An example of SIPOC Diagram to better visualize your process

What is the SIPOC Diagram?

The SIPOC diagram is a particularly useful way of managing business processes from start to finish without overcomplicating it for your entire team. SIPOC itself is an acronym that helpfully spells out the steps in the framework, namely Suppliers, Inputs, Process, Outputs, and Customers. Through this mapping exercise, you and your team can better understand the ins and outs of any particular initiative, giving you all the opportunity to tackle possible pain points and take advantage of any efficiencies that you can leverage.

In essence, you’ll be able to summarize the entire process flow from start to finish, identifying key inputs, defining outputs, and properly dealing with all stakeholders that will be affected by the project. There are also certain frameworks that prioritize the Customer aspect of the diagram, depending on the focus of the business and industry standard.

How Does Six Sigma Fit In?

The SIPOC diagram itself falls into a more extensive scope of a project management discipline known as Six Sigma, sometimes extended in size as a “Lean” Six Sigma. Developed in the late 1980s, the SIPOC diagram was created in part of the Total Quality Management, or TQM, an approach that defined a large part of Six Sigma management.

As this framework is utilized in specific contexts primarily aimed at business process improvements, the SIPOC diagram can also be complementary to teams and organizations looking to implement lean manufacturing and more agile work dynamics in their workflows.

Why Use a SIPOC Diagram?

The SIPOC Diagram isn’t just an abstract concept developed by conflated business experts but an actual quality management technique entrenched in the overall Six Sigma process and other similar business process improvement frameworks.

As we mentioned, this high overview of the entire business process can help you identify any stumbling blocks along the way while better utilizing potential resources that you have better leverage on. But as a quality management framework, the SIPOC diagram can also be useful in identifying and measuring any variations throughout the process. As project managers may know, variations are a key factor in determining how efficient a process is, which when identified can help you better stabilize and standardize a particular process.

The SIPOC diagram can also help you better manage external partners as well. With many of the inputs and outputs properly identified and defined, you can better-set expectations with external stakeholders. This can reduce friction in negotiations as well as give you and your team better flexibility when choosing vendors to work with.

You can also utilize the very same SIPOC diagram to better onboard team members and internal colleagues who might not have been as close to the project as you are. This helps increase transparency across the organization and gives them a better understanding of where you are throughout the project’s lifespan.

Creating Your Own SIPOC Diagram

Now a SIPOC Diagram, despite having a fairly technical-sounding name, is quite easy to use and integrate within your  workflows. As we mentioned earlier, the name SIPOC stands for the different aspects you’ll need to focus on in this exercise. It’s important that a properly developed SIPOC diagram identifies all the relevant steps from the outset as this is key to its functionality in giving you the overarching view of the business process.

As we have done in our previous framework articles, we will introduce a business case to help illustrate the diagram in action. For this SIPOC introduction, we will use the example of a fast food restaurant serving hamburgers. While you might assume that it’s a fairly simple process— buns, patty, tomato, lettuce, cheese, and serve— utilizing the SIPOC diagram can help uncover a lot of the more non-visible aspects of the entire workflow. At the end of this exercise, the goal should be to identify areas for improvement, standardization, and more.

Identify Your Suppliers

This step is your “S” in the SIPOC diagram, the suppliers of your process. This means identifying those that provide all of the inputs to your process that have a direct material effect on the intended output product. This naturally varies from business to business, and can either be internal or external to your company as well.

For our example, a key factor here would be the raw ingredient suppliers that provide you with all of your burger inputs, that being the buns, beef, vegetables, and cheese that we mentioned a while ago. But digging deeper into this first step, you should also identify the other suppliers that have a material effect on the burger. This means looking at the suppliers that supply cooking oil, optional condiments, and even the cooking utensils being used.

Another supplier which often gets overlooked in these scenarios would be the cooking line staff themselves. As we established, the suppliers in this part of the SIPOC diagram pertain to any party that has a direct impact on your output product. This definitely then needs to have those cooking the actual product taken into consideration.

Again, the supplier portion of this diagram will be very variable based on how you and your team understand the business process flow, but being as granular as you can give you a better view of which aspects you should be focused on if you want to improve the process overall.

Identify Your Inputs

Next, you’ll want to get into identifying the different inputs that come into making your output product. These include any materials, equipment, resources, or even data that is needed to be used in your production process. We went very granular with the supplier's portion of the SIPOC diagram, so it follows that this section is as granular as well. An additional caveat here is that some inputs will likely be more critical to your end product than others, so noting those important inputs in this step can help you properly outline your entire process.

With our business case restaurant, inputs will include all of those different ingredients we mentioned— buns, meats, cheeses, and vegetables— as well as other lesser identified inputs like cooking oil and cooking supplies. Remember there will likely be other input aspects to this section as well, including different items such as a receipt or order number that dictates how many hamburgers to make and maybe specific special requests that the customers might have.

As inputs will likely vary from product to product, businesses that have multiple end outputs need to properly categorize each one into specific product groups. While you can create different SIPOC diagrams for each product process, you can also create subgroups under the same SIPOC diagram to better consolidate the different products under a SIPOC banner.

Outline Your Processes

This stage, the “P” in our SIPOC diagram, pertains to the steps that make up the process in its entirety. Project managers will need to be specific with each possible step that the process goes through as this essentially outlines the entire flow from inputs to your desired outputs. It can remain high-level enough to represent the entire process map, roughly around 4 to 5 main steps. Complicated workflows can include substeps that help the main process step move along.

In making hamburgers, this process will likely manifest itself in the recipe for the product itself. Specific cooking times, meat blends, and even order of assemblage of the food itself. Having your entire recipe jotted down in this manner can help you and your team be familiar with the process without having to completely observe every step.

Remember, the SIPOC diagram goes beyond what could be understood as the main process as well, and can include preparation steps as well as finishing steps. This means outlining the process of delivery of the input materials to the kitchen, managing the finished outputs, and delivering them to your customers.

Depending on your type of business, this process can either be fairly simple or complex, touching on multiple possible stakeholders internally and externally.

Define What Your Outputs Are

The next stage is likely to have been completed in parallel to the previous three stages, focusing on how you define your product outputs at the end of the entire process. Essentially, you want to provide a guiding framework of how your intended inputs and subsequent processes become a specific output, whether as a tangible product or service.

These outputs should be fairly dependent on the market requirements and include the type of value that a customer is looking for. In our restaurant example, look towards what kind of hamburger is being developed utilizing the inputs and processes outlined previously. Some hamburger product items might be geared towards a specific audience’s preferences, while others might be crafted in response to a specific dietary need.

Whichever the case may be, it’s important that these outputs are laid out logically, following from the previous two stages and culminating in this final intended outcome.

Identify Your Customer Targets

This next SIPOC stage helps you define and tailor your product and processes to meet market needs and requirements. With everything going on, it’s important to properly understand who you are targeting, regarding this process development in the first place. Without a proper target in mind, you’re likely developing a product or service in response to your own internal understanding of the problem, risking product or service mismatch in meeting your actual customer’s needs.

Our restaurant example quickly accomplishes this. Our understanding is that the customers are likely to be either the patrons of the restaurants or the kind of people that like to regularly eat hamburgers. More complex restaurant structures include those that service big catering functions as well as private events. But within these target audiences lie more customer subgroups that need to be attended to. These include possible vegetarians with dietary restrictions, as well as specific customer groups that have specific food preferences. Understanding all of these target audiences as well as their intended subgroups can better lead you to words crafting a product that suits your market needs.

Other non-retail or customer-oriented businesses might find this part challenging. For example, an internal committee that’s working on a safety report might not completely understand who their exact customers are. But outlining who the report is intended for as well as its possible readers can help you craft the proper language and data requirements that are needed to get the best possible outcome.

Final Thoughts on SIPOC Diagrams

As you may have figured by now, a SIPOC is not a single chronological process, but rather an outline of all the different aspects of a project running in parallel. If you can master this usage of the diagram, you’re likely going to be able to better visualize all of the different steps in your project process, as well as convey the necessary information to your team and other relevant stakeholders.