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Six Sigma Project Charter: Complete Guide
In Lean Six Sigma, a project chart is a document template of two pages that describes examples of a project for process improvement. The charter includes data-driven information that explains the need for the particular project. The document will become the primary reference for the Six Sigma team once it is approved.
A Lean Six Sigma chart is similar to traditional project charter examples in that it’s the first document that communicates the project’s goal. The document is updated and reviewed by the team throughout the project’s lifecycle.
Key Elements
These key elements are common to both traditional project charters as well as Six Sigma project charts:
- Agreement Document a contract between the project team and management.
- Alignment Align the project goals with the organization’s goals.
- Business Case: Present the business case of the project.
- Outline Provide a broad outline for the project.
- Overview Describe project objectives, resources needed, and timeline.
- Project scope: Define project scope.
- Reference: Serve as a point of reference throughout the entire project.
How to prepare a Six Sigma Project Charter
Depending on the size of the project, it can take up to six weeks for a Six Sigma project chart to be prepared. The project champion gathers all the data and organizes it into a brief document. Champions communicate with the management and key stakeholders on each activity. Six Sigma project charts will be based on Six Sigma method examples.
The champion will organize and build the charter in the first phase of the project. It doesn’t matter if they use the Six Sigma methodologies DMAIC or DMADV.
DMAIC is a popular Six Sigma project method. The project champion is responsible for the following activities during the define phase:
Collecting Data
The project champion will assign data collection to Green Belts or Black Belts. The team will work for a couple of weeks to collect any data necessary to support the project. The champion will then enter the information into a Six Sigma project template for a charter and work with the team to refine the document.
Consider competing priorities
This activity allows the team to optimize their time and manage scope expansion. To determine the best actions to take, teams use a quadrant diagram, also known as a PICK chart or payoff matrix (possible implement challenge and kill).
Create a PICK chart by creating a chart that has four quadrants as shown in the above image. Discuss and then place each project activity onto the chart.
Here are the four quadrants and what they mean on a PICK chart:
- Possible Items that are low-rewarding, but easy to achieve.
- Implement high-payoff, low-difficulty items that are essential for the project.
- Challenge Items that are difficult but high-payoff. They will be a challenge, but they might be worth it.
- Kill Highly difficult, low-pay-off things that are not worth tackling and should be killed.
Include any items from the Implement section in your project activities. Remove all items from the Kill section. Finalize the discussion with the team on the items from the other two sections before you decide which ones to include.
Schedule formal and informal updates
The champion should be vigilant in revisiting the charter on a regular basis once the management has approved the project. Eckes emphasizes the importance of updating the document. He says that the project champion should constantly review the charter and make any necessary changes to ensure that it is a living document, rather than a static document that was created early in the life cycle of the project team.
Eckes suggests scheduling formal and non-formal updates to the Charter: “Once the team has collected the data (about four to six weeks from now), the project champion will revisit the Charter and make changes based on the collected information.”
What should be included in a Six Sigma Project Charter?
Six Sigma project charts include six main elements: the business case, the problem or opportunity statement, and the goal statement. They also include timelines and milestones and members of the team. Charters can combine timelines, milestones, and team members in a single category.
Six Sigma project elements have the same names as traditional project elements. Here are some expert tips for writing the various project charter elements.
Six Sigma Problem Statement
The Six Sigma problem statement identifies the main problem that the project is intended to solve. The statement quantifies a process problem. The statement is called an opportunity statement if it identifies an improvement opportunity rather than an existing problem.
Eckes encourages team members to write the problem statement even if some details are missing. He says it’s fine for the problem statement to be blank, as the team might not have all the information at the start of the project. Here is an example of a client’s problem statement: Since______ Gamma Alpha spent __________ on loan applications, with an accuracy rate of ________. This resulted in an _______increase of labor costs, ________negative attainment of growth goals and ________ operation margin .”
He discourages teams to try and identify the cause of the issue within the problem statement. He says that one of the biggest mistakes project teams make when creating a problem statement is to not state the issue in neutral terms. They will include their own experience as to what the cause is or how they perceive the solution. When you see the phrase because to the team, they have jumped straight to the root cause.”
Six Sigma Business Case
The Six Sigma business case explains the problem that the project will solve. The business case is an argument to convince the company that the project should be undertaken. The case should include how the project will impact the organization, and what would happen if it isn’t selected.
A business Case is an unquantified statement that outlines the Six Sigma team’s goals and objectives. The business case explains the necessity of the project and the cost to the company if it is not undertaken. The business case should be brief (usually two sentences) and clearly articulate the project’s vision.
Eckes believes that a business plan should address the following questions.
- What is the impact of this project on the strategic goals and objectives of the company?
- Why should this project be undertaken now?
- What will be the consequences if you don’t start this project?
Six Sigma Goal Statement
Six Sigma goals are a way to define the target of the project and what will happen once the team has solved the problem. This section of the project charter must include quantifiable and measurable information. Write the goal using a tool such as SMART Goals to write the goal.
Ensuring that each element in the charter has a clear link to the previous elements is very important. The goal statement must refer to the problem and business case. Eckes says that in the business case, we stated a problem regarding loan decision accuracy as well as loan decision time. Our goal statement must reflect an improvement in accuracy and time.
Six Sigma Scope Statement
The scope statement outlines the project boundaries of the Six Sigma team. It explains what’s in and out of scope. A scope statement that is effective will be specific about the work the team will or will not perform for the project.
Poorly constructed scoping statements can lead to scope creep. According to Eckes, this is the second-most common cause of project failure, behind poor team dynamics. Use a template to create a scope statement. Include deliverables and define what’s within and outside of the project team boundaries.
Six Sigma Timeline Milestones
Six Sigma timelines outline the project schedule and identify all team members. Divide the timeline by phases and milestones. You can then track your progress.
Estimate the timeline using the DMAIC framework. Include a high-level overview of relevant resources and the people who are influencing the work for each phase. Determine the major milestones at each phase and within it.
Set a realistic timeline and team expectations if you are the project leader. Eckes reminds the leaders that their team isn’t just working on a new project, but also learning new techniques and tools. Allow them enough time to finish the project.
Six Sigma Team Members
Six Sigma teams are made up of all the people involved in the project. Document the contact information, role, and responsibility of each team member. Green Belts and Black Belts are among the team members.
