- by Christian Loyer, Strategic Innovation Lead at i-nexus (MBA, MBB)
What is the SIPOC diagram?
The SIPOC diagram is a visual tool for documenting a business process from the very beginning to its very end. It is pronounced [sigh-pock] and is sometimes referred to as a high level process mapping tool because it breaks down a business process into easy to understand steps. SIPOC is an acronym that stands for Suppliers, Inputs, Process, Outputs and Customer. The advantage of creating a SIPOC is that it gives an overview of all elements surrounding a process in a one page document.
No one really knows when and who first presented SIPOC. If you search the web, there is not much on the origins of this tool. However, it is believed that the SIPOC concept originated in the first discussions about in the late 1960s. It is important to mention that the SIPOC tool is a great team working tool because to build one you need inputs from different functions of your business.
Why should you use the SIPOC tool? Because it helps identify and understand all elements involved in a business process or system. In a complex, multi-process, multi-time zone and cross functional business, SIPOC can help understand how everything links together. It’s not often that team members know a process from start to finish: a SIPOC diagram can provide clarity in that respect.
Building a SIPOC diagram can also help answer the following question:
1. What is the scope of the process: where it starts and ends?
2. Who are the stakeholders involved in this process? (customer and suppliers)
3. What can we measure? (inputs and outputs)
4. What does the customer get?
Most importantly, SIPOC builds a common understanding of the process which is the foundation for continuous improvement. When should you use a SIPOC? In Six Sigma SIPOC is typically built at the “Define” phase of the DMAIC improvement cycle. You should use this tool when you want to start a process management or improvement activity because it is vital to get a clear overview of the scope of your business process first.
How to create SIPOC
You might be tempted to follow the S> I> P> O> C order to create your SIPOC diagram. But when you actually start creating a SIPOC it can be difficult to follow this order because it is sometime can be complicated to identify suppliers when you don’t know what your inputs are. At the same time it’s not an easy job to identify the inputs if you don’t know what the process steps are.
Instead, you can follow one of the following sequences:
COPIS. This is way you put the customer at the beginning of the identification process and work other way around (as opposed to SIPOC).
PISOC. This is my preferred way of using this tool. I find it easier to use PISOC in large teams because in most cases the process to improve is already understood and starting with the process step is easier in this case, and because of that the team engages straight away.
Let’s have a look at the whiteboard video, where we’ll be building a SIPOC together using an example everyone can related to – making a cheesecake process.
1. Don’t try to create SIPOC alone as you are most likely to miss key information – engage as many people with domain knowledge as possible;
2. Keep it simple and concise, lay out all steps on one sheet of paper, this should be a high level overview;
3. Use technology to create a visual diagram to convey your process in an easy to grasp manner;
4. Connect your SIPOC elements using codes. For example, “SIP1.4” which means Supplier of Input 1.4. It is tagged “1.4” because it is the 4th input going into process step number
- Here is an illustrative example:
5. List obvious outputs as well as the “hidden” ones. The hidden outputs referred to the ones that might require additional work or/and can be costly. For example it can be a production waste or, in our example of making a cheesecake, this can be washing kitchen equipment;
6. When you complete your SIPOC make sure you explain the difference between controlling and monitoring to your team. In business language, this is often referred to as leading (control) and lagging (monitor) indicators. Measuring inputs and ensuring they are at the right level before being put in a process is called control: it generates much more control and ensures a much better output if controlled, after all: garbage in, garbage out! Measuring an output is after the event and as such is what is defined as monitoring. It is still important to measure it because this is what the customers gets as a result of your process but doesn’t help you much in improving your process.