responsible for 80% of the crimes committed in the country.
• 80% of the complaints are from 20% of clients.
• Just 20% of your company's products generate 80% of its revenue.
• 80% of the cooking you do in your kitchen home is contributed by 20% of the total utensils.
• 20% of defaulters are responsible for 80% of loan repayment pending.
• 80% of your international travel is to only 20% of the places.
• 80% of your clients utilize only 20% of the features available in the software application.
• 80% of the overall contribution is due to 20% of potential donations.
• 80% of your restaurant sales are from 20% of its menu.

Types of Pareto Chart

Pareto Bar Chart

In this Pareto Diagram example, the x-axis contains the bars. These bars display the number of events. The y-axis has the area of interest.

The cumulative frequency can be observed on the right y-axis.

Pareto Column Chart

This is a type of Pareto Chart in which the bars are located on the y-axis. You can display the number of events on your y-axis.

On the other hand, the x-axis displays the categories of interest. On the x-axis, you can view the cumulative total.

How to Create a Pareto Column Chart in Google Sheets?

Steps to Make Pareto Chart in Microsoft Excel:

1. Open your Excel application.
2. Install ChartExpo Add-in for Excel from Microsoft AppSource to create interactive visualizations.
3. Select the Pareto Chart from the list of charts.
4. Select your data.
5. Click on the “Create Chart from Selection” button.
6. Customize your chart properties to add header, axis, legends, and other required information.
7. Export your chart and share it with your audience.

Steps to Make Pareto Chart in Google Sheets:

1. Open your Google Sheets application.
2. Install ChartExpo Add-on for Google Sheets from Google Workspace Marketplace.
3. Select the Pareto Chart from the list of charts.
4. Fill in the necessary fields
5. Click on the Create Chart button.
6. Customize your chart properties to add header, axis, legends, and other required information.
7. Export your chart and share it with your audience.

How to Interpret & Analyze Pareto Chart?

When interpreting and analyzing a Pareto Chart, you want to determine which factors contributed to the overall productivity.

You can have Pareto Chart example questions and answers. This will help ease your analysis.

A Pareto Chart is an easy-to-read visualization. We will use the example of the Pareto Bar Chart we created in Excel. It will help you understand how to read & interpret the Pareto chart.

A Pareto Chart arranges bars from the largest to the smallest. The best-performing campaigns were the first as you move down to the least-performing campaigns.

Since the Pareto Chart has a cumulative line, it can take time for a newbie to analyze.

It is essential to learn about what is displayed in the various axes of the Pareto Chart.

• The Y-axis shows the multiple campaigns.
• The top X-axis shows campaign performance totals (from 0 to 580)
• Z-axis represents the cumulative percentage (from 0% to 100%)

For instance, the cumulative percentage shows how each campaign performed compared to the rest. You would easily see that Campaigns 4, 12, 2, 1, 7, 9, and 3 generated a staggering 80% of the performance across all campaigns.

That's not all.

The seven best-performing campaigns are above the gray line. This gray line signals the top 20% of campaigns.

These are the campaigns that should be your main focus. That is how to analyze the Pareto Chart.

When to Use a Pareto Chart?

When you want to measure your business' performance

When you analyze your business, a Pareto Chart can help you identify areas you can focus on. You can formulate Pareto Chart questions to analyze every aspect of your business.

Every aspect of the activity is paramount to the business' growth. Still, it is essential to prioritize the most significant contributors to your business.

A Pareto Chart can also help you realize that 20% of workers in your business do 80% of the overall work. In addition, 80% of your business's revenue comes from 20% of the business product.

When you want to achieve profitable keyword targeting

Most PPC managers spend much time analyzing keywords but don't achieve their desired results.

When you apply the 80-20 rule, keyword analytics becomes easier. You can focus on the most productive keywords. Typically, 20% of SEO analytics yields the highest profitability.

When Not to Use a Pareto Chart?

A Pareto Chart is not suitable for calculating averages, standard deviations, or other statistical measures of a data set.

Pros And Cons of a Pareto Chart

Pros:

• It assists you in identifying the top factors of your business development.
• It helps you prioritize the top issue for a business setback. You will seek solutions for such
• It enables you to understand the cumulative effect of various issues.
• It can help you plan corrective and preventive actions.
• It gives you a focused, clear, and simple method to investigate a few vital causes.
• It allows you to improve your decision-making and problem-solving skills.
• Charts and graphs help enhance the effectiveness of your quality management efforts.
• You can use a Pareto Chart in every leadership decision.
• It is efficient in time management in your workplace and your duties.
• It generally helps you to improve performance management.
• It enables you to plan, analyze, and address any activity.
• It helps you in change management.

Cons:

• By itself, a Pareto Analysis cannot identify root causes. You need to use it along with other root causes analysis tools to identify the root causes.
• A Pareto Chart does not indicate the severity of the issue being analyzed.
• It focuses only on past data where the damage occurred. In some instances, it cannot be effective for future scenarios.
• You can only apply it to some cases.

FAQs

What is a Pareto Chart with Example?

A Pareto Chart combines a bar graph with a line chart for visualization. You can use it to visualize data to find the factors in your business that contribute the most results.

One of the examples includes: 80% of the overall work is done by 20% of the employees.

Where is the Pareto Chart used?

You can use a Pareto Chart to measure the performance of your business. You can also use it as a web expert to analyze keywords that rank the highest.

Health professionals can use a Pareto Chart to analyze patient issues to ensure the best service delivery.

What is the Importance of Pareto Analysis?

• It helps you gain an idea of the cumulative effect of various issues.
• It can help you plan corrective and preventive actions.
• It gives you a focused, clear, and simple method to investigate a few vital causes.
• It helps you to improve your decision-making and problem-solving skills.

Wrap Up

Let’s recap.

You have learned that in business individuals are interested to know the main factors that contribute the most results. Such analysis is easy when you visualize it.

This is achievable only with a Pareto Chart. You now understand the distinction between a Pareto Chart and the Pareto Principle.

You have learned that Pareto Charts follows the 80/20 rule, which states that 80% of output is contributed by 20% of the causes.

You have understood the various Pareto Chart examples in real-life situations and other vital sectors. You know the advantages and disadvantages of a Pareto Chart.

You have also learned how to create various Pareto Charts in Google Sheets and Excel. The steps were possible with the help of the ChartExpo third-party application.

You have understood how to interpret the Pareto Chart.

You, too, can create a Pareto Chart for your business today. Sign up for a 7-day free trial and visualize one of the various Pareto Chart examples you have learned.