PDCA Cycle: what it is, steps and how to use it in the company

When you need to make a change or improvement in your company, what do you turn to: your sixth sense (the famous ‘ feeling’ ) or some planning method to guide the process?

If you are part of the “evidence-based decisions” team, in this article, you will learn everything about the PDCA cycle , a systematized method that helps to plan, execute, monitor and evaluate the actions implemented in business.

With a methodology guiding the process, there is the possibility of having to adjust the chosen actions, imagine modifying them without having any prediction of the impacts that this will cause.

So, continue reading the article and learn how to implement successful strategies, overcome challenges along the way and continue the process of continuous improvement of your company with the PDCA tool!

What is PDCA in a company?

The PDCA cycle (Plan, Do, Check, Act) is a methodology that helps solve corporate problems, with the aim of promoting the continuous improvement of business processes, assisting decision-making with accurate and reliable data and contributing to better predictability of results .

The method was created in the 1920s by the American physicist Walter A. Shewhart. In the 1950s, the statistician William E. Deming perfected the tool, popularizing it in the corporate world.

The difference is that the methodology can be applied to each process optimization cycle that the company goes through. Thus, the steps are repeated, but the context analyzed is always different, since it starts from previous improvements.

In this way, the method is a way to continue optimizing strategies to achieve the desired results, without losing what has already worked.

What are the 4 steps of the PDCA cycle?

The PDCA cycle is based on four main steps: Plan, Do, Check and Act. The names indicate what is done in each phase of the method, but we will detail each step below:

1. Plan

The first step of the PDCA cycle is to plan , that is, find opportunities for improvement and then make the plan that will lead to the changes.

And how do you know what needs to be improved? As a manager, you must pay attention to your sector to identify processes that are not working and causing problems.

This investigation results in a list of demands, so it is necessary to define which will be the priority at the moment. One way of thinking is to evaluate which process has the greatest impact on the workflow and which, if changed, would improve other steps.

Each optimization must have its own planning with a defined objective linked to the business goals. In short, at the end of this stage, you must complete the following steps:

• Define the problem
• Analyze the root cause
• Set a goal
• Decide on corrective actions

2. Do (do)

The second step of the PDCA method is Do. Here, it is time to put the planning into practice and execute corrective actions to test its efficiency.

Optimizations can occur in several areas, such as the operational line, logistics, maintenance management , training strategies, administrative practices, among others.

The action must be customized for each context, considering the need for improvement and other factors that influence the activity.

To take effective action, map out the process step by step, define those responsible for each part of the task, establish indicators to monitor results and assess the need to include new tools.

3. Check

The third stage of the PDCA cycle is verification (Check) . The main activity is to evaluate the results of the first post-change tests through performance indicators, based on the criteria defined in the planning.

The second check takes place after the implementation period has been completed. At this point, it is possible to identify errors in execution, failures and successful actions.

This way, at the end, you will have a list of what worked and what still needs to be optimized for the process to be fully efficient.

This is a crucial moment in the application of the methodology and requires a lot of attention. Some tips that can help are:

• Set deadlines for initial testing and the overall process
• Monitor quantitative metrics constantly
• Define a qualitative improvement parameter, if the process does not have a numerical reference

4. Act

Closing the PDCA cycle, we reach the action stage (Act) , that is, the defined solution based on the results achieved. At this point, the responsible team creates a new pattern and records the step by step.

The new instructions must be passed on to all employees involved in the activity to avoid errors in the new stage. If, in the future, the first optimization is no longer as efficient, a new PDCA can be carried out to adjust the process.

As mentioned above, the method is cyclical, so with each round of improvements/adjustments, the four steps need to be repeated. Often, due to overconfidence, teams make decisions without planning.

This decision harms the progress of continuous improvement because, by discarding the previous process, the errors overcome may be repeated. Therefore, always remember that the continuity of improvements depends on the correct application of the methodology.

Variations of the method

PDCA is a tool recognized for its efficiency in solving business problems. It is so successful that there are variations of the method, but all maintain the four-step scheme. We have separated three alternatives:

PDSA

PDSA only changes the penultimate step of the original cycle. Check is replaced by the Study step. This does not mean that it is completely eliminated, but in this variation of the method, the study is more in-depth, using historical data from the process .

The person responsible for this change was William Deming, who, when evaluating the original cycle, considered that the verification stage was very superficial and that it was necessary to investigate the changes achieved in greater detail.

PDCL

In PDCL, the changed step is the last one. Act gives way to Learn, so instead of standardizing the process, concluding the cycle, the team turns its attention to learning.

In this way, the work continues, directing efforts to deepen knowledge about the process, evaluating the chances of obtaining other improvements with a new planning and execution cycle.

PDCL can be useful in complex operations in highly competitive markets, where efficiency is a key aspect of the operation, in addition to keeping the business at the forefront of its market .

SDSA

The last variation is SDSA , and here two steps of the original cycle are changed: Plan becomes Standardize and Check becomes Study.

The goal of this cycle is standardization. The idea is to conduct continuous rounds of testing until the goal is achieved. Only when the ideal level of performance is achieved will the new process become standard and be implemented.

To obtain positive results with the SDSA cycle, it is recommended to perform the PDSA first (once or twice) to improve the main aspects and then apply the SDSA with more knowledge about the work context.

The goal is for this approach to consolidate improvements and prevent the recurrence of errors and mismatches.

How to do a PDCA cycle?

To carry out a PDCA cycle, it is essential to follow each of the main steps, or variations. As the process is systematized, the steps complement each other and aggregate information, allowing for accurate assessments.

The methodology can be repeated as many times as necessary and there is no limit. However, having a break between one cycle and another helps to observe the situation with more perspective and understand where the root cause of the error/misadjustment lies.

The responsible team sets the deadline for reapplying the method. This way, those involved can monitor the work and, most importantly, avoid skipping steps due to the rush to reactivate the process.

Remember that one step depends on the other? Therefore, an error or poorly performed assessment can directly impact the quality of the final PDCA analysis.

Errors in applying the tool

To obtain a good result, be careful and avoid the following mistakes when applying the cycle:

In-depth reviews

When a problem arises in a company, the most urgent need is to resolve it quickly. However, rushing can lead to a superficial analysis of the situation. Without finding the root cause, the solutions defined on impulse will not actually improve the situation.

To assist in the planning stage, use other management tools with a systemic approach, such as the 5 Whys and 5W2H , which focus on helping to define the root cause of problems.

Insufficient knowledge

The team responsible for conducting the PDCA cycle needs to have knowledge not only of the methodology, but also of the process being analyzed.

So, if the work will be in the operational sector, the team needs to include people with sufficient knowledge of the area and its processes for the proposals to be coherent.

Furthermore, improvement proposals need to consider the need for new training for the team that will carry them out so that employees can learn the new technique.

Confused assessment

Another PDCA error is to make a confusing assessment without clear criteria to support the conclusions. An incorrect assessment can lead to changes that will not be beneficial to the process, causing losses in productivity and deliveries.

Therefore, the indicators that will guide the analysis need to be well defined for the assessments to be accurate and reliable.

PDCA method example

As PDCA is widely applied in process improvement, we will use the increase in industrial productivity as the objective to be achieved to create a practical example.

In the planning stage, the team must evaluate which activities are carried out, determine the average production time, how many people work in the area evaluated, who the manager is, etc.

One of the problems identified is not having enough staff to cover the entire process quickly. So, in the execution stage, the first test is to include more people in the team for two weeks to try to reduce the average production time by 5%.

During verification, the team assesses whether, in the period analyzed, the indicator was reduced and what impact this had on the rest of the operational chain.

If the results are positive, new employees can take on the position permanently. If the desired result is not achieved, it is essential to listen to the team to understand what went wrong and gather new suggestions for improvement.

The example is simple, but it illustrates the collaborative work of applying PDCA well. It is not just the steps that are connected, the team leading the project and the team executing the tests must collaborate, contributing to broadening the vision of the framework studied.

Where can PDCA be used?

PDCA is a versatile method that can be used to guide various types of projects in different areas of a company. In the corporate world, the method is applied to the following activities:

• Business process optimization : reorganizes and improves workflows by including or deleting steps to optimize the process.
• Adapting sectors to compliance guidelines : helps to make changes so that a sector, for example, finance, meets compliance requirements, prioritizing transparency.
• Creation of new products or services : the PDCA method is very efficient in guiding the steps of including new items in the portfolio, prioritizing the high level of quality of the company’s solutions.
• Efficient standardization : the method guides the entire process of implementing new standards, highlighting errors and successes and allowing them to be improved to meet the defined requirements.