What is a Pareto diagram primarily used for?

A Pareto diagram is primarily used to identify and prioritize problems or issues based on their significance. It employs a histogram format, wherein the data is arranged in descending order of frequency or impact, enabling users to see which factors contribute most significantly to an overall effect. This visualization allows organizations to focus their improvement efforts on the most critical areas that will yield the highest return on investment.

The histogram component of the Pareto diagram helps in visualizing the relative size of different problems or causes, often accompanied by a cumulative line graph to show the overall impact as you consider more factors. This is grounded in the Pareto principle, which asserts that roughly 80% of effects come from 20% of the causes, making it a powerful tool for quality improvement and decision-making in healthcare processes.