Deming PDCA Cycle Four Stages, Advantages, and Disadvantages

Deming PDCA Cycle- Four Stages, Advantages, and Disadvantages. PDSA Cycle Pros and Cons. PDSA or Deming Cycle Revolution. 4 Stages of PDCA.

Deming PDCA Cycle

Deming PDCA cycle refers to a repeated four-step management model that ensures the continuous improvement of products and services in the industry. In the 1950s, a famous management scholar Dr. William Edwards Deming, introduced the PDCA method; therefore, it is also known as the Deming Cycle or Deming Wheel. It is a famous method for solving problems to yield the highest quality results. The full meaning of PDCA is the Plan–Do–Check–Act, a four-step action method.

Apart from PDCA, it has many other names, such as the PDSA abbreviation of the Plan–Do–Check–Adjust, the Deming cycle or circle or wheel, the Shewhart cycle, and the control cycle or circle. The Plan-Do-Study-Act (PDSA) cycle is a quality improvement framework commonly used in various industries, including healthcare, manufacturing, and education.

The Four Stages of the Deming Cycle

The Four Stages of the Deming Cycle are Plan, Do, Study or Check, and Act. These are the inevitable elements of the Deming cycle.

1. Plan

PLAN is the initial step of the four-step method that identifies the problem and opportunities to suggest recommendations. In addition, it analyzes and describes the overall current situation of the project. The authority recruits a team to understand the full process of the project in this stage; they will identify the problems that need to be changed and find solutions to fix the problems. You have to find out the answers to some basic questions regarding the project. The questions are as follows;

Firstly, what is the main problem that needs to be solved in your organization?
Secondly, what kind of resources do you have now that you use regularly?
In addition, what resources do you have to have to resolve the problem?
Moreover, what is the solution that you have taken with resources?
Finally, how long will it take to analyze the problems and implement the planning?

2. Do

The DO phase is the second stage of the Deming cycle, where the testing of the solution starts to be executed to identify the results. After completing the planning step, you have to take action to solve the problems. You will apply all plans that you have taken in the first stage. Some unwanted problems can emerge in this stage, so you have to be aware to confront them. To increase your confidence level, you can apply your actions to a small arena in the project. It is a subtle way to control the situation properly as well as avoid an unpredicted big mistake. All team members stay alert at this stage to play their roles and responsibilities. In addition, you with your team members will take some initiatives mentioned below:

  • Keep a record of what happened and what happened.
  • When do you apply the planning?
  • Collect data from the planning stage.
  • Try to use a check sheet, swim lane map, and flowchart to capture data.
3. Study or Check

Study or check is probably the most important step of the Deming cycle. You must pay attention to the CHECK stage if you want to scrutinize the output that is yielded from the earlier stage. It will help you to avoid repeating mistakes and clarify the success of your planning and applying steps. This stage will allow you to audit your plan’s performance; you will be confirmed whether the plan works perfectly or not.  Additionally, your team will identify the problematic portion of the project to eliminate them in the future. You would be able to discover the root cause of the problem if something went wrong. In short, this stage will assess the system’s effectiveness and help you decide whether the theory is helpful or not.

Example: Appraisals or  Gap analysis.

  • In this stage, you have to answer some questions mentioned below.
  • Is the system effective or not?
  • Do you want to continue this system or need to change it?
  • Have you outlined a list including the unexpected results, failures, successes, and outcomes?
4. Act

ACT is the final stage of the system that finalizes the perfect solution to implement it. In this stage, your organization should follow adapt, adopt, and abandon factors. Adapt refers to changing and modifying the PDSA circle for the next test. Adopt indicates considering expanding the system to all departments in the organization. Abandon means modifying your full approach and repeating the PDCA circle.  In sum, it is the step of standardization that is considered standardized when goals are exceeded.

The Pros and Cons of the Deming Cycle or PDSA / PDCA

Firstly, PDSA is a simple and effective process to resolve a new and recurring problem in the industry. In addition, it is a repeated approach that will allow you to measure results without a waste of time. Moreover, it is a risk-free cycle to apply a small scale in the project; therefore, no need to change the full process if it doesn’t work.

In contrast, the full process of the PDSA is slow when applying the four steps in the industry to yield the final result. It is not a straightforward execution process that can apply to urgent problem-solving issues. Additionally, you need to use some resources, including effective team members, to ensure that each circle step is directed perfectly.

The Eight Advantages of PDSA Cycle

The eight benefits of the PDSA or PDCA cycle are systematic strategy, flexibility, iterative process, focus on learning, team empowerment, evidence-based decision-making, rapid improvement, and continuous improvement culture.

Systematic Strategy

The PDSA framework offers a structured strategy to resolve problems to ensure continuous improvement. It shows the step-by-step (Plan, Do, Study or Check, Act), process to assess the improvement. We can address the complex issues and refine them in every section methodically. It allow us to follow one by one systematically.

  • Flexibility: The PDSA cycle is flexible and adaptable to a wide range of settings and industries. It can be applied to small-scale projects or larger initiatives, making it suitable for organizations of all sizes and types.
  • Iterative Process: The iterative nature of the PDSA cycle allows organizations to make incremental improvements over time. By continually cycling through the steps of the PDSA cycle, organizations can refine their processes, systems, and practices to achieve greater efficiency and effectiveness.
  • Focus on Learning: The PDSA cycle emphasizes learning and experimentation as essential components of improvement. By studying the results of each cycle, organizations gain valuable insights into what works and what doesn’t, enabling them to make informed decisions and adjustments.
  • Empowerment of Teams: The PDSA cycle encourages collaboration and engagement among teams involved in improvement efforts. By involving frontline staff in the planning, execution, and evaluation of improvement initiatives, organizations empower employees to take ownership of the process and contribute their expertise and insights.
  • Data-Driven Decision-Making: The PDSA cycle relies on data and evidence to drive decision-making. By collecting and analyzing data throughout the improvement process, organizations can identify trends, root causes, and opportunities for improvement, enabling them to make informed decisions and prioritize actions effectively.
  • Rapid Implementation: The PDSA cycle enables organizations to implement changes quickly and test their impact in a controlled manner. By breaking down improvement initiatives into small, manageable steps, organizations can avoid delays and minimize the risks associated with large-scale changes.
  • Continuous Improvement Culture: The PDSA cycle fosters a culture of continuous improvement within organizations. By encouraging ongoing reflection, learning, and adaptation, organizations can create an environment where innovation and excellence are valued and rewarded.
Disadvantages of PDSA Cycle

While the PDSA cycle offers numerous benefits for continuous improvement, it also has some potential disadvantages:

  1. Time-consuming: Implementing the PDSA cycle requires time and effort to plan, execute, and evaluate improvement initiatives. For organizations with limited resources or competing priorities, the PDSA cycle may add to the workload and strain resources.
  2. Complexity: The PDSA cycle involves multiple steps, including planning, implementation, data collection, and analysis. This complexity can be daunting for individuals or teams unfamiliar with quality improvement methodologies, leading to confusion or errors in implementation.
  3. Risk of Inefficiency: In some cases, organizations may engage in the PDSA cycle without clear goals or objectives, leading to inefficient use of resources. Without proper planning or alignment with strategic priorities, improvement efforts may yield minimal results or fail to address critical issues.
  4. Resistance to Change: Implementing the PDSA cycle often requires changes to existing processes, workflows, or behaviors. Resistance to change from stakeholders, including employees, management, or customers, can impede the effectiveness of improvement initiatives and hinder progress.
  5. Limited Scope: The PDSA cycle is best suited for small-scale, incremental improvements rather than large-scale organizational change. For complex or systemic issues requiring comprehensive restructuring or transformation, alternative methodologies may be more appropriate.
  6. Data Quality Issues: Effective implementation of the PDSA cycle relies on accurate and reliable data for decision-making. However, organizations may encounter challenges with data collection, measurement, or analysis, leading to flawed conclusions or ineffective interventions.
  7. Lack of Sustainability: Improvement initiatives resulting from the PDSA cycle may struggle to sustain long-term gains without ongoing support, monitoring, and reinforcement. Without a culture of continuous improvement or organizational commitment, improvements may regress over time.
  1. Cost: While the PDSA cycle can lead to cost savings through efficiency gains or error reduction, there are also associated costs with implementing quality improvement initiatives. These costs may include training, technology investments, or hiring additional staff to support improvement efforts.

Overall, while the PDSA cycle offers a systematic approach to continuous improvement, organizations must carefully consider its limitations and potential drawbacks to maximize its effectiveness and achieve sustainable results.

The Evolution of the Deming Cycle or PDSA

The Deming cycle has been evolved from time to time to make it an effective process. I will discuss how the Deming cycle came to be and how it has evolved from time to time.

Dr. W. Edwards Deming

Deming was an American management consultant who graduated as an electrical engineer, later concentrating on mathematical physics. He has become a famous person in the Japanese industry for his work and initiatives after WWII. In addition, Dr. W. Edwards Deming got recognition as one of the most influential Japanese manufacturing industries who are not Japanese but American. He championed the work of Walter Shewhart, including total quality management, statistic process control, and renamed the Shewhart Cycle. After all, He had a great contribution to the rise of the post-war economic growth in Japan.

The Shewhart Cycle

Deming had been inspired by an American engineer Walter Andrew Shewhart who was also a physicist and statistician. In 1939, Shewhart published a book on the Viewpoint of Quality Control. It was the first book that articulated a three-stage systematic process of specification, production, and inspection. These three stages were developed to test the hypothesis of experiments. Finally, he mentioned that these stages should not go straight, but they should go in a cycle. Thus, the Shewhart Cycle came up with the process of a circle.

The Deming Wheel

In 1950, Deming analyzed Shewhart’s Cycle to modify it. He introduced a new version of Shewhart’s Cycle: a four-step of design, production, sales, and research. This cycle has been known as the Deming’s Circle or Deming Wheel.

PDCA

Some Japanese executives probably modify the Deming cycle or Deming wheel into Plan, Do Check, Act (PDCA), although the exact reason for changing the term name is unclear. This four-step cycle was introduced to identify the problems in the industry and solve them by applying four steps together. The prime objective of this cycle is to standardize if the results are satisfying.

Deming Cycle- Four Stages of Deming Cycle & PDSA Cycle Pros and Cons
Deming PDCA Cycle or PDSA Cycle
PDSA
Deming was not satisfied with the name of PDCA; therefore, he amended it in 1986. He emphasized the core meaning of checking, and he mentioned that checking is not incorporate the cycle. Hence, the PDSA emerged with the recommendation of Deming.
When to Apply PDSA

The PDSA or PDCA framework can develop any process or product by splitting it into a shorter steps. This cycle can be used in every kind of organization in many aspects such as changing management, new service or product deployment, product lifecycle, and so on. This framework is beneficial for assisting the improvement of the six sigma and total quality management process. It is the best option to dig out problems and practical solutions.

Deming Cycle or PDSA Quality Improvement

The Deming cycle is one of the essential parts of the quality improvement process in the big industry. Apart from that, organizations apply other quality improvements program that is much complex QI processes.

  • Continuous Quality Improvement: It is also known as the CQI process that organizations apply to reduce waste, increase efficiency, and increase internal and external satisfaction. It is a management philosophy that assesses how the industry works to develop its process. These more complex quality improvement programs include the following:
  • Lean: The lean process is a manufacturing program that effectively improves efficiency and reduces wasteful practices. This program focuses more on improving services and products based on customer’s demands.
  • Six Sigma: The six sigma process is the set of tools and techniques that develop the quality of a process by eliminating defects and minimizing variability in manufacturing.
  • Total Quality Management: It is a process of a management system based on practicing a principle that instills good business culture where every employee maintains a high standard of work. It influences the organization to maintain a high quality of service in every aspect of the company.
  • Quality Improvement Collaboratives: It is a process that usually applies to the healthcare center in which many organizations work together to develop services for patients.
Conclusion

Deming cycle refers to a repeated four-step (PLAN, DO, STUDY, ACT) that ensures the continuous improvement of products and services in the industry. Today, many organizations worldwide use this method to improve the product and service by solving problems.

Enron Scandal Summary- The Crooked: The Unshredded Truth

Enron Scandal Summary- the crooked e: the unshredded truth about Enron. Summary of Enron Scandal and Enron Case Study. Enron Scandal Summary. Story of Enron Fraud.

Enron Scandal Summary

Enron Corporation is an energy company based in Houston, Texas. However, it is one of the most devious economic scandals. The company was also a commodities and services organization that served much of the country.

Questionable accounting techniques were brought to light, and many suspected that the stench of fraud was lingering around the business. During the profitable years, Enron’s stock price was above $90 per share. However, the scandal that eventually was revealed toppled the business in an instant by Bottiglieri, Reville, and Grunewald. The stock closed in 2001 at an ultimate low of 26 cents a share—furthermore, Enron’s inevitable declaration for bankruptcy.

Kenneth Lay, Founder of Enron

Kenneth Lay, the founder of Enron, promoted the importance of high stock prices above all else. He pushed employees to focus on rising rates of return by trading assets and borrowing more money. An asset-free balance sheet meant that new resources could come in and trick the public into thinking that the company was hugely successful. Lay essentially began the craze for high earnings, an obsession that cost his company its life. Ultimately, it was Lay’s role that set in motion the collapse of Enron.

Andy Fastow Enron’s CFO

Andy Fastow, Enron’s CFO, was a master at manipulating liabilities. He used a technique common among energy corporations that used unique purpose entities to relocate liability away from Enron. He made it so that the stock price per share would continually increase, allowing it to continually hold a high investment rating. Fastow was the reason that Enron got away with the scandal for so long. He enabled the company to hide behind false information and comfortably take advantage of the system.

Enron Scandal

Enron, as a company, completely fell apart after the collapse. It was forced to renounce earnings with multiple partnerships such as Chewco Investments and JEDI. The corporation was then required to recover profits back to 1997, which amounted to just $586 million, just 20% of the estimated earnings. The stock prices dropped to mere pennies and lost all consumer and financial buoyancy. Enron declared bankruptcy shortly after

Enron’s shareholders did not benefit from the greed of the executives. Those that had their pension funds financed in the company lost almost everything. Consequently, the SEC and Congress worked swiftly to begin immediate restructuring to reduce losses like those experienced in the future. A $40 billion lawsuit followed the collapse, demanding compensation for the shareholders’ worthless stock. The collapse destroyed more than $2 billion in pension plans.

The Enron workers have suffered immensely and, in most cases, lost all that McLean and Elkind, “The Guiltiest,” had put in the company. One employee, Charles Prestwood, lost $1.3 million in the Enron collapse. Money entrusted in the company in retirement savings or investments disbanded overnight. The SEC announced after the crash that they would try to regain as much of the missing money as they might through their justice system. Enron employees have fired abruptly without issuing any notice. Employees also need to vacate the company within 30 minutes. So, the company should be aware of the economic situation and the factors of the company’s downfall. We must always monitor and speed constantly.

Enron Scandal Analysis

So, in my opinion, the company should be aware of the economic situation and the factors of the company’s downfall. We must always monitor and speed constantly, instead of the company’s Enron wasting the struggle to make a loan to support Enron’s business. Every company should follow a business management strategy such as TQM, Six Sigma, and Deming cycle.

The company should try to cover back the share that employees have invested in the company. So no company still bears debt in terms of banks and between employees but often if share, if the company loses the person involved indirectly or invests with the share also loses. This is because if the employee wants to claim rights, the company has nothing. They want to sue the company is under bankruptcy, so no point. From this, the company must take care of management at least issue a notice saying the company can’t cope for the next month, so employees can take time from the issuance of the notice to find a job.

Monitoring Operation

Besides that, organizations should monitor everything closely. If an organization does not follow, it has the ability to abuse the system and do whatever it wants. I believe that due to the Enron collapse, people will pay more attention to how corporations operate even if they cannot directly control the ethics of the company. At least, in this case, there will be significant pressure to do what’s right.

Moral Practice

Last but not least, that our group can conclude was organizations can be as ethical or unethical as they want. They will treat their employees, shareholders, partners, and creditors however they want. Sometimes corporations will act in their best short-term interest, but there’s also the option to behave properly and look at the long-term goals. Risk tolerance can be a good thing, but it is up to the corporation to decide how much risk they are going to take and at what cost they are going to take risks. We can do our best to regulate and criticize, but in the end, it’s their call. We can only hope they do the right things.

Enron Scandal Movie Summary
Crooked e the unshredded truth- Enron scandal summary

The Crooked E: The Unshredded Truth about Enron Scandal is a television movie broadcasted by CBS TV, an American television broadcasting company, in January 2003. Therefore, the movie depicted the real situation, condition, and emotion of those who suffered from this Enron scandal. It shows how employees, shareholders, and partners suffered from the fall of Enron. In addition, this movie displays how a large number of employees lost their life savings.

Based on the Crooked E TV movie plot, we have outlined three important topics: Business Ethics, Corporate Governance, and Corporate Branding. These three topics are related very closely to the movie story.

Business Ethics

Firstly, business ethics is the extension of any organization’s moral philosophy and principles. Business ethics is a guiding principle; it helps the company increase productivity and run smoothly based on honesty and integrity. Based on both the case study on Enron and the movie story, it is evident that the higher authority of the Enron Corporation did not follow the business ethics properly. They engaged in corruption intentionally, which is against business ethics. So, the Enron Corporation collapsed because of not practicing business ethics. “Ethics and integrity are at the core of sustainable long term success,” says Richard Rudden, managing partner at Target Rock Advisors in New York State.

Corporate Governance

Secondly, corporate governance is an inevitable system of rules, processes, and practices by which a company is established and regulated (Moore & Petrin 2017). A solid corporate governance framework in a company can protect Partners, employees, stakeholders and maintaining investor confidence. The Enron Corporation failed to strengthen corporate governance; therefore, it got bankruptcy. Due to not maintaining and practicing corporate governance in the Enron corporation, many employees, shareholders, and partners suffered from the fall of Enron. Additionally, the audit officer was also indulged in corruption that represents the company’s lack of practicing corporate governance. Therefore, the lack of corporate governance in the Enron Company is another vital cause of falling.

Corporate Branding

Finally, corporate Branding denotes the practice of marketing the brand name of a corporate entity instead of specific products or services. Corporate Branding became a much-talked issue when Enron became bankrupt. The higher authority paid huge attention to corporate Branding to attract stakeholders and employees for investing more money in the company. In 2000, Enron’s share skyrocketed to an all-time high of $90.56 because of tricky corporate Branding. They managed to conceal their mountains of debt and losses. Enron became a very famous company in the US within a short time because of proper and tricky corporate Branding. They exaggerate only the positive aspect of the company and hide negative features during marketing. Fortune magazine listed Enron as one of the “100 best companies to work for in America”.

Lessons Learned From Enron Scandal

Based on the Enron Scandal Movie Review The Crooked E: The Unshredded Truth, we have outlined three key takeaways from this movie, for example, be careful of starting a new job, never invest all money at a business and finally, investigate the company before investing money. We will use it in our life hereafter and also pass it on to your children. These key takeaways are essential for building a secure and successful career. Around 4,500 employees lost their job because of the Enron scandal; therefore, I will be more conscious whenever starting a new job and suggest others investigate more about the company before starting the job.

Key Takeaways From Enron Scandal Movie Summary

Firstly, we have to be more careful when investing our all money in a business. The finding I got from this movie is to invest half of our money and keep the rest of the money to recover if we lost money somehow. Many young investors sank because they invested all of the money that they accumulated.

Finally, we have to have a heuristic mentality when study about a company for investing. It is an indispensable process to study background information and map out the future condition of the company. Many young investors invested their capital, but the company dramatically collapsed within a short time. There is no alternative, but we have to be more conscious before starting a new business or job.