SIPOC Diagram: Meaning, Benefits, Examples

SIPOC Diagrams date way back to the 1980s as an integral part of the Total Quality Management Approach. This technique is instilled in the definition phase of the DMAIC improvement cycle. The project goals, challenges, scope, and time frames are well established in this phase. SIPOC model diagrams play a bonus role in lean manufacturing and business process improvement programs.

Six Sigma courses online emphasize SIPOC Diagrams as a predefined quality management technique used in various improvement models, including Six Sigma project management.

What is a SIPOC Diagram?

A SIPOC Diagram is a tabular formatted visual representation of the numerous business processes. SIPOC stands for: Suppliers, Inputs, Processes, Outputs, and lastly, Customers. All of it put together can be called a business process map.

Suppliers	Inputs	Process	Outputs	Customers
Human resources, hiring management, and applicants.	Job post, interview questions list, and interviews.	Hiring managers seek it for hiring, Human resources upload posts for the vacancy, conduct pre-interview tests, shortlist approved candidates, and forwards it to the hiring manager, Interviews - Application selection - Employee onboarding.	Published job posts, performed screenings, and interview summary.	Human resources, hiring manager, and applicants.

SIPOC traces back to the Total Quality Management programs in the late 1980s. It proceeds to be used today in Six Sigma and lean manufacturing, including business process management.

SIPOC Diagrams are meant to define the inputs and outputs of a business process from start to finish. The SIPOC technique's objective is to derive the results, recognize the inefficiencies, and trigger process improvement efforts through a high-level overview of the ongoing processes. Also, it challenges people to be on the lookout for innovative and upgraded processes.

Let's get a clear-cut understanding of the elements of a SIPOC Diagram six sigma. Suppliers are the input-providing agencies that directly influence the outputs. These inputs may cover a variety of materials, data, resources and equipment required. Four to five high-level steps make up the process of the SIPOC model diagram. It connects the main points of the process. Now, outputs are the products formed as a result of the process. Outputs must be broad and neutral while reflecting the value customers need. Finally, customers refer to the demographic audience that can be benefitted from the outputs.

The SIPOC technique is a great tool for ensuring that everyone, from newer employees to stakeholders, is in sync with the current projects and processes. It encourages a unified understanding of processes as well as issues to debug. It maps out the foundations of problem-solving decisions and enables transparency by determining the futile areas. This straightforward method of structuring a business's activities is very simple to apply and synchronizes all of the processes across the firm.

When to Use SIPOC Diagrams?

SIPOC Diagrams come into play when you want to bridge the gap between what your supplier provides and what your customers are asking for. It helps you form a direct relationship between the two elements. Additionally, SIPOC Diagrams make it easier to introduce the process to a new team and can be a lifesaver in articulating new business concepts.   

Benefits of SIPOC Diagram

1. Optimizes Business Processes

Outcomes are a direct product of the business outputs. This makes it all the more important for you to understand the outputs of business processes inside-out. SIPOC diagrams help formulate an accurate and comprehensive representation of the correlation among the processes, the systems, and the outputs.

2. Enhances Efficiency

SIPOC Diagram provides a micro view of the processes in your business. It highlights the details and, thus, aids you in deconstructing the unproductive elements of the process. As a result, a lot of time is saved for you to tend to other equivocally vital aspects while simultaneously improving the overall efficiency of your business.

3. Helps Six Sigma Projects

Because SIPOC model diagrams are visual representations of business processes, they serve a simple and concise standpoint of the outputs and inputs of a process. This helps in laying out at-a-glance definitions of suppliers and customers. The primary misleads of variation in business processes on a visual diagram tackle the key aim of Six Sigma.

4. Enrich Problem-solving

Picking apart the faults in a project is simpler when you have a bird's eye view of the planning process. Every project and process has room for improvement in its initial stages, and for you to not dwell on them for too long, SIPOC Diagrams help immensely. They unlock valuable insights into process impediments. Your team's problem-solving abilities are sharpened, whereas the business process gains stability and predictability for future actions.

5. Boosts Revenue

The transparency and alignment added to your project bring everyone across the bounds of your organization on the same page. Once the requirements of inputs and outputs are crystal-clear, strategic and tactical management can be attained. SIPOC diagram templates are a useful documentation tool for processes and projects. All of this combined contributes to successful projects and, therefore, elevates the business revenue.

How to Create Your First SIPOC Diagram?

1. Initiate the Process

The correct way to go about kickstarting with your first SIPOC diagram is to be 100 percent sure of the process you'd want to analyze. Jot down the title of your project in the mid-column and then state the key steps in brief. This can be done in a listicle format or a flowchart to simplify it.

Note that this step demands you to know the process's precise starting and ending points for this method to work. Another thing to be mindful of is that be to the point without delving into the details. Decision points, as well as feedback loops, need to be eliminated. Nail these two points, and you can proceed with the next step.

2. Identify the Outputs

Here, the focus is on the primal outputs of the process. Consequently, you will be required to enlist the main outputs of the process, preferably using nouns in your briefing. While you're at it, try to keep your tone moderately neutral. Having your notes leaning towards good or bad will not contribute to the SIPOC Diagram prolifically. 

3. Identify Customers

This step is going to have you determine the potential customers of the process. A target audience is a demographic that will be the end-user of this process. It doesn't have to be too literal, though. For instance, a work-in-progress SIPOC model diagram for an internal process would make your coworkers the "customers." 

Take your time and give a thought to who is the benefiting party from this process. Who would it affect if the process is incomplete? Once you have clarity, note the customers' requirements in the Output column. 

4. List the Inputs

Now is the time to list the inputs necessary for the process to function profitably. There may be several that come up at the start. However, don't rush it. Shortlist it to the ones that are truly indispensable to the process. Anywhere between four to six important inputs should do the trick. 

5. Identify the Suppliers

The Supplier's column will need you to determine the suppliers based on the inputs this process seeks. Do not miss out on certain suppliers whose input directly impacts one of the outputs.

Take, for example, you are creating a SIPOC model diagram for the process of "Making mayonnaise." You wouldn't want to mess this far into the project by not including any suppliers that the "Taste" output might influence, would you?

Six Sigma Green Belt Certification will make learning SIPOC diagram fun and interactive.

SIPOC Diagram Example

Supplier	Input	Process	Output	Customer
Happy Milk	Milk	START	Fruit and nut ice cream tub	Outlet customer
Sugar Land	Sugar	Boil Milk	Fruit and nut bar	Supermarket
Flavor Inc.	Flavors and preservatives	Add Sugar	Fruit and nut popsicle	Online Customer
Go Nuts Pvt Ltd.	Nuts and sweets	Add Preservatives		Mobile Customer
Argo Pvt Ltd.	Apple, Banana, and Currants	Mix
		Cooling
		Add Flavors
		Add fruits and nuts
		Packaging
		END

The above-given table is a SIPOC Diagram example illustrating the suppliers, inputs, processes, outputs, and customers that fall under purchasing of popsicles, fruit and nut bars, and fruit and nut ice cream tubs. You can create similar SIPOC Diagrams using the  SIPOC Diagram maker.

The first column is titled suppliers where the respective suppliers of milk, sugar, flavors and nuts are stated in short. Next, we have the inputs. Inputs are basically the ingredients suppliers provide you with for the process to have enough factors to work with. Now comes the process that's going to add elements one by one.

The final products formed are termed as the outputs. In this case, they happen to be fruit and nut ice cream tubs, fruit and nut bars, and fruit and nut popsicles. Customers interested in these commodities would be outlet customers, supermarkets, online customers as well as mobile customers.

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Limitations of SIPOC Diagram

The disadvantages of SIPOC Diagrams are related to how simple they are in all of their aspects. Not demeaning the element of transparency attached to the diagrams, execution has proved time and time again that it can be inadequate in resolving process errors alone. 

The fact that it is insufficiently paired with its too simple an approach and the need for other tools to bring out its best implementation more often do not result in the most positive outcomes.

Conclusion

Like every great tool, SIPOC has its benefits and drawbacks. Although that doesn’t beat the weight of difference, it can create gaps in a business process. 

To get started today, reach out to KnowledgeHut admission committee for any inquiries and enroll yourself in our KnowledgeHut Six Sigma Course Online.