Quality Management: Create/Develop Team Charter

One thing that makes Six Sigma stand out from other process improvement processes is that it is very formal in the way that things are done. It was developed by scientists at Motorola and follows the Scientific Method very well. To make that happen a Six Sigma project charter is developed before the project begins to identify the high-level requirements for project success and defines the scope and purpose of the project.

The Six Sigma project charter includes 7 critical components:

· Measurable or quantifiable objectives to be achieved

· Organizational and Operational boundaries or scope

· Top management support & commitment

1. Why the project matters

2. Problem Statement

3. Goals / Benefits

4. Project Scope

5. Team Structure

6. Schedule

7. Required support

The Six Sigma project charter should be very short and to the point. However, it requires a significant amount of time to write. One reason it takes so long to develop is that it is difficult to understand and consider all of the aspects that could be related to the problem at hand. Please note that this is very different to the way that most business address problems. In most businesses, the problem is identified and as soon as one plausible solution is identified, the patch is put into place and the company moves forward. The goal of Six Sigma is to improve the process, not merely patch holes, so understanding all aspects of the process is crucial to determine how any one solution may affect other portions of the process.

Critical Components of Project Charter

1. Why the project matters

Many times in business we do things because that is the way it has always been done, or because the boss says we will do it. Doing a Six Sigma project does not follow this thinking. At the core of Six Sigma is the belief that defects should be removed from the system. So, the first step of a project is to determine how investigating a particular problem will reduce defects or will deliver some other quantifiable benefit. If no benefit can be defined, it does not make sense to waste the team members’ time with the project.

2. Problem statement

The Six Sigma Project Charter problem statement should answer three questions:

1. What is wrong? – A brief and quantified description of the problem along with the metric

2. Where is the problem appearing? – Here we need a process step or process name and location

3. How big is the problem? – The size, magnitude, and criticality of the business problem

Fight the urge to start solving the problem. At this point we are not looking at possible causes or solutions. The Six Sigma project charter looks at the problem, not the solution.

Here is an example of a poorly written problem statement:

Construction defects are too high

There is no doubt that construction defects are a problem if there are too many. However, defining the problem more definitely allows the Six Sigma team to focus efforts and establish better goals. Here is a revised statement:

Construction defects in Warehouse A are above the acceptable limit and are creating overtime conditions due to rework of defects. The average construction defects are 1,500 per million opportunities, with a high of 2,650 DPMO. These levels have exceeded the target of 500 DPMO 82% of the time since July 2017. We could save $250,000 annually if the target was being met.

This statement is rich with details and would require considerable time to find the information that is included. However, consider the likelihood that the boss would support the second statement over the first statement.

3. Goals

As I have mentioned before, Six Sigma is nothing more than the scientific method being applied to business. We have identified a problem with the Problem Statement, now it is time to discuss which metrics we need to collect to help identify the problem and which metrics do we need to definitely state that we have made an improvement. The bottom line is that we need metrics and goals.

Here is an example of a well-defined goal statement:

Construction defects (composed of material defects, process defects, and finishing defects) exceeded the 500 DPMO goal 82%, of the days since July 2017. The average DPMO during this period was 1,500. If DPMO levels are returned to within the acceptable goal overtime costs will be reduced by $250,000 annually.

Please notice that this statement helps identifies metrics, their current level, and the goal.

4. Project Scope

The Project Scope describes the boundary conditions and identifies key parameters covered or not covered by the project. This is a very important step since the team members are going to find other problems as they track down potential process improvement options. This leads to “mission creep” and makes it impossible to finish the project. The scope keeps the blinders on so that the team can focus and finish.

5. Team Structure

The seventh element of the Six Sigma project charter is the team structure. The team structure refers to project resources. Normally,  the resources are Project Managers, Leaders and Project Team Members who are involved in the project.

6. Schedule

The project schedule will often contain the Six Sigma steps Define, Measure, Analyze, Improve, Control (DMAIC). It is important to consider all of these steps, think about them carefully, and then put just enough information on the charter to keep the team on track and inform key stakeholders of when to expect milestones to be met.

7. Required Support

This section is designed to inform others of the resources that are going to be needed to accomplish the task. The team is going to need access to subject matter experts, to data resources, to individuals working in the area, and will also require potential funding or physical resources to complete the task. Since this charter has to be approved by company management, this is the opportunity to give them advance notice of everything that will be needed to successfully complete the project.