Pareto chart: definition, examples, and when to use one.

What is a pareto chart?

A pareto chart sorts bars from largest to smallest, left to right, and adds a line tracking the running cumulative percentage as each bar is added. As the eye moves across the chart, the bars shrink and the line climbs toward 100%. The name comes from the Pareto principle, the observation that a small share of causes often accounts for a large share of effects, commonly summarized as the 80/20 rule.

The chart is standard in quality management and operations, where the goal is usually to find the smallest set of causes worth fixing first.

A worked example

A support team analysing complaint categories over a quarter might sort them like this, ranked by ticket count.

In this example, the first three categories already account for 82% of ticket volume, which is where a fixed 80% reference line usually gets drawn on the cumulative curve.

When a pareto chart helps

• Root cause analysis, identifying which defect types or failure modes drive most of the quality issues.
• Customer support prioritization, showing which complaint categories generate the majority of tickets.
• Cost review, ranking line items to show which ones make up most of total spend.
• Sales concentration, showing how much revenue comes from the smallest slice of top accounts.

How to read a pareto chart

Read the bars first, largest to smallest, for the individual contribution of each category. Then read the line for the running total. Wherever the line crosses 80%, everything to the left of that point is the vital few, and everything to the right is the long tail that contributes comparatively little.

Best practices

• Always sort bars largest to smallest. An unsorted pareto chart loses the entire point of the format.
• Keep the cumulative line, since without it the chart is just a sorted bar chart with no running total.
• Mark the 80% threshold with a reference line, so the vital few versus the trivial many split is visible immediately.
• Group small categories into an "other" bucket once you have more than ten or twelve, to keep the ranking legible.

Chartbuddy does not ship a dedicated pareto type. You can build the same view with a combo chart, placing the sorted bars on one axis and the cumulative line on the other.