PDCA: Full Cycle Of Risk Management

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The Plan-Do-Check-Act (PDCA) cycle is a four-step management method used for the control and continual improvement of processes and products. First introduced by American engineer and business theorist William Edwards Deming, the method has later been widely adopted by organizations implementing a management system compliant with a best-practice standard.

What is the Plan-Do-Check-Act Cycle?

The PDCA cycle is not a single one-off process but is intended as a continuous loop of planning, doing, checking and acting.

The general steps are plan, do, check and act, the first step being to identify a purpose and define the metrics used to measure its success. This is followed by putting the plan into action, followed by analysing data on its success or otherwise in meeting the initial goal, and finally acting to implement any changes or improvements.

The method has been widely adopted by organizations looking to implement a systematic approach to risk management and when seeking to implement a management system and get it certified to an ISO or other recognised, best-practice standards.

When to use the PDCA Model?

The PDCA cycle can be used for various purposes, including quality control, process improvement, and the implementation of change. It is particularly useful in situations where an iterative approach to problem-solving is required.  This is what makes it an ideal tool for organizations as they develop and maintain a compliant management system where continual improvement is central.

The PDCA four steps

When it comes to developing and implementing management systems, breaking the process down helps clarify the requirements of each of the stages of the PDCA cycle as companies aim to continually improve and seek certification to a recognized standard by a third-party certification body. In this case, the requirements are set by the chosen management system standard, e.g. an ISO standard such as ISO 9001 (quality) or ISO 14001 (environment).

Plan

The planning phase involves setting objectives based on the organization's policy, conducting risk assessments, and determining the processes needed to deliver the desired outcomes.

This is covered in the requirements of the ISO standards and if we take a quality management system (QMS) as an example, it should include:

• Understanding the Context of the Organization: Identify internal and external factors that can impact the QMS’s objectives and outcomes.
• Determining the Needs and Expectations of Interested Parties: Recognize who the interested parties are and what their needs and expectations are.
• Determining the Scope of the QMS: Define the boundaries and applicability of the QMS to establish its scope.
• Planning the QMS: Establish quality objectives and plan how to achieve them, considering risks and opportunities.
• Quality Objectives and Planning to Achieve Them: Set measurable quality objectives and plan the actions needed to achieve them.
• Planning of Changes: Plan changes to the QMS in a controlled manner. It is almost always the most complex part of the cycle as it requires a thorough understanding of what systems may already be in place and what is the ultimate aim.

Do

The doing phase is about implementing the plan, executing the processes, making the product, and collecting data for the checking and the next act phase.

Essentially this should become the routine working for the organization, but it should be sufficiently flexible to allow for unforeseen circumstances and events. Ideally there would be a contingency plan for unusual situations that might occur.

Check

The check phase focuses on monitoring and evaluating the performance of the management system and according for a quality management system, it should include:

1. Monitoring, Measurement, Analysis, and Evaluation: Organizations must determine what needs to be monitored and measured, the methods for monitoring, measurement, analysis, and evaluation, and when these should be carried out.
2. Internal Audit: Conduct internal audits at planned intervals to provide information on whether the QMS conforms to the organization’s own requirements and the ISO 9001 standard, and is effectively implemented and maintained. Discover more about the DNV internal auditor training course.
3. Management Review: Top management must review the organization’s QMS at planned intervals to ensure its continuing suitability, adequacy, effectiveness, and alignment with the strategic direction of the organization.

These requirements ensure that the QMS is functioning as intended and provides a basis for identifying areas for improvement.

Act

The acting phase is where the organization implements the changes needed to ensure that it is compliant with the standard and drive continual improvement. This could involve making adjustments to the plan and starting the cycle again.

Actions like audits, management review and monitoring indicators can identify areas that need improvement and result in non-compliance (or non-conformance) reports being raised. It may be that there is a weak area in the processes that needs to be revised. These need to be addressed within a given time to close the non-conformity if discovered as part of the external audit by the certification body.

Example of a PDCA

The PDCA cycle is a cornerstone of a quality or any other management system a company seeks to implement. It provides a clear and concise framework for managing change and ensuring continuous improvement within an organization. However, it is a versatile tool that can be applied to almost any situation where an improvement is sought.