Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Project Charter
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The project charter is a written commitment approved by management stating the scope of authority for an improvement project. It is recognized by all parties involved in the project. Once published, it provides powerful communication about the project to the entire team. At the same time, a charter is a “living” document, constantly being reviewed and updated to reflect the addition of relevant data as it becomes known.
Project Charter Purposes
• Gives authority to act, gives permission to work
• Summarizes the project itself and its goals, boundaries and deadlines
• Provides a source for reference to determine which new requirements are covered under the original agreement
• Serves as a living document which continues to evolve as more requirements are uncovered, but also provides a central source from which to manage these changes
Project Charter Elements
Six Sigma Black Belt | Project Management | Project Charter and Plan Task: Project Charter Elements
Listed below are project charter elements. Click each term below to learn more. To view the a charter template, roll over Page Resources and click Project Charter Template. To view a completed charter, roll over Page Resources and click Project Charter Example.
Business Case
The business case is a short summary of the strategic reasons for the project. The justification for a business case would typically involve at least one of the following:
• Cost per unit
• Quality or defect rate • Cycle time
Good business cases should:
• Define one primary business metric.
• Focus on a process rather that a cost account. • Quantify a financial impact.
• Focus on the output (product/service) for the external customer.
• Provide details regarding the baseline performance of the primary business measure to ensure that this is really a problem, not an exception.
• Determine the gap between the baseline performance of the primary business measure and the business objective.
Problem Statement
The problem statement will detail the issue that the project team wants to improve. From the perspective of owners and relevant stakeholders, a major cause of project failure is the lack of clarity in describing the problem. Develop the problem statement as thoroughly as possible with the information you have. The problem statement is a crucial part of the charter.
Problem cases include: • historical data
• what areas of the business are affected • how long the problem has existed
Project Charter Elements
Six Sigma Black Belt | Project Management | Project Charter and Plan Task: Project Charter Elements
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Goal Statement
As discussed later in this lesson and in the Define lesson, the goal statement should specifically outline what you hope to achieve at the end of the project.
Goals should:
• Be carefully thought out and expressed.
• Specify how completing the project will lead to improvements over the status quo. You should be able to clearly describe the outcomes, deliverables and benefits to stakeholders and customers.
• Provide the criteria you need to evaluate the success of the project in terms of time, costs, and resources.
• Be reviewed by the core team, which must reach consensus before moving to the next phase of the project.
Resources
In terms of the project charter, resources are the people required to complete the project. In the Team Leadership topic of this lesson, you will read more about the creation of teams and the roles and responsibilities of team members.
Work Breakdown Structure
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Work Breakdown Structure
The work breakdown structure (WBS) is a hierarchical chart representing all the activities that must be completed in order to finish the project. It may be completed as a tree diagram or an outline. In essence, the WBS is like an organizational chart for a project. The idea behind the WBS is to break larger tasks (or milestones) into
individual components. Typically, a work breakdown structure will include three levels. However, for more complex projects, it may involve as many as five levels.
Procedure
1. Gather input from the project team by using questionnaires, interviews, group sessions and historical data.
2. Restate the project mission and objectives and confirm that they are correct. 3. Define the project in terms of major elements of work, or deliverables (level 1
categories).
4. Break each level 1 work element into detailed activities and milestones (levels 2, 3, etc.).
5. Identify an activity owner and deliverable for each activity at the lowest WBS level.
Planning Tools
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Planning Tools
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In developing the project plan, the Six Sigma leader uses a variety of tools. In the next section, we will explore and explain the following tools:
• Gantt chart
• Critical path analysis • PERT chart
Gantt Chart
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Gantt Chart
The Gantt chart was developed by Henry Gantt in the 1910s. According to The Quality Toolbox, Second Edition, Nancy Tague states, "A Gantt chart is a bar chart that shows the tasks of a project, when each must take place, and how long each will take. As the project progresses, bars are shaded to show which tasks have been completed." The Gantt chart may also be known as a "milestones chart" or "project bar chart."
Benefits
• Easy for people to understand
• Helps all parties understand the project • Monitors the project's progress
• Manages the dependencies between tasks
• Displays the project schedule and status at a glance • Assesses the time needed to complete the project
Gantt Chart Cont.
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Gantt Chart Cont.
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Procedure
In The Quality Toolbox, Second Edition, Tague suggests the following steps for creating a Gantt chart:
1. Identify the following tasks needed to complete the project: a. Key milestones (important check points)
b. Time required for each task c. The sequence:
i. Tasks to be finished before the next task can begin ii. Simultaneous tasks
iii. Tasks to be completed before each milestone
2. Draw a horizontal time axis along the top or bottom of a page, and then mark off in an appropriate scale for the length of the tasks (days or weeks).
3. Down the left side of the page, write each project task and milestone in order: a. For each event happening at a point in time, draw a diamond (unfilled)
under the time for that event.
b. For activities occurring over a period of time, draw a bar (unfilled) spanning the appropriate times on the timeline:
i. Align the left end of the bar with the time the activity begins. ii. Align the right end with the time the activity concludes. iii. Ensure that every task of the project is on the chart.
4. As events and activities take place, shade the diamonds and bars to show completion. For tasks in-progress, estimate the percentage of completion and shade the appropriate amount.
5. Place a vertical marker to show the current date. When posting the chart on the wall, a heavy dark string hung vertically across the chart with two thumbtacks is an easy way to show the current time.
Use When
Tague states that Gantt charts are used when: "
• scheduling and monitoring tasks within a project. • communicating plans or status of a project.
• the steps of the project or process, their process, their sequence, and their duration are known.
"
User Tips
Gantt Chart Cont.
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Gantt Chart Cont.
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• Sometimes Gantt charts have additional columns for showing details, such as the amount of time the tasks is expected to take, resources or skill level needed, or person responsible.
• Beware of identifying reviews or approvals as events unless they really will take place at a specific time, such as a meeting. Reviews and approvals often can take days or weeks.
• It can be useful to indicate the critical points on the chart with bold or colored outlines of the bars.
Critical Path Analysis
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Critical Path Analysis
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Developed by project managers in the 1950s, critical path analysis (CPA) is one of several planning tools for demonstrating and viewing chronological tasks, identifying possible timing risks, and establishing the least amount of time for the project/process. CPA is also known as critical path method (CPM).
Benefits
• Displays a graphical model of the project
• Predicts the shortest time required to complete the project • Emphasizes activities critical to maintaining the schedule • Provides a timing reference point throughout the project • Identifies interrelationships between tasks
Three paths exist in the diagram above:
• 1-3-4-5-7 (8 weeks) (critical path; longest time) • 1-3-5-7 (6 weeks)
Critical Path Analysis Cont.
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: Critical Path Analysis Cont.
Procedure
1. Use sticky notes to individually list all tasks in the project. Underneath each task, draw a horizontal arrow pointing right.
2. Arrange the sticky notes in the appropriate sequence (from left to right). 3. Between each pair of tasks, draw circles to represent events and to mark the
beginning or end of a task.
4. Label all events, in sequence, with numbers. Label all tasks, in sequence, with letters.
5. For each task, estimate the completion time. Write the time below the arrow for each task.
6. Draw the critical path by highlighting the longest path from the beginning to the end of the project.
Use When
• Developing an optimal plan for the project
• Identifying the most critical issues/processes that would affect the overall project time
• Identifying the longest path through the process causing the most risk to miss the deadline (the critical path)
• Determining fixed time targets
User Tips
• All activities begin and end at circles (nodes: a stage of completion). • All activities with no predecessor branch from node 1.
PERT Chart
Six Sigma Black Belt | Project Management | Project Charter and Plan Concept: PERT Chart
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First developed by the Navy in the 1950s to manage complex projects, program evaluation and review technique (PERT) charts are powerful tools for reducing the time and cost for completing a project. PERT's planning technique accounts for randomness in time requirements. PERT charts fall under the category of network tools similar to the activity network diagram detailed later in this lesson under the Management and Planning Tools topic.
Benefits
• Provides a means of estimating the project completion time
• Demonstrates the probability for completing the project ahead of schedule • Identifies start and end dates as well as critical path activities that affect
completion time
• Organizes tasks in established timeframes • Acts as a decision-making tool
• Identifies where and when parallel activities occur
• Serves as an evaluation tool to determine the effect of changes