Pareto Distribution: A Tool For Root Cause Analysis


Process Cat demonstrates Pareto Distribution
Have you heard about the Pareto Chart????

Why use a Pareto Distribution?

You’ve figured out how to prevent defective inventory from getting out to customers. So you just test them, scrap the bad ones, and you’re done!  No need to even think about it again, right?


That’s what Gary thought at first.

If you’re a regular PCat reader, you know that Gary is a former accountant who recently took his side-hustle (baking and selling delicious cookies!) full-time.

Gary making cookies
So fun!

But recently he did encounter a small problem: customers were reporting that some of the cookies tasted like baking soda!  And unfortunately, they were right :/

So Gary decided to implement some quality control and quality assurance measures to his manufacturing process.  We won’t delve into those in this article since we’ve already covered those topics here on process cat, but basically, Gary figured out how to identify the baking-soda-tasting cookies and prevent them from getting out to customers.

Process Cat biting into a gross cookie
Let’s just say “cookie taster” can be an overrated job title!

And that’s definitely the first and most important step when troubleshooting manufacturing problems: containment!  In other words, your first priority is to avoid having defective products get out to customers.  This is especially true if there are possible health or safety implications, but even if the problem is not dangerous, bad products hurt your reputation and can also be expensive to fix now that they’ve been shipped.

Enter Root Cause Analysis.  Basically, root cause analysis is a fancy way of saying “figuring out why the bad thing is happening.”  And the idea with root cause analysis is that once you’ve found the cause of a defect, you’ll be able to actually prevent it instead of just catching it.  And if you’re familiar with the concept of Yield, you know that means saving you time and money!

But back to the nasty cookies.

Gary noticed something unusual about the batches of cookies that tasted like baking soda: most of them also had a weird, mushy texture…

Gary snapping a cookie in half
…but some of them didn’t!

Which brings us to the next of the root cause analysis tools,

The Pareto Distribution!

The what now?

Well, let’s back up a bit. Sometimes what initally appears to be one defect that should have one root cause actually turns out to be several different defects, each with its OWN idiosyncratic root cause.  Gary suspected this might be the case for his cookies, so he brought his friend Process Cat in as an extra set of eyes.

Now, this part is definitely a judgment call!  You basically just look at the defective cookies (or toesocks or sunshades or pistachio-scented stickers…) and assign a label to each category.

Process Cat and Gary sort some cookies
Here’s another one for the “blotchy” pile…

Than, you use a tool called the Pareto Distribution to help you make some decisions.

To make the Pareto Distribution, first you’ll organize your data, probably using a spreadsheet. You’ll want to list your (entirely subjective!) categories in the first column, then fill in the rest of the sheet like this:

Gary creates a Pareto Distribution!
Leave a few blank lines in case you have some new categories pop up!

Now you’re going to create your Pareto Distribution!

The steps will depend slightly on what type of spreadsheet software you’re using, but basically, you’re going to do this:

  1. Sort in descending order by column B.  
  2. Use your software to generate a bar graph
Pareto Chart
You should end up with something like this.

Now you know which types of defects are causing the MOST cookies to be scrapped. And you can use experiments to figure out what’s causing those and how to prevent them, while not wasting excessive resources chasing problems that occur only rarely*.

Gary and Process Cat celebrating
Now that’s something to celebrate!

Weekly Challenge:

Try using the Pareto Distribution when troubleshooting your own manufacturing and inventory issues.  You might be surprised what you find!

*Reminder: this article is only talking about defects that don’t pose any significant safety or legal problems.  If you have any manufacturing defects that do cause those types of problems, you need to take them seriously no matter how rare they are!

M.G. Rhoads shares her deep engineering

through engaging stories that make manufacturing principles easy to use and understand.

“I show makers, inventors and entrepreneurs the secrets big companies use to run a successful manufacturing line!”

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