What is the PDCA cycle? Example and how to apply PDCA cycle with quality management

What is the PDCA cycle?

The PDCA cycle is the abbreviation of an operation sequence of businesses, which is “Plan, Do, Check, Action”. Carrying out this cycle continuously is called the “iterative PDCA Cycle.” 

In simple terms, a business operates based on the following tasks:

• Plan: In this step, business managers and leaders are to define the goals, resources, timeline, and methods to achieve the desired goals.
  

• Do: The company implements the detailed plan.
  

• Check: Based on the work report in comparison to the target check and evaluate the results.
  

• Act: Through the evaluation results, the company plans new agenda to adjust before starting a new cycle with new input data.
  

PDCA is also known as the management cycle. This cycle can be applied iteratively and thoroughly to any business regardless of the business sector.

Learn More: What is Workflow? How to create an effective workflow

Example of the PDCA cycle

Here are some examples of the PDCA cycle when applied to the actual work:

In fact, the PDCA cycle has been applied by many large enterprises around the world, such as:

Nike

Nike has implemented a lean management method to optimize its production process. However, the working conditions and regulations at Nike are not really good and effective. This made Nike decide to apply the PDCA cycle. This process has empowered Nike employees, partners, and customers to improve working conditions in their manufacturing plants with a scoring system that measures the performance of manufacturing facilities.

With the PDCA cycle, Nike has drastically improved their working conditions in factories and factories, eliminating unnecessary costs. Lean governance and PDCA have doubled Nike's growth, from $100 billion in 2015 to $200 billion in 2021.

Mayo Clinic

Mayo Clinic is a non-profit hospital founded in 1889 and has been ranked as the number 1 hospital in the US for many years in a row. Mayo Clinic used Kaizen and PDCA in tandem to refine treatments, manage patient records, and reduce customer wait times. As a result, the time to examine and test patients is reduced from 7.3 hours to 3 hours after 1 year of applying the two methods above. In addition, the hospital's total inventory of medical supplies and equipment also decreased by 31%.

 See More: 13 Ways to Effectively Manage Work, Beat Every Deadline

Advantages and disadvantages of applying the PDCA cycle in businesses

The PDCA cycle plays an important role in businesses that apply quality management systems according to ISO 9001. It decides the success or failure of a business.

• Change in management
  

The PDCA cycle not only encourages businesses to ensure quality and performance but also helps managers understand the efficiency of business processes, thereby changing the management methods to optimize goals.

• Process improvement
  

The PDCA model provides accurate, continuous improvement with its repetitive and periodic operation process. Each task goes through the same phase over and over again. This ensures that errors and omissions can be detected and corrected in time.

• Performance Management
  

• Quality management
  

One of the PDCA cycle’s main benefits is managing quality. Its continuous loop of feedback and performance enables data collection planning and statistical analysis to verify and prioritize problems (or the root causes thereof). It determines the means to reduce discrepancies between the current state and the desired state.

• Control over projects
  

The PDCA cycle helps project managers maintain greater control over a given project in many ways.

Besides the outstanding advantages, PDCA still has certain disadvantages:

• The implementation of PDCA cycles is only useful when the process is repeated from time to time. Implementing the PDCA cycle at just one time only wastes the organization’s resources.
• The application of PDCA is suitable and flexibly applied to many business models, however, PDCA is not suitable for short-term, rush projects and jobs.

How to apply PDCA successfully?

Step 1: Plan

• Planning is the first and most important step in the PDCA process. A detailed and accurate plan helps businesses orient the next activities in the PDCA cycle. 
• An accurate and clear plan will limit the adjustment and improvement activities. At the same time, activities can also be controlled more effectively.
• This planning step includes defining goals, resources, and implementation methods before going into official production. This helps businesses make use of resources effectively, cut costs, and increase competitiveness.
  

The planning step consists of small, specific tasks:

• Set goals for the project.
• Develop a detailed description of the task.
• Form a team to do the work and predict the completion date.
• Determine the required data during implementation.
• Clearly analyze the work, performer, completion deadline, operating style, etc. to serve as a basis for the following steps to operate in the right direction.
  

Step 2: Do

• In this stage, businesses start to implement the activities of the plan set out in the previous stage. At this stage, businesses implement the plan by using tools and means to accomplish the set goals.
• After identifying the points to improve, the business needs to make an implementation plan. Managers need to answer a number of questions, specifically:
• • What needs improvement?
  • What steps are needed to complete the plan?
  • When is the deadline to complete the plan?

Step 3: Check

• This stage ensures whether the implementation process is effective or not, to ensure that the set goals are achieved.
• In this phase, businesses perform activities such as checking, monitoring, collecting, and evaluating shortcomings. These activities are to detect the causes and provide timely solutions.
• At this step, businesses need to:
• • Evaluate the performance of the process.
  • Look for ways to improve.

Step 3: Action

• Improve the defects.
• Look for ways to limit the problem.
• This stage allows the synchronization of businesses’ activities. At the same time, errors in the process are also corrected.
• This stage helps the quality of the product to match the actual situation with the business. As a result, the gap between customer expectations and actual quality is erased.

The PDCA cycle in production and quality management

The PDCA cycle is widely applied to the production process and quality management according to ISO 9001. Specifically, this process is carried out in association with articles 4 - 10 of the ISO 9001 standard as follows:

• Plan:

Businesses need to ensure that the cycle is performed once a year if they want to apply PDCA to quality management. From there, the execution plan is guaranteed to be relevant and there are appropriate improvements in real time. 

Planning according to ISO 9001 is specified as follows:

• Do
  

Businesses take action to realize the set plan. This is partly in clause 7 and mostly in article 8 of ISO 9001, specifically:

• • Article 7.2: Competence.
  • Article 8:
  • • Plan and control the implementation.
    • Set out requirements for businesses' products and services.
    • Design products and services to meet requirements.
    • Control objects outside the business.
    • Produce and provide suitable products and services.
    • Accept products and services.
• Check:

Businesses need to regularly check and evaluate overall QMS activities. This activity is described in article 9 - evaluation of terms of operation with specific requirements as follows:

• • Collect information, evaluate, and measure customer satisfaction.
  • Organize internal audits.
  • Manage reviews and comments.
• Act:

After the assessment, the business needs to make a review and improvement. This process may include troubleshooting and handling problems that arise during operation. In ISO 9001, this process is specifically described as follows:

• • Nonconformities and remedial measures are specified.
  • Continuous improvement.

PDCA cycle application in Viindoo software

With many specific purposes, the PDCA cycle is applied to many services of Viindoo software. The three main ones are:

• Customer Relationship Management software and Sales application

• Project Management application
  

• Manufacturing Management application 

For a more concrete representation of the PDCA cycle, I’ll use an example in manufacturing.

Set up production master plans (Plan)

A thorough, efficient manufacturing operation cannot exist without the initial setting and planning. This is also the period when manufacturing businesses apply the letter P in the PDCA cycle. This planning goes from setting up manufacturing elements to automating the production chain, such as:

• Set up material thresholds for products and variations
  

• Establish manufacturing capacity and corresponding prospective capacity
  

• Set up the manufacturing process 

• Devise a master production plan 

• Establish supply routes for the total production chain
  

Typically, businesses manufacture products based on the master plan, order requirements, or inventory demands. Whatever the input demand is, the planning steps above can ensure the Just in Time goals in production management.

 See also: What are differences between Just-in-time and Just-in-case methods?

Conduct the production stages (Do)

The letter D represents the implementation of production stages. If your production is simple, you only need to manage production with one object, which is Work Order. 

However, if you must control a more complex process, you can use additional manufacturing operations for the production process. Production is a massive “task” in which you must efficiently conduct small activities, from supplying raw materials and filling production orders to monitoring post-manufacturing inventory, etc. They must be done quickly and efficiently. In Viindoo software, this implementation includes:

• Create a work order
  

• Fulfill related purchase orders and corresponding inventory movements 

• Process manufacturing orders
  

• Complete Production Orders 

Examine and evaluate the results (Check)

Depending on demands or quality standards applied in each company, you can perform quality control during every stage of the process, such as purchasing, pre- and post-production inventory, or exporting, according to different criteria and evaluation methods.

For quality checks and inspection, the management process in Viindoo software comprises:

• Create control criteria
  

• Carry out the Production Orders and supply operations
  

• Create quality check sheets to examine the products or materials on Production Orders when goods are imported
  

• Set quality alerts and take corrective actions
  

Correct errors and devise an implementation plan (Action)

On a small scale, after the measurement of quality, the Quality Control team handles the quality alerts. The processing status of quality alerts should also be recorded in the software.

On a larger scale, companies must carry out engineering change orders (ECO). This step comes after the analysis of production-related issues, changes in ingredients, the number of components in the bill of materials (BOM), or adaptive production capacity. Specifically, the engineering change will need to be conducted as follows:

• Create ECOs
  

• Execute ECOs
  

• Update and modify the BOM
  

• Approve ECOs