PDCA Cycle: What It Is and How It Helps Improve Business Results
The PDCA Cycle is a methodology used to solve problems and achieve organizational and personal goals. Mainly disseminated here in Brazil by the Falconi management consultancy, of Professor Vicente Falconi, it is used in thousands of organizations around the world to evaluate the efforts and the results generated, seeking continuous improvement.
Using the PDCA cycle is an excellent way for companies to optimize their processes and focus on a more qualified delivery of products or services.
Even because, let’s face it: what businesses can thrive without organization, focused on greater daily productivity? Technology has changed the way customers relate to brands.
The growing demand, therefore, forces companies to be better and better.
That’s why organizations that want to be more and more a reference where they operate need to constantly improve their processes.
And through the PDCA cycle this is possible. But, after all, what is this methodology and how is it applied?
Or, better: what benefits does it bring, in practice, to companies that use it?
These are questions that we will be answering from now on.
Come on? Good reading!
After all, what is the PDCA cycle?
The PDCA cycle is a methodology used for continuous improvement of processes within organizations. The acronym, by the way, means:
- plan (plan);
- do (do);
- check (check);
- act (to act).
What is the origin of PDCA?
The origin of the PDCA takes us back to the 1920s. The person responsible for its creation is an American physicist. Your name? Walter Andrew Shewart , who had notorious work in the field of statistical quality control.
Although the date of creation, this methodology became popular only 30 years later on account of Professor William Edwards Deming .
He, who is also an American, is a reference in quality management, having been honored with titles in this area.
His legacy brings works related to the improvement of production processes in the USA, especially during World War II.
But, let’s go back to the concept of PDCA?
Its focus is on eliminating failures, increasing the productivity of everyone involved and, of course, offering a more qualified delivery to the market.
More than that, this method is focused on problems that are not apparent at first – which increases its importance even more.
It also acts to solve those issues that previously had failed correction attempts. It is a way to accelerate knowledge and improve activities within the company.
The PDCA cycle works by identifying these defections, their causes and building a strategic plan based on possible solutions.
Focus on continuous improvement
As it is a cycle, you can already imagine that it is something that ends up repeating itself. And that’s right.
The methodology works through repetition and the search for better and better results.
Even so, the final product is not always the same, after all, you are looking for improvement, not stagnation.
Therefore, every new process carried out gives rise to a new one. And so on.
The cycle is constantly renewed and never stops. The intention is that the product or service resulting from this continuous improvement will finally reach customers.
That’s why failures are always on companies’ radar and are immediately corrected.
With concrete data to measure both bottlenecks and applied solutions, the application of the PDCA cycle becomes even more assertive.
Its application can – and should – occur in any operation within companies.
But we’ll talk more about this later.
PDCA cycle: phases and application in companies
To plan. To do. Check. Act.
These are the phases of the methodology.
But what exactly do they mean?
To understand how to “attack” a problem, it is necessary to break it down.
Thus, it is possible to concentrate efforts and, at each stage, carry out an assertive decision-making , surrounded by the necessary care.
P lan (Plan)
The planning stage is the time to establish the goals and objectives of the PDCA cycle.
So, ask yourself: what problems will the company focus on to solve? And what do we need to succeed in this mission?
At this point, it is essential to know how to plan well and have a really effective administrative management .
Then, it is necessary to understand which performance indicators are relevant to show whether the actions are or are not being effective.
Therefore, we can divide the planning stage into 4:
- Problem identification – this is when you analyze data, reports and all possible information to be sure of the problems and why;
- Problem observation – the time to detail the problems, their specific details. It is a thorough work and must be observed from different perspectives;
- Problem analysis – time to raise the possible causes of the problem and order them by their relevance so that it is possible to choose the most likely ones, based on data;
- Action plan – having identified the real causes of the problems, it is time to create an action plan to combat them.
For the item above, methodologies like 5W2H help at this point.
The Ishikawa Diagram is also important to support and assist when making decisions.
After all, it is time to plan that you will determine which complementary methodology will be used to correct the issues raised.
Planning needs to be careful and detail as much as possible.
It has to be didactic for everything that is put there to be executed.
D o (Do)
Once you’ve identified the problems and set your goals, it’s time to get down to business.
Plan the work and work the plan. That’s what needs to happen here. To the letter.
The planning was done in a meticulous way, based on relevant information and, therefore, it is necessary to be disciplined to follow it.
If there is any kind of deviation then you will need to return to the first stage of the PDCA cycle and retrace your steps.
Otherwise, you run the risk of performance indicators not mapping your actions.
And without control there is no management. Understand: everything that is done needs to be metered.
Take control, even if you need to back off. The BSC, Balanced Scorecard can help you right now.
And to ensure that everyone involved in doing what was planned can succeed, invest in their qualification.
Training, coaching, lectures… it doesn’t matter.
Ensure that the time spent on the action plan is offset by actions that are truly effective for the company.
Only a capable team, with high motivation, will be able to deliver what your business needs and deserves.
It is from there that we see a change in attitude at work that is positive and directed towards an even more qualified delivery to customers.
C heck (Check)
As soon as the “doing” step starts, the checking starts.
The sooner results start to be tracked, the sooner you’ll know if you’re on the right track or not.
Compare what has been predicted with what is being accomplished. Is it in agreement or behind the projected?
Quickly identify gaps and make adjustments with ongoing actions and, of course, monitor them.
If they’re too complex, well then you’ll need to restart the cycle.
Go back to the initial steps to ensure that everything planned will happen reliably.
Also assess the work methodology you have chosen for your teams to work on.
Does it match the characteristics of your employees?
Does it fit the company’s organizational culture and do people good?
Don’t forget to do a quantitative, statistical analysis of what is being done.
Qualitative assessment is important, but you will also need numbers to know if the original problem is actually being fixed.
Yes, it is time to start seeing results in practice.
The ACT (Act)
If you were successful in applying what was planned, then you have that plan as your default.
Otherwise, the PDCA cycle will restart and the lesson will have been learned so that mistakes are not repeated.
The last stage, therefore, proposes a reflection on the path that will be taken from now on.
More than that: what was learned on this trajectory, regardless of whether the mission was successful or not?
Therefore, we can separate the act step into:
- Standardization – when successful, the process is adjusted and the plan will be followed by everyone in the company. Document these good practices and make them available to everyone in the company so that anyone is able to develop them.
- Conclusion – moment of reflection, both by managers and employees. Make use of numbers right now and have everything documented, both to repeat part of what went right, and not to do what went wrong anymore.
The cycle is a learning opportunity.
It’s how companies manage to improve their processes, even if they need to retrace the path once, twice, or more times.
The important thing is to stay on track. Have the customer focus and improve internal productivity to be able to deliver a product or service better and better.
Examples of companies that use PDCA in their operations
Thousands of companies around the world use PDCA as a management tool in their operations. Here in Brazil it is no different and we can mention some companies that are recognized by the FNQ (National Quality Foundation):
- Brasal Soft Drinks
- Ford Motor Company
- Master brakes
- Windmills Hospital
- Volvo of Brazil
So, how can we help you?
If you are unsure how to apply the PDCA cycle in your company, or want to share some pain when it comes to running your business, talk to a consultant today.
Take the opportunity and read two articles that bring methodologies to help you in the task of being an always better manager.
The first talks about the importance of the SMART methodology for setting goals in companies. The second talks about how the kanban system helps companies organize their processes.