SIPOC diagram – what is it?

A SIPOC diagram is a graphical representation of a chain consisting of elements such as suppliers, inputs, process, outputs and customers.

Arranging these elements within a company helps set overall process boundaries. The development of a SIPOC diagram helps to identify information, valuable from the decision-maker’s point of view, about the course of the entire chain without going into detail. What is important – already at the stage of visual preparation of the diagram it is possible to find the problems occurring in the chain and eliminate unnecessary activities.

SIPOC diagram

When do we use a SIPOC diagram?

The diagram is used to increase customer satisfaction and ensure smoother flow operations. The visual representation of the “SIPOC” elements shows the direct relationship between what customers expect and what you (as a process owner) receive from your suppliers. Depending on the effectiveness of connecting these two flow elements to each other – you will be more or less successful.

The graphical representation of the flow allows you to find answers to questions such as:

• Do your customers’ expectations accurately translate into the goods and services you receive?
• Are your suppliers providing you with what you need?
• Do you know your customer? Do you know what his or her expectations are?
• When creating a product, does your team take the shortest path to success?
• Are there no unnecessary sub-processes in the process of delivering value to the customer?

The SIPOC diagram is often used interchangeably with the Value Stream Mapping tool.

Another example of using SIPOC diagrams is to familiarize new employees with a process. A simple, graphical representation of a process is more quickly remembered or an extensively described process.

SIPOC diagrams are also used when planning new business concepts and planning key process improvement changes. By using this tool as part of your business process management, you can make sure that the processes described in SIPOC diagrams are consistent and meet your company’s standards.

This tool is used in Six Sigma methodology – at the “define” stage during the implementation of optimization processes according to the DMAIC methodology and in Lean Management.

How to prepare a SIPOC? Creating a diagram.

In order to prepare the diagram, we need to prepare information about the different elements in the chain.

We can divide the process of creating a SIPOC diagram into 5 stages:

1. Identify your customers
   Get to know your customers and their expectations. It is worth noting that a customer can be anyone for whom the process provides output. Thus, there can be internal customers (for example, other company employees) and external customers. As part of this step, you should also define the degree to which the customer can influence your process.
2. Verify the process outputs
   It is worth noting that starting the analysis “from the customer’s side” is in line with the Lean Management methodology, according to which the value of a process is defined as what the customer is willing to pay us for. Correctly identifying the outputs of the process – that is, the results of our work – will help us prepare a list of specific customer requirements. Knowing our customer’s requirements, we are able to determine whether our products or services meet their expectations or not.
3. Outline the process
   Prepare a broad view of the stages that make up the process you are analyzing. Placing the process flow right in the middle of the diagram will enable you to understand where the process begins and where it ends, and what it entails. It is important to list only the most important steps. There should be no more than 10, the optimal number of steps is 6-8.
4. Verify process inputs
   Process inputs are nothing more than materials provided by our suppliers that are necessary for the process. When performing this step, it’s a good idea to ask for help from everyone involved in the process – that way, we won’t leave out any needed materials.
5. Prepare a list of suppliers
   At this stage, you should prepare a list of all suppliers that have a direct impact on the process. When analyzing the suppliers, check the list of materials that are the input of the process – then you will not leave out any supplier.

Remember that the SIPOC diagram can be changed – it is worthwhile to make improvements to your process and update its visual form.

Example of a SIPOC diagram

Example of Sipoc diagram for a coffee shop – coffee preparation process