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.
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 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.
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:
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.
PDCA, Six Sigma, and Kaizen are all methods and frameworks used in management and quality improvement. Here’s how they differ:
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 | Six Sigma | |
| Main goal | Makes continuous improvements to perfect the process | Minimizes variations and defects in the process to the optimal level |
| Cycle |
- Includes 4 stages: Plan, Do, Check, Act |
Includes 5 stages: Define, Measure, Analyze, Improve, Control (DMAIC) |
| Nature of the cycle | Continuous; exists as a never-ending iterative cycle | Focuses on specific projects; the cycle ends once the project is completed |
| Scope of application | Can be flexibly applied in many cases, not only for quality improvement but also for process efficiency | Typically used in manufacturing and services to improve product and service quality |
| Importance of data | Data plays an important role, but full statistical analysis is not always required | Must be based on numerical data and full statistical analysis |
| Resource requirement | Can be implemented quickly and flexibly without requiring significant investments | Typically requires more time and resource investment |
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.
| PDCA | Kaizen | |
| Main goal | Makes continuous improvement to gradually perfect the process | Accumulates small improvements over time to achieve significant |
| Cycle | Includes 4 stages: Plan, Do, Check, Act | More like a work environment where every employee participates in suggesting and implementing improvements |
| Frequency | Can be carried out in cycles or based on specific needs, not necessarily continuous | Typically carried out continuously and periodically |
| Scope of application | A specific and planned method focused on identifying clear goals | Often seen as a general operational philosophy closely tied to corporate culture |
| Resource requirement | Can be implemented by individuals or small working groups | Usually implemented through specially formed working groups (Kaizen teams) |
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:
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.
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:
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.
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.
Finally, after developing, implementing, and evaluating your plan, it’s time to act. At this stage, you need to categorize the results as follows:
Here is an example of a PDCA cycle in software development.
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.
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.
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.
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.
The PDCA cycle is a powerful tool for continuous improvement, but it has some drawbacks when used in specific contexts.
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.
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!