What Is a SIPOC Diagram and How to Implement It?

SIPOC diagram is a visual representation of business processes in a table form. The acronym stands for Suppliers, Inputs, Process, Outputs, and Customers and it's perceived as a business process map. It is used to define the inputs and outputs of a process from its initiation to its completion. The goal of the SIPOC technique is to determine results, identify inefficiencies, and provoke process improvement efforts by providing a high-level overview of the current processes and challenging people to define new and improved ones.

Applying the SIPOC tool brings everyone on the same page about projects and processes, from new employees to stakeholders. It brings a unified understanding of the process or issue at stake. The transparency it creates facilitates the identification of non-value-adding areas and lays the foundations for problem-solving actions. While helping to bring alignment across the organization, the SIPOC approach is a straightforward but also very simplistic way of mapping a business process. It is best used in addition to other techniques.

Here's how a hiring process operation can be mapped using a SIPOC diagram.

1. Suppliers: Human resources, hiring manager, applicants.

2. Inputs: Job post, interview questions list, interviews.

3. Process: Hiring managers identifies the need for hiring - Human resources post vacancy, performs pre-interview tests, sends a list of approved candidates to hiring manager - Interviews - Application selection - Employee onboarding.

4. Outputs: Published job post, performed screenings, interviews summary.

5. Customers: Human resources, hiring manager, applicants.

What Is the History of SIPOC Diagrams?

The SIPOC diagram origins can be traced back to the late 1980s as a part of the total quality management (TQM) approach and the Six Sigma model to continuous process improvement. The technique is used during the DMAIC improvement cycle's definition phase where project goals, challenges, scope, and time frames are clearly defined. SIPOC also plays a complementary role in lean manufacturing and business process improvement programs.

Why Are SIPOC Diagrams Important?

SIPOC diagrams are an established quality-management technique utilized in Six Sigma project management as well as other process improvement models. The diagram is ideal to identify the causes of process variation. It can be used to measure and control these variations to arrive at a more stable and predictable process.

SIPOC diagrams are excellent for analyzing and improving business processes. Thanks to their easy-to-use nature and application of less specific language, they are easy to understand and can be applied to any business context. They are equally useful for onboarding new team members, filling in newly added members to a project and stakeholders alike.

SIPOC diagrams allow to define the specifications of the process inputs and determine who is expected to supply the said inputs so there are no misunderstandings. It also helps to identify the customers in the process along with their specific requirements.

What Is the Definition of SIPOC?

The SIPOC diagram represents all the inputs and outputs of a process in a table format. The components of the acronym are listed and explained below:

1. Suppliers: the providers of inputs to the process that have a direct impact on the outputs. They can be internal to the organization or third parties. In a SIPOC diagram for upgrading a production line, for example, the suppliers can be a maintenance team, line operators, and contractors. They all influence the output of the process - upgrading to the new production line.

2. Inputs: resources, material, equipment, or data required to complete the process and produce the outputs. These entities are provided by the suppliers. It's important to capture the most significant inputs. In an engineering process, these can include creating electrical plans and drawings, preparing electrical installation and cabling, etc.

3. Process: refers to the steps that make up a process. It connects the inputs with the outputs of the process. It represents a process map including 4-5 high-level steps. When upgrading a production line, such steps could be posting upgrading the equipment, establishing benchmark criteria for the new line, testing.

4. Outputs: the key products or services resulting from the process. Both inputs and outputs can be any type of resource or completed actions. The outputs are broad and neutral in nature and reflect the value required by the customer. The outputs in our engineering process would include a variety of reports: safety report, test operation report, energy savings report, etc.

5. Customer: refers to anyone who benefits from the process outputs. Both suppliers and customers can be internal or external to the organization. The recipients of the outputs in an engineering process would be the maintenance team, partners, end clients, as well as line operators themselves.

What Are the Benefits of SIPOC?

The SIPOC tool can be used to bring on board not only new people unfamiliar with a process but also helps to align the common understanding of a project's goal. It is equally beneficial to employees and stakeholders alike. Some of the key benefits of SIPOC are listed below.

• SIPOC brings transparency and alignment about the process across the organization.
• Provides a high-level project overview for strategic management.
• Can be used for process documentation and templates for processes and projects.
• SIPOC can be used as training material for onboarding.
• Helps to identify properly the suppliers and customers.
• Helps to clarify the inputs and outputs requirements.
• Supports problem-solving initiatives within the process.

What Are the Disadvantages of SIPOC?

The drawbacks of SIPOC diagrams are related to the simplicity they provide. While it increases transparency across the organization, it is often insufficient to solve process-related issues on its own.

• SIPOC diagrams can be insufficient to resolve process issues.
• SIPOC is a simplistic approach to process mapping.
• It works best complemented by other tools.

What Are the Examples Of SIPOC?

Examples of the SIPOC can be seen in the tables below that demonstrate the suppliers, inputs, processes, outputs, and customers.

SIPOC Example 1: Production Line Upgrade

The first SIPOC example demonstrates the suppliers, inputs, processes, outputs, and customers involved in a production line upgrade.

SIPOC Example 2: Car Purchase

The second SIPOC example demonstrates the suppliers, inputs, processes, outputs, and customers involved when purchasing an automobile.

SIPOC Example 3: Restaurant Food Preparation

The third SIPOC example demonstrates the suppliers, inputs, processes, outputs, and customers involved in the preparation of restaurant meals.

Templates For SIPOC Diagram

Templates for SIPOC Diagram demonstrates the necessities, steps, and building blocks of the SIPOC. Below, you can see a diagram for the SIPOC.

SIPOC Diagram Template 1

The SIPOC Diagram template represents a business process displayed on a visual board using different colors to map the different building components.

SIPOC Diagram Template 2

The SIPOC Diagram template represents a business process displayed in an Excel sheet.

SIPOC Diagram Template 3

The SIPOC Diagram template represents a business process displayed in a Word document.

How To Create a SIPOC Diagram?

SIPOC diagrams can be created following five key steps.

1. Map The Process. Break down the process into up to five high-level activities comprising the business process.

2. Identify The Process Outputs. Include up to five key process benefits.

3. Identify The Customers. Determine the recipients of the process outputs - external or internal.

4. Determine The Process Inputs. Map the key inputs necessary for the process completion.

5. Identify The Suppliers. Determine the suppliers of the inputs required by the process.

Once the diagram is complete, it has to be shared with project leaders and stakeholders for its verification before implementation.

How Does SIPOC Help in a Six Sigma Project?

Being one of the most widely applied sets of tools and techniques for process improvement, Six Sigma utilizes the SIPOC diagram during the definition phase of Six Sigma project management. The Six Sigma approach achieves improvement by identifying and removing the root causes of defects and minimizing variability in the process. Тhis is where the two models intersect and complement one another.

SIPOC diagrams are visual representations of business process mapping. They provide a clear and concise overview of the inputs and outputs of a process, defining the suppliers and customers. By visualizing on a diagram the root causes of variation in a business process, the SIPOC tool supports the key objective of Six Sigma - identifying and reducing variation. By mapping a process on a SIPOC diagram, you will gain a better understanding of how each item would impact the process benefits (outputs).

By helping to identify the root causes of process variation, SIPOC diagrams can be beneficial to measure and control variations. Breaking down the sources of variation for each SIPOC category unlocks key insights into process impediments and improvement opportunities. As a result, due to reducing process variations, you will ultimately decrease the outputs' variation and make your process more stable and predictable - one of the key Six Sigma assertions.

Which Industries Can Use SIPOC?

The SIPOC diagram is a comprehensive process improvement technique that captures a process along with its inputs and outputs in a single map available to everyone. As such, the business mapping model can be successfully used by every industry, organization, department, or individual. Some of the most prominent applications of the SIPOC visualization are listed below.

• Manufacturing
• Construction
• Services
• Banking
• Tech
• HR

What Is the Difference between a Process Map and a Value Stream Map?

Business process mapping is a structured method for documenting what a business process is, who is responsible for its completion, what are its inputs and results, what represents a business success, etc. On the other hand, the value stream mapping is a Lean management approach that displays all the important steps in a delivery process, visualizes work items, and facilitates traditional status reporting. While the ultimate goal of the business process map is to help organizations have more effective processes, value stream mapping highlights the value each process step creates. VSM drives process changes while business process mapping strives to make existing processes more efficient.