Continuous Improvement – Plan, Do, Check, Act

A fundamental principle at the heart of many quality management systems is “Plan – Do – Check – Act”, first championed by Deming in the 1950’s:

• Plan – design or revise a business process or system or product
• Do – implement the plan and measure the result
• Check – evaluate the measurements or results
• Act – decide if further changes are appropriate and, if so, what these should be; then back again to…
• Plan – re-design or revise the process, system, product
• etc.

This cyclic feedback process helps you achieve continuous improvement in the way you work, and in many respects it’s pretty obvious.

It’s also a fractal; individual activities within, say, the ‘Do’ phase, can themselves go through the same Plan-Do-Check-Act process in microcosm.

So how do you use it in practice?

In the last article I explained that Quality is about meeting requirements, doing “exactly what is says on the tin”. So an obvious way of applying Plan-Do-Check-Act is to look at how well your processes or procedures or working methods meet their requirements.

To do that, you really need measurements, in other words, objective, numeric Key Performance Indicators (‘KPIs’ – sorry for yet more jargon), then you can take action based on facts and can measure the real effectiveness of the changes you make rather than relying on subjective judgement. And the Key Performance Indicators should also align with the company’s objectives because, if not, how do you know how well you’re meeting your objectives?

So what KPIs do you measure in order to close the Plan-Do-Check-Act loop and achieve Continuous Improvement? Every company is different, but here are some that you could choose from:

Customer

Customer satisfaction monitoring results, complaints, customer support calls, repair or servicing response rates.

Sales

Sales pipeline (weighted according to probability vs. un-weighted), market share, competitive position, repeat sales, bid success rate, marketing campaign response rates.

Operations

Development project timescale or launch date vs. planned, proportion of product requirements met, product costs, production rate, staff productivity, on-time deliveries, supplier performance, stock levels, stock turn rates.

Quality

Reliability (e.g. Mean Time Between Failures or in-warranty returns), rejects / defects, production test yield, inspection levels, rework levels, waste (scrap) levels, ‘Cost Of Quality’, Corrective Action closure rates, internal audit rates and results.

Finance

Turnover, profit, cash in the bank, share value, dividend payments, adherence to budgets (across the whole company).

Human Resources

Staff turnover, headcount, utilisation (especially for service industries), appraisal scores, training, staff satisfaction monitoring results.

In order to manage your company at a detailed level you are probably using many of these measurements already. At the top level that I’m discussing in this article you don’t need to use all of them by any means, it’s better to have just a few and to use them well.

Choose your own KPIs, but always choose ones that are specific to, and key to the success of, your company. You should also have targets for each KPI – what results are you aiming at? (These targets are likely to change as a result of going round the Plan-Do-Check-Act loop).

Once you have the measurements in place, the rest of the Plan-Do-Check-Act process can kick in. This is usually done by reviewing or auditing the company’s processes and systems every few months and comparing the KPI results with their targets.

If shortcomings are found then you can Act accordingly and re-Plan or redesign the relevant processes or ways of working. A simple and pragmatic way of doing this is via ‘Corrective Actions’; I’ll talk about this technique in another blog.