What is the PDCA cycle?

Imagine you’re trying to bake a cake, and when you baked it,
you see your cake does not really look like the one in the recipe.

Instead of giving up on baking any more cases in your life,
you think about what went wrong, you make a few adjustments, and you give it another try.  
This second cake looks already much better than the previous one. (Not perfect yet, but better).

The same you can do at work with your work processes.
Identify what is not working perfectly, implement a few adjustments, and give it a new try.
By continuously repeating this cycle, you will notice improvements in your processes (and consequently in your results). This is what the PDCA cycle is about. Discover more in this post.

What is the PDCA cycle?

The PDCA cycle is a simple and effective methodology to continuously improve work processes (and consequently your results) commonly used in big corporations such as Procter & Gamble, Unilever, Henkel…

The PDCA cycle has four stages clearly differentiated: plan, do, check, and act.
Operating in a repetitive cycle.
If you are serious about improving the results in your organization, the PDCA methodology is for you. Not only will you increase the results,
but also you will increase the efficiency, effectiveness, and overall performance of your organization.

When the PDCA cycle was discovered?

Back in the 1950s, in Japan the consultant Dr William Edwards Deming ask himself why some production processes were not working as expected.

Theory vs practice.

In theory,
these production processes were looking excellent on paper, however in practice when looking into the results, the outcome was not really what was expected.

To understand what it was the reason for not achieving the expected results,
Deming developed his own method (Plan-Do-Study-Act PDSA) of identifying why the process didn’t work as hoped. He found out later that the focus on Check is more on the implementation of a change.

Using his PDSA methodology as a base,
this continuous improvement theory has evolved in the current well-known PDCA cycle that we know nowadays

Introduction to the PDCA Cycle

The PDCA cycle, also known as the Deming cycle,
Do you remember the guy in Japan who implemented for the first time the PDCA cycle?,
is a continuous improvement methodology used across many organizations and industries to improve existing processes, products, and services?

The PDCA cycle consists of four stages clearly defined: Plan, Do, Check, and Act.
Before jumping into the details of the PDCA cycle, few elements that you may be wondering.

Is the PDCA cycle applicable only in Supply Chain? No, no matter the industry.
Whenever there is a chance for improvement, there is a chance for the PDCA cycle.

In supply chain, customer service, retail …
pretty much in every industry, the PDCA cycle can be implemented to drive better results.

What would be the main goal of the PDCA cycle?
If there would be one unique goal of the PDCA cycle,
that would goal would be driving improvements in the organization.

In the products, in the processes, in the service…you name it!

The most important thing is that these improvements do not happen by chance.
The improvements are driven, by first identifying the potential problems,
and for each of the potential problems, implementing an action plan that will allow you effectively address the issue.
All these action plans must be implemented in a systematic and structured way.

The Four Stages of the PDCA Cycle

As said before,
the PDCA cycle consists of four stages clearly defined: Plan, Do, Check, and Act.

The first stage, is Plan,
involves analyzing the current situation (either a specific process or business) and defining the problem statement. As a result of this stage, you need to have a clear challenge that you need to address and an action plan that you will develop to mitigate the challenge
Example:
Problem: Poor service to customers at each quarter end (average service of 90% vs target of 95%)
Definition of the action plant

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In the second stage, Do,
it is the moment that you execute the action plan defined in the previous stage. Ensure this action plan is concise and precise enough to address the problem identified in the Plan stage.
For each element in the action plan, there must be a clear owner and due date.
Example: to address the poor service to customers at each quarter end:
Action plan to execute:

  • Define the top 50 products causing most of the service impact – Sarah 10-Feb
  • Increase Safeties by 20% on top 50 products and assess if any risk in materials – John 17-Feb
  • Review forecast for top 50 products for next 6 months – Luke 17-Feb

Note: For each of these actions there is a clear action, owner, and due date.

The third stage, Check,
involves monitoring and evaluating the results of the action plan.
Once the action plan is in place,
monitor after a certain period (for example a month), how the results are changing vs the original status.
Example:
Service increased at the end quarter from 90% to 91%. There is a slight improvement of 1pp.

The fourth and final stage, Act,
involves making necessary changes based on the results of the previous stage.
Example:
The changes implemented in the Do stage, are showing some positive progress but are still far from the target, thus changes are needed to reach the target.

While following this repetitive cycle, progressively the processes will get stronger and stronger and consequently the results will be better than without implementing the PDCA methodology.

Let’s see in detail each of the different stages of the PDCA cycle.

The Plan Stage in the PDCA cycle

The plan stage is where you get a clear understanding of the current situation.
In this state, you clearly need to define the status of the business and focus on the elements you want to tackle.
This involves analyzing the problem, determining the objectives, and developing an action plan. It’s important to involve all relevant stakeholders in this stage to ensure that everyone is on the same page and that the plan is feasible. The action plan should include specific, measurable, attainable, relevant, and time-bound (SMART) goals.

The Do Stage in the PDCA cycle

In the do stage, you put your plans into action.
This stage is about implementing the action plan developed in the previous stage.
Remember to make an action place that is concise and to the point and address each action to one unique individual with a due date.
The do stage is where you make the changes necessary to achieve your goals. It’s important to communicate the changes to all relevant stakeholders and make sure everyone is on board.

The Check Stage in the PDCA cycle

The check stage is all about monitoring and evaluating the results of the changes made in the do stage. This stage helps you to determine if the changes made have had the desired impact. If the changes haven’t had the desired impact, then it’s time to go back to the planning stage and develop a new action plan. If the changes have had the desired impact, then it’s time to move on to the next stage.

The Act Stage in the PDCA cycle

In the act stage, you make any necessary changes based on the results of the previous stage. This stage is about taking the necessary steps to ensure that the changes made in the do stage are sustained. It’s important to involve all relevant stakeholders in this stage to ensure that everyone is on the same page and that the changes made are sustainable.

Applying the PDCA Cycle in Supply Chain Management

Following the best practices of the big FMCG organizations (Procter & Gamble, Unilever, Henkel…),
the PDCA cycle is applied mainly within their supply chain and production functions.
Including various functions of the organization such as procurement, production, distribution…
By using the PDCA cycle, you will be able to identify and solve problems, increase efficiency, and improve company results and consequently customer satisfaction.
The key is to involve all relevant stakeholders in each stage of the PDCA cycle to ensure that the changes are executed in a timely and sustainable manner.

Benefits of Using the PDCA Cycle in Supply Chain

Using the PDCA cycle in supply chain management can bring several benefits, such as:

  • Improved efficiency
  • Increased customer satisfaction
  • Reduced waste
  • Lower fixed costs

Moreover benefits,
the PDCA cycle can also help to identify and solve problems before they become bigger issues, leading to a more reliable and resilient supply chain.
It is crucial for a successful PDCA to involve all the relevant stakeholders at a very early stage and make them participate in the process.
An organization engaged in the PDCA cycle, it is an organization that delivers above and beyond.

Common Challenges in Implementing PDCA in Supply Chain and How to Overcome Them

All this about the PDCA cycle may sound very exciting, however, there are some challenges you may want to consider prior to implementing the PDCA cycle in your organization:

  • Resources
  • Resistance to change
  • Communication
  • Collaboration

To overcome these challenges,
it’s important to involve all relevant stakeholders in each stage of the PDCA cycle and to clearly communicate the benefits of using the PDCA cycle for them as individuals and for the company as a total.

If you are not sure how to initiate the PDCA cycle in your organization drop me a note at hello@misterpaton.com , and we can work out the details.

Real-life Examples of PDCA Cycle in Supply Chain

Few examples within Supply Chain when you can use the PDCA cycle:

  • Service challenges
  • Forecast accuracy
  • Collaboration with suppliers
  • Inventory challenges
  • Transportation optimization
  • Master Data Speed and accuracy

These are a few real-life examples in Supply Chain, where I have seen how the PDCA cycle was successfully implemented.

Does the PDCA cycle have a particular due date?

No, the PDCA does not have a particular due date.
The PDCA methodology operates assuming that improvement is always possible. (And this always it is the case, think about the F1 cars, they can always do better during the qualification lap).

You need to bear in mind that PDCA is not a one-time project but a mindset.
If you are serious about driving improvements in your organization,
consider the PDCA methodology as your starting point.

FAQ PDCA cycle:

Some of the most frequent questions asked about the PDCA cycle.

How often should the PDCA cycle take place?

The PDCA cycle should take place monthly. (Once per month). This way there is enough time to monitor if the action plan is working as expected and make the relevant changes when needed.

What is the purpose of the PDCA cycle?

The ultimate purpose of the PDCA cycle is to continuously improve processes. By improving the processes, you will get better products, and services, and consequently better results as an organization.

Who uses the PDCA cycle?

The PDCA cycle is used typically in production plants and in supply chain organizations. Reality is that the PDCA cycle is used in any organization no matter the size or the industry.

How often is the PDCA cycle used?

The frequency of using the PDCA cycle depends on the organization and the processes being improved. If you don’t know where to start, you can use the PDCA cycle monthly and adjust based on the needs of the organization.

How long does each stage of the PDCA cycle take?

In the beginning, the biggest length should be on the Plan and Do stage, and once those are properly defined, the focus will be on the Check and Act stage. Ideally, each stage should be covered by the next PDCA review that should take place at least monthly.

What is the benefit of using the PDCA cycle?

The main benefit of using the PDCA cycle is that it helps organizations to continuously improve processes and consequently get better products, services, and results. On top of this, thanks to the PDCA cycle there will be increased efficiency and effectiveness with the same number of resources.

Conclusion and Final Thoughts on the PDCA Cycle

In conclusion,
the PDCA cycle is a valuable tool for organizations looking to improve processes, products, and services. When applied to supply chain management, it can bring several benefits, such as improved efficiency, increased customer satisfaction, and reduced costs. By following the four stages of the PDCA cycle, supply chain managers can identify and solve problems in a systematic and structured way, leading to a more reliable and resilient supply chain.

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