Table of Contents
- 1 Six Sigma Project Charter
- 2 Four Critical Elements of a Lean Six Sigma Project Charter:
- 3 The Lean Six Sigma Project Charter is a “Living Document”!
- 4 The “Quad-Chart” Project Charter
Six Sigma Project Charter
Plan your Work, and then Work your Plan.” This is the mantra of the Six Sigma practitioner when developing the project charter. The Project Charter is the guideline for the entirety of a Six Sigma Project.
In this article, I will show you the four critical elements of a Lean Six Sigma project chart. I will also show you a simple way to fill out a charter with a team using a flip chart (called the “Quad Chart Charter”)
Four Critical Elements of a Lean Six Sigma Project Charter:
- The Business Case describes why this project is important to the company.
- Why should the organization support this project
- The Problem Statement contains a brief description of the “pain” being experienced by the organization.
- The Problem Statement should be related to the Voice of the Customer (whether internal or external).
- What is the goal of the project?
- How much improvement is targeted?
- The Goal Statement should be specific, measurable, attainable, relevant and time-bound (SMART Goal).
- The project goal should be related to the problem you are trying to solve.
- The Scope Statement of the project clearly describes the physical boundaries of the project.
- The Scope defines what is included in the project and what is excluded in the project.
- Scope can include product families, geographical areas, departments, etc.
- When I describe the Project Charter to students, I use the analogy of “planning a race.”
- The charter is where you define the starting line and the finish line.
- You also define the purpose and the route of the race.
Business Case Example
I relate the “purpose of the race” to the Business Case on the charter. The Business Case is where we start to understand the urgency of the project. The Business Case defines: Why is the project worth doing? Why is it important to do now? What are the consequences of not doing this project?
A good Business Case connects the project to the strategic priorities (KPI’s) of the business.
- How will this project drive business initiatives and goals?
- How will this project impact the customer; internal and external? The Stakeholder?
- What are the expected financial benefits (revenue increase and/or cost reduction)?
A good template to use when developing a Business Case for a Six Sigma Project Charter:
“From time 1 to time 2, we experience pain metric. With a target of target metric, this gap of ## leads to a Cost of Poor Quality of $$.”
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Problem Statement Example
The “starting line” is the Problem Statement. The purpose of the Problem Statement is to clearly Define and Quantify (using Metrics) the Current State (problem or opportunity).
An example of a Problem Statement:
In the last six months, 20% of our repeat customers paid their invoices over 60 days late. The current rate of late payments is up from 10% in 2015 and represents 30% of outstanding receivables. This affects our operating cash flow by $259k.
Two things you should never see in a Problem Statement for a Project Charter:
- Never assign blame in a Problem Statement.
- Never state the solution to the problem (if you know the solution, there is no need to waste time on a Six Sigma Project).
For example, “Invoices are over 60 days late because of our antiquated ERP system. We need to evaluate upgrading to the newest version.”
Goal Statement Example
The “finish line” is the Goal Statement or Objective Statement. The Goal Statement defines the expected improvement the team is seeking to achieve in clear, concise and measurable terms.
A good Goal Statement:
- Is SMART (Specific, Measurable, Attainable, Relevant and Time Bound)
- Does not assign blame, presume cause, or prescribe a solution
- Starts with a verb (reduce, achieve, control, increase, etc.)
An example of an effective Goal Statement:
Increase (<-verb) employee motivation survey scores (<-what is improved) from the current 42% to 70% (<-improvement and gap) by end of 3rd Quarter 2005 (<-completion date).
More on “Scope” of a Project
The “Route” of the Race is related to the Scope. The Scope focuses on the boundaries and resources of the improvement efforts.
The Scope Statement should include:
- The 1st Consists of input, value-add, and output. Learn More... task (this is the beginning of the project scope or the physical boundary of the process we are investigating)
- The Last process task (this is the end of the project scope or the physical boundary of the process we are investigating)
- What is In-Scope (This could be departments, personnel, sites, equipment, etc. that are inside the scope of your investigation and are controllable)
- What is Out of Scope (This could be departments, personnel, sites, equipment, etc.. that are outside the scope of the project and/or outside of our control)
If the Scope has not clearly been defined, projects are subject to Project Scope creep (sometimes known as “requirement creep... Learn More... which can result in projects that stall indefinitely. Scope Creep can include a change request, update, or addition that was not in the initial Scope. These changes can alter the intended outcome of the project and cause alterations or delays to the Scope.
The Lean Six Sigma Project Charter is a “Living Document”!
It is important to understand that the Six Sigma Project Charter is a “living document,” meaning the Charter will be revised as you gain more knowledge about the project. Your Problem Statement, Goal Statement and Scope could change as you progress through the DMAIC is an abbreviation of the five improvement steps it co... Learn More... roadmap.
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This FREE Downloadable ZIP file contains seven templates in the Lean Six Sigma Root Cause Analysis toolset (Including the Project Charter). Each template is in a Microsoft Excel format. These tools are used in the DMAIC (Define, Measure, Improve, and Control) phases of a Lean Six Sigma Root Cause Analysis.
The “Quad-Chart” Project Charter
Use the “Quad-Chart” Charter on a flip chart to get engagement from the whole team in the development of the charter. The “Quad-Chart” Charter focuses the team on the four critical elements of the Lean Six Sigma Project charter: “Problem Statement”, “Goal Statement” and “Business Case”.
Use the instructions above about the four critical elements or the Lean Six Sigma Project Charts to fill out the “Quad-Chart” charter.
Quad Chart Example:
A project charter serves as a detailed road map for a project, clearly defining the problem it will address, who will participate, the intended result and the project’s deadlines. It’s a document that deals in detailed certainty and provides strong guidance, keeping team members on track.
Creation of the project charter ranks at the top of the “first project steps” list (it’s in the Define phase of a DMAIC project).