If you are working in the area of process improvement, one of the most commonly used tools is a SIPOC Diagram. The acronym follows the work flow of Suppliers, Inputs, Process, Outputs and Customers. A SIPOC Diagram is a simple tool that provides a high level overview of a process or product in a visual form that can help teams in a variety of ways. Whether you are looking to better understand a current process in its “as-is” state, or if you are attempting to define a new product or process, using a If you are working in the area of process improvement, one of the most commonly used tools is a SIPOC Diagram. The acronym follows the work flow of Suppliers, Inputs, Process, Outputs and Customers. A SIPOC Diagram is a simple tool that provides a high level overview of a process or product in a visual form that can help teams in a variety of ways SIPOC Diagram is an easy and effective tool. We have put together a quick tutorial on how to use a SIPOC Diagram and included a unique example of how to it use for your reference. As it’s one of our favorites, we hope you enjoy this brief video tutorial.

 

Video Transcript

:10 – 1:13 – Introduction to the SIPOC Diagram

A significant challenge that many teams face is how do you scope the project or initiative that you’re working on. Now there are a number of methods to determine the scope but what I find is that many of them take way too long. So the main tool that I like to use when scoping out a project is a SIPOC diagram. The value of a SIPOC diagram is it takes a very short amount of time, maybe 30 minutes to an hour to complete, and once complete it provides you with a tremendous amount of information and most importantly it gives you an indication of the scope of the project or process that you’re working on. So what I’d like to do is take a few minutes and I’ll give you a quick tutorial on how to complete a SIPOC diagram and then once that’s complete, I’ll come back to you and I’ll share with you an example of where I applied the SIPOC diagram with an executive team of a large division of one of the world’s largest pharmaceuticals companies.

1:14 – 4:35 – SIPOC Diagram Tutorial

Section 1

It is important to understand that all company activities constitute a process. A process is defined as taking one or more inputs from suppliers and creating outputs, whether these are for a service or a product. The graphical display of these activities is known as a process map. Understanding business processes is made easier by first identifying the key components of a SIPOC diagram: Suppliers, Inputs, Process, Outputs, and Customers. Effective improvement requires information from the entire supplier-customer relationship.

Section 2

The key elements of a SIPOC diagram are:

  • The supplier is whoever provides an input into the process.
  • The inputs are the resources required to perform the process.
  • The process is the actual actions required to transform the inputs into the desired outputs.
  • The output is the actual product or service the customer receives, and
  • The customer is whoever receives the output of the process.

Section 3

There are many different methods that you can utilize when creating your SIPOC. The following is a method that I have had great success with.

Work backwards when completing the SIPOC. Start by identifying the customers first, then the process outputs. Once this is complete, identify the process start and stop points, then the high-level steps to complete the process. In a SIPOC diagram I recommend identifying five to seven high-level process steps. When this is complete, identify the inputs and suppliers to your process. As you can see, completing a SIPOC diagram is meant to be easy as these few steps.

Section 4

Let’s take a look at a SIPOC example. In this example, we are using a call center. The suppliers are customers calling into the call center and collection agencies. The inputs are customer complaints, billing questions, statement questions, renewal or new account setup. The processes which starts with the start boundary are, receive customer call, gather data, review history, identify problem, resolve problem, and update customer data, which is also the stop boundary. The outputs are credit card resolution, accurate statement, and credit or debit to the account, and the customers in this example are credit card customer, collection agency, accounts payable, and accounts receivable.

As you can see in the SIPOC example, we kept everything, the suppliers, inputs, process, outputs, and customers, at a very high level. This is the intent of a SIPOC diagram.

4:36 – 6:47 – Unique SIPOC Diagram Example

There are a number of different ways that you can apply SIPOC diagram. One of the most unique ways that I’ve utilized this tool was working with an executive team of a large division of one of the world’s largest pharmaceuticals companies. Let’s set the stage. I was responsible for facilitating a two-day workshop to improve their new product development process. I’d spent a lot of time up front building a really rigorous agenda to get to the improvements by the end of the workshop but what I had learned about an hour and a half into the first day’s agenda is that not many people had a good perspective of the overall end-to-end process and more importantly not many of them agreed on the overall end-to-end “as-is” process.

So what I did at that point in time was take a time out, made adjustments to the agenda, and I said I want to spend one hour with all of you and complete a SIPOC diagram so we can gain agreement on the overall new product development process in its current state. Now I got a few funny looks because not many people had heard of a SIPOC diagram, but they all agreed to spend 1 hours’ time completing it. To their amazement, in one hour we now had a tremendous amount of information. We had identified the high-level suppliers to the overall process, the inputs that the suppliers provided to the process, the high level steps in the process which included its boundaries of start and stop points, the outputs to the process, and most importantly, the customers to the overall new product development process. At the end of completing this tool, the executives now set the stage for a successful remaining day and a half of the workshop and what we’d learned is that you can apply a simple tool that can help you really understand the scope of a process and in this case it got everybody on the same page so we could actually make improvements to the process together as a group. My encouragement to you is try this tool. I’ve had a lot of success using it in many different scenarios and I think you will too.

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