A Challenge is used in SWARM to identify and scope a specific area of your business you need to improve. It is described in a Challenge Definition and can be solved using a Challenge Solution.
Curious what the difference is between a Challenge and a problem? Check out this article.
Example #1
We wish to improve the number of pallets per truck in the western district to reduce our overall transportation costs.
Example #2
If we could optimize the purchase price, location, and quality of product we buy, and balance this to the demand by location more effectively, we could reduce both over / underage on stored product and total purchase / transportation costs.