Project Charter: What is a six sigma project charter and how to create it in 7 steps[Free download]

What is project charter in six sigma

Project charter in six sigma very important requirement for the project. It is a living document for the project and it lays out every important project variable. The creation of a project charter is one of the first steps in six sigma project. It is a part of the Define phase of DMAIC process. This includes everything from who is participating in the project, to the project goals. Let us take few minutes to understand the different components of project charter step by step.

Step-1: Defining the project name

The very step in making a Project Charter is to name the project. The project name should reflect what the project is looking to fix.  The project name works almost like a milestone sign, it keeps everyone moving in the same direction and focused on the project goal.

Step-2: Business Case

The second step of Project Charter is defines the quantifiable benefits of the project and how it aligns with the business strategies and goals. A good business case should answer the following Wh- Question.

  • Why is the project worth doing?
  • What are the consequences of NOT doing it now?
  • Why is it a priority?
  • How does it fit with business initiatives and targets?

Please read the below sample business case to understand how to write a good business case.

AGX insurance company is a largest insurance provider in U.S. and have outsourced its some of large process to BCM. Considering last 4 months data of customer care department  for AGX insurance company, we observed that the average quality of the process is @ 89% against the target of 95.00%. This may result in client dissatisfaction, revenue generation and majorly contributing to client penalty against process performance for last 2 months. This may also impact our long tern business planning and new business generation from the existing client.

Sample Business Case

Step-3: Problem Statement

The third step of Project Charter is the problem statement and it addresses the problem or major challenge of the project we are aiming to fix.  In this section we will discuss details of the problem, what are the critical-to-quality elements, and where does this perceived problem exists. A good problem statement should answer the following Wh- questions.

  • What is wrong or not meeting our customer’s need?
  • When and where does the problem occur?
  • Whom is it impacting?
  • How big is the problem?
  • What is the impact of the problem.

It should be data-based and no cause or reason should be mentioned. It should also mention other relevant KPIs in data which is impacting by this.

Please refer to the below sample problem statement to understand how to write it in a good way.

Last 4 months data shows that the Process Quality has been reduced to 92% against the SLA of 95.00%.  It might impact  our long term business planning with the existing client and can contribute to process penalty, client dissatisfaction and  VOC.

Sample problem statement

Step-4: Goal Statement

The project Goal statement will discuss the anticipated results of the project. We should set challenging yet realistic goals in this section.

It should contain the following items

  • Definition of improvement that we are are expecting to achieve.
  • Should start with a verb (reduce,increase,eliminate,control).
  • It should be realistic and not over aggressive.
  • Should be SMART(Specific,Measurable,Attainable,Relevent,Time bound).
  • It should transform our vision into a discrete statement of direction.

A good Goal Statement should be like written below.

To improve process productivity from 48.56 documents per hour to 58 documents per hour by 21st November 2010.

Sample Goal Statement

Step-5: Roles and Responsibilities

Now it’s time to determine who the key stakeholders are for the project.  It is to be noted that stakeholders can be both internal and external to the company.  We need to make sure we should understand their expectations for project communication, team member involvement, and the project outcome.

It should have a clear vision on the roles of Champions/Balck Belt/Green Belt, Roles of project Team, Frequency of interaction, Purpose of interaction, and process of interaction. We can use two models for this activity.

  1. ARMI :
    1. A Approval for team decisions outisde their chartered authorities e.g. sponser, business leader
    2. R resource to team, one whose expertise and skill may be needed on ad hoc basis.
    3. M Member of team with the authorities and boundaries of the defined charter.
    4. I Interested party are those who will be needed to be inform on direction and findings and if later support is required.
  2. RASIC :
    1. R Responsible one who is solely and directly responsible for the activities(Owner). It includes approving authority
    2. A Approve the one who reviews and assures that the activities is being done as per expectations
    3. S Support, they provides the necessary help and support to the owner
    4. I Inform, those who need to be informed of the status or progress being made
    5. C Consult, they need to be consulted for this activity for inputs
Project Charter
Project Charter
RASIC tool
RASIC tool for roles and responsibilities

Step-6: Timelines/Milestones/Phases

This should contain the following reference points.

  • Reference points regarding major events in the project.
  • High Level Project plan with dates.
  • Dates should cover all phases of DMAIC phases.

Step-7: Scope

This is the last part of Project Charter. This sets the boundaries for the project. This is where we will define the clear project objective, and define the outside influences of the project. We should bifurcate it in In Scope and Out Scope.

That is all for what is project charter in six sigma now. We will meet again with some new topics.

We can read more about project charter from the below articles. These will help us in better understanding this topic.

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