PDCA, or the "plan, do, check, act" cycle is a management method for continuous improvement of a business's products or processes. The PDCA cycle has become an integral part of lean management, a method inspired by the Toyota Production System. PDCA is a method of eliminating waste and maximizing efficiency in pursuit of continuous improvements. There are many PDCA cycle benefits and relatively few PDCA cycle disadvantages.
Origins of PDCA
PDCA evolved from the principles of Total Quality Management traced back to Bell Telephone employee and statistician Walter Shewhart. Inspired by Shewhart's work, William Edwards Deming developed the PDCA cycle.
If the phrase "continuous improvement" calls to mind the business methods of Japanese carmaker Toyota, it is because after World War II, William Deming was involved with the Japanese reconstruction. He taught Statistical Quality Control to top Japanese managers. As a result, the PDCA cycle might also be called the Deming cycle or the Shewhart cycle.
PDCA is, in fact, a process that encourages continuous improvement of the organization, section or department. Because of its emphasis on continuous improvement, reduction of waste and maximization of efficiency, it has become an important element of lean management.
The Stages of PDCA
The PDCA cycle is a four-step process, starting with the "plan". The planning stage involves defining the problem to be addressed, assessing the available resources and needed resources to fix the problem, identifying the best solution and developing key performance indicators (KPI). It is vital that the KPI is established or else you will not have a way to find out if your plan was effective and the other steps of the process will be useless.
In the "do" phase of the PDCA cycle, you will take action on your plan. Many organizations implement the plan on a small scale at first, perhaps only in certain branches of a chain of stores, or in one or two departments of an organization. These small-scale test subjects allow managers to do and check as many times as necessary before deciding to fully act on implementing the change. In this doing phase, problems may arise. This allows you to see what might occur and what will need to be changed to achieve your goals.
The next phase has you "check" that the plan is going as expected. If something is going wrong, the check phase is the time to analyze the unforeseen effect and tweak the plan to deal with the issue. Once you have checked in to see how your process is doing, you might repeat the "do" stage to work out issues or proceed to the "act" phase.
When it comes time to "act", you will fully implement your plan. This implementation might be adopting a new policy that governs how your department handles something. It might be a change in how an item is manufactured. It could be any variety of strategies appropriate for reaching your business goal.
Maintaining Continuous Improvement
One of the most important PDCA cycle benefits is its use in continuous improvement. Once your organization has worked through one problem with PDCA, it will become the standard. Other problems in the organization can be tackled with the same approach. Plans that get implemented but then experience further problems can go back through the PDCA cycle to be improved upon once more.
PDCA Cycle Benefits
The PDCA cycle is designed to be an iterative, or repeatable, process. It can be used and reused as many times as necessary to address an issue. Its value cannot be underestimated as a standard-setting tool. The people in your organization will know there is a process to address problems, and they will understand their role in resolving those problems.
The continuous improvement that PDCA encourages can give your organization a distinct competitive edge over companies in your industry who are content to accept their status quo. Increased productivity and efficiency due to the use of the PDCA cycle will increase your business's profitability as well as your customer satisfaction.
Another important PDCA cycle benefit is risk mitigation. The cycle is designed to catch errors and mistakes in the process, analyze them, test out improvements and repeat as necessary. In this way, problems do not continue to occur and cause a loss for your business. Risk is also mitigated because PDCA provides an excellent way for a change to be tested on a small scale before being implemented company-wide.
PDCA Cycle Disadvantages
Although there are very few PDCA cycle disadvantages, they do exist. The PDCA cycle means that the individuals doing the work must be involved in the process. You may have to challenge the current corporate culture to initially bring PDCA into your organization. PDCA is also a multi-step process that involves analysis and testing, sometimes multiple times, before the change is brought to its final form. This makes it a relatively ineffective tool for solving urgent problems.
PDCA Cycle Example
In this PDCA cycle example, assume that Really Cool Item (RCI) Corp. is experiencing multiple customer complaints about items arriving in a damaged condition. The quality control department has reported these complaints to the head of shipping. The shipping manager calls a meeting of the shipping department. Since Really Cool Item Corp. has used PDCA in the past, the manager suggests that shipping holds a planning meeting.
The people who work in shipping come to the meeting with their suggestions. Some people complain that the carrier handles items roughly, and describe some of the things they have observed. Others mention the cheap packing material and make suggestions for upgraded packaging.
In the end, it is decided that RCI Corp. will try shipping to a certain region using a different carrier, and QA will carefully monitor complaints that come from that region versus other complaints. The manager sets a deadline to move from the doing phase — using the new carrier — to a check-in.
At the deadline, the manager gets a report from QA. Complaints from the region using the new carrier have decreased. The manager decides that it will benefit the organization to use this new carrier for all regions. The change goes into the action phase, where it is implemented to all regions where RCI Corp ships products.
Conversely, management could have checked in and found the volume of complaints had not gone down. They might then go with the second suggestion, the change to packaging. The cycle would experience another do and check phase. The new packaging would be used for a while. When the manager checks in and finds that complaints have decreased, this change would be implemented. The company could continue to monitor the situation to be sure the problem was adequately solved.
Getting Everyone Involved
In the PDCA cycle example, everyone is involved. Management asks the shipping department to report their observations, make suggestions and help the new plan succeed. Because the employees feel listened to and valued, their motivation is higher. They no longer just work with what they are given to get by.
They understand that if there is a significant problem in the work process, they can bring it up and the organization will look into solutions. Thus, PCDA is not only a problem-solving tool. It is also a valuable tool for retaining employee motivation and loyalty.
Laura Chapman holds a Bachelor of Science in accounting and has worked in accounting, bookkeeping and taxation positions since 2012. She has written content for online publication since 2007, with earlier works focusing more in education, craft/hobby, parenting, pets, and cooking. Now she focuses on careers, personal financial matters, small business concerns, accounting and taxation. Laura has worked in a wide variety of industries throughout her working life, including retail sales, logistics, merchandising, food service quick-serve and casual dining, janitorial, and more. This experience has given her a great deal of insight to pull from when writing about business topics.