Are you tired of managing projects that seem to have no clear direction or purpose? It’s time to introduce the power of a project charter in your six sigma improvement project.
Are you struggling to keep team members on track and focused on the end goal? don’t worry we have the project charter, the crucial document in the six sigma project that outlines the purpose, goals, and key stakeholders of a project, providing a roadmap for success.
In this article, I will discuss the basic concept of a project charter, its importance, and how to create the charter by understanding the 7 elements of the charter along with one example.
If you are new to Six Sigma methodology or a Six Sigma practitioner then this article is for you because charter can ensure the success of your Six Sigma project. So Let’s get started…
What is a Project charter?
A Project charter in Six Sigma is like a roadmap for your project journey. It is the compass that guides you through the process of continuous improvement and helps you achieve your desired outcomes.
It is the blueprint for your project. It outlines the purpose, objectives, and scope of your project, roles & responsibilities of each team member. (Check out – What is Six Sigma methodology)
It also includes the timeline, budget, and resources needed to complete the project. It serves as a contract between the Six Sigma project team and the project sponsor who provides financial support to the project.
A Charter is basically a written document issued by the project sponsor and it gives the project team authority to use organizational resources for project activities.
The project charter is essential for a successful Six Sigma project because it sets the direction and keeps everyone on the same page. It helps to align the team’s efforts and ensure that everyone is working toward the same goal.
Image Source – Six Sigma way team field book
Basically charter provides a clear understanding of the project’s purpose and objectives, making it easier to measure the progress and success. The project charter in Six Sigma is a living document and you will need to update it throughout the project.
It is the foundation of your project like the captain of the ship, steering you toward success and helping you navigate the choppy waters of process improvement.
The project charter is like a GPS system for your project journey, guiding you from start to finish and making sure that your team stays on track. Without a solid project charter, your project is like a ship without a rudder, drifting aimlessly in the sea.
7 elements of the Six Sigma Project charter
In order to create an effective project charter you need to first understand the 7 key elements of a charter i.e. Business case, Problem/opportunity statement, Goal statement, Project scope, Project milestones, Resources & team roles, Project stakeholders, etc.
Creating a project charter means you have to get into the depth of the project details. It is not just an overview, you have to include all the necessary details about the project so that you can get approval from upper management and financial support from the project sponsor.
That’s why you must know these 7 elements of project charter in Six Sigma very well. Let’s understand them one by one.
1. Business case:
The business case communicates the need for the project in terms of meeting business objectives. It basically helps to understand how the project is linked with the overall business objectives.
The business case explains why there is a need for the organization to undertake the project, what are the benefits to the organization of doing this project, and how it will support organizational objectives.
In order to write a business case you need to answer some important questions like
Why stakeholders should support your project?
Why you are taking this project?
Why is it important to work on this project now? Why is it worth doing?
How your project will help the organization achieve its strategic goals?
Why is this project important to customers, your employee, and overall business?
What happens if you don’t start the project right away? (Any negative consequences)
Example – Robo cars represent the key market niche for the company, chargebacks to our stamping operations for these reject cost nearly $50,000 a month, and the cost for lost sales are not known.
2. Problem statement:
The problem statement is where you need to quantitatively describe the problem or the pain point in your process. It is a clear and concise statement that defines the issue or opportunity that the project aims to address.
Ask some simple questions like what is the problem or pain point? where is it occurring? when it occurred and how long it has been there? what is the magnitude of that pain or problem in the process?
By answering these questions you can write effective problem statements for your project. The problem statement and the business case look like same but in reality, the problem statement is more focused and specific than the business case.
While creating a charter maintain the perfect balance of critical details in your problem statement without overwhelming the project charter with unnecessary information and make sure your focus should be on the problem at hand, not its solution.
Go for the Six Sigma project only if your team doesn’t know the solution to the problem. If the solution is already known then don’t go for the Lean Six Sigma project.
The format of the problem statement includes: What is wrong, where is that wrong happening, when it is occurring, what is the baseline magnitude at which it is occurring, and what is it costing me?
Example – During FY 2005, the 1st time call resolution efficiency for new customer hardware setup was 89%. This response is a gap of 8% from the industry standard of 93% which amounts to US $2000000 of annualized cost impact.
3. Goal statement
The problem statement describes the symptoms of a hidden cause while the goal statement defines the relief expected from teamwork. The goal statement should be SMART (Specific, Measurable, Attainable, Relevant, and Time-bound) Goal statements have 3 following elements –
- It starts with a verb – The goal statement basically starts with verbs like reduce, increase, and eliminate followed by the other information.
- Includes measurable target for desired results – A target should put a number on expected cost saving, defect elimination, or reduction in cycle time. This measured target in the goal statement will become one of the measures of the team’s success.
- It has a clear projected deadline to reach a goal – The initial date you set may change, but setting some date to project goal achievement will help your team to take action in the right direction.
The goal statement should not say how the goal will be reached and should not include a solution in it. Many Lean Six Sigma experts also say that getting agreement on the problem statement and goal statement is one of the hardest parts of the Six Sigma project.
So you should make sure that write these two statements accurately for your project charter in the Six Sigma project. Here is a simple example of a goal statement check out below.
Example – Reducing defects on the customer application by 37% by March 28, 2023.
4. Project scope
Process champion generally outlines the scope of the project. The defining project scope will help you understand the start and end point of the process along with details about project constraints and assumptions.
- Project constraints – Constraint refers to the limits placed on resources to be devoted to the project. Eg- A common constraint is the time that team members will devote to the project.
- Project assumptions – Assumptions include how often the champion expects to meet with the team leader and team. How does he or she support the team when it runs into a roadblock and also freedom, the team has to implement a solution without champion approval.
Add the important details in the project scope so that all the team members know what is considered in the project scope and what is outside of the scope. This gives the team more clarity about the direction of the project.
This sharpens the project team’s focus and team members can concentrate on what is important for the project. See if the project scope is not properly defined in that case, the project team may lose interest in the project.
It becomes difficult to implement that project and if somehow, the team implemented the project then there is a high chance they will not get the expected benefits after implementation. So defining proper project scope is important for creating an effective project charter in the Six Sigma project.
5. Team members
Successful Lean Six Sigma projects are basically the result of careful planning and effective collaboration of team members. This portion of the project charter talks about key individuals who are part of project planning and implementation.
Here project charter in Six Sigma should list the name of a champion who is responsible for the project outcome, team leader, team member, MBB, GB, and other people assigned to help the team. (Check out – 7 important Six Sigma project roles & responsibilities)
- Lean Six Sigma coach – In a Six Sigma project there must be one Six Sigma coach (SME) who coaches the team in planning as well as implementation.
- Project sponsor – The sponsor is typically a member of senior management who approves the project charter and is also considered a driver of the six sigma project because he provides all the required resources and support to the project.
- Project leader – The Project leader is responsible for planning, implementation, and closure of the Six Sigma project.
- Process owner – Process owners are responsible for sustaining activities once the project is completed.
- Other team members – They are responsible for all the daily actions in the project and also provide required inputs to the project to make it successful. They are subject matter experts in different functions acting together as cross-functional teams to complete the project.
6. Project milestone
As we know Six Sigma project follows the DMAIC approach, at this section of the charter you have to define the planned target completion date for each phase of DMAIC (Define, Measure, Analyze, Improve, and Control)
You also need to put the actual completion date for each of the phases of DMAIC. You can check the below charter worksheet to understand this section. This is required to ensure that the Six Sigma project gets completed within a defined timeline.
You can call this section a high-level plan. As you are reviewing your project at each of the DMAIC phases, this is also called a phase review or tollgate review.
The tollgate review confirms that all the activities in the current phase will be completed before moving to the next phase of DMAIC.
7. Identify project stakeholders
This section of the project charter in Six Sigma identifies and includes all the stakeholders in the project. The people who can influence or are affected by your project, both types of people inside and outside of your organization are basically called stakeholders.
Understanding who these people or groups are (suppliers, managers, employees) and what they expect from your project team can help you deal with their requirements.
Because these people provide you with the resources and necessary support during the project implementation.
The earlier you identify their needs and wants and then start your project, the less opposition or resistance you will face during your implementation of the Six Sigma process improvement project.
Project charter example
This is an example of the project charter created for the global car manufacturing company Midwest Auto. By reading this charter you can easily understand the overview of the project.
You can see the project title at the top and then the project leader information. After that Business case is written there (Why this project is worth doing).
The problem statement is properly defined (Pain in the process). The project scope is defined including constraints and assumptions.
On the top right side, you see the list of team members involved in the project. After that clearly defined goal statement is there and in the end list of stakeholders is there.
At the bottom of the project charter in this Six Sigma project, you can see the project timeline or milestone with a target completion date and actual completion date for each phase of DMAIC.
If you want to learn how to create a project charter in Six Sigma for your project then you can join us – Lean Six Sigma Live training program and certification.
Image Source – Six Sigma way team field book
Do’s and Don’t of Project Charter
Do’s of charter
- Use the project charter to set the proper direction for the project and also gain agreement on the project goal as well as the project plan. Address all the important questions of the project early in the charter so that you can save a lot of time later on.
- Make sure that your problem statement is very specific and measurable, and avoid assumptions. You should focus on the symptoms or pain points that you observe in the process.
Don’ts of charter
- Don’t assign any blame in the problem statement, even if you have some guesses at the beginning of the project.
- Don’t set a project goal that is impossible to achieve or something with impossible expectations.
- Don’t go for perfection, you can’t create a perfect project charter at the beginning of the project because the charter is always changing as your team’s understanding of the process increases.
Conclusion
A project charter is an essential tool for any Six Sigma project. It sets the foundation for any project by outlining goals, problem statements, objectives, stakeholders, and the scope of the project.
The 7 elements of the charter play a crucial role in ensuring that the project is executed effectively and efficiently. (Join us for – Certified Lean Six Sigma with Minitab (GB+BB) live training program and certification)
In this article, I talked about the project charter in detail that will help you create a comprehensive project charter for your Six Sigma project. I also discussed the simple steps to create a charter along with one practical example.
I hope now you have got clarity on this topic. If you found this article useful then please share it with your network and subscribe to get more such articles every week.
FAQ
Who approves project charter in Six Sigma?
The project sponsor approves the project charter in Six Sigma and communicates it to the important stakeholders. Then provides all the necessary resources to the project team.
What is in a project charter?
The project charter is a crucial document in the six sigma project and created at the define stage of the project by the project team. It provides the foundation and proper direction to the Six Sigma project.
