Pareto Charts Made Simple

 

Introduction:

If you’re new to quality tools, a Pareto chart is one of the easiest and most useful visuals you can learn. It helps you see which few problems cause most of the trouble so you can focus improvement where it matters. This guide explains Pareto charts in plain language, shows how to build one step‑by‑step, and  suggests simple images to include to make the idea clear for first-time readers.

Why Pareto Charts Help

The Pareto chart answers a basic question: Which issues create the biggest impact? Lets understand Pareto chart taking an example: In healthcare, this could mean the causes of most medication errors, most delayed discharges, or most billing denials. By showing problems from largest to smallest and adding a cumulative percentage line, a Pareto chart quickly highlights the “vital few” to tackle first.

What a Pareto Chart Looks Like (Simple)

·       Bars: each bar shows how often a problem occurs, ordered from highest to lowest.

·       Line: a curve shows the cumulative percentage—how much of the total is covered as you move across bars. Together they show which small group of causes make up most of the problems.

When to Use a Pareto Chart

·       You have multiple problem categories and need to prioritize.

·       You want a clear visual to explain priorities to your team or leaders.

·       You’re planning improvement work and need to pick targets with the biggest impact.

 

Step-by-Step: Build a Pareto Chart (Beginner-friendly)

1.       Define the problem Pick one outcome to measure (e.g., “reasons for missed medication doses this month”).

 

2.       Collect simple counts Record how many times each reason occurred during a set period (week or month). Example:

Select the range A3:B13.

3. On the Insert tab, in the Charts group, click the Histogram symbol.

4.  Click Pareto.

5.       Result:

 

6. Enter a chart title.

7. Click the + button on the right side of the chart and click the check box next to Data Labels.

8. Result:

 

 Interpretation:

The Pareto line shows that (50 + 30) / 174 ≈ 46% of the errors come from just 2 out of 10 = 20% of the error types (Wrong dose and Wrong medication). Expanding to the top 4 errors (50 + 30 + 25 + 15 = 120) / 174 ≈ 69% shows that most errors are concentrated in a few causes. In other words, the Pareto principle applies — addressing the top few error types will give the largest improvement in reducing medication errors.

 

If you don't have Excel 2016 or later, simply create a Pareto chart by combining a column chart and a line graph. This method works with all versions of Excel.

1.       First, select a number in column B.

2. Next, sort your data in descending order. On the Data tab, in the Sort & Filter group, click ZA.

3. Calculate the cumulative count. Enter the formula shown below into cell C5 and drag the formula down.

4. Calculate the cumulative %. Enter the formula shown below into cell D4 and drag the formula down.

 

 

Note: cell C13 contains the total number of reasons for missed medication doses. When we drag this formula down, the absolute reference ($C$13) stays the same, while the relative reference (C4) changes to C5, C6, C7, etc.

5. Select the data in column A, B and D. To achieve this, hold down CTRL and select each range.

 

6. On the Insert tab, in the Charts group, click the Column symbol.

7. Click Clustered Column.

8. Right click on the orange bars (Cumulative %) and click Change Series Chart Type...

 

 

The Change Chart Type dialog box appears.

9. For the Cumulative % series, choose Line with Markers as the chart type.

10. Plot the Cumulative % series on the secondary axis.

11. Click OK.

 

 

Note: Excel 2010 does not offer combo chart as one of the built-in chart types. If you're using Excel 2010, instead of executing steps 8-10, simply select Line with Markers and click OK. Next, right click on the orange/red line and click Format Data Series. Select Secondary Axis and click Close.

12. Right click the percentages on the chart, click Format Axis and set the Maximum to 100.

13. Enter a chart title.

14. Click the + button on the right side of the chart and click the check box next to Data Labels.

15. Result:

 

 

 

Interpretation: the Pareto chart shows that 80% for missed medication doses come from 20% of the reasons as highlighted. In other words: the Pareto principle applies.

 

Practical Tips for First-Time Users

·       Start small: use one month’s data or one unit’s data.

·       Keep categories clear and mutually exclusive (no overlapping reasons).

·       Use absolute counts for simplicity; add severity later if needed.

·       Don’t chase perfection—Pareto charts are for quick, practical prioritization.

 

Common Mistakes to Avoid

·       Too many tiny categories—group minor reasons together.

·       Very small sample sizes—collect enough data to see patterns.

·       Ignoring the severity of events—if a rare event causes serious harm, give it attention even if it’s not frequent.

 

How to Present Findings to Your Team

·       Start with the question you asked and the time period.

·       Show the Pareto chart and point to the top 1–3 causes.

·       Propose one small pilot action for the top cause.

·       Agree on how you’ll measure success and when to re-check.

 

Conclusion

Pareto charts are simple, fast, and powerful for beginners. They help you focus on the few issues that will deliver the biggest improvements. Start with small, clear data and the four-step workflow, use the suggested images to communicate clearly, and iterate: measure, act, and measure again.

References: The step-by-step guide for creating a Pareto Chart was inspired by Excel Easy, which made it easier to explain in this blog.