PDCA: What Is it and How Can it Help Your Company?

Introduction about PDCA

Continuous improvement cycles and compound interest

Do you know the effects of compound interest? This effect makes each next iteration, the next ones higher than its previous ones, evolving each new incidence of interest. This is an essential lesson for those who use the financial market to increase their equity. But what does this have to do with the PDCA cycle?We will explain how cycles of continuous improvement can be used in your company so that with each cycle, the increase in speed and quality in deliveries is greater than in previous cycles.


History of continuous improvement cycles

It's assumed that the continuous improvement cycles were popularized by Walter A. Shewhart, an American known as the “father of statistical quality control”, but who really brought it to light for everyone was W. Edwards Deming.

Influenced by the work of Shewhart, Deming created the now-famous PDCA Cycle, spreading his knowledge mainly in Japan after the Second World War, which is considered by many Japanese as one of the main responsible for the post-war Japanese economic miracle.

Since then, several tools have been introduced in the PDCA Cycle to improve its accuracies, such as the Ishikawa Diagram, the Pareto Diagram, and more.

Chapter 1

What is the PDCA cycle?

Comprehending the PDCA Cycle isn't complicated.It's one of the most used methodologies in solving problems in companies. It's mainly used to solve issues that are not easily seen.

Usually, the problems in which companies use the PDCA cycle are those that have already undergone several attempts at a solution, but unsuccessfully.

The purposes of this cycle are to accelerate and improve the company’s activities through the identification of problems, their causes, and possible solutions.

“Ok, but what does PDCA mean and how can I apply it?”

PDCA is an abbreviation for the words Plan-Do-Check-Act. Each of these words refers to a step in that cycle, which we will explain below.

Chapter 2


During the Planning stage, you must focus first on identifying the problem that we want to solve. Using this methodology, we will focus on one problem at a time, instead of trying to embrace the world and solve it all at once.

After the stage of identifying the problem, we must find out what is the root cause of it, that is, what really creates the problem. To perform this analysis, one of the tools that we can use is the Ishikawa Diagram.

After finding out what really causes our problem, we must plan what will be done to eliminate this root cause. Here we can conduct a brainstorming session to help us think about what actions can lead us to eliminate this problem.

It is important to create a well-defined action plan to guide the team towards the solution, defining which possible root causes we want to solve in this cycle and how we will address each one.

Chapter 3


The execution stage can be considered the most “simple” stage of the PDCA cycle but it is also considered by many to be one of the most important stages.

With the planning already in place, it is time to put into practice the execution of the Action Plan created previously. It is important that the team is closely monitored during this stage so that the actions are carried out as planned.

During this stage, it is very important to collect and evidence the results of each task completed, whether good or bad. This will allow a learning experience that will be necessary by the team involved during the process.

Chapter 4


The Check step is where we will inspect what was done and what were the results obtained after executing our action plan.

This stage often begins together with the Execution stage, so we can take notes on what are the obtained results from the execution of each part of the Action Plan. But it is also necessary that these results are formally presented at the end of the Execution stage, allowing the team and other interested people can understand what has really changed, what has improved, and whether any action actually worsened any results.

This verification consists of confirming that what was planned is already implemented, in addition to comparing the results before and after the execution, in addition to showing whether the proposed goal was achieved or not with the execution. If the results have not been achieved, we recommend that you return to the first phase (Planning) of the PDCA cycle.

Chapter 5


In the last stage of the cycle, Acting, it's necessary to reflect on the path to be taken at the end of the cycle: what will be the dissemination of the results and the obtained knowledge and what to do with any remaining problems.

These remaining problems can and should even be addressed in a new PDCA cycle so that the processes that are causing such problems are continually improved.

At this stage, we must standardize what worked in the implementation of the Action Plan, so that we can prevent the problem from recurring.

This standardization is done by creating or revising documents that describe the processes (standards).

In addition, it is important to communicate changes in the company’s various communication vehicles, such as e-mails, meetings, etc. For this standardization to be effective, the team must be able to develop it, which requires training and education for those involved in the change.

Chapter 6

Tools used in the PDCA Cycle

In order for us to work on the most necessary improvements, thus increasing the improvement made in each cycle, we must first find out what is the root cause of the problem we want to solve.

This is necessary so that we are not dealing with the symptoms instead of the problem itself, which would bring improvement but would not be the most effective way of working. In order to find the root cause of a problem, several tools have been developed in order to facilitate the diagnosis.

Chapter 7

Ishikawa Diagram (or Fishbone Diagram)

Originally proposed by Kaoru Ishikawa, a Japanese chemical engineer, in 1943, the Ishikawa Diagram is one of the most well-known and used quality tools for identifying root causes in ventures around the world.

Due it’s shape when utsing the Ishikawa’s Diagram, it also became popular as the “Fishbone” Diagram.

To use this diagram intending to discover any root cause from an issue, we make a straight line and risk more three above and three below this line. Each of these new lines will be used to describe one aspect of the original problem.

To find the root cause, we used a methodology to complete the diagram. For each of the 6 lines, we assign an area that can affect the problem. These areas are:

Method: any cause involving the method that was being performed;
Material: any cause that involves the material that was being used at work;
Labor: any cause that involves an employee’s attitude (ex: improper procedure, haste, imprudence, unsafe act, etc.)
Machine: every cause involving the machine that was being operated;
Measure: any cause involving the measurement instruments, their calibration, the effectiveness of indicators in showing the variations in the result, if the monitoring is being carried out, if it occurs at the necessary frequency, etc.
Environment: any cause that involves the environment itself (pollution, heat, dust, etc.) and the working environment (layout, lack of space, inadequate dimensioning of equipment, etc.).

After filling in the diagram, it is easier to see possible root causes.

Chapter 8

The 5 whys

The simplest tool to use to determine the root cause of a problem is called "The 5 whys". We say that the technique is simple because to use this tool, you and your team must ask "Why is this problem happening?" 5 times in a row.

It is worth saying that although it is a simple tool, errors often occur during its application. An example of this is when, instead of looking for reasons in the system that lead to failures, the team appoints people who are supposed to be failing in their roles.

To exemplify the tool for you, we will use it in a hypothetical situation where the symptom of the problem is a defective part.

Symptom: Defective part

1st why: “Why did this piece come with defects?”

Answer: It resulted from a problem in the production process.

2nd why: “Why was there a problem in the production process?”

Answer: There was a malfunction in the equipment.

3rd why: “Why was there a malfunction in the equipment?”

Answer: Preventive maintenance was not performed correctly.

4th why: “Why was preventive maintenance not carried out?”

Answer: The preventive maintenance of the equipment was not in the plans.

5th why: “Why was preventive maintenance not in the plans?”

Answer: The equipment supplier’s manual has not been consulted.

With these 5 questions we arrived at the root cause of the problem, and a possible solution would be to read the manual and include preventive maintenance actions for the equipment in the company’s plans.

Chapter 9

Pareto Diagram

Coined by Joseph Juran in the early 1990s, the Pareto Diagram is named after the Italian economist Vilfredo Pareto, who noted that 80% of the country's wealth was in the hands of 20% of the population, showing how the concentration of wealth in your country at that time. Juran saw that a similar proportion was also found in the quality of products, with 80% of quality problems being caused by 20% of problems.

This diagram is to help us focus on what will really make a difference. Whenever you find yourself thinking about a symptom of a problem, ask yourself the question: “Is that symptom part of the 20% of errors that cause 80% of the problems?” If you see that this is not the case, you will find that you are focusing your time and effort on something that will not generate as much value and should look for the root cause of that problem, rather than solving the symptoms.

Chapter 10

Adoption of the PDCA Cycle

For being an easy and very intuitive tool, the PDCA cycle can be applied to practically any type of project and in the vast majority of agile management methodologies, be it of projects or strategic, from the simplest to the most complex, since it helps to direct the team for the development of continuous improvements, sharpening the senses so that we can identify flaws and opportunities for improvement, also contributing for all involved to visualize the changes made.

With this, you increase the efficiency of the processes and obtain greater productivity on the part of the team, developing projects with much more agility and assertiveness. Not to mention that the PDCA also guarantees greater learning during the execution of activities, contributing to the personal and professional development of the team. Besides, with high productivity and efficiency, you can reduce the company’s operating costs, directly impacting the budget of each project.

An organization that can structure itself within the four phases of the PDCA cycle is more likely to achieve its goals and continuously improve. Here, it is important to remember the importance of understanding the meaning of each stage and giving importance to each one. The planning phase is considered the most laborious and complex, but good planning facilitates the passage through the other stages.

Concerning the application of the PDCA cycle, it is essential to emphasize the importance of the measures. Only by using metrics is it possible to know how much of your goal has been achieved. If it is not possible to measure, it is not possible to manage.

As the PDCA culture takes root, more and more benefits emerge, as the improvement never stops. It is okay that the adoption of the PDCA Cycle is optional, but, believe me, from the moment you try this management tool, you still use it in any other initiative.

The use of the PDCA cycle can guarantee an accurate diagnosis of the processes and address the failures and solutions that must be applied during the project’s progress. The use of this quality tool is an effective way to control processes and obtain improvements.

Chapter 11

A practical example of using the PDCA

Sure. As an exercise, imagine that you need to promote fire training.

Take a sheet and divide it into four parts, each related to an activity in the cycle. And place, in each part, activities corresponding to the project. For example:

Prepare training schedule at P;
Conduct fire fighting training activities in D;
Verify that employees understood the procedures and measure the physical progress of the project, in C;
Correct emergency procedures, or “hire more people, at A.

Anyway, this is just an example of how the PDCA methodology can help you improve processes and products in a continuous way in your management.

Now that you know how to use the PDCA cycle in your company, it's time to get your hands dirty and apply. We guarantee that your teams will experience exponential improvements, work faster and more efficiently using this methodology!