In a SIPOC diagram, high-level process maps are used as simple yet effective illustration tools. Project leaders use them to quickly explain expectations and provide common reference points to all project team members. SIPOC diagrams are also helpful in identifying problem areas offering little value.
A SIPOC diagram is a tool for documenting and improving business processes. Ultimately, SIPOC diagrams help businesses develop operations that are more efficient and less wasteful. The diagrams are a form of process mapping, where project goals are first identified and then detailed steps devised regarding how they might be achieved.
The five components of a SIPOC diagram
SIPOC is an acronym of five components that are included on a SIPOC diagram. Emphasis is given to high-level processes and how they transform inputs (resources) into outputs (products or services).
Here are the five components:
Supplier – the provider of inputs into a process. For a café business, the supplier may be a local roastery or grocery store. Customer requests or feedback can also be classified as suppliers.
Input – materials, resources, or other information required to complete a process. Coffee beans and cake are examples of inputs for a café. Electricity and water are also important inputs in the coffee-making process.
Process – what are the steps that must be taken to convert inputs into outputs? The café must take customer orders using a point-of-sale system and then convert coffee beans into a hot appetizing beverage.
Outputs – or products and services that result from the process. For example, a freshly brewed cup of coffee.
Customer – the recipient of the output, such as coffee lovers or morning commuters.
How to construct a SIPOC diagram
Constructing a SIPOC diagram is relatively straightforward. To start, create a table with five columns and then label each with one of the five components.
Then, follow these steps:
Write the name of the process in the central column and describe key steps. In describing the steps, remember that SIPOC diagrams describe high-level processes. Keep each step brief by using a flowchart and ensure that the team understands the start and endpoints.
Identify the outputs. Describe four or five important outputs using nouns and neutral language to avoid categorizing them as either positive or negative. Businesses can also note customer requirements in this column but again, keep the tone neutral where possible.
Identify customers. Who are the stakeholders that will ultimately benefit from the process? If improvements to internal operations are the goal, then employees are the customers.
List the inputs required for the process to function at the desired level. The focus should again be on four to five of the most salient.
Identify the suppliers for each input described in the previous step.
At this point, a business may choose to identify preliminary customer requirements. This step is useful for those incorporating customer requirements into the measure phase of the Six Sigma DMAIC methodology.
Lastly, discuss and verify all aspects of the process with sponsors, key stakeholders, and decisions makers.
SIPOC diagram examples
In this section, we will outline some hypothetical examples of SIPOC diagrams.
Car dealership
Consider a car dealership with the following process steps:
Meet with prospective customers.
Understand what the customer wants or needs in a new vehicle.
Present several different models to customers and test-drive available vehicles.
Reach an agreement on any optional extras, total price, and delivery timeframe.
Complete paperwork and hand over keys to the new owner.
Based on this process, the following SIPOC elements can be defined:
Suppliers – vehicle manufacturers, other component suppliers, gas stations, car washes, and office printer.
Outputs – new customer account, paperwork to state motor transport authority, paperwork to the dealership, paperwork to the vehicle manufacturer, payment for the vehicle, and service notifications.
Customers – vehicle purchaser, dealership franchise owner, Department of Motor Vehicles (DMV), and dealership service department.
Requirements – color choice, built-to-order, and paperwork that must be filed or submitted within 72 hours.
Smoothie café
Here is a SIPOC diagram that describes the process of preparing a made-to-order smoothie:
Suppliers – smoothie requester (customer), smoothie maker, store owner, order taker, and kitchen supervisor.
Process – receive order, prepare order, prepare (clean, cut, and sort) ingredients, place ingredients in a blender, taste order, and notify customer service staff of order completion.
Customer – thirsty customer, smoothie maker, and store owner (purchaser of ingredients).
Mobile application development
In this example, let’s describe an enterprise that wants to employ the services of a software development company to develop a mobile app:
Suppliers – enterprise customer, project manager, software development team (programmers, developers, analysts, software quality assurance officers, etc.).
Inputs – customer requirements in the form of a functional specification document (FSD) and user requirement specifications (URS), skills and knowledge of the technical personnel, databases, frameworks, hosting services, and all other project management tools.
Process – in this case, we’ll describe the process in terms of broad phases of the software development life cycle. Namely: requirement analysis, design, development/coding, testing, release, and maintenance.
Outputs – the most obvious output of this process is the mobile application. However, any product or service created at a step that will be used later is also deemed an output in a SIPOC diagram. One example is a requirement document design diagram. Other outputs include a completed project and satisfied client.
Customer – in software development, the customer is the enterprise contracting the company’s services as well as the end user of the mobile app. Customers can also encompass the employees on the development team who carry out the process using outputs from the previous step. Thus, customers include users, clients, technical personnel, and third-party individuals.
Key takeaways
A SIPOC diagram helps businesses identify the key drivers of high-level process improvement.
A SIPOC diagram consists of five components: supplier, input, process, output, and customer. Focus is given to processes and how they transforms inputs into outputs.
Constructing a SIPOC diagram is a straightforward affair that favors simplicity. Team members should identify processes using flow charts and keep input and output lists to a maximum of five items. However, those wanting a more detailed analysis can incorporate the Six Sigma DMAIC process.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
