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D
Tool: Project CharterPurpose: Formalizes purpose, goal, and scope of the project for tracking and accountability.
It builds on the information you brainstormed for the A3 Problem Statement, Current Situation and Target Goals.
The Lean Office uses it to submit projects to the Board of Trustees.
Project Charter
Project Name
Strategy Linkage Nature of Benefit
College/Division Supports vision to become a top 20 public university. Cost Savings
Department Provide every student opportunities for engagement and leadership. Re-allocation of Resources
Champion/Sponsor Recruit, retain and reward faculty and staff quality, performance and productivity. Risk Avoidance
Process Owner Build competitive technology and information infrastructure. Soft Savings
Mentor Maintain an environment that is healthy, safe and attractive. Revenue Generating
Team Leader Increase the reputation of the University: state, national, and international.
Business Issue/ Opportunity
Project Metrics
Metric Baseline Target Target Date
Project Goals & Objectives
Resources
Department Employees Involved Resource Demand
Scope
Project Team
Lean ProgressStatus
DeliverablesDMAIC phase Date Started/ Completed Red, Yellow, Green.
Stakeholders
Key Subject Matter Experts
Project Notes/ Comments
Project Charter DProject Charter Form
DProject Charter
Filling in the Charter
Filling in the charter
Use the format: Department: Descriptive Title
• Provide a Project Name for reference
Project NameProcurement: Leverage Industry
Norm Payment Terms
College/Division Finance
• Name the College/Division that is responsible for this project.
DProject Charter
Filling in the Charter
Filling in the charter
• List the Department responsible.
• A project Champion/Sponsor is most likely the head of your division. This is usually the person who gives approval for the project to go forward.
Department Procurement Department
Champion/Sponsor Procurement- Mike Nebesky
Process Owner Mike Nebesky
• The Process Owner is the individual who is ultimately responsible for the process being improved.
DProject Charter
Filling in the Charter
Filling in the charter
• The Lean Office will designate the Team Leader.
• Identify the assigned project Mentor and the contact information.
MentorLisa Knox- G06 Sikes; (864) 123-
4567
Team Leader Lisa Knox- REPI
What do I want to fix?
What is the problem’s
background?
DProject Charter
Filling in the Charter
Business Issue
• Draw on your initial A3 answers to explain the problem.
Business Issue /
Opportunity
• Be sure to include briefly:
• Who is being impacted? (This is your customer.)
• What is the issue that is impacting the customer?
• Where and when do the customers encounter the problem with the process?
• What is the impact to the customer when the problem occurs?
DProject Charter
Filling in the Charter
Business Issue
What do I want to fix?
What is the problem’s
background?
DProject Charter
Filling in the Charter
Business Issue
• Now we can begin to define the situation. Drawing again on the A3…
Business Issue /
Opportunity
DProject Charter
Filling in the Charter
Business Issue, example
• In this example, then:
• Who: Clemson University
• What: Paying vendors upon approval
• Where/When: Delays past discount windows
• Impact: Foregone savings
Business Issue /
Opportunity
Clemson University currently pays vendors upon approval. CU does not leverage early payment
discounts. Industry standard discounts are generally 2% for payment in 10 days and 1% for
payment in 30 days.
How far would I like to get?
DProject Charter
Filling in the Charter
When would I like to get there?
Project Goals/Objectives
Project Goals & Objectives
Tool: Benchmarking
Purpose: provide realistic goals and direction; monitor performance; improve processes to match the best in Higher Education.
Benchmarking is the technique of comparing practices and processes to the best in the industry.
Remember: Some processes should be compared to norms outside of Higher Education!
DBenchmarking
Establishing benchmarks
• Call similar departments at other universities or businesses.
• Consult other departments within Clemson University.
• Contact individuals who have experience with or ties to other organizations.
DBenchmarking
Benchmarking
Benchmarking
DProject Charter
Filling in the Charter
As appropriate, include,
• What are my measures of success that are aligned to the project objective? OR
• What are the goals for primary and secondary metrics? OR
• What change in performance level will be considered a success? OR
• How much does the primary metric need to change for your project to be considered a success?
Be sure to include,
• How long will it take you to complete this project?
Goal/Objective considerations
• Goal: Save $1MM annually
• Deadline: 7/1/2011
DProject Charter
Filling in the Charter
Goal/Objective example
Project Goals & Objectives
Develop and implement vendor payment terms that yield $1M
annually by 7/1/2011.
What do I
want to fix?
DProject Charter
Filling in the Charter
How does this
process run?
What areas can I target?
Scope questions
Scope
DProject Charter
Filling in the Charter
Be sure to consider,
• What authority do we have?
• What processes are we addressing?
• What is not within scope?
• What are the starting and ending points of the process?
• What components of the business are/are not included?
• What, if anything, is outside of the project boundaries?
• What constraints must the team work under?
Scope considerations
DProject Charter
Filling in the Charter
BEWARE Scope Creep
• Not your job!Upstream Process
• Stick with beginning /end points.
PROCESS • Not your job!Downstream Process
Create boundaries and maintain them!
Scope Creep
• current payment process• current vendor base• vendors accepting industry
standards
DProject Charter
Filling in the Charter
Scope example
Note the limitations:
Scope
The scope of this project is limited to the current payment
process and vendor base. Focus is on the vendors that have already agreed to accept
industry standard payment terms.
DProject Charter
Filling in the Charter
• List your Project Team.
Filling in the Charter
Project TeamLisa Knox, Taylor Vick, Mike
Nebesky, Angie Wiggins
• List Stakeholders -- individual consumers, employees, etc. who could gain or lose from this project. Be specific!
StakeholdersEmployees involved in the
current AP process, Vendors
DProject Charter
Filling in the Charter
Stakeholders and Experts
• Identify Subject Matter Experts, people with technical skills or experience that could help complete this project.
Key Subject Matter Experts Mike Nebesky - Procurement
• Add any additional (or quarterly updated) Comments you may have about the project, stakeholders, team, etc.
Project Notes/ Comments
Use this section to update each quarter savings to date, revenue,
etc.
Strategy Linkage
Supports vision to become a top 20 public university.
Provide every student opportunities for engagement and leadership.
Recruit, retain and reward faculty and staff quality, performance and productivity.
Build competitive technology and information infrastructure.
Maintain an environment that is healthy, safe and attractive.
Increase the reputation of the University: state, national, and international.
• Place an “X” in each box in which you believe the project will align with our current University Strategy.
DProject Charter
Filling in the Charter
Strategy Linkage
Nature of Benefit
Cost Savings
Re-allocation of Resources
Risk Avoidance
Soft Savings
Revenue Generating
• Place an “X” in each box that you believe will be a benefit from completing this project.
DProject Charter
Filling in the Charter
Nature of Benefit
Various Financial Benefits
Project Charter
Filling in the Charter
Some benefits like new revenue, higher profitability, or faster growth result in tangible dollar amounts and are easy to measure.Others, like cost avoidance, reduced labor, or reduced process time are harder to measure but can be calculated.Customer satisfaction, employee morale, risk avoidance and image are hardest to quantify.
Hard dollar
s
Calculated dollars
Intangible
D
Kinds of financial benefits
“Nature of Benefit,” explained
DProject Charter
Filling in the Charter
•Direct expense reduction
•Yield improved bottom line
Cost Savings
•Reduction of non-value-added work
•Typically employee time
Resource Re-
allocation
•Calculated value of removing the threat of financial culpability or penalty
Risk Avoidance
Nature of Benefit, explained
“Nature of Benefit,” explained
DProject Charter
Filling in the Charter •Financial
benefits that are difficult to quantify but still mission-critical
•For example: satisfaction, image, ranking
Soft Savings
•Development of new income streams or expansion of existing ones
•Recorded in income statements
Revenue Generatin
g
Nature of Benefit, explained
• Establish metrics, baseline, targets and target dates.
Where do we stand?
What are some ways to measure
this?
DProject Charter
Filling in the Charter
How far would I like to go?
When would I
like to get there?
Project Metrics
Metric Baseline TargetTarget Date
Project metrics
What is a metric?• A measured variable that can be
tracked and used to detect errors, inefficiency, or improvement. It can be a process metric or and organizational metric.
Process metrics apply to specific processes or programs like time, cost, or quality.
Organizational metrics address organization-wide issues like employee satisfaction and turnover.
DProject Charter
Understanding
Metrics
Choose one or more to describe accurately your process’ efficiency.Defining metrics
Kinds of Metrics• Time Metrics
– Value-added time
– Non-value-added time
– Processing time
– Cycle time• Cost Metrics
– Cost savings– Opportunity
cost– Decreased
waste
• Quality Metrics– Customer
satisfaction– Percent
complete and accurate
• Output Metrics– Backlog– Work in
process
DProject Charter
Understanding
Metrics
Kinds of metrics
DProject Charter
Understanding
Metrics
You must have a baseline to
measure improvement.
The Lean Office will help establish your baseline metrics.
Baseline
• Enter your metrics and goals.
DProject Charter
Filling in the Charter
Project Metrics
Metric Baseline TargetTarget Date
$ Saved 0 $400K 5/15/2011 Vendors discounting Current All 7/1/2012
Project metrics, example
Be sure to document your inputs, assumptions and reasoning in setting your baseline, target and timeline in the electronic version of your project charter.
We must be able to replicate your baseline and savings!
• Now that you have your metrics, targets and deadlines established...
DProject Charter
Filling in the Charter
What offices will be
involved?
Which people in those offices
do I need?
How much of their time?
Considering resources
DProject Charter
Filling in the Charter
Resources
Department Employees InvolvedTime
CommitmentProcurement Mike Nebesky 50%
REPI Lisa Knox 5%Procurement Angie Wiggins 30%
Admin Support many as neededVendors many as needed
• Under Department, list the offices involved.
• Under Employees Involved, list the specific individuals.
• Estimate how much time (per day/week/month) will be necessary for successful project completion. This is the Time Commitment.Resources, example
DProject Charter
Filling in the Charter The Lean Office will
immediately enroll your team members in Purple Belt training.
Note that this is where you create your team.
Creating the team
• Now, from a high level, apply DMAIC to the project to define the activities and plan to complete them.
DProject Charter
Filling in the Charter
Deliverables
Define the issues and metrics involved in the procurement process
Measure the current cost of not leveraging payment terms.
Conduct analysis of the procurement process.
Improve the process by publishing revenue and receivables plan.
Control the process by implementing performance measures.Deliverables
Next make a thorough list of everything necessary to achieve each of those high level goals. These are your Deliverables. This list will include steps like:– make a plan– define what the customer wants– identify those involved– establish a process for
communication– define the ideal system or norm– understand the current process– determine what data to collect and
how– analyze the current process for
improvement opportunities– evaluate the options for the most
benefit– prepare the ground for selected
changes– prepare the solution– train in the new format– implement changes and monitor
DProject Charter
Filling in the Charter
Deliverables plan
– make a plan
– define what the customer wants
– identify those involved
– establish a process for communication
– define the ideal system or norm
– understand the current process
– determine what data to collect and how
– analyze the current process for improvement opportunities
– evaluate the options for the most benefit
– prepare the ground for selected changes
– prepare the solution
– train in the new format
– implement changes and monitor
DProject Charter
Filling in the Charter
Define
Measure
Analyze
Implement
ControlDeliverables and DMAIC
Step
Tool
Phase Define
Project Charter
Make a plan
Voice of Customer
Define what
customer wants
Stakeholder Analysis
ID those involved
Benchmark
Establish ideal
DDefine
Deliverables and DMAIC
Define phase
Step
Tool
Phase
Measure
Current State Map
Draft the current process
Metrics
ID data to collect and
how
DDefine
Deliverables and DMAIC
Measure phase
Step
Tool
Phase Analyze
5 Whys
Find main causes for problems
Fishbone
Find all contributo
rs to problems
Pareto Chart
ID primary contributo
r
DDefine
Deliverables and DMAIC
Analyze phase
Step
Tool
Phase
Improve
Implementation Plan
Define how the solution will happen
Future State Map
Draft the end-goal for the
process
DDefine
Deliverables and DMAIC
Improve phase
DDefine
Ongoing Deliverables
Leadership
Change Management
Plan
Help stakeholders accept and
embrace change
Communication Plan
Define what stakeholders need to know
Set up ways to inform and
engage stakeholders
Project Charter Revise and update quarterly
Good planning is
critical!
DProject Charter
Filling in the Charter
You need a thorough list to make a reasonable timeline. You need a reasonable timeline to achieve your target date.
Timeline formulation
• Fill in the Deliverables, Phase and relevant Date under Status.
DProject Charter
Filling in the Charter
Lean ProgressStatus
DeliberablesDMAIC phase
Date Started/
Completed
Red, Yellow, Green
Define 3/7/2011 Complete Identify current university deliverablesMeasure 3/7/2011 Complete Develop a detailed data collection toolMeasure 3/7/2011 Complete Create a high level SIPOC diagramMeasure 3/7/2011 Complete Collect revenue and receivables dataMeasure 3/7/2011 Complete Collect internal customer dataMeasure 3/7/2011 Complete Create a value stream map
Analyze 3/7/2011 CompleteConduct value-added/non-value-added
analysis
Analyze 3/7/2011 CompleteCreate prioritization and cost benefit
matrix
Implement 3/7/2011 CompleteDevelop comprehensive communication strategy
Implement 3/7/2011 CompletePublish revenue and receivables
strategic planImplement 3/7/2011 Complete Develop change management plan
Implement 3/7/2011 CompleteRFP written for procurement website
development upgradeImplement 2/12/2011 Started Website completeImplement 2/24/2011 Started Develop training planImplement Plot future stateImplement Implement performance measures
Control Implementation completeLean Progress