Understand how the PDCA cycle works, its benefits, and how it can be a strategic ally in energy and utilities management.
Spending on energy and utilities currently represents one of the largest costs of a company. In addition, the search for solutions that verify the sustainability of a company's operations and products in the market has moved slowly. Faced with this scenario, organizations seek to minimize their costs, reduce the impact on the environment, and optimize energy and utilities processes. A McKinsey study released in 2017 indicates that countries investing in energy efficiency can slow the growth of their energy needs from 3.4% to 1.4% in the next 12 years. Thus the search for a management system that continuously promotes the efficient use of resources has become a matter of extreme importance for any corporation.
Managing energy and utilities in companies is more than the search for projects for reducing consumption. The next steps are to identify problems, plan how they should be solved, undertake actions for the solution, and verify if the results were satisfactory. From this point the promotion of improvements in routine and, finally, the search for investments become important. Due to the need for continuous improvement in the management process, the use of the PDCA method - plan, do, check, and act becomes increasingly important in the areas of energy and utilities.
Understand a little more about the PDCA cycle, the benefits of its application, how it can be used in the energy and utilities management field, and how an energy and utilities management system can be optimized using this tool.
What is the PDCA cycle?
Developed at the beginning of the 20th Century by the engineer Walter A. Shewhart, the PDCA cycle, also called the Deming or Shewhart Cycle, is part of the concept of Total Quality Control that emerged in industry and which has as its initial objective controlling the quality of companies. The PDCA cycle is one of its tools and focuses on eliminating problems using a structured plan and continuous improvement of the process so that issues do not recur. This method is called a cycle because upon each execution of all of the steps a new analysis can be performed and the tool can be applied once again.
The PDCA cycle is classified in 4 basic steps:
This first step is one of the most important, because it makes it possible to see the problems and plan how they should be solved. To begin the process, it is essential to understand all the steps required to realize it, which are:
- Identify the problem to be solved;
- Establish what objective should be achieved from the solution;
- Define which team will be responsible for this demand;
- Check if any funds will be necessary for its execution;
- Define a deadline for the execution of the plan;
- Define the data to be collected and used to verify the effectiveness of the plan;
After identifying the problem and structuring how it will be achieved, the phenomenon to be addressed must be analyzed. This is achieved through data collection, meetings of the team dedicated to the solution, and field research, among other actions that show in detail the problem presented. In this step it is clear that the adoption of a database and information about the process in question (inputs, production, interruptions, etc.) are of the utmost importance to the success of the work.
To identify the problem and the structure of the process it is necessary to analyze it. This moment is one of the most crucial in the process, where it is possible to verify how the problem occurs and how it can be solved.
After verifying why this problem occurs, an action plan is necessary, starting from everything that was analyzed, measured, and discussed. At this point the problem is divided into a number of actions. It should be stressed that it is extremely important to structure the steps of the action plan so that it is effective.
This step is the execution of the action plan developed previously. It is important that the actions defined act on the fundamental causes of the problem. The team that is designated for this demand shall analyze the main difficulties and relevant points found in each execution and indicate solutions when necessary.
The third step is to verify the results obtained from the action plan. At this point the results are presented and evaluated as to whether the defined objectives were achieved or not. Again here it is of the utmost importance that data, reports, and dashboards, that is, sufficient information for defining new actions, or even indicating that the problem is solved. IT platforms aimed at energy and utilities management are commercially available and are fundamental to the success of world-class energy and utilities management.
In the final step the work is completed, ensuring the standardization of was worked and taking new actions as necessary.
After all the steps it is possible to continue the cycle for continuous improvement of the process in question. If it continues, the PDCA cycle makes space for SDCA (Standardize, Do, Check, Act), which is the cycle of standardization, that is, maintaining a level of quality already reached.
The PDCA cycle is used to solve a specific problem; the SDCA cycle is for consistently maintaining the success actions already implemented, and SDCA is maintained until a new PDCA process is implemented.
The PDCA methodology can be implemented in a number of actions, whether in educational routines or in companies, governments, and institutions focused on planning, implementing, measuring, and promoting continuous improvement.
Benefits of the PDCA cycle in companies
In an increasingly competitive market, the search for social, economic, and environmental excellence and balance is essential for the company to gain competitive advantage in the face of its competitors. Therefore the PDCA cycle is a fundamental tool for continuously implementing all of these objectives. These are the benefits that affect the whole organization:
- Reliability and effectiveness in the execution of activities.
- Process optimization.
- Continuous improvement.
- Best practices in the company routine.
- Cost reductions.
- Detailed and accurate vision of the process in which it is inserted.
- Team productivity.
It is possible to understand that the PDCA cycle is a basic but very efficient tool when it comes to solving problems in an organization.
Thinking of energy and utilities, the use of the PDCA cycle becomes strategically essential in view of the constant search for productivity and cost reductions.
The PDCA cycle applied to energy and utilities management
The field of energy and utilities management in companies is currently being impacted by large technological innovations and ever more automated and efficient energy and utilities management systems. In addition, there is the pressure for cost reductions, process optimization, and the search for ever cleaner energy matrices.
Consequently the PDCA cycle can be widely used for energy and utilities for planning, actions, measuring, and continuous improvement of efficiency projects, energy matrix exchange, process optimization, and consumption planning, in addition to incremental evolution of its management model.
A sign reflecting the importance of the methodology to enable companies to evolve is that it is the foundation of ISO 50001 – Energy management systems, a standard that certifies that companies that meet the minimum and specific requirements for energy management.
All of the steps to achieve certification are aligned with the PDCA cycle, so the greatest benefit of the standard is continuous improvement of processes starting from planning, execution, monitoring, and review of the plan to achieve or maintain certification.
The importance of an energy and utilities management system in the PDCA cycle
It is important that the use of the PDCA methodology be anchored in an IT platform for the management of energy and utilities that automates the processes, unifying information and allowing real-time monitoring to permit optimizations, reducing the role of teams in manual processes, directing employees to think strategically about process improvements and performing the management of energy efficiency processes together with the team.
Managing the energy and utilities area, it is not only seeking individual improvements – continuous process monitoring is need it to make it ever more profitable for the company. PDCA anchored in energy and utilities management systems helps strategically so that the continuous improvement cycle is ever more efficient.