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Problem Solving: Plan-Do-Check-Act (PDCA)

Questions to ask yourself before reading:

What problems do you have to solve every day?

How do you solve them?

Do you like solving problems?

The PDCA cycle encourages a commitment to continuous improvement. Imagine that your customer satisfaction score on a popular business ratings website has got worse. When you look at recent comments, you see that your customers are complaining about late delivery, and that products are being damaged in transit.

You decide to run a small pilot project for a month, using a new supplier to deliver your products to a small sample of your customers, and you're pleased to see that the feedback from these customers is positive. As a result, you decide to use the new supplier for all your orders.

What you have just done is to go once around a loop called the PDCA Cycle, which helps you to strive for continuous improvements to your business.

What Is PDCA?

PDCA, sometimes called PDSA, the "Deming Wheel," or "Deming Cycle," was developed by renowned management consultant Dr William Edwards Deming in the 1950s. Deming himself called it the "Shewhart Cycle," as his model was based on an idea from his mentor, Walter Shewhart.

Deming wanted to create a way of identifying what caused products to fail to meet customers' expectations. His solution helps businesses to develop hypotheses about what needs to change, and then test these in a continuous feedback loop.

Deming used the concept of Plan-Do-Study-Act (PDSA) and his focus was on predicting the results of an improvement effort, studying the actual results, and comparing them to possibly revise the theory. He stressed that the need to develop new knowledge, from learning, is always guided by a theory. This is why he referred to “Check” instead of “Study” changing PDSA to PDCA.

PDCA / PDSA is an iterative, four-stage approach for continually improving processes, products or services, and for resolving problems. It involves systematically testing possible solutions, assessing the results, and implementing the ones that are shown to work.



The four phases are:

Plan:    identify and analyze the problem or opportunity, develop hypotheses about what the issues may be, and decide which one to test.

Do:     test the potential solution, ideally on a small scale, and measure the results.

Check/Study:    study the result, measure effectiveness, and decide whether the hypothesis is supported or not.

Act:    if the solution was successful, implement it.

You can do many Do and Check phases as you need until you get to the best or optimum solution. These stages are illustrated in Figure 1.

The PDCA or PDSA Cycle

The PDCA cycle helps you to solve problems and implement solutions in a rigorous, methodical way. Follow these four steps to ensure that you get the highest quality results.

1. Plan

First, you need to identify and understand your problem. The first six steps of The Simplex Process can help you to do this by guiding you through a process of exploring information, defining your problem, generating and screening ideas, and developing an implementation plan.

Finally you must define how you will know your idea is successful and your problem is resolved. For example, “There will be zero customer complaints”.

2. Do

Once you have identified a potential solution, test it with a small-scale pilot project. This will show you if your proposed changes are useful or not, with minimal disruption to the rest of your operation if they aren't. For example, you could organise a trial within a department, in a limited geographical area, or with a particular demographic.

As you run the pilot project, gather data to show if the change has worked or not. You'll use this in the next stage.

Remember that, in this situation, Do means "try" or "test." It doesn't mean you have finished.

3. Check

At this stage, you analyse your pilot project's results against the expectations that you defined in Step 1 to assess whether the idea has worked or not. If it hasn't worked, you return to Step 1. If it has worked, you go on to Step 4.

You may decide to try out more changes, and repeat the Do and Check phases. Move on to the final phase (Act) only when you're truly happy with the trial's outcome.

Deming's model was adapted in the 1980s by quality management pioneer Kaoru Ishikawa. However, Deming modified his original model in the 1990s. He emphasised the importance of study and learning in the third phase. As we highlighted earlier, this is why the model is sometimes referred to as Plan-Do-Study-Act (PDSA).

4. Act

This is where you implement your solution. But remember that PDCA / PDSA is a loop, not a process with a beginning and an end. This means that your improved process or product becomes the new baseline, and you continue to look for ways to make it even better for your organization or customers.

When to use PDCA / PDSA

The PDCA / PDSA framework can improve any process or product by breaking it into smaller steps. It is particularly effective for:

• Helping to implement Total Quality Management   or Six Sigma initiatives, and generally helping to improve processes.

• Exploring a range of solutions to problems, and piloting them in a controlled way before selecting one for implementation.

• Avoiding wastage of resources   by rolling out an ineffective solution on a wide scale.
  
  

You can use the model in all sorts of business environments: new product development, project management, change management, product lifecycle management and supply chain management.

The Pros and Cons of PDCA / PDSA

The model is a simple, yet powerful way to solve new and recurring problems in any industry, department or process. Its iterative approach allows you and your team to test solutions and assess results.

It instills a commitment to continuous improvement and can improve efficiency and productivity in a controlled way, without the risks of making large scale, untested changes to your processes.

However, going through the PDCA / PDSA cycle can be slow so it might not be the best way to deal with an urgent problem or emergency.

It also requires significant "buy-in" from team members, and offers fewer opportunities for radical innovation, if that's what your organisation needs.

There are continuous improvement models that are similar to PDCA / PDSA, such as Build-Measure-Learn  , the After Action Review Process , and The Hoshin Planning System . These incorporate some of the principles of PDCA / PDSA, but they are not substitutes for it.

Key Points

The PDCA / PDSA cycle is a continuous loop of planning, doing, checking (or studying), and acting. It provides a simple and effective approach for solving problems and managing change, and it's useful for testing improvement measures on a small scale before updating procedures and working methods.

You can use it in all sorts of business processes, from developing new products through to managing the supply chain.

The approach begins with a Planning phase in which problems are clearly identified and understood, and a quantified hypothesis is developed. Potential solutions are tested on a small scale in the Do phase, and the outcome is then evaluated and Checked.

You can go through the Do and Check stages as many times as necessary before the full, polished solution is implemented, in the Act phase.

Apply This to Your Life

While PDCA / PDSA is an effective tool for businesses, you can also use it to improve your own performance. Identify what is holding you back and how you want to progress. Look at the root cause of any problem, and set goals to overcome these obstacles (Plan).

When you've decided on your course of action, test different approaches to getting the results that you want (Do). Review progress regularly, adjust your behavior accordingly, and consider the consequences of your actions (Check). Finally, implement what's working, and continually refine what isn't (Act).

Help in making hotel and restaurant reservations when you’re abroad.

Questions to ask yourself before reading:

How do you book a hotel?

How do businesses usually book hotels?

With the Internet now being the dominant source of information, it makes sense to use this resource. There is a wide choice of booking services on the Web for holidays and business trips. Such sites specialise in providing information on everything from booking flights and hotels, to hiring a car and finding a restaurant.

When you’ve found what you’re looking for, it’s usually a matter of following the instructions on the on-line booking form. If, for example, you want to book a hotel room, specify the number of rooms you want, the type of room you’d like (single, double or twin) and the dates of your stay. You’ll also be asked for your credit card details (or your company’s, if it’s picking up the tab). You will then usually be sent confirmation of your booking by e-mail. This will include a reservation number that you should quote at reception when checking in.

Maybe you prefer direct human contact when you book a hotel. If so, be prepared to give the same details over the phone. Ask about availability (“I’m looking for two singles from the 14th to the 16th”) or (“Do you have a double room from January 27th  to February 4th?”). You may want to compare prices (“How much is a suite?”), or have special requirements (“Will I have access to the Internet / a fax machine / a gym?”). Once everything is agreed, the receptionist will ask for your name or company name, credit card details, and daytime phone number.

If you are in a foreign city, you can ask the receptionist at your hotel to recommend a good restaurant in the area. Remember, though, that the better the restaurant, the longer the waiting list. It pays to book early.

When you book a table at a restaurant by phone, give the number of people who will be dining (“I’d like to book a table for four, please”) and a reference name for the reservation (under the name ‘Smith’), and the time (for 8 o’clock). If you really want to impress potential clients, ask the restaurant about the house speciality. You can then make a recommendation to your dinner guests (Try the fish, I’ve heard it’s very good). Although most restaurants take credit cards these days, it’s always worth checking beforehand to avoid embarrassment (“Do you take/accept credit cards?”).

Some useful words and expressions:

itinerary – a schedule for a business trip

brochure – a colourful leaflet publicising something (e.g. a hotel)

abroad – any nation outside the one you live in

accommodation / lodgings – a temporary place of residence

book a room / table – make a reservation in a hotel or restaurant

check in / out – arrive at / leave a hotel

room service – a hotel service which sends meals directly to your room

a double – a room with a double bed

a single – a room with a bed for one person

queen-size bed – a double bed equivalent to a “matrimonial”

king-size bed – a double bed larger than usual

twin beds – two single beds in one room

guest – the person you invite to a restaurant or party

host – the person who invites you to a restaurant or party

bill – the total amount of money to be paid for a restaurant meal or a hotel room

expense account – a company bank account reserved for hospitality and travelling

overbook – make too many reservations for the space available

block book – reserve a number of tables or rooms for a large group of people

tip – the money given to the waiter/waitress for his/her service (usually 15-20% of the bill)

house speciality – a dish for which a restaurant is well known

Common expressions:

to foot the bill / pick up the tab – to pay for something

(e.g. The company’s footing the bill for the hotel.

Who’s picking up the tab for the meal?)

Could I have the bill (UK)/ check (US)please? – What you ask the waiter at the end of the meal when you want to pay

to fit someone in – to be able to accommodate someone

    (e.g. I think we can fit you in at nine o’clock)

Can I have a wake-up call at 6:20 tomorrow morning, please? – What you ask reception when you need to wake up at a specific time

How many of you are there? – How many people are there in your group?

There are four of us – there are four people in our group

Are you licensed? – Does your restaurant serve wine and alcohol?

Glossary

it makes sense – conveniente

to pick up the tab – pagare il conto

A guide to conducting meetings.

Meetings can be the formal committee type or the informal one-to-one type. Meetings nonetheless, have their own jargon and an agenda, a list of points to be dealt with. For a formal meeting, this document is often sent out to its participants beforehand as a memo. When the “chairperson” convenes a meeting they need to make sure that:

- the meeting starts on time

- the agenda is followed in a logical manner

- everyone has an opportunity to contribute

- no one dominates the floor

Introductions – the chairperson opens the meeting, welcomes and introduces the participants, states the principal objectives of the meeting and makes apologies for those who are absent. Reviewing past business – the minutes of the last meeting are read and any recent relevant developments are mentioned.

Beginning the meeting – the agenda is introduced, roles are allocated (secretary, participants) and the ground rules for the meeting (contributions, timing, etc) are agreed on.

Discussing items – the first item on the agenda is introduced. At all times it is necessary to keep the meeting on target. Participants may be asked to be brief and to the point, and the chairperson might have to push for decisions to be taken on a particular item. The first item is closed and the next item is introduced, etc.

Finishing the meeting – the points discussed and the decisions made are summarized. A time, date and place is decided on for the next meeting. Participants are thanked for attending and the meeting is closed.

The following most frequently used expressions are in order of formality (most formal first):

Starting a meeting

- Well, ladies and gentlemen, I think we should begin.

- Perhaps we’d better get started.

- Perhaps we’d better get down to business.

- Right then, I think we should begin.

- Let’s begin

- Let’s get going, shall we?

- Shall we start / begin?

Stating objectives of an agenda

- The purpose of this meeting is, first, to… and secondly to…

- We are here today to consider firstly.. secondly… thirdly…

- The first item on the agenda is…

Making your point

- I’d like to emphasise the fact that…

- In my opinion…

Asking for comments

- Would you like to begin/to open the discussion… ?

- Perhaps you’d like to explain/tell us/give us…

- What do you think… ?

- Would you like to comment here?

- What about you?

Keeping the meeting moving

- We're beginning to lose sight of the main point

- Let’s get back on track

- Shall we continue then?

- Let’s move on.

Agreeing

- I agree that…

- I’d go along with you on that.

Disagreeing

- I must disagree

- I’m sorry, I don’t agree

Ways of interrupting

- If I could just make a point here

- I’m sorry to interrupt but…

- I’d just like to say…

Correcting misunderstandings

- I don’t think I’ve quite made myself clear.

- That’s not quite what I meant.

Asking for more information

- I’m not sure I understood the point about…

- Could you give us further details?

- Can you be more specific?

Postponing a discussion

- Could we come back to that later?

- Let’s leave that until later.

Coming to the end of a meeting

- So to sum up…

- If there’s no other business…

- Is there anything else you want to discuss?

The rules of a meeting are adhered to by using set phrases:

chairperson – the meeting moderator

brainstorm – gather a group together to produce ideas

minutes – the written record of a meeting

call to order – to start a meeting

be out of order – not adhere to the rules of the meeting

the chair recognises Mr X – the moderator gives Mr X permission to speak

have the floor – have permission to speak

lay (something) on the table – present a matter for discussion

table a discussion – postpone a discussion for a later time

I move that we… – I propose…

I second the motion – I agree with the proposal

all those in favour of… say “aye” – if you agree with the proposal say “yes”

all those opposed say “nay” – if you don’t agree say “no”

the “ayes”/ “nays” have it – the majority of participants have voted in favour of/against the proposal

The First Computer Programmer

Ada Lovelace was the daughter of the poet Lord Byron. She was taught by Mary Somerville, a well-known researcher and scientific author, who introduced her to Charles Babbage in June 1833. Babbage was an English mathematician, who first had the idea for a programmable computer.

In 1842 and 1843, Ada translated the work of an Italian mathematician, Luigi Menabrea, on Babbage's Analytical Engine. Though mechanical, this machine was an important step in the history of computers; it was the design of a mechanical general-purpose computer. Babbage worked on it for many years until his death in 1871. However, because of financial, political, and legal issues, the engine was never built. The design of the machine was very modern; it anticipated the first completed general-purpose computers by about 100 years.

When Ada translated the article, she added a set of notes which specified in complete detail a method for calculating certain numbers with the Analytical Engine, which have since been recognized by historians as the world's first computer program. She also saw possibilities in it that Babbage hadn't: she realised that the machine could compose pieces of music. The computer programming language 'Ada', used in some aviation and military programs, is named after her.

Biofuels and the Environment

Leading investors have joined the growing chorus of concern about governments and companies rushing into producing biofuels as a solution for global warming, saying that many involved in the sector could be jeopardising future profits if they do not consider the long-term impact of what they are doing carefully.

It is essential to build sustainability criteria into the supply chain of any green fuel project in order to ensure that there is no adverse effect on the surrounding environment and social structures. The report produced by the investors expresses concern that many companies may not be fully aware of the potential pitfalls in the biofuel sector.

Production of corn and soya beans has increased dramatically in the last years as an eco-friendly alternative to fossil fuels but environmental and human rights campaigners are worried that this will lead to destruction of rain forests. Food prices could also go up as there is increased competition for crops as both foodstuffs and sources of fuel. Last week, the UN warned that biofuels could have dangerous side effects and said that steps need to be taken to make sure that land converted to grow biofuels does not damage the environment or cause civil unrest. There is already great concern about palm oil, which is used in many foods in addition to being an important biofuel, as rain forests are being cleared in some countries and people driven from their homes to create palm oil plantations.

An analyst and author of the investors' report says that biofuels are not a cure for climate change but they can play their part as long as governments and companies manage the social and environmental impacts thoroughly. There should also be greater measure taken to increase efficiency and to reduce demand.

Airbus crisis over

Airbus says it has turned the corner after a crisis connected to production problems and turmoil in the boardroom at its A380 super-jumbo project that has gone on for the past year. Speaking at the Paris air show, Louis Gallois, CEO of the European planemaker, said, "Airbus is back."

Airbus, which announced a raft of orders on the first day of the show, is competing with Boeing, its American rival, for the title of the largest planemaker in the world.

Boeing is expected to reveal the numbers of orders for its 787 Dreamliner soon. Airbus orders unveiled on Monday included Qatar Airways confirming a $16bn order for 80 A350 Airbus planes and ordering three A380 super-jumbos for about $750m.

Boeing and Airbus are also competing for orders from aircraft leasing firms. Orders from these companies - who rank highly among the biggest global buyers of aircraft - are often regarded as an indication of how successful a model will be in the long term.

Airbus also secured orders from US Airways that are worth $10bn for 22 of its A350 jets, 60 A320s and ten of its A330-200 wide-body planes.

A few months ago, Airbus unveiled a major cost-cutting programme aiming to reduce the workforce in Europe by 10,000, as well as announcing a group restructuring. "I can tell you with full confidence that Airbus is back and fully back, as you have started noting yesterday as demonstrated by our first day announcements," said Mr Gallois on the second day of the air show.

However, Boeing also announced a deal with General Electric (GE) on the show's first day. GE's commercial aviation services placed an order for six 777 Boeing freighters valued at around $1.4bn, to be delivered in the last quarter of 2008.

A Wall Street Journal website report, quoting the Delta operating chief yesterday said that Delta Air Lines were on the verge of ordering as many as 125 Boeing 787 jetliners by the end of this year. However, a spokesman for Delta later said that it had been having conversations "with several aircraft makers" and that "no final decision" had been made on future fleet purchases.

Neither a Borrower Nor a Lender Be

Both borrowers and lenders in the sub-prime mortgage market are wishing they had listened to the old saying: neither a borrower nor a lender be.

Last year people with poor credit ratings borrowed $605 billion in mortgages, a figure that is about 20% of the home-loan market. It includes people who cannot afford to meet the mortgage payments on expensive homes they have bought, and low-income buyers. In some cases, the latter could not even meet the first payment. Lenders include banks like HSBC, which may have lost almost $7 billion.

Both sides can be blamed. Lenders, after the 2-3 percentage point premium they could charge, offered loans, known as 'liar loans', with no down payments and without any income verification to people with bad credit histories. They believed that rising house prices would cover them in the event of default. Borrowers ignored the fact that interest rates would rise after an initial period.

One result is that default rates on these sub-prime mortgages reached 14% last year- a record. The problems in this market also threaten to spread to the rest of the mortgage market, which would reduce the flow of credit available to the shrinking numbers of consumers still interested in buying property.

So, the housing market will remain weak; borrowers with weak credit histories will find the credit window closed; people with adjustable-rate mortgages will have to spend less so they can meet their increased payments; tighter lending standards and falling home prices will reduce consumers' ability to tap the equity in their homes.

But as long as the labour market remains strong, which it has done despite job losses in housing-related industries, and as long as real incomes continue to go up, consumers might complain, but they are unlikely to go on a buyers' strike on a scale that will make this slowdown become a recession.Therefore, we should not be too worried, but, at the same time, we should be a bit cautious and watch closely how things develop.