August 16, 2015

Six Sigma : Define : 6 Update Project Charter ( PERT CPM Gantt Bar WBS)

Work Breakdown Structure Program Evaluation and Review Technique (PERT) Critical Path Method (CPM) Gantt Chart (Bar Chart) Project Documentation Critical Elements of a Charter Definition of project scope Project plan and milestones Project Charter Problem statement case Project Plan elements


Critical Elements of a Charter

•A statement of the problem in clear, concise and measurable terms.

The problem statement should be crafted as descriptive as possible. That is, how long has the problem existed, what measurable item is being affected, what isthe business impact, what is the performance gap, the problem statement should be neutral, toavoid jumping into conclusions.

•Explanation of why the project is being conducted –“the Business Case”

The business case can be defined as a short summary of the strategic reasons for the project. The general rationale for a business case would normally involvequality, cost, or delivery of a product with a financial justification. A common problem for many projects is the lack of a company impact measurement. Therefore, business case should be crafted in clear, numerical terms. Projects which do not show a significant financial impactto the company should be eliminated as soon as possible.

•A statement of the goal and desired results in measurable terms A The goal statement will be created and agreed to by the team and team champion Hopefully, the goals will be achieved within 120 to 160 day period. The ‘rule of thumb’goal calls for a 50% improvement in some initial metric, such as ‘reduce cycle time from 60 days to 30 days”.

•Definition of project scope

The project scope refers to the boundaries of the project. It isan attempt to outline the range of the team’s activities. In the area of product development, the team may decide to limit itself to the launching of a new product at a single manufacturing site. The team should work very hard in its first meeting to clarify the project scope. The team champion, team leader, and all team members will be all involved.

•Project plan and milestones

For any well managed project, a set of stages or mile stones areused to keep the project on track and to help bring a project to completion. It is recommended that the first team project should be at the 120 day length. Only half of the project duration would be allocated to the define and measure stages. Experiences indicated that assigning teams a first project with lengths of more than 160 days will lower their success rate.

•Roles and responsibilities

The composition of the team is of great importance especially for critical projects. Team should be composed of qualified people with sufficient expertise to carry out the team’s charter. The team should not be staffed with people just interested in improvement. To carry out projects that lead to the high impact, highly qualified, highly trained team members will be the best choice.

Project Charter
•Definition: A charter is a written document that defines the team’s mission, scope of operation, objectives, time frame, and consequences

Moen Nolan and Provost (1991) suggested that a team project charter should contain the following key elements
•Business case (financial impact)
•Problem statement
•Project scope (boundaries)
•Goal statement
•Role of team members
•Milestones/deliverables (end product of the project)
•Resource required

Business case
Four basic activities:
•Design of a new product
•Redesign of an existing product
•Design of a new process
•Redesign of an existing process
‘Must have’in business case
‘$ figure of benefit’, for example, ‘This project will reduce product cycle time from 6 weeks to 5 days , add 10,000 units of production, and result in an additional $1,000,000 of revenues’.

Problem statement
A problem statement details the issue that the team wants to improve.
For example, ‘ABC company in 2001 has experienced a 25% drop in sales and 40% drop in net profit’.

Project Scope
The project scope refers to the boundary of the project
For example, ‘ABC company’s Dearborn production facility and the company design department will be involved.

Goal statement

The goal statement will be created and agreed to by the team and team champion, hopefully achieved within 120 to 160 day period.Example: ‘Reduce the scrap from 5% to 2.5% with 5 month period’

Roles of team members

Who is doing what’.


Example:Day 1: Start

Day 2: Start project definition

Day 30: Measure the current performance

Day 60: Analyze data and search for root causes

Day 90: Start improvement plan

Day 120: Conclude the project and make presentation

Resource Required

Qualified people Machine time Equipment Computer time Lab space Office space Etc.

Project Objective and Scope:

What process will the team focus on?•What are the boundaries of the process we are to improve? Where does the process begin? Where does it end?•Which customers will be affected / included•What is outside of scope for the team?•What constraints or timelines must the team work under?

Determine the Stakeholders

Who will need to be involved and at what level for this project to be successful?

Determine Team Members 

Who will need to be on the team and at what % of their time?

Determine any Capital, Test or HR Requirements

What materials, testing, software programming, outside services or equipment will be needed? Are those costs acceptable to management?

Other Support to be Successful


Project Plan elements
Definition of project: A project is a series of activities and tasks with specified objectives, starting and ending dates and resources. Resources consumed by the project include time, money, people and equipment.

Definition of project management:Project management includes project planning and implementation to achieve: The specified goals and objectives
At the desired performance or technology level Within the time and cost constraints While utilizing the allocated resources

The stages of project management are:
Planning: decide what to do
Scheduling: deciding when to do it
Controlling: assuring that desired results are obtained

Key project management elements include:
•Identifying schedule time limits•Allocation of functional responsibilities•Establishing continuous reporting methods•Selecting applicable tradeoff methodologies•Measuring accomplishments against plans•Identifying problems early•Applying corrective action to problems•Knowing when objectives will be met or exceeded•Improving capabilities for future projects

Work Breakdown Structure

Each project task is divided into smaller activities, and then elements, until the level is reached in which each element is under one identifiable, individual or group responsibility. Each activity is assigned a duration, along with interrelationships between activities. If one activity must be completed before another can begin, it is called a predecessor event.

Time constrained projects Fixed deadline, resource constraints can be flexible. Heavy penalty on delays. Most projects have relatively fixed levels of resources

Project Planning Tools
•Project planning tools include developing and analyzing the project timeline, required resources, and estimating of costs Timelines determination: PERT, Gantt Charts and critical path method (CPM)Cost estimation: Work breakdown structures and activity based cost estimation

Program Evaluation and Review Technique (PERT)

The program Evaluation and Review Technique (PERT) requirements are:All project individual tasks must be included in the network Events and activities must be sequenced in the network to allow determination of critical path.Time estimates must be made for each activity in the net work, and stated as three values: optimistic, most likely, and pessimistic times.The critical path and slack times for the project are calculated. The critical path is sequence of tasks which requires the greatest expected time.

Critical Path Method (CPM)
The critical path method (CPM) is very similar to PERT, except PERT is event oriented, while CPM is activity oriented. Unique feature of CPM include:
•The emphasis is on activities
•The time and cost factors for each activity are considered
•Only activities on the critical path are contemplated
•Activities with lowest crash cost (per incremental time savings)are selected first
•As an activity is crashed, it is possible for a new critical path to develop

Gantt Chart (Bar Chart)
Gantt Chart, named after Henry Gantt, display activities or events as a function of time (or cost). Each activity is shown as a horizontal bar with ends positioned at the starting and ending dates for the activity.
Advantages of Gantt charts includes:
•The charts are easy to understand
•Each bar represents a single activity
•It is simple to change the chart
•The chart can be constructed with minimal data
•Program task progress versus date is shown
Disadvantages of Gantt Chart include:
•They do not show interdependencies of activities
•The effects of early or late start of an activity are not shown
•There is no means to indicate the variation in expected time to complete an activity
•The details of an activity are not indicated
•There is little predictive value to this presentation of data.

Advantages of using PERT
•The planning required to identify the task information for the network and the critical path analysis can identify interrelationships between tasks and problem areas
•The probability of achieving the project deadlines can be determined, and by development of alternative plans, the likelihood of meeting thecompletion data is improved changes in the project can be evaluated to determine their effects
•A large amount of project data can be organized and presented ina diagram for use in decision making.
•PERT can be used on unique, non-repetitive projects

Disadvantages of using PERT
•The complexity of PERT increases implementation problems
•More data is required as network input

Project Documentation

Project Review
The project review is a formal and documented critique conductedby a committee of qualified company personnel
A project review considers all of the important factors in the creation of a mature product design. Some of the fundamental review topics include:
•The adequacy of personnel, time, equipment and money
•The project effectiveness as determined by internal and externalinformation
•The effectiveness and reliability of corrective actions
•The true quality level of the delivered product and/or service
Measurement of Project Activity
Planning, monitoring and controlling are main activities in a project
•The project monitoring plan should address the following areas:
•What is being monitored
•The purpose of the monitoring
•Timing or frequency of reporting
•Method of reporting (written report, verbal summaries, forms etc)
•Procedure for indicating the need for assistance
•Criteria for reporting of unusual events or urgent information
•The channel for feedback (to whom and how the information is sent)
•Assignment of feedback loop responsibilities
•Action to be taken when performance differs from requirements

The feedback loop defines the methods for monitoring and adjusting the process if results are different than desired. Planning for feedback is analogous to designing an automatic control system. The success or failure of a project is measured in the following dimensions:
•Were specified goals and objectives achieved?
•Within the time deadlines?
•At or below cost constraints?
•Utilizing the allocated resources
Well executed project plans meet all of the above criteria. As project complexity, project duration, or innovative technology increase, the more likely the project will not meet the desired time target.



Methods for planning, monitoring, and controlling projects ranging from manual techniques (using plain paper, graph paper, grease boards, and colored magnetic markers) to computer software.

Advantage of manual project management method include:
•Ease of use
•Low cost
•Best for monitoring schedules and timing of events
•A hands-on feel for the status of the project
•Easily customized for specific project needs
•Minimal training requirements

Advantage of computer/automated project management methods include:
•Able to model what-if scenarios
•Able to show the impact of alternate options
•Can present information in variety of formats and detail
•Schedules are automatically calculated
•Variances from plan are known in almost real time
•Project status reports are easier to generate
•People at different locations can input data, and share the sameinformation
•Projects can be easily summarized
•Some data collection activities can be automated

Milestones Reporting
Milestones are significant points in the project which are planned to be completed at specific points in time.

Intermediate milestones serve the purpose of refocusing priorities on the longer range objectives, and at the same time providing status of progress. Milestones typically occur at points where they act as a gate for a go/no Go decision to continue the project.

Project Report
The final report is the report card on project performance for completion of objectives, comparison of actual Benefits and costs with budgets, and measures of major activity completion dates versus milestones. The next Step of project is ‘what went right, what went wrong, lessons learnt’analysis.

Document Archiving
The final project stage is document achieving. This include development test data, tractability of materials, key process variables, and reports generated during the project.