SIPOC

Using SIPOC to improve business processes 

Reading time: about 6 min

Topics:

  • Process improvement

Businesses always look for ways to work more efficiently and improve product quality. To succeed, you need to understand and monitor current processes thoroughly.

Using a visual and structured approach, SIPOC helps you analyze current processes and identify opportunities for improvement. For example, SIPOC can help you to understand where consistent bottlenecks, unnecessary steps, or redundancies occur so you can make changes that will keep everything on track.  

In this post, we’ll discuss SIPOC diagrams, their advantages and challenges, and how to make one.

What is SIPOC?

SIPOC is a method used to map a business process and its key elements: Suppliers, inputs, process, outputs, and customers. SIPOC provides a high-level overview that makes it easier to identify problems, implement improvements, increase efficiency, and communicate status details with stakeholders. 

Here is a brief explanation of the key SIPOC elements:

  • Suppliers: These are the internal or external sources, like individuals, companies, and business units, responsible for providing the inputs of a process. 
  • Inputs: These are the materials, information, or resources that the suppliers provide.
  • Process: The process includes the steps or activities that turn inputs into expected outputs.
  • Outputs: These include the results of a completed process, such as products, services, reports, etc.
  • Customers: Customers can be any party using or purchasing the outputs, including individuals, internal departments, or external companies.

What are the benefits of using SIPOC?

SIPOC is a valuable tool to improve processes and operational efficiency for the following reasons:

  • Clarity and understanding: A SIPOC diagram gives you a clear overview of a process by breaking it into its essential components so it’s easier to understand how its elements interact.
  • Better communication: Because a SIPOC matrix is a visual representation of a process, it’s an effective communication tool for everybody involved. The clarity the visual representation of the process provides helps minimize misunderstanding.
  • Define boundaries: SIPOC identifies the elements of a process so you can determine where it begins and ends. Defining process boundaries is especially helpful when one process interacts with others.
  • Problem identification and process improvement: A SIPOC diagram can help you find a problem when the process doesn’t deliver the expected results. Analyzing the key elements of the process allows you to pinpoint the root cause of a problem so you can implement a practical improvement.
  • Risk assessment: Identifying potential problem areas helps you proactively address issues and minimize the risks that could disrupt the workflow and impact the quality of your outputs.
  • Process standardization: Defining the critical components within a process helps you standardize it to maintain workflow consistency and output quality.
  • Customer-centric focus: SIPOC focuses on your customers and their needs, boosting satisfaction.

What are the challenges of using SIPOC?

SIPOC diagrams are a powerful process improvement tool, but they do present some challenges.

  • Diagramming complex processes: If you are working with extensive processes, creating a SIPOC tool can be time-consuming and confusing. Try to break complex processes into smaller pieces to keep the diagram concise and clear.
  • Maintaining SIPOC diagram accuracy: A SIPOC matrix is accurate only if it is up to date. Any changes to the elements (suppliers, inputs, process, etc.) need to be updated in the diagram promptly. Creating your SIPOC tool using a web-based diagramming application like Lucidchart makes it easy to update your diagram in real time.
  • Resistance to change: We all know that change is required if you want to improve processes and outputs, but many resist change because it takes them out of their comfort zone. Gain buy-in by getting input from team members and stakeholders.

Steps to creating a SIPOC diagram

Creating a SIPOC diagram is easy: Simply gather information relative to the corresponding letter of the acronym. 

Make it your own. Some people like to start with the customers and work backward to the suppliers, calling it a COPIS diagram instead. Others prefer beginning by identifying the process because it’s the foundation of the other elements. The steps below describe how to start with the process, working from the middle of the acronym outward to complete your diagram.

Step 1: Define the process 

Begin by identifying the process you want to visualize and break it down into four or five high-level steps. For example, a process for shipping a product might be broken down like this:

  1. The customer orders a product.
  2. The order invoice is sent to the warehouse.
  3. The product is packaged for shipment from the warehouse.
  4. The distributor picks up the package from the warehouse.
  5. The distributor delivers the package to the customer.

It might be easier to read and digest the information if you map your high-level steps in a flowchart.

Step 2: Identify the outputs

List the outputs you expect will result from completing the process. This helps you understand what you and your customers gain from your investment in the process.

For example, a new user-friendly design of your website’s customer dashboard makes it easier for customers to access, navigate, and manage account information. Easier access and better navigation encourage more customer interaction with your website, leading to brand loyalty, increased purchases, and more revenue for your company. 

Step 3: Identify your customers

Identify the end-users of your products or services. Your customers are the people who benefit from the outputs of the process. This can include individuals, teams within your department or from other departments, and external companies.

Step 4: Identify the inputs

List any resource (raw materials, information, services, etc.) that will serve as inputs in your process. The process turns these inputs into your expected outputs. For example, an input could be a customer’s account number, payment information, shipping address, etc.

Step 5: List the suppliers

Identify the individuals, teams, departments, and companies supplying your inputs. This helps you understand how many suppliers you work with on a given process and identify areas of improvement in your supply chain.

Additional tips for creating an effective SIPOC diagram

Here are a few other things you can try to make your SIPOC diagram easier for your teams to read and understand:

  • Keep it simple: Don’t make your SIPOC diagram too complex. Try to keep it simple and concise. 
  • Be consistent: Keep terminology and naming conventions consistent to reduce misunderstandings.
  • Use digital diagramming tools and templates: You can draw SIPOC diagrams using paper and a pencil or a whiteboard and markers. However, this makes it harder to maintain and share with team members and stakeholders. Instead, use a diagramming application like Lucidchart and one of the following templates to keep your SIPOC diagrams simple, concise, and easily accessible to anybody who needs to see it:
    • SIPOC diagram with icons
    • SIPOC diagram
    • SIPOC template
    • COPIS diagram
  • Use colors and shapes: Consider using colors and shapes to differentiate all the elements in the diagram so it is easy to understand.
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Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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