Project Charter

Project charter is a document that outlines the main objectives and responsibilities of a project, it is like the Carta Magna or Constitution of a project. This document constitutes the official authorization and sets guidelines and targets and it is the document that all must refer to achieve a common goal on time and form.

There is no a strict rule on how to write a project charter document, below is presented a generic format with the most wanted information fields, please use it as a guide and adapt it to to your specific requirements as necessary.

Lean Manufacturing

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Value Stream Mapping

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Deliverables	Current Condition	Target in Six Month
Current customer Satisfaction level	93%	99% Minimum
Product return rate versus sales	7%	1% or less
Customer perception of brand quality versus the competition	Ranked #3 in product quality	To be ranked #1 in a three to six months period due to market inventories

PROJECT CHARTER

Project title: Increase Customer Satisfaction

Original Issue XX-XX-XXXX Rev Issue: ____ ____ ____

Company division or business unit: Cordless telephones

Plant Manager: Richard Brown (Sponsor)

Department Manager: Mark White

Project leader: John Smith (Black belt)

Team members and responsibilities:

Charles Rodriguez, Green Belt (Quality department)

Susan Wilson, Manufacturing/ operations Supervisor

Edward Moore: Production supervisor

Project Scope:

Increase customer satisfaction and product quality in the Cordless Telephones Division as a mean to regain market share, the estimated termination time will be three months and will involve Production, Manufacturing, Quality, Customer Satisfaction, Marketing and Finances key members. The successfully termination of this project will result on a loyal and expanded customer base in our North America Market.

Project Overview or Problem Statement:

It is necessary to increase the customer satisfaction level from the current 93% as it was reflected in our customers survey and complaints feedback from our Customer Satisfaction Department. The improvement on customer satisfaction is essential to recuperate the 10% market lost in the past two quarters and to reduce the 7% current product returns rate. Is also important to note that in accordance with market benchmarking information our closest competitor has a product return rate of 6%.

Project Objectives and Goals:

Identify, solve and set the appropriated measures to improve and sustain quality in all applicable areas toward increasing the customer satisfaction level from the current 93% to the new target of 99%, to improve our product return rate from 7% to 1% or less to be positioned better than our competitors. The expected result will help to improve the quality perception of our company from the perspective of our customers. All these goals have to be accomplished in a three month period with a minimum of financial impact and without significant disruption to the running production process.

PROJECT TARGETS:

Project Constraints:

1- Time constraint: Has to be done in a three months period so results can start being measured following the next Fiscal Quarter

2- Must be accomplished without disruption of the current production and quality levels: This point is important since training of employees and changes to process and layouts could be necessary.

3- Financial constraint: The total investment should be no more than 5% of the total operation budget of the departments

involved.

Project Risks:

Major risk:

No foreseen or expected

Minor Risk:

Temporary disruption of production if a machine or equipment is relocated and damaged during the new layout process, however precautions will be taken to reduce to a minimum such risks.

Financial Impact:

Investments:

Will require max 5% of the operations expense from the manufacturing department budget, ($50,000) that will be allocated as follow, with small adjustments if necessary that will be performed during the project implementation.

Personnel training materials $2,000

Personnel overtime expenses $15,000

New layout : $18,000

New inspection equipment : $15,000

Total: $50,000

Gains:

1- Current sales are ten millions per quarter, increasing the sales by 10 %, will bring one million on additional sales, considering

that in average each million on sales generate 20% profit it can be expected a $200,000 additional profit per quarter.

2- Current products return is 7% on sales or $700,000 total, by reducing this percent to 1%, the loses due to PR’s

will be reduced to $100,000 or less, saving the company $600,000 each quarter.

3- As consequence of the previous two points the customer loyalty and brand recognition will impel the company to the first

place on customers quality ranking.

Summary:

Investment: $50,000

Profit gains during the first Mature Quarter:

$200,000

Expenses savings

$600,000

Total profit + expenses savings = $800,000

Return on investment ROI = 16