Project management & leadership | September 28, 2023

SIPOC 101: How to Use a SIPOC Diagram to Improve Your Business Delivery 

Gain a competitive edge, thanks SIPOC diagram! Read the article and get to know visual way to map out your Suppliers, Inputs, Processes, Outputs, and Customers to give you a complete view of any workflow.

SIPOC

To gain a competitive edge, organizations need their business processes to be as lean and effective as possible. A SIPOC diagram is a visual way to map out your Suppliers, Inputs, Processes, Outputs, and Customers to give you a complete view of any workflow.

Whether it’s a project management process or a high-level business one, by the end of this article, you’ll be ready to get started with SIPOC. We’ll dive deeper into what it is, the benefits it can bring you, and walk through a 7-step process to help you build your first SIPOC diagram.

What is SIPOC?

SIPOC is a process management tool that helps teams visualize workflows to gain greater understanding and identify improvements. Specifically, SIPOC stands for Suppliers, Inputs, Processes, Outputs, and Customers, with each of these a lens to assess the workflow, break it down, and fully understand the component parts. 

Let’s break each area of SIPOC down into more detail. 

  1. Suppliers – Here, you’ll identify any suppliers contributing to the workflow, naming them and calling out the specific goods/services they provide. 
  2. Inputs – Next, you’ll consider the inputs to the process, such as a customer request, purchasing raw materials, or knowledge from stakeholders. Capturing the set of inputs helps identify the things you need to keep the workflow ticking over. 
  3. Processes – Now, you’re looking for any key process steps that make up the overall workflow. For example, in a border software development process, you’ll have individual sub-processes for code development, testing, and release. 
  4. Outputs – As a fourth step, you’ll identify any outputs of the process. While it’s easy to think of this as physical goods or services, this could also include other factors such as decisions, recommendations, or communications. 
  5. Customers – To finish off, consider the customer at the final step of the SIPOC process. This includes who the customer is, the needs of the customer, and the experience the customer receives as part of the overall workflow. 

The SIPOC model prompts teams to consider all of these crucial elements of any process. As a visual tool, SIPOC helps understand the entire process and identify where improvements could be made. A SIPOC table, or a SIPOC diagram, is the key output of a SIPOC exercise, providing an artifact for stakeholders to visualize process-related issues and take actions for improvement.

Read also: Disciplined Agile Delivery: Framework, Phases and more (nearshore-it.eu)

SIPOC Model vs. Lean Six Sigma Projects vs. COPIS

Because the world of business process management is small, there’s often a lot of confusion between SIPOC, Lean Six Sigma, and COPIS. But the good news is, if you’re new to all three, it’s actually really simple! 

Lean Six Sigma is an overarching methodology for process improvement that includes various stages of analysis and implementation. Referred to as the Six Sigma DMAIC, those stages are Define [D], Measure [M], Analyze [A], Improve [I], and Control [C]. 

Within Lean Six Sigma, the SIPOC template is recognized and used as a crucial tool in the ‘Measure’ stage of DMAIC, helping teams to identify all the different areas of a flow before any work starts to improve business processes. So, the good news is that SIPOC is part of the Six Sigma methodology, not something different.

The comparison between SOPIC and COPIS is even more simple. COPIS, which stands for Customer, Outputs, Process, Inputs, Suppliers, is just SIPOC re-ordered. This nuance is because some companies like to put customer requirements at the start of the process to encourage teams to be more customer-focused in any new process they develop. They complete the process in exactly the same way, just in a different order!

The Benefits of SIPOC – Process Improvement & More

SIPOC is a tried and tested methodology for improving business processes, and there are many reasons it’s so popular. Let’s look at some of the key benefits you can receive by following the SIPOC process. 

  • Helps with problem-solving. SIPOC provides a structured way to evaluate a business problem by breaking it down into component parts. If you’re struggling to solve a process problem, there’s a good chance SIPOC can help.
  • Provides clarity for the team. Lagre organizations are complicated places, but a SIPOC diagram documents everything in a clear and simple process map. This high-level overview provides clarity for the team and helps everyone move forward. 
  • It’s simple to put into practice. You don’t have to be a super-experienced project professional to start using SIPOC, thanks to its simplicity and structure. This means anyone can build a SIPOC map without years of training or spending lots of money. 
  • You’ll start speaking a common language. Because SIPOC is so popular, it’ll help you have better conversations with suppliers and customers, as there’s a good chance they’ve used it, too! 
  • Efficiency = value. Of course, the most significant value of using SIPOC is the end result. Gaining process efficiencies can save you time, resources, and money, meaning it has a direct impact on the bottom line of your business. 

How to Create a SIPOC Diagram – 7-Step Guide

Now that you know all about SIPOC, how it’s used within other business process improvement methodologies, and the benefits a SIPOC diagram provides, it’s time to get on and start building your own. 

To help, let’s go through a 7-step guide, breaking down the elements of the process to help you get started immediately. 

  1. Select your business process. The first step is to choose a business process that needs a SIPOC review. This might be a process that causes problems, is old and clunky, or even just central to your business operations.
  2. Define the process. While SIPOC reads with Suppliers first, in reality, you always start by defining the process steps first. To do this, detail an overview of the business process’ high-level steps, including the actions and who does them.
  3. Identify the outputs. Note down the outputs from the process, keeping things simple with facts and nouns. Remember, outputs aren’t just goods and services but can be information, decisions, or communications, too.
  4. Include your customers. Next, define who your customers are that benefit from the process. These won’t always be traditional money-paying customers, but may be internal stakeholders such as board members of system users.
  5. List the inputs required. Now, list the inputs by considering the resources, knowledge, and decisions needed for the workflow. A SIPOC diagram doesn’t need to be war and peace, so keep this high level.
  6. Identify the suppliers. This section lists the suppliers associated with each of the processes’ inputs. A supplier is anyone externally with direct input on the process, so make sure you include them all.
  7. Get the diagram out there. Congratulations! You’ve completed your first SIPOC diagram and can share it with the team. Use the diagram as a central reference point to bring clarity, identify weaknesses, and implement improvements to your business process moving forward. 

Below, you’ll see a SIPOC example to illustrate what you’ll create. A format like this shows the overview of the process in one place, including your inputs and outputs, customers, suppliers, and process steps. 

SIPOC

It’s Time to Get Improving With SIPOC

When it comes to improving business processes, there aren’t many better frameworks than SIPOC. A SIPOC diagram is a tool used to visualize any process you want, highlighting the suppliers, inputs, process steps, outputs, and customers for any operational flow. 

Whether you’re running a project or just looking to optimize your business, it’s a great tool to help you and the team bring clarity, speak a common language, and solve complex business problems. 

Speaking of complex business problems, if you’re still struggling to fix a burning business issue, why not contact us at Inetum to see if we can help?  Inetum Consulting helps clients across the globe define the strategic target, direction, timing, and speed of their transformation plans, as well as provide operational support to implement solutions into your core business processes.

If you’d like to hear more, check out the Inteum Consulting page on our website. 

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