The Manual Pareto Chart
By Sam Frazier
The Manual Pareto Chart
By Sam Frazier
The Manual Pareto Chart
By Sam Frazier
When was the last time you created
a Pareto chart manually? For those of you not familiar with a “Pareto
” chart, it is simply a bar chart that organizes the categories
from highest-to-lowest in frequency of occurrence. Pareto charts are useful when “issues”
outnumber the resources available to solve them; obviously, you would want to
put the resources on the largest issues first. (I want to mention here that frequency of
occurrence is not necessarily the best way to prioritize issues; a much better
method is using a technique called FMEA
(Failure Mode Effects &
Analysis) where each possible mode of failure is ranked by multiplying its
severity to the customer, its frequency of occurrence, and its probability of
detection to determine its overall ranking. But for everyday issues in a production
process, we’ll stick to occurrence frequency to rank our issues.) With the Pareto chart, the x-axis will
list the various issues, while the y-axis plots the frequency of occurrence.
This type of bar chart is
prevalent in manufacturing plants, however, the Pareto chart is useful in any
environment where continuous improvement through problem solving is
important. For those of us over
forty years of age, we remember sketching manual Pareto charts. They weren’t nearly as sophisticated,
aesthetically pleasing, and quick to make as today’s computer-generated charts,
which are easily handled by Microsoft Excel and myriad other graphics software
packages. So why on earth
would we ever want to make a Pareto chart manually in this age of
laptops?
The answer can be found in two words: real-time. To explain, let’s consider the creation of a computer-generated Pareto chart. To begin with, we don’t create the chart until we have all the data. “All the data” can mean one month’s worth, one week’s worth, or maybe even one day or one shift, but not one hour or every 15 minutes. Second, we create the graph on our computer while in our office, well away from those whom the data is measuring. These two points make the computer-generated Pareto chart a weak tool for real-time production monitoring.
In comes the manual Pareto chart,
ready to assist in real-time communication directly to those who can impact
today’s production results – namely the manufacturing associate and the first
line of direct support. Let’s walk
through an example to clarify how it works.
We start with a production status board that is in view of those doing and directly supporting production. In this example, we are going to monitor production output to the established standard every half-hour. The product is a Widget, and we’ll set the standard at 10 finished goods every half-hour. With the shift starting at 7 am, the first data recording will occur at 7:30, and we’ll assume that 10 units were completed in this period. The person recording the production will use a green pen (green is “good”), and write “10” in the proper place on the production board. Since no production related issues occurred during this period, the Pareto chart directly below the production status remains blank.
During the next half-hour, let’s
say that one Associate’s pneumatic screwdriver stops working, and the repair
takes about ten minutes. Instead of
producing 10 finished goods, the team’s output is only 7 units. This time “7” is recorded on the
production status board, using a red pen.
All the associates notice the red on the production board, so they
realize that they are now behind schedule.
In addition to recording the production count (7), three “X’s” are
recorded in a column on the Pareto chart, directly above the label “pneumatic
screwdriver”. The “X’s” represent
finished goods production loss (10 – 7).
Based on current data, it has been predetermined that those directly
supporting the production team must use problem-solving to eliminate each issue
that exceeds a quantity of 5 lost units during a shift, and this is marked with
a red line on the Pareto chart. Of
course, we would love to resolve every issue that occurs, but unfortunately our
resource constraints force us to choose wisely. This limit of 5 lost units has been
determined to be the threshold where issues must be addressed. Therefore, a problem-solving list that
is posted directly below the Pareto chart remains blank.
All during the shift, the
production board and Pareto charts are updated each half-hour. When a Pareto category exceeds the
marked limit of 5 lost units, then the issue is recorded on the problem-solving
list. A “direct support” person
will then record his name, planned countermeasures, and target date; the status
is also updated at standardized time intervals until the issue is resolved. Everyone can see the status of
problem-solving, and who is doing what to eliminate the current
issues.
So now we see how a manual Pareto
chart can be utilized to alert the production personnel as well as direct
support when issues arise, and to show when an issue warrants immediate
attention. Computer-generated
Pareto charts are useful for long-term trends (weekly, monthly, and annually,
for example); but for real-time communication and action, keep it simple with an
erasable manual board.
First time implementers of this
very useful trio of charts (production status, Pareto, and Problem-Solving List)
should keep the following points in mind.
First, if you do not have individuals whose primary duty is real-time
direct support, then manual Pareto charts and problem-solving lists are a
complete waste of time. Associates
will not sustain real-time data recording if no one is taking action on the
issues being recorded, and morale on the production floor will plummet. Second, if you set the “action” limit
too low on the Pareto chart (meaning almost every issue requires action), you
will quickly build a long, long list of problems to solve – without ample
resources to address them, causing everyone frustration. In fact, I recommend that you begin with
a problem-solving list that is designed to record only two or three issues; all
other issues will go in a holding pattern until these few are resolved. After 6 months, you may change the form
to allow for more issues to be recorded; only do this when you have demonstrated
a successful track record of adherence to this process, as well as dependable,
efficient problem-solving by a confident team of direct support. Finally, be patient; learning and
following a standardized problem-solving methodology takes time to develop. At the same time, be persistent; don’t
be quick to call the program a “failure” after the first few weeks’ poor
performance. Observe, audit, and
correct the process every day.
Encourage, coach, and give support, but never give up.
On another day, we’ll see how this
skill of real-time problem-solving is the basis for successful incremental
continual improvement, and how world-class Lean companies begin training this
skill to all levels from day one.
When a production floor is operating with disciplined real-time
monitoring procedures and surrounded by well-trained problem-solvers, one can
practically smell the “kaizen” or continuous improvement in the
air.
Until then, good luck in taking
another Lean step forward!
Remember, patience and persistence.
Sam Frazier is a Lean SME (Subject Matter
Expert
) who transforms business processes
and culture to achieve world-class levels in Quality, Cost & Delivery. He pioneered the Lean effort in
Contact him at samfraziertps@sbcglobal.net.
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