What is PDCA: Leverage the power of continuous testing

Imagine your business operates on an e-commerce platform, and customer satisfaction ratings have recently declined. Upon careful review, you discovered that your customers complained about late deliveries and damaged products during shipment.

To address this, you ran a one-month trial project using a new carrier for a sample group of customers. To your delight, positive feedback started coming in, and delivery problems improved. You decided to switch to the new provider for all future orders.

What you just did is a simple iteration of the PDCA cycle. Considered the "secret formula for the miraculous growth of Japanese businesses," what exactly is PDCA, which type of companies can apply, and how can it be implemented effectively? The following article will provide a detailed analysis.

What is PDCA?

What does PDCA mean?

PDCA, which stands for Plan – Do – Check – Act, is a four-step project management tool designed to facilitate continuous improvement. PDCA encourages testing improvements on a small scale before rolling out new procedures and working methods company-wide.

PDCA can accelerate continuous improvement and help the company optimize processes and operations. If each step is performed consistently and accurately, the cycles can happen more quickly, leading to faster improvements.

The origin of PDCA  

The PDCA cycle was first introduced by Walter Shewhart, who is referred to as the “father of statistical quality control”. In his book “Economic Control of Quality Of Manufactured Product”, Shewhart applied the scientific method to economic quality control.

Shewhart’s thesis was further developed by W. Edwards Deming, a leading thinker in modern quality control, who strongly advocated for Shewhart’s work. Deming expanded Shewhart’s ideas, applying the scientific method not just to quality control but also to process improvement.

Deming introduced this method to Japanese engineers. There, Shewhart’s cycle was integrated with the principles of continuous improvement, such as Kaizen, Toyota’s production system, and Lean manufacturing, evolving into what is now known as the Plan-Do-Check-Act (PDCA) cycle.

Today, PDCA is widely used as part of Lean project management. It is also known by several other names, including the Shewhart Cycle, the Deming Cycle, and the Deming Wheel.

When should you use PDCA?  

Companies that want to improve their operational processes often implement PDCA to minimize errors and maximize output. Organizations can repeat the PDCA cycle when effectively executed, embedding it as a standard operating procedure. Specifically, the PDCA cycle can be applied when your business is:

• Starting a new process or project  
• Improving an existing process  
• Identifying a repetitive workflow  
• Planning to collect and analyze data to set business priorities  
• Identifying the root causes of bottlenecks or errors in operations  
• Or working on any process aimed at continuous improvement  

However, implementing the PDCA cycle may require considerable time and resource focus. Therefore, it may not be the best approach for resolving urgent issues or situations that demand quick creativity and responsiveness.

What are the differences between PDCA, Six Sigma / DMAIC, and Kaizen?

PDCA, Six Sigma, and Kaizen are all methods and frameworks used in management and quality improvement. Here’s how they differ:

PDCA vs. Six Sigma

Six Sigma (6σ) is a method for improving business processes and quality management. It uses statistical methods to count the number of defects in a process and then determines ways to eliminate them.

PDCA is a core part of Lean Manufacturing, making it simple and easy to apply. It can be used at all levels of an organization to solve common, everyday business problems. For example, PDCA can help detect errors in a production line operated by factory workers.

On the other hand, DMAIC, which is linked to Six Sigma, is more detailed and data-driven. It’s best for tackling complex, technical problems and requires a specialist to lead the process. For example, DMAIC can be used to figure out why production output is inconsistent, even when inputs are the same

PDCA vs. Kaizen

Kaizen is a philosophy and continuous improvement method developed in Japan. It aims to create small, incremental improvements across all aspects of an organization.

Unlike PDCA, which is a structured cycle for specific improvements, Kaizen focuses on fostering a work culture where every employee is actively involved in identifying opportunities for improvement. This ongoing approach emphasizes making small, consistent changes that, over time, significantly enhance processes, efficiency, and overall company performance.

How to implement the PDCA cycle  

1. Plan – Analyze the nature & plan details

During this stage, your main focus will be on planning the necessary tasks. Depending on the size of the project, the planning phase may require a substantial amount of your team's time and effort. Usually, it will involve breaking down the task into smaller steps to create a robust plan with minimal risk of failure.

Before moving on to the next stage, ensure that you've addressed the following questions:

• Identify the problem: What issue are you facing that needs improvement? Or what opportunity for improvement do you have? For example, it could be a product's declining quality or a content production process that could be optimized.
• Define the goals: What do you aim to achieve regarding these issues? Ensure the objectives are clear and tied to measurable indicators. You will need to revisit these in the "Check" phase.
• Analyze the situation: What is the current status? You can apply the 5-Whys thinking framework to find out the root cause of the problem. 
• Develop solutions: What approaches might help resolve the issue, based on the cause that we have analyzed?
• Choose the best solution: From the possible solutions, select the one that seems most promising and aligns best with your budget.

This could be the most crucial part of your PDCA implementation efforts. Depending on the project’s progress, you might even need to repeat specific steps until the most suitable solution is found.

2. Do – Conduct testing & Standardization

Once the plan is finalized, it’s time to take action. 

During this stage, you'll apply everything analyzed and planned in the previous phase. This could involve altering production lines, improving products, or applying new technologies—essentially, bringing all your ideas and plans to life. This phase can be broken down into three sub-steps: training all personnel involved, executing the project, and recording data for performance evaluation in the next phase.

Be mindful that unforeseen issues may arise during this stage. Therefore, it may be beneficial to first run a small-scale test project. This allows you to evaluate whether the proposed changes will yield the desired results without significantly disrupting the company’s operations in case the changes don’t work. For example, you can test the new processes in a specific department, business unit, or with a small customer group.

Additionally, some common issues that might arise during the execution phase include:

• Unexpected incidents beyond the control of the initial plan.
• Bottlenecks in the operational or production process that are difficult to identify.
• Employee engagement and commitment to the plan may fluctuate.

Standardized processes are vital to improving the organization's execution to address these challenges. Standardization ensures that every employee is clear about their role and that every operational incident is recorded and addressed effectively.

3. Check – Continuous monitoring and evaluation

This is the time to verify whether things are going as planned. At this stage, your team can identify problem areas in the current process and eliminate them in the future. If something goes wrong during the process, you need to analyze and find the root cause of the issue.

While this stage is crucial, "Check" is often the most overlooked part of the PDCA cycle. Without consistently maintaining proper monitoring and evaluation, you might fall into a common trap known as the "Hawthorne Effect."

The Hawthorne Effect illustrates a phenomenon where managers make any change in the production area—no matter what that change is—it improves the system, but only for a short time. Once management’s oversight is no longer present, everything reverts to its original state.

An improvement must maintain its result over time to be considered effective. 

4. Act – Categorize results & Make decisions

Finally, after developing, implementing, and evaluating your plan, it’s time to act. At this stage, you need to categorize the results as follows:

• For unwanted outcomes: You must identify the cause of failure and then decide whether to continue improving or stop.
  • If you choose to continue improving: This leads to repeating the PDCA cycle with a new plan to find a better solution.
  • If you choose to stop: It means you accept that the process/product/service doesn’t need (or cannot be) improved further at this time. If that’s the case, it isn’t a strategic factor, and you should focus on improving truly strategic areas.
• For successful outcomes: Congratulations! You now find the right process to stick with. Also, don't forget to share the win with the team that contributed to this success.
  However, like the PDCA cycle, the work doesn’t stop here. Now, you need to think about which issue to tackle next. Prioritize the problems, select the most suitable one (often the one that provides the maximum benefit with minimal resources), and start a new PDCA cycle.

Example of PDCA cycle

Here is an example of a PDCA cycle in software development.

1. Plan

The development team identifies that the current user interface (UI) of a software application is difficult to navigate, leading to user complaints and increased support tickets. The goal is to improve the UI to enhance user experience and reduce complaints. The team plans a redesign, gathers feedback from users, and outlines a clear set of UI improvements.

2. Do

The team implements the planned UI changes in a small-scale update or within a beta version of the software. The new design is tested internally, and feedback is collected from a small group of users.

3. Check

After a few weeks, the team reviews the feedback from the test users and analyzes key performance indicators (KPIs) like user satisfaction scores, support ticket trends, and engagement metrics. They evaluate whether the changes met the improvement goals.

4. Act

Based on the analysis, if the new UI proves effective, the team rolls out the changes to all users and standardizes the new design approach. If further improvements are needed, they return to the planning phase, refine the design, and repeat the PDCA cycle.

This iterative process helps continuously improve the software’s usability and user experience.

Pros & Cons of PDCA cycle

The PDCA cycle is a powerful tool for continuous improvement, but it has some drawbacks when used in specific contexts.

Advantages

• Useful for teams aiming to start with continuous improvement.
• Flexible and applicable to most projects.
• Quick to implement changes and see results.
• A proven method for continuous improvement and enhancing organizational standardization.

Disadvantages

• Requires support from senior management to be successful.
• Works best only if the cycle is iterative 
• Time-consuming to implement and learn.
• Not suitable for urgent projects.

PDCA template

To help businesses easily apply the PDCA cycle management method to improve their results, we have prepared a flexible template, suitable for a variety of plans.

“To improve is to change; to be perfect is to change often.”

The importance of change and continuous improvement is always emphasized in business operations. Among the various continuous improvement models, the PDCA cycle is one of the most streamlined and optimal methods for addressing issues at any level of your organization. It ensures that processes do not repeat errors while allowing your organization to test ideas on a small scale in a controlled environment.

You can start applying PDCA today, and we hope this article has been helpful!