Q: We have created a Pareto Chart to
tell us which production problems are happening
the most often. However, all of the problems
do not cost the same since some can be easily
corrected but others will cause us to scrap
the part. Can this information be included in
Pareto charts?
A: In this situation, you may want to
look at a Pareto chart of the total costs associated
with each problem type in addition to the chart
you have already made. This will help you direct
resources to the problem that will be the most
profitable to address first.
For example, consider the following list of
production problems and their associate costs.
|
Problem
|
Count
|
Cost per Occurrence
|
Total Cost
|
| Bad Seal |
15
|
$15
|
$225
|
| Bent |
10
|
$10
|
$100
|
| Dirt |
40
|
$2
|
$80
|
| Extra holes |
6
|
$60
|
$360
|
| Missing holes |
20
|
$12
|
$240
|
| Scratch |
12
|
$5
|
$60
|
A Pareto chart on the count data is shown
below. It indicates that the most prevalent
problems are dirt and missing holes. If all
of the problems were of equal cost or severity,
then the causes of these two problems should
be addressed first.
These conclusions may change if we look at
the total costs instead. For example, a dirty
part can be cleaned easily and at low cost.
However, a part with extra holes must be scrapped
at a much higher cost.
A Pareto chart on the total costs is shown
below. The total cost was calculated by creating
a new variable equal to the defect count multiplied
by the cost per occurrence. This chart indicates
that the most costly problems are extra holes
and missing holes. With this information, it
would seem prudent to address problems in drilling
first to get the best savings in production
costs.
