Project charters are one of the foundations of any continuous improvement effort. The charter is the basic contract between the project team and management. In simple terms it states what the project team is going to work on, the business case for conducting the project, the problem statement, the metric, the goal of the project, and the timeframe for completion. In return it implies that management is going to give the team the necessary time and resources needed to complete the project.
In addition to the information above, every project should have a project owner or sponsor. That is the person to whom the team will report their progress and if any problems arise, the person who will help them resolve the issue.
Before charters are initiated projects are identified. Projects should relate to business needs and should be tied to gaps that exist between customer’s want and desires and current process outputs. The projects undertaken should then close that gap. Project charters should be initiated by upper management and not something a team should put together.
Project charters usually have the following elements:
- Business Case
- What is the purpose of the project and why is it important to the organization. What goal or objective will this project help the organization achieve? Will it improve customer satisfaction, i.e., reduce defects, errors, OTD, etc? Will increase efficiency, i.e., improve changeover times reduce inventory or some other process waste?
- What strategic business objectives will be impacted by doing the project?
- Preliminary Problem Statement
- The preliminary problem statement is a quantitative statement of the problem that the project is going to solve.
- The preliminary problem statement must be specific and measurable.
- The preliminary problem statement must state the gap between the current and desired state.
- The statement must not include a perceived cause or a potential solution.
- Project Scope
- The project scope defines the boundaries for the team to work within. It should also include what the team is to exclude and are outside the boundaries of the project.
- It is important that the team stay focused and within the boundaries of the project. Other improvements that are identified should be documented and saved for other projects down the road.
- Goals and Objectives
- The goals and objectives are what the team is expected to deliver at the end of the project.
- Goals and objectives should follow SMART guidelines
- Specific
- Measurable
- Achievable
- Relevant
- Time bound
- I like aggressive goals and objectives. Most organizations are not looking for 5 – 10% improvement and many projects achieve at least 50% or better especially when there is low hanging fruit to be gathered.
- Project Milestones
- Project milestones define the time line for the team to complete their work. It usually is an estimate of the time for each of the DMAIC phases.
- Other Charter Information
- Project Title
- Team Leader
- Team Members
- Project Sponsor / Champion
- Projected Savings
- Signatures of team leader, team members, sponsor, and finance (for validation of project savings!)
As mentioned above, project charters provide the team with focus and the expectations for what they are to deliver. Since charters are developed at the initial stages of the project it is not meant that they are cast in stone! As the team digs into the project they will uncover facts that may change the charter, so the charter is considered a dynamic document. Any change to the charter must be approved by the project sponsor or champion as part of the project tollgate review process.