Key Components of a Project Charter I – Problem Statement

Problem statement

For having a Clear and Very good Project Charter, the following Components are very important. A clear understanding of the problem will help not only to build the business case to be presented, but also quickly arrive at solutions. A Problem well understood by all the stakeholders is half resolved.

The Key components of a charter are

· A Clear and un ambiguous Problem Statement.

· A Clearly defined and reachable goal to resolve or in the direction to resolve the problem

· A Business Case, stating the benefits which can be achieved by resolving the problem.

Let us first discuss the Problem Statement. It is a Known proverb that if understand the problem clearly, you are half way to the solution. A Good problem Statement shall address the following.


· What is the process that is involved?

· What is wrong?

· What is the gap / opportunity?


· Where do we see the problem / gap?

· What is the period for which we looking at?

· When do we see the problem / gap?

How big?

· How big is the problem /gap/opportunity?

· What are the limits it is impacting and by how much

· How will we measure it?

Impact? (Importance)

· What is the impact of the problem /opportunity?

· What are the benefits of the action /consequences of inaction?

Problem Statement – Example

For the period from Jan 2013 to Jun 2013 (When), the Average Fuel Consumption (What) of all the Luxury service buses is at 4.3 KMPl against a target of 6 KMPL (size). This has resulted in a loss of 700000 INR (Impact).

Key Considerations / Potential Pitfalls

· Is the problem based on facts or assumptions?

· Is data available or can be collected to verify and analyze the problem?

Potential Pitfalls

· Is a solution included or implied in the statement?

· Would customers be happy if they knew we were working on this?

· Does the problem statement prejudge a root cause?

· Is the problem statement too narrowly or broadly defined?

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Originally posted 2013-10-08 17:19:00.

What is Design of Experiments (DOE)

Design of Experiments (DOE) is a structured approach for varying process and/or product factors (x’s) and quantifying their effects on process outputs (y’s), so that those outputs can be controlled to optimal levels.
DOE deals with identification of critical factors and their response variables, and the magnitude of the response for each level of the critical factors. DoE is also used to understand the interaction between the various critical factors to ensure right mix of the critical factors to get the best amount of response.
DoE is used to understand the transfer function and mathematical model for the optimization of the response variable.
A DC motor manufacturer might wish to understand the effects of two process variables, wire tension and trickle resin volume, on motor life. In this case, a simple two factor (wire tension and trickle resin volume), two level (low and high values established for each of the two factors) experiment would be a good starting point. Randomizing the order of trials in an experiment can help prevent false conclusions when other significant variables, not known to the experimenter, affect the results. There are a number of statistical tools available for planning and analyzing designed experiments.

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Originally posted 2013-09-29 16:46:00.

Six Sigma Project Charter – Main elements

A Six Sigma Project Charter is essentially a planning document. The document also serves as an agreement between the project team and the management for the project. This is the essential record through which the management accepts and supports the project. This document is essentially an agreement between the Management and the project team on what is expected from both the sides. This is used to

  • Keep the project team aligned with the organizational Goals.
  • Clarifies what is expected out of the team
  • Keeps the team focussed on the objective
  • the project teams role is in fact increased from the champion after the charter is agreed.
A charter is prepared, once you have defined the problem, to communicate and confirm agreement between the problem-solving team and management.
There can be many other forms to use for a project charter. The most important information needed for management to approve the project must be captured here.
Here are the essential elements of the Project Charter
  • Project Name
  • Project Goal
  • Problem Statement
  • Business Case
  • Milestones
  • Support Needed
  • Estimated Cost
  • Signatures/Approvals.
These will define the complete description of the project in the language fo Management.
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Originally posted 2013-09-16 23:59:00.

Key Components of a Project Charter

image  In the earlier sections I have covered the list of key components and the problem statement in the following articles. I will continue this discussion on the Project Charter so that the problem is well understood at all levels and support wherever needed in clearly identified. A good start is half done. Same way in a Six sigma Project, A good project charter becomes heart of the project and to achieve the goals.
Once you have defined the problem clearly the other sections of the charter need to be completed.  Follow these sections in the order so that the logical flow is available. However, this is not mandatory. The details are below.
Project Goal or Goal Statement: The Goal statement is linked to resolution of the problem. Important consideration here is to set a goal which is achievable in a period of about 120 to 160 days. The goal is agreed by the team and team champion as achievable. This really helps in setting the scope of the project.
Business Case & Estimated cost: This section is for the Management to understand the Return on Investment. This shall be as realistic as possible since this is commitment to the Management on the benefits of the project. The business case shall be linked to resolving the problem and the benefit shall be in line with reducing the losses as outlined in the problem statement and achieving the goal in the goal statement.
Support Needed: This will help the management to understand allocation of resources and support. This shall outline the likely support needed from outside the project team.
Milestones: Clearly define the timelines for the phase of the project. This will help to see if the project is in the right direction and correct course by both management and the project team.
Signatures/Approvals : This is just a commitment for the project both from management and the project team.
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Originally posted 2013-08-11 02:59:00.

Introduction to Six Sigma

Introduction to Six Sigma is necessary as Six Sigma is seen only as a continuous improvement method. However Six sigma has many faces. It is originally developed as a Quality management program in Motorola in the 1980s; Adopted with a zeal by GE in mid 90s; Being used effectively all over the world now. The goal of six sigma is to achieve continual improvement. The term Six Sigma is used in many contexts with an aim of Continual Improvement. Some of them are listed below.
Six Sigma is used as a Management Philosophy focused on business process improvements to:

  • Eliminate waste, rework, and mistakes
  • Increase customer satisfaction
  • Increase profitability and competitiveness
  • Statistical measure to objectively evaluate processes.

Six Sigma is used as a business strategy by concentration on Quality and defect reduction resulting in increase profitability and competitiveness. Fewer defects will lead to increased reliability and brand popularity.
Six Sigma is used as a metric to define the Quality of the output and ability of production process to produce defect free output.  
Six Sigma Is a Method for Continual Improvement. This is the most popular use of this word. A six sigma project has a defined method of an improvement project. These are DMAIC and DFSS.
Six Sigma is a Benchmark or a Goal to achieve the highest standard of productivity. A Six Sigma Quality is equal to less than 3.4 defects per million opportunities. This is the Vision for most of the organizations to make sure they deliver high quality to the customers.
Six Sigma is a Statistical Measurement to define the process Capability based on Standard deviation. For any normal distribution, the process capability is equal to six Standard Deviations.
Six Sigma is used in many other contexts which are most relevant and make sure customer satisfaction.
An organization can easily tell the customer about its quality by using the term six sigma.

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Originally posted 2013-03-17 13:02:00.

Prioritizing Generated ideas using Project Prioritization Matrix

Previously we have discussed various ideas which can be considered for a Continual Improvement Project. Once all the ideas are identified, you need to rank these ideas. A total value for each project is calculated and plotted against an ease of completion number to decide which projects have the most value for the effort expended. The tool used to complete this technique is called as project prioritization matrix

Why Prioritization

  • Prioritization will keep your focus on the high impact improvements. it is always advisable to keep the focus while attempting the improvements. Additional benefits include greater visibility and acceptance from the stakeholders. A carefully selected project can be a game changer with respect to the perception on the Continual Improvement in any organization.
  • Prioritization helps you to rank potential projects by both their weighted benefits and their relative ease of completion.
  • It also helps in reorder the ranking of projects if the weighting of the company’s strategic goals changes (such as, the last Quarter there will be very high focus on the Revenue and targets.)

How to prioritize ideas 

  • Identify a list of project selection criteria (For example Revenue, Cost, inventory customer satisfaction, etc)
  • Develop a list of potential projects and enter in the left column of the table
  • Assign weightage to the criteria on top of the list. A weightage can be given based on the impact like 0- No Impact, 1- Low Impact, 3- Medium Impact and 5 – High Impact).
  • Using a team, develop a score for the criteria.
  • You will get the Priority Number based on Multiplication of these two.
  • You can order them according to the priority Number
  • After a project prioritization matrix is created, you can easily update it by adding new potential projects and changing the weighting of the project values to reflect changes in organizational priorities.
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Originally posted 2013-03-10 12:02:00.

Ideas for Six Sigma Projects – By Function and Industry

We have discussed the General Ideas and Ideas from Issues earlier. Here is another trigger for you to look into ideas for Six Sigma Projects by function. If you are new in the continual Improvement Journey, these various classifications help you project identification and selection. Classifying ideas for Six Sigma Projects by function will help you to ignite those who have less time to look at general issues.
Few years back it was generally believed that the six sigma method is used for Manufacturing Industry is only. How ever, Many service and IT organizations have adopted this and saved tons of money. Even this method can be used to increase the process speed and lean out the process. You may take up the improvements in a step by step approach which can give you better clarity and improve the system.

Project Selection Ideas By Function

Six Sigma Project Ideas for Finance/Accounting function
Reduce the time taken to close the accounting books (cycle time)
Improve the forecast accuracy
Spending control
Reduce balance sheet risk
Eliminate unstable customers and associated risks
Improve processing of payment to vendors/suppliers
Improve Days Sales Outstanding (DSO) — the average time taken by a company to collect payment from its customers
Reduce payroll process cycle time
Improve cash management processes
Improve payment/collection processes
Reduce electronic financial transaction costs
Reduce the cycle time of reconciliation
Reduce the procure to pay cycle
Standardize the accrual and deferral processes
Cycle time reduction in processing of Invoice generation
Reduction of cycle time in Purchase order generation

Six Sigma Project Ideas for Human Resources function
Reduce the turn around time to hire an employee
Reduce the time to process an insurance claim
Improve employee on-boarding and orientation processes
Reduce expenditures for recruiting firms
Improve hit-rate for successful hiring
Reduce Attrition
Improve timeliness and the value of employee performance reviews
Reduce absenteeism
Improve training efficiency
Improve employee satisfaction
Identify and correct retention issues

Six Sigma Project Ideas for Sales function
Improve cross-sell opportunities
Reduce time required to enter sales orders
Reduce errors and rework associated with sales orders
Reduce customer credit worthiness cycle time
Reduce the number of “bad deals” that are processed
Improve the cycle time of the entire sales order to cash process
Increase repeat orders/customers

Six Sigma Project Ideas for Shipping/Receiving function
Improve on-time delivery of products to customers
Improve on-time delivery of goods to our facility from vendors
Improve documentation accuracy
Reduce line downtime due to shipping/receiving
Improve inventory control/rotation
Improve inspection processes
Reduce the space occupied by the inventory

Now for some of the ideas by Industry. This section can be used by linking the ideas to specific industry

Sis sigma Project Ideas for Information Technology Industry
Reduce network/server/application downtime
Improve process of logging-in to network from remote locations
Improve system reliability/uptime
Standardize computer loads for configuration and support productivity improvement

Six Sigma Project Ideas for Product/Service Design industry
Reduce time required to design a product or service
Reduce errors in design
Reduce production time
Reduce testing time
Optimize Inventory

Six Sigma Project Ideas for Call Center Industry
Increase/decrease (depending on your business needs) average talk time
Reduce abandon calls
Improve employee knowledge
Reduce number of times customer is put on hold
Reduce Call drops
Improve resolution of queries
You may start resolving problems and  one at a time. do not attempt a great improvement at once. In case you have to then pilot the solution and deploy horizontally.

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Originally posted 2013-02-27 00:23:00.