SIPOC diagram: what is it and how to use it to define the purpose of a project

The SIPOC diagram is one of the most widely used tools when working in the area of process improvement.

This diagram is, in fact, a simple tool that provides a top-level overview of a process or product using a visual form that can help the team in several ways.

Whether you are trying to better comprehend an ongoing process in its state or whether you are trying to define a new product or process, the implementation of a SIPOC diagram is a simple and effective solution, for a key aspect.

The real value of a SIPOC diagram lies in the ratio between time and return information.

The completion of the diagram takes a very short time – from an average of 30 minutes to an hour – and, once completed, it provides an enormous amount of information. But above all, it indicates the scope of the project or the process you are working on.

By the way… SIPOC stands for:

• Supplier
• Inputs
• Process
• Outputs
• Customers

The key elements of a SIPOC diagram

It is vital to understand that all the company’s activities constitute a process. A process is defined by taking one or more inputs from the suppliers and creating outputs, regardless of whether it is a service or a product.

The graphic visualization of a SIPOC diagram simplifies immensely the understanding of these business processes, identifying the key components, namely suppliers, inputs, processes, outputs and customers.

Specifically:

• The supplier is whoever provides an input into the process.
• Inputs are the resources needed to execute the process.
• The process indicates the actual actions needed to transform the inputs into the desired outputs.
• Output is the actual product or service that the customer receives..
• The customer is whoever receives the output of the process.

When should the SIPOC diagram be used?

Now let’s see when it is advisable to use the SIPOC diagram.

This tool is useful to focalize a discussion and help team members agree on a common language  and the understanding of a process for continuous improvement.

This diagram should be used when the process is being managed or an improvement activity is in progress as it is important to obtain first of all a high level understanding of the scope of the process.

The SIPOC diagram is particularly useful when the following are unclear:

• Who provides the input to the process?
• What specifications are set on the inputs?
• Who are the actual customers of the trial?
• What are the requirements of the customers?

How to generate an effective SIPOC diagram

To generate an effective SIPOC diagram, a brainstorming session is required.

During a brainstorming session, participants can be asked to fill in the SIPOC diagram, starting with the central column, the process one.

The process column works in a simple way: ideally, it does not list more than five stages and each of them consists of an action and a subject.

Once the group agrees on how the process is carried out, it passes to the results and customers list of the process.

Then the group works “backwards” from the center of the diagram to identify inputs and suppliers.

Since SIPOC diagrams are often approached in this way, they are sometimes referred to as POCIS diagrams, in the order in which the various points are analyzed.

But why does one work on the diagram in this way?

The SIPOC diagram is an advanced overview of the existing process and in a stationary manner.

The POCIS diagram, on the other hand, is an advanced level overview of an optimized process.

It is often used in projects to visualize, and possibly rationalize, a business process from the customer’s perspective.

This approach is usually limited to the scope of a single project and, typically, also to a single process.

The stages for creating the SIPOC diagram

1. The first stage is to establish the name or title of the process. The name or title chosen must be descriptive and context-specific so that it is immediately clear what the process is about.
2. The second stage is to define the starting point and the end point of the process to be improved. The starting point (trigger) could be the arrival of an input from a supplier, while the end point represents the moment when the customer receives the output. Establishing these extremes precisely ensures a clear view of the workflow.
3. The third stage is to establish the higher-level stages of the process. It is advisable to keep the list within the four to eight main steps.
4. The fourth stage is to list the key outputs of the process. Here we identify the end results that the process produces. Usually, this list includes up to three or four main outputs, although the process may generate more of them.
5. The fifth stage is to define who receives these results or outputs, i.e. the customers. These customers can be internal or external to the organization. At this stage, one should also assess what specific requirements customers have and how the process can respond to them.
6. The sixth stage is to list the inputs to be processed. Inputs are the resources needed to start the process. A detailed list of inputs helps to identify what needs to be provided to achieve the desired result. It is important to keep track not only of tangible inputs, such as raw materials, but also of intangible inputs, such as information or permits.
7. In the seventh stage it is defined who provides the inputs to the process.

To further clarify the use of the SIPOC  diagram, let’s consider a simple example, outside the normal business processes and with an easy approach: the creation of a smoothie ?

The practical creation of a SIPOC Diagram

To begin with, you create a table with five columns corresponding to the five words that make up the SIPOC acronym, as shown in the previous table.

First, we have the supplier who has the duty to create a smoothie for a customer. To do this, one must have a smoothie maker, a shop owner where that person works, a kitchen manager and someone in charge of the orders.

This leads to inputs, i.e. first the request or the order of the smoothie. After having received the order, there is the recipe needed to prepare it, the receipt to legally certify the sale, the counter to interact with the customer and, of course, every ingredient needed to create the smoothie.

Now we get to the part dedicated to the process: the process begins with the reception and preparation of the order and the ingredients, which must be cleaned, cut and sorted. Then the ingredients are mixed as required by the recipe.

The output of this process is the completed purchase and – hopefully – a delicious smoothie and a happy customer.

This finally brings us to the customer who walked into the store with a need: in this case, hunger. However, customers are also the milkshaker and even the shop owner, who becomes a customer when he buys the ingredients.

To manage such a project, which requires the coordination of several phases and actors, the use of a project management tool like Twproject can be extremely useful.

Twproject allows each step of the process to be organised and monitored in detail, keeping track of the suppliers, inputs and resources involved, right up to the final output, ensuring that everything runs smoothly.

As you can see in the example, all relevant elements of the SIPOC diagram – suppliers, inputs, processes, outputs and customers – have been considered at a very high level.

This is the ultimate purpose of a SIPOC diagram that can be applied in any industry and to any process, making it a real strategic guide.