LEAN SIX SIGMA PROJECT CHARTER

INSTRUCTIONS: For instructions on completing a Project Charter, see the "Charter Development Procdure" tab and "Reference Guide" tab included in this file

PROJECT INFORMATION Project Title

Strategic Goal(s) Impacted Business Group Goals Impacted:

Business Group Goals Impacted:

Efficiency

Effectiveness

Flexibility/Adaptability

Customer Satisfaction

Department

Submitted By

Date Submitted

PROJECT SELECTION CHECKLIST The following is a checklist that r eviews cr iter ia common to successful Six Sigma Pr oj ects. Please complete the following 14 questions.

Yes

No

Question 1) Has the project already been done ? 2) Is there pre-determined solution to the project goals ? 3) Does this project conflict with other projects ?
I f you answered Yes to any of the above questions, stop here. Please contact your deployment leader to determine if Six Sigma applies to this project

4) Does the project have a high probability of success ? 5) Is project linked / aligned to goals of business ? 6) Does the cost reduction opportunity meet the goals of the business ? 7) Has the project been properly scoped ? 8) Can starting and end points for the process be defined ? 9) Does the champion have functional control of the impacted process ? 10) Are metrics available, on Primary Metric - Y, or could they be developed quickly at low cost ? 11) Is data collection relatively easy ? 12) Does the process complete at least one cycle weekly ? 13) Is there a "good" measurement system in place (on the Primary Metric - Y) 14) Are resources available and supportive for this project (Process Owner, Team, Sponsor)? 15) Can you define the defect definition for the project ?
PROJECT REQUIREMENTS
Problem Statement

Objective

Define Defect

Project Scope

Out of Scope

BACKGROUND INFORMATION
Process Owner Other Critical Stakeholders Primary Metric (Y) Data Availability No Data Available, need collecting Some data available, need manipulating Data available and ready for analysis Baseline Target Project Sponsor

Funding Responsibility

HARD SAVINGS CALCULATION

Hard dollar opportunity amount, please outline the expected hard savings benefits:

Hard dollar opportunity amount, please outline the expected hard savings benefits:

SOFT SAVINGS CALCULATION

In addition to hard savings quantified above please outline any potential soft savings. Soft savings may include operational improvements that are not easily quantified, intangible in nature or represent improvements in cycle time that do not reduce overall positions:

PROJECT LIMITATIONS / BOUNDARIES

Project Cost Constraints (additional costs over and above team costs that you are approved to spend to gain improvements)

Project Time Constraints (the total time limit in which the project must be completed)

Project Technical Objectives (Impact) (the minimal level of impact, savings or improvement that the project must obtain)

Assumptions (Information the team used to base decisions upon)

TEAM INFORMATION
Black Belt/Green Belt Team Members Financial Validator Data Expert

1. 4. 7.
Project Sponsor Process Owner Initials Initials

2. 5. 8.
Date Date Business Unit Financial Leader Black Belt/Green Belt

3. 6.

Initials Initials

Date Date

Project Sponsor / Owner Charter Self Assessment Completed char ter s ar e submitted to the Value Str eam Champion of each r espective business unit. The completed char ter s ar e added to a r unning list of char ter s for futur e assignment to a black belt or gr een belt. To insur e we ar e wor king on the pr oj ects that make the gr eatest impact to our or ganization L ean Six Sigma evaluates each pr oj ect using a scor ing system. To assist the team with this pr ocess please complete the following questions.

High

Med

Low 1) How well does this project align with the strategic and/or business unit goals ? 2) What is the hard dollar savings impact of the project ? 3) What are the soft dollar savings impact of the project ? 4) Your assessment of the level of complexity of this project charter ? 5) As a sponsor, provide your level of engagement/support for the project ? 6) To what degree would completion address your customer needs/process challenges ? 7) Please provide feedback regarding your level of urgency regarding completion of this project.

> $ 700k

< $ 75K

> $ 200k

< $5k

Ver y Ur gent

M edium

No Ur gency

Issue Tracking Additional Comments

COMPLETED CHARTER CHECKLIST to be completed by deployment team

Strategic Goals Identified Project Selection Checklist Completed Clear Problem Statement Data Available
ROUTING: Send the completed form to the Value Stream Champion for your Business Group

Primary Metric Identified Saving Opportunity Outlined Financial Validation Review Sign-off Self Assessment Completed
75-1688 09/03

Six Sigma Charter Development Reference Guide

Problem Statement Good Problem Statements Are:
# Clear, concise, accurate - linked back to what is important to the customer Clearly defines and quantifies the problem. It is a clear and concise description of the problem Quantified with a metric that includes units Identifies gap in performance States current state (baseline) - Likely an estimate at the start Best in class OR where we wish to be Contains no solutions or causes Does not include financial measures Includes reference to time period measured Includes source of data where appropriate Content In one sentence describe provide context for the problem. In one sentence describe the opportunity. What data flagged this as a good project? What is the goal? Is there a benchmark or entitlement? In one sentence describe the pain. How is this problem impacting the business?

The 3 Elements of Good Problem Statements

Example 1. Alliant Energy installs $8 million in standard distribution transformers annu and currently has approximately $8 million in distribution transformer inventory, representing an inventory turns ratio of 1.0. 2. The Inbound Freight process internally managed. In nearly all cases, the supplier selects the method of shipping and the carrier based on convenie to them, not lowest cost to AE. 1. 2. Industry data shows that turns of at least 2.0 are very achievable.

Industry standards indicate it is acceptable to pay .5-2% of your total cos freight. A sample of invoices from ERP showed that Alliant energy is payin 2.5% of total cost for freight. Improving the inventory turns ratio to 2.0 would reduce inventory to approximately $4 million improving cash flow and asset utilization.

1. 2.

The savings opportunity for better managing our inbound freight expense exceeds $1 million.

Objective Good Objectives:

# 1 2 3 4 Identify the desired action, the baseline, the goal and the target completion date. Content Desired Action Describe what you are trying to impact. Be sure the Black Belt can measure this Identify your baseline and your goal performance Date project will be completed Examples Improve, reduce, increase, etc.

The 4 Elements of Good Objectives

Meter Re-Reads, # of property damage claim average inventory on hand, etc. From XX% to XX% By January 1, 2003

Primary Metrics Good Primary Metrics:

Can be measured/counted Align with your defect Avoid using $ as the unit of measure

Defects Good Defects:

Align with your project objective Can be measured/counted Avoid using $ as the unit of measure Have a clear operational definition

Primary Metrics Good Primary Metrics:

Can be measured/counted Align with your defect Avoid using $ as the unit of measure

Defects Good Defects:

Align with your project objective Can be measured/counted Avoid using $ as the unit of measure Have a clear operational definition

rence Guide

ion of the problem

dard distribution transformers annually ion in distribution transformer rns ratio of 1.0. managed. In nearly all cases, the and the carrier based on convenience

ast 2.0 are very achievable.

able to pay .5-2% of your total cost for showed that Alliant energy is paying

2.0 would reduce inventory to h flow and asset utilization.

aging our inbound freight expenses

date.

es reduce, increase, etc.

-Reads, # of property damage claims, nventory on hand, etc.

% to XX%

ry 1, 2003

ur project objective ured/counted as the unit of measure operational definition

ur project objective ured/counted as the unit of measure operational definition