LEAN MANAGEMENT: PDCA

LEAN MANAGEMENT: PDCA

Introduction

Nowadays, organizational learning must support the strategic planning which has to be a permanent process. (in traditional approach), the strategy was viewed as a one-shot event but in a more actual, more turbulent, situation, this strategy seems to be not valid anymore.

In fact, the strategy must be adapted almost all the time, be more flexible and elastic. To implement this such process, strategies must develop an organizational learning by acquiring data to refine the initial version and make it improved. In our discussion, we will discuss about an improvement method used in companies: The PDCA cycle. We will start by defining the PDCA methods and its process, then we will see how it was applied in business cases, and finally, we will speak about the limits of the model and how it can be improved.

KEYWORD: PDCA Cycle, organizational learning, knowledge, strategic management

1. PDCA Definition

What is PDCA

PDCA - also known as Deming cycle - was introduced by Walter Shewhart in 1929, but W. Edwards Deming really popularized it in the 1950s. The PDCA cycle is a method used to learn and develop the improvement of a product or a process in a company. this cycle is composed of four steps which are: Plan - Do - Check- Act.

The PDCA cycle has been created to be used as a dynamic model. by following this principle of continuous improvement, the process can be review at any time and a new change test can begin. This model is based on the Kaizen concept and on the Japanese culture: “SAN GEN SHUGI” which means “3 real ideology”.

SAN GEN SHUGI ideology is based on 3 key concepts in the analysis:

- GEN-BA -: by collecting data, the analyst will analyze the site where there the problem takes place. The real place where the activity takes place, or the problem occurs.

 - GEN-BUTSU -: the problem has been detected. The non-compliant piece can be compared with a good one and the relevant factors can be identified easily.

- GEN-JITSU - the real moment when the non-compliance was detected. The analysis is made with relevant data.

How does PDCA work

PDCA is a method that works following 4 stricts steps that are mandatory and usually iterative.

• The “Plan" phase of PDCA for quality management. It covers:

• Definition of the problem(s)/things to improve
• Definition of what would be the objective to achieve
• data collection to understand what the difference between the problem and the state you want to reach is.
• Figure out what creates the problem
• The evaluation of the solutions you can implement to avoid the problem and the different problematic outcomes
• The selection of the solution which answer best your problem
• Prepare your do phase by attributing the resources and putting the right people in charge.
• The mapping of the corrective process using control charts, flowcharts, and other tools

The aim there, for the preparation phase, is to define the problem, focus on the issue by collecting relevant data and try to determine the causes of this issue.

For example, to improve a product, some datas are collected from the marketing area of a company, like some clients reports and then the modifications are taking into account.
Not taking into account this plan step or fail this part could lead to loss some time, resources and materials. this result would be the loss of market share then.

• The “Do” phase.

This phase is the implementation of your solution. Of course, you usually implement it on a small portion not to damage your business in case the solution is not efficient and also to keep a point of comparison. Afterward, if the solution proves efficient, you would deploy it on all your units. In this phase you can also add the training of your employees which refers to the application of this solution.

• The “Check” phase also referred to “Study” by Deming.

Indeed, he found that the term study was more relevant than check to best describe this step. This phase is an assessment of the results of the experience. Study the test results to find out whether you need to generalize the solution. Are they up to the expected results? In the case that the experiment does not give satisfaction, it will be necessary to capitalize on the lessons to be learned. Some examples to assess this phase; satisfaction survey, result analysis (qualitative or quantitative) ...

• The "Act" phase

It consists in applying the effective solutions to your business model, it is the deployment of the previous phases. From there, it may be possible to explore new solutions to go further if necessary/ needed. If, your experimentation has been successful, you must therefore sustain and extend the solution to the entire defined perimeter. By setting up, the budgeting, the organization of the processes, the organization of the services, the drafting of the procedures, the speakers and the choice and setting up of indicators of piloting and performance, of course, other elements can be put in place. This will deprive of the objective set. It’s by this phase that the company applying PDCA will be able to take other decisions in order to growth, to develop, to create…  You can also involve external stakeholders in the solutions.

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1. PDCA applied to business cases

Accenture

In Accenture, they would try to develop a company culture where the individual is valued for its creativity in solving problems. Basically, if you would create a process to make something easier and/or faster in your business unit, you should share it to people working in different business units in other parts of the world. This would have two benefits. First, this would be great for the general health of the companies as good ideas worth spreading in order to create more values for the customer and eventually, save money. Second, from new ideas can emerge better ideas. An idea can help you not unlock a difficult situation, but give you hints about it, so you would create better processes and share it back.

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