Six Sigma Project Charter Excel & PDF Template with Case Study


What is Project Charter in Lean Six Sigma Project?

→ The project charter is a written one-page document that contains all the fundamental details about the project.

→ It is one of the most important documents of the Six Sigma Project.

→ The project charter is a part of the Define Phase of the Lean Six Sigma Project.

→ It defines the project objectives, business case, scope, roles, and responsibilities of the project team, and milestones and target dates, etc.

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Example of Project Charter in Six Sigma Project:

→ The key elements of the project charters are as mentioned below:

  • Project Title
  • Project Leader
  • Process Owner
  • Project Sponsor
  • Business Case
  • Problem Statement
  • Process & Sub Process
  • Goal Statement
  • Project Scope
  • Project Milestone
  • Project Team Members 
  • Benefits

→ Now we will understand all key elements of Project_Charter with the help of a case study:


πŸ‘‰ Six Sigma Project Charter Excel Template Download



Case Study of Project Charter in Lean Six Sigma Project:

→ We will understand the project charter by taking one case study.

→ In this study, we will understand all the project charter's elements with the help of the example that is explained below.

Example of Project Charter in Six Sigma Project


Project Title

→ The project title is very brief details about the project.

→ It is generally a one-line title that represents the project.

➨ Examples:

→ (1) OEE Improvement at Assembly Line A.

→ (2) Cycle Time reduction on assembly line B.


Project Leader

→ Need to mention the name of the person who will be leading the Lean Six Sigma Project.

→ He has a required competency related to project level (Six Sigma Green Belt, Black Belt, Master Black Belt, etc.)


Process Owner

→ Name of the person who is head of the area/process/sub-process.

→ Process Owner is responsible for implementing all the strategies identified during the Project.

→ The Process Owner has to take the handover from the Project Leader once the project is completed and sustain the improvement.


Project Sponsor

→ The project sponsor is a coach, project reviewer, and also representative of the Top Management.

→ A Project Sponsor is responsible for getting approval from all the stakeholders.


Project Champion

→ The Process Owner, Sponsor & Champion can be the same person depending on the organization’s hierarchy.


Business Case

→ The business case is the reason behind why we are doing this project or why this project is important.

→ We can understand how this project is related to our organization’s goal and financial benefits.

→ It shows the impact of the project on the customer and other stakeholders of the organization.


➨ We need to identify below things in the Business Case:

→ Why is the project worth doing?

→ Why is it important to do now?

→ What are the consequences if we are not doing this project?

→ How this project is integrated with the business objectives and goals of the organization?

→ How will this project impact the customer and other stakeholders?

→ What are the expected financial (tangible) benefits?


➨ Example of Business Case

→  (1) The improvement in OEE by 20% will reduce the manufacturing cost per product by 25%, improving our profitability by 25% directly.

→  (2) The rejection rate of product A is 2.3% so the competitors are taking some of our market shares to sustain and improve our market share we need to reduce the rejection % of product A.


Problem Statement

→ The problem statement is a statement that mentions the project's baseline performance and pain area of the organization.

→ In very simple words, we can say that the problem statement is a short description of the pain area of the organization that we want to improve.

→ The problem is the gap between what we want and what we are achieving.

→ The problem statement should be clear and concise. So, anybody can easily understand the objective of the project.

→ The problem statement should not contain any Root Cause or solution to the problem.

➨ Also, refer to this article - Various Problem Solving Methodologies.

➨ Also, refer to this article - Root Cause Analysis.


➨ Example of Problem Statement.

→  (1) The last 4 month's OEE of line A is 45%. So the manufacturing cost of the product is higher.

→  (2) The rejection rate of the Last 4 months of product A is 2.3% so the competitors are taking some of our market shares.


Process & Sub Process

→ We need to mention the main process name and sub-process name in the project_charter.

➨ Example of Process & Sub Process:

→ Manufacturing Process (Sub Process: Assembly Line A)


Goal Statement

→ The project’s goals and objectives can be defined based on the project_scope and problem statement.

→ Goal Statement defines the expected improvement that the project_team is seeking to execute in clear, concise, and measurable terms.

→ The goal statement should start with the verb.

→ Goal statements should be SMART: Specific, Measurable, Achievable, Relevant, and Time-Bound.

→ Refer to SMART Goal Method for goal setting for detailed understanding.


➨ Example of SMART Goal Statement

→ (1) To Improve the OEE of Line A from the current baseline of 45% to 65% in the next six months. It will give the tangible benefits of 10K USD.

→ (2) Reduce the Rejection of product A from 2.32% to 1% in the next three months will give the tangible benefits of 5K USD.


Business Matrix & Primary Matrix

→ We will understand both matrices with one example that is mentioned below.


➨ Example of Business Matrix

→ Goal: "To Improve the OEE of Line A from the current baseline of 45% to 65% in the next six months. It will give the tangible benefits of 10K USD."

→ So in the above case, our business matrix is OEE.

→ To improve our business matrix (i.e. OEE) we need to focus on Availability, Performance, and Quality Rate.

→ So our primary matrix should be the rate of availability (ROA), rate of performance (ROP), and rate of quality(ROQ).

→ We can take any of one, two, or all three primary matrices to improve our business matrix (OEE).


Project Scope

→ The project scope is the boundaries of our project and it will provide us focus areas and clarity about the project. So, we can add value to our customers.

→ The project scope is a mandatory thing that we need to define before the project starting.

→ We need to ensure that all project_team members should be agreed on the project_scope.

→ The boundaries of the Project_scope should be optimum. It should not be too narrow or too broad.

→ The Scope of the project clearly describes the boundaries of the_project.

→ It defines what is included in the project and what is excluded in the project such as product families, geographical areas, departments, types of resources, etc.


➨ Examples of Project Scope:

→ (1) The project's scope is limited to Manufacturing assembly line A.


Project Milestones

→ Project milestone in a project_charter defines timelines of starting and completing all phases of the DMAIC Methodology of Six Sigma_Project phases.

➨ Example of Project Milestones:

→ (1) Define phase - Target Date - 15th June 2021

→ (2) Measure phase - Target Date - 10th July 2021

→ (3) Analyse phase - Target Date - 25th July 2021

→ (4) Improve phase - Target Date - 15th August 2021

→ (5) Control phase - Target Date - 30th August 2021


Project Team Members

→ We need to identify team members and mention their roles and responsibilities as project_team members.

→ The top management team approves the resources required for the_project.


Benefits

→ We need to identify all types of benefits either it is tangible or intangible.

→ The tangible benefits are measured directly; these benefits are like quality, profitability, and performance of the derived products.

→ The intangible benefits cannot be measured in terms of product metrics.

→ Intangible benefits include customer satisfaction, employee satisfaction, employee morale, employees' motivation level, etc.


Tips for Preparing an Effective Project Charter:

→ It should be developed with the help of relevant team members.

→ The charter should be clear and concise.

→ Customer and business-focused and addresses their specific needs and expectations.

→ It should contain realistic and achievable objectives.

→ It should be a live document and updated during the project.


πŸ‘‰ See Also:

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