PDCA: Improvement Tool or Mental Model?

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“Management is prediction.”  – W. Edwards Deming

Much of the literature about the Plan-Do-Check-Act (PDCA) cycle focuses on its application to kaizen activities.  This is unfortunate because PDCA has a much wider application across a business and can be used to clarify direction, increase learning, align efforts, and improve results.

The benefits of PDCA begin to appear when people recognize the cycle as a mental model for managing the business rather than merely a tool for kaizen.  Getting to this point, though, requires a lot of coaching, reflection and practice.

Linking Activity At All Levels

The figure below shows how the PDCA cycle applies to different levels of the business and how, even though different in scope, each relates to the others in providing direction and assuring results.

The application of PDCA thinking to a typical organization

Business Planning

At the highest level, Hoshin Kanri applies the PDCA cycle to business planning.  The cycle involves:

• PLAN:  Determining objectives (including key performance indicators-KPIs), identifying barriers and market opportunities, and developing action plans (predictions) to address the barriers and take advantage of the opportunities;
   
• DO:  Implementing the action plans;
   
• CHECK:  Reviewing progress of the action plans and determining whether the plans are leading to accomplishing the objectives;
   
• ACT:  Making appropriate adjustments based on the CHECK activity (e.g., adding resources to get action plans back on schedule or adjusting the action plans to better align them with objectives).

The catchball process helps clarify the objectives and make sure they are understood by more than those at the organization’s highest levels.  Catchball is the thread that connects actions at different levels and helps assure that there is clear alignment throughout the organization between activity and objectives.

System/Area Improvement

Clear and consistent objectives help assure area leaders are focusing on the right things.  In most organizations, there are a virtually unlimited number of areas that can be improved, but since time and resources are limited, it is critical to focus on those things that are the most closely related to objectives.  This is what Pascal Dennis refers to as the “right things” in his book, Getting the Right Things Done.
At this level in the organization, PDCA involves:

• PLAN:  Understanding objectives (through catchball) and setting clear targets at the process level.  For a production process, this could include targets for safety, quality, delivery, and cost (SQDC).  The PLAN stage also includes assuring standard work is deployed for the process, including work instructions and the proper WIP and buffer inventory levels to assure the process can meet takt;
   
• DO:    Assuring the process is operated and managed in accordance with standard work;
   
• CHECK:  Reviewing the KPIs, possibly at the individual process and team level, to determine the gap between current performance and ideal condition.  For any gaps, the general issues that are causing the gaps are identified;
   
• ACT:  Initiating kaizen activities to address the gaps.  This could involve providing direction to a team to assure improvement activities are focused on the proper gaps or creating teams with specific objectives to address gaps.

Kaizen / Daily Improvement

This is what comes to mind for most people when they think about kaizen– the daily activities that result in small, continual improvements to a process.  At this level, PDCA consists of:

• PLAN:    Understanding the ideal condition and gap between current and desired performance (through catchball).  Identifying the root cause(s) of the gaps and developing countermeasures that may help close the gaps;
   
• DO:  Testing the countermeasures to understand whether or not they result in closing the gap;
   
• CHECK:  Reviewing the results of the test to determine whether the countermeasure did, in fact, result in expected improvement;
   
• ACT:  Adopting the countermeasure and updating standard work; adjusting the countermeasure based on test results, or abandoning the countermeasure if it did not result in improvement.

The Learning Organization

One of the most critical aspects of PDCA thinking that is often ignored is the amount of learning that each trip around the cycle provides.  Whether an action results in the desired improvement or not, proper testing can provide valuable information for future activities, as well as increasing the knowledge of team members.

As with much of a lean deployment, the benefit lies in transforming thought rather than implementing tools.  Thinking of the PDCA cycle as a management model rather than a tool is critical to a successful and sustained lean effort.