Late last year I mentioned the “PDCA cycle” to a client and drew a blank look. “How is it that you don’t know about this?” I asked. “Inconceivable!” I thought to myself. Immediately conducting a straw poll in the office, I eventually found someone who had a vague recollection of the iconic improvement acronym. How have so many well-educated, technically-minded people managed to avoid apprehending such a foundational business concept? I was absolutely flummoxed.
Perhaps my background was privileged. My career began in the Steel Industry at Port Kembla in the 80’s; a decade bathed in difficult economic circumstances. In 1982, the Australian government drafted a bail-out plan to revive a failing industry. Significant efforts were made to identify and remove waste and loss and to inject vital capital judiciously. Against this backdrop, BHP Steel’s business leaders revisited and instituted some essential improvement tools. A most fundamental concept was the P-D-C-A or Plan-Do-Check-Act cycle. It is also known as the Deming cycle, after the father of modern quality control, W. Edwards Deming. So what made him and this tool so famous (or infamous)?
It may be common knowledge that the post-war US auto industry was a juggernaut, producing almost 75 % of the world’s vehicles by 1950. What may not be so well known is that for several years, Deming had been offering his services to US business leaders who, drunk on the wine of their production records, believed that the masses would buy anything they produced, no matter the quality. Demings overtures were rebuffed by one and all, causing him to turn to Japan (not a very good trade deal – hey President Trump!) There he met the leading figure Ichiro Ishikawa and, still stinging from his US rejection, agreed to teach Japanese business leaders and Engineers the concepts of quality control. This instruction was instrumental in developing, among other processes, the Toyota Production System (LEAN) and TPM, enabling many Japanese businesses to steal huge portions of US market share. “Made in Japan” was at one time a derogatory term, like “rice rocket” and “Godzilla snack.” Not so today. If you find something that’s actually manufactured in Japan, you can be confident of it’s superior quality, like German-made goods. You’ve got to wonder who won the war.
Let’s take a step back to examine the “why” for something like PDCA. Simply put, the Second Law of Thermodynamics states that entropy, or the level of order of a system decreases over time, unless energy is injected into it. This law is one of the most broadly understood and agreed across all branches of science; it’s virtually a closed case. If you don’t believe me, just take a look at the bedroom of the average teenager! There is good reason to believe that entropy applies to business systems. Without the injection of energy (discipline), people will randomly adjust process elements and performance will degrade. Therefore, a simple and fundamental process like PDCA is required to provide the masses with a simple and efficient way to swim against the currents of inefficiency, loss and waste. Once in place, PDCA becomes a fundamental piece of the “culture of excellence” puzzle.
Establish the objectives and processes necessary to deliver results aligned with the expected output.
Implement the plan, execute the process and manufacture the product. Collect data necessary for analysis.
Confirm that the plan was deployed effectively. Study the actual results and compare them with expected results; measure any differences. Where they exceed a control limit, invoke the ACT phase.
If the PLAN was deployed effectively and the results are within control limits, then the elements of the PLAN should be standardised. However, if the results exceed upper or lower control limits, determine the root cause of the deviation. Create a new PLAN and test it through a subsequent iteration of the DO and CHECK phases before standardising the new PLAN.
Quality control concepts like PDCA were crucial for transforming Japanese manufacturing from weaklings into world leaders and stealing huge market share from US business. What is it about PDCA that’s so special? Some consider that the individual steps themselves are critical. Others believe that the secret sauce is their sequence. I believe that what makes PDCA so special is its genesis – the scientific method. Francis Bacon developed the process of hypothesis, experimentation and evaluation and published it in his Novum Organum in 1620. The scientific method is based on the principles of truth-seeking: a willingness to diagnose an issue, hypothesise the root causes, eliminate them, measure results and follow the evidence where it leads. Pre-suppositions are rejected, pet theories eliminated and truth distilled. There is no room for subjectivity or favouritism.
While I was in BHP Billiton’s Operating Excellence Group, the company’s leaders implemented the Six Sigma program. Major activities included the establishment of Business Improvement departments, installation of Black Belt coaches and development of value driver trees. Although all of these were important, they were not sufficient. What I believe was lacking was a deliberate attempt to develop a culture of excellence across the business, with PDCA as a foundational element. There seemed (to me) to be a misplaced attempt to hold the BI department primarily responsible for improvement. BI owned the improvement process, the KPIs, ran the projects and reported progress to the GM. Unfortunately, this acted to emasculate the people who were crucial to understanding the issues at hand and implementing the required changes– the operators and maintainers. In a culture of excellence, the responsibility for improvement must be shared by all.
So, while working with my client, I re-learnt a very familiar lesson – don’t assume anything. It’s actually not inconceivable that people have never heard of PDCA, or a raft of other key business concepts. That’s one reason why consultants are essential – not to tell the time, but to identify and introduce some essential new thinking. But even in this article, I’m making an assumption that you are all familiar with the character Vizzini from the 1987 cult movie classic, The Princess Bride. In case you’re not, let me tell you a little about him. Vizzini is a mastermind who kidnaps the Princess Buttercup (her true name) and repeatedly uses the word “inconceivable” whenever his plan is foiled by the Dread Pirate Roberts. At one point, Roberts is using a rope to summit a cliff when Vizzini cuts through it.
Vizzini: He didn’t fall?! Inconceivable!
Inigo Montoya: You keep using that word. I do not think it means what you think it means.
PDCA. I trust that you understand what it means. Now, go improve – and I mean everyone. Quite conceivable!