A SIPOC diagram is an essential tool for designing or improving business processes. It is a concise way to identify Suppliers, Customers, Inputs, Outputs, and Process steps, all on a single page!
Process Modeling & the SIPOC Diagram
Processes are the lifeblood of an organization. They lay out the flow of work so that people understand what they need to do and how to do it. Process maps also act as the blueprint for automation.
A process is a set of activities that transforms inputs into value-added outputs.
Business Process Modeling, typically performed by a process analyst, is an exercise designed to document all aspects of the process. The analyst captures process steps, roles & responsibilities as well as metrics, controls, and supporting tools.
There are many items that come out of a process mapping exercise. These can include process guides, RACI charts, process workflow diagrams, procedural information, and technical specifications (requirements) for Business Process Automation (BPA).
One of the most powerful, and often overlooked, documents from a process mapping exercise is the SIPOC diagram.
This diagram puts the key aspects of the process on a single page. It's a great starting point for designing the process as well as a powerful tool for process improvement.
Check out our Introduction to Process Mapping to learn more!
What is the meaning of SIPOC?
SIPOC stands for Suppliers, Inputs, Process, Outputs, and Customers. Organizations use this diagram to capture, at a high level, all the critical parts of a process. Here is a definition of each part of the SIPOC diagram.
Suppliers:
Any role, system, or inter-process connection that provides inputs to the process. Here are some examples of suppliers:
- A role is a function played by a person. For example, a client fills out an order form that kicks off the order fulfillment process.
- A system is typically a software product used by the organization. For example, an automated monitoring system can provide an alert to a Service Desk agent kicking off an incident management process.
- Inter-process: In the same way a system can provide information to a process, so can another process. For example, the expense reporting process can be a supplier to the reimbursement process.
Inputs:
An input is a trigger for the process. Inputs are something transformed, consumed, used, or processed. They can sometimes be the output of another process.
The process of manufacturing a product, such as a car or a cell phone, requires many inputs. These can include the various components that need to be assembled or the labor required to assemble them. These inputs come from Suppliers.
Process:
A process is a set of activities that transform inputs into value-added outputs. In the example of manufacturing a car, the inputs are put through a manufacturing process resulting in a fully assembled car. The manufacturing process can include welding the frame, inserting the drive train, rust-proofing, painting, and a final quality check.
Outputs:
An output is a value-added result produced by the process. They can sometimes be the input into another process.
- Examples of outputs: The insurance claim process has the output of a processed claim. Manufacturing processes result in assembled goods. The fulfillment process results in having something shipped to a customer.
Customers:
Similar to a supplier, any role, system, or inter-process connection that receives outputs from the process can be a customer.
- A role is a function played by a person. A client who placed an order ultimately becomes a customer of the process when their product is received.
- One process can feed another. For example, the shipping process is a customer of the order-picking process.
- Different software systems may be involved in the end-2-end ordering process. For example, once the order is placed information may be passed to a payment system. In this example, the payment system is the customer.
Top 5 benefits of a SIPOC diagram.
1. Helps to Define a Process
A SIPOC diagram provides an overall look at a process. This diagram focuses on suppliers, inputs, key activities, outputs, and customers. Create a SIPOC diagram as a starting point when designing a new process or when trying to improve an existing one.
Learn how Business Process Management can help your organization design consistent ways of working to increase performance
Read here
2. Helps to Identify Problems
Another benefit is that it can help to identify problems within a process. Start by mapping the process and identifying suppliers, inputs, outputs, and customers. Use this diagram in problem-solving sessions with stakeholders to help to find any potential issues. For example, delays in the process could be caused by an issue with one of the suppliers.
3. Helps to Improve Communication
A SIPOC diagram can also help to improve communication within an organization. It gets people on the same page by clearly mapping out the process and identifying the various stakeholders. This information helps to ensure that all team members are working towards the same goal. This can be especially helpful in large organizations where there may be many different departments and individuals involved in a process.
4. Helps to Reduce Waste
Another benefit is that it can help to reduce waste within a process. The SIPOC provides an excellent high-level view of the process. This view can make it easier to spot areas where there may be unnecessary steps or duplicate information. The SIPOC is often used in lean six sigma projects to streamline the process and make it more efficient.
5. Can Be Used for Multiple Purposes
Finally, a SIPOC diagram is that it can be used for multiple purposes. In addition to being used for process improvement, it can also be used in a number of areas. These include training new employees, project management, understanding customer requirements, or documenting an existing process.
SIPOC Example
The following is a simple example of the SIPOC diagram. We will be using something we can all relate to, the creation of pizza.
You can watch the following video or continue reading the blog.
The SIPOC chart shows a number of Suppliers including grocery stores, dairy farms, and vegetable farms. Other suppliers to the process could include servers or cooks.
These suppliers provide the Inputs (raw ingredients) for the pizza. Other inputs into the process could have included the labor and operating costs of running the restaurant.
The main activities of creating the pizza are listed in the Process column. The process is not to be confused with detailed procedural steps. We recommend no more than 8 process steps (to keep things simple).
The Output of the process is pizza, either whole or by the slice.
And the Customers are defined by Role, dine-in, take-out, and delivery.
Getting Started
If you are new to creating a SIPOC diagram you can start with a SIPOC template. Many templates are available on the internet or in many of the process modeling tools, such as the Navvia Process Designer. Check out our guide to selecting business process mapping tools.
You can start by bringing together team members with a good understanding of the process you wish to document. These identify the suppliers, inputs, process steps, outputs, and customers of the process.
A potent tool for process improvement.
SIPOC diagrams gained prominence as part of Total Quality Management (TQM) programs back in the '80s. Today, SIPOC diagrams are an essential part of Lean Six Sigma initiatives, lean manufacturing, and general process design and improvement projects. SIPOC is also used with Agile, Lean (Kaizen event), or other Continuous Process Improvement methods.
One example is Value Stream Mapping. The SIPOC diagram is the starting point for decomposing a process and problem-solving issues with the process.
Continuous process improvement is also a key use case for this diagram. One such example is the DMAIC cycle. DMAIC is a continuous improvement approach and stands for Define, Measure, Analyze, Improve, and Control. The SIPOC provides an excellent overview of the process to help drive improvement.
Another example includes project management. The SIPOC diagram can be used to identify the key elements of your project. This helps in keeping an eye on the big picture and improving project execution.
The SIPOC is used to capture the process on a single page before any process improvement work begins.
To learn more about how SIPOC can improve process management check out this article: 5 Benefits of a SIPOC diagram.
The SIPOC diagram is one of the most powerful, yet overlooked, process tools at your disposal. It captures the process on a single page so you can better communicate the value, identify issues or initiate process improvement.
