Project Chartering

• Define• Kaizen Facilitation

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Objectives

• Identify and document project opportunities:• Formulate Problem Statement• Learn to develop “S.M.A.R.T.” Objectives• Objectively identify project Benefits (financial and non-financial)• Determine Team (Full-time and Support)

• Be aware of chartering pitfalls

Chartering the Project• Using a simplified form of the Charter that your

project is based on:• Describe ideas in terms of:

• Current Situation - What is the problem/ opportunity?• Objective - How do we measure success?• Benefits - What value does it provide?• Team Members - Who should be involved?

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Project Idea Form

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Objective:

Benefits:

Team Members:

Reduce/optimize/increase __________________________________________________________ (project y)from _________________________________________________________________________(current level)to ____________________________________________________________________________ (target level)for __________________________________________________________________________ (specific area) while reducing/increasing/holding constant______________________________________( constraining Y’s)

Current Situation:

Problem Statement

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Opportunity / Problem Statement

What is the current situation?

• In a few brief sentences explain:• What the opportunity is• How long it’s been occurring• Any specifics that help narrow the scope

• Specific service• Specific shift• etc…

Project Idea Form

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Objective:

Benefits:

Team Members:

Reduce/optimize/increase __________________________________________________________ (project y)from _________________________________________________________________________(current level)to ____________________________________________________________________________ (target level)for __________________________________________________________________________ (specific area) while reducing/increasing/holding constant______________________________________( constraining Y’s)

Current Situation:

Problem Statement

‘S.M.A.R.T.’

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Objective Statement

Objective – How do we measure success?

• Gain insight into our current processes• How good is it (Baseline)?• How good could it be if perfect (Entitlement)?• What is limiting it from getting better?• How can it be improved

(Closing the Gap)?• How much of the gap do

we want to close during this project (Goal)?

Reduce/optimize/increase: (project Y) from (current value) to (goal level) for (specific area) while holding constant (constraints)

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Project Metrics

• What are the Right Metrics (Key Process Indicators)?

Leverage SMART principles when identifying statements

S = SpecificM = MeasurableA = ActionableR = RealisticT = Time-bound

Reduce/optimize/increase: (project Y) from (current value) to (goal level) for (specific area) while holding constant (constraints)

Objective Statement - Pitfalls

• Boiling the Ocean• Example: Reduce labor hours by 15%

• Micro-Focused• Example: Reduce ink used by 2% at the two scaled in-gate pedestals for

trouble tickets

• Solution in Mind• Example: Reduce days to bill a vessel by implementing an automated system

• Too Many Metrics• Example: Increase net moves per hour, reduce labor cost, and improve crane

cycle time in vessel operations

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Objective Statement - Examples

• Would you accept these objective statements?• Reduce maintenance response time from 10 hrs to 1 hr• Increase market share & reduce costs through increased customer satisfaction

and improved efficiencies• Fix the AFE process• Decrease overtime hours from 100 hours to 50 hours• Revamp the approved vendor list by placing controls and procedures for

introduction of new vendors, and assurances of supplier qualifications• Create a parts inventory system for the power shop to save 20% with auto-

reordering min’s and max’s

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Project Idea Form

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Objective:

Benefits:

Team Members:

Reduce/optimize/increase __________________________________________________________ (project y)from _________________________________________________________________________(current level)to ____________________________________________________________________________ (target level)for __________________________________________________________________________ (specific area) while reducing/increasing/holding constant______________________________________( constraining Y’s)

Current Situation:

Problem Statement

‘S.M.A.R.T.’

What Value Does It Provide?

Document Benefits / Financial Assessment• This needs to be objectively defined, mathematical description (if

possible) of how to calculate the business impact ($$$$)• This must be accepted and supported by the Controller / CFO• If this is not defined well in the beginning of the project, you will

struggling at the end to determine the financial impact

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Two Types of Savings

$ Spent

“Hard” Savings: Savings that can be measured by a change in the bottom-line (EBITDA)

“Soft” Savings (Cost Avoidance): Savings that reduce or eliminate future spending of money without a change to the bottom-line

$ Spent Costs that were

avoided

Project Idea Form

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Objective:

Benefits:

Team Members:

Reduce/optimize/increase __________________________________________________________ (project y)from _________________________________________________________________________(current level)to ____________________________________________________________________________ (target level)for __________________________________________________________________________ (specific area) while reducing/increasing/holding constant______________________________________( constraining Y’s)

Current Situation:

Problem Statement

‘S.M.A.R.T.’

What Value Does It Provide?

Who Should Be Involved?

Team Members

• Carefully consider the Makeup of the Team and Who should be involved in this improvement effort

• Core team members are those who will stick with the project from start to finish [full-time]• An ideal team size is 3-5 people• Identify experts or other specialized people you’ll need for the project as

extended team members (S.M.E.)• Call on them for assistance as needed

• Do not forget the Process Owner and any other Key Stakeholders!

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Project Idea Form

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Objective:

Benefits:

Team Members:

Reduce/optimize/increase __________________________________________________________ (project y)from _________________________________________________________________________(current level)to ____________________________________________________________________________ (target level)for __________________________________________________________________________ (specific area) while reducing/increasing/holding constant______________________________________( constraining Y’s)

Current Situation:

Problem Statement

‘S.M.A.R.T.’

What Value Does It Provide?

Who Should Be Involved?

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Project Review Questions

• Does charter state what the project is trying to accomplish, in measurable terms?

• Is the project worth doing?

• What’s probability of success? What happens if the project fails?

• Does it fit within the business initiatives?

• Is this a customer-oriented project?

• Is it properly scoped? (Boiling the ocean or right sized?)

• What are the specific goals of the project?

• Who owns the process?

• Can we get benchmark information? If so, where?

• What resources are available in the team?

• What is the actual process we are working to improve?

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Review

• Complete project definition is critical to success• Clearly document the problem and project objectives• Objectively measure project benefits and results• Ensure the right people are on the team• Review and understand chartering pitfalls and how they can affect

the success of your project

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Notes

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Notes