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Home > Process Workshops > SIPOC - How to Improve Your Output
Run a business?
Then you need to use SIPOC.
āWoah woah woah-
How do you know?ā
Because every business needs SIPOC.
Every process.
Every product.
And every department.
Each element of your operation can do with a visual overview from supplier to customer.
Not convinced?
Well, weāve trained nearly two-thirds of our clients in SIPOC diagrams.
Yep - thatās a lot of successful businesses.
In fact, it was only last month we introduced a new customer to SIPOC.
They were an accounting firm based in Northern Ireland.
They did pretty well last year by advising lots of worried business owners for small fees.
(Theyāve got a thing about giving back to the community.)
After COVID-19, they were planning to make these low-cost advising services one of their main services.
Demand went through the roof.
And hey, thatās a good thing!
But what wasnāt so good was their efficiency.
They wanted to find ways to streamline the delivery of this service.
Any time they could slash would translate to cash savings.
Normally this would call for a process mapping session.
You know, a clear way to see any inefficiencies and delays in processes.
But we started them off with a SIPOC map.
Why?
Because it provides a clear overview of where a process starts and ends, what goes into it, and the stakeholders involved.
It familiarised their financial advisory department with their new offering and the process behind it.
Engaged employees are more productive and generate a 21% increase in profits.
Joanna Grimbley-Smith - Business Automation Expert
Source: Go Remotely
This was an essential foothold to boost them into the next stage:
Process mapping and optimisation.
Itās only been a few weeks, and theyāve cut the average process time per client down by two hours.
Might not sound like a lot, but that adds up.
A simple visual tool gave the entire team a chance to sync up.
It was the starting point for their post-pandemic journey.
After all, you canāt improve something if you donāt know what needs improving!
Sounds like you could do with some SIPOC?
Well, youāre in the right place.
In this article, Iām going to cover:
What SIPOC diagrams are
Six Sigma (where SIPOC comes from)
Whether your business needs SIPOC diagrams
How to complete a SIPOC diagram
And the pros and cons
Iām even going to take you through a step-by-step example of a SIPOC diagram.
You really canāt go wrong!
Talk to the Automation Experts!
Chapter 1
What Is SIPOC?
Chapter 2
What Is Six Sigma?
Chapter 3
Does Your Business Need SIPOC?
Chapter 4
A Step-By-Step Guide To Completing A SIPOC Map
Chapter 5
The Pros And Cons Of SIPOC
Chapter 6
An Example Of A SIPOC Map
Chapter 1
Itās pretty intimidating, isnāt it?
Staring a scary acronym in the face.
(And itās in all-caps, too.)
But itās really quite simple.
A SIPOC is a tool that summarises the inputs and the outputs of a process in a table form.
It tends to look something like this.
We will come back to this SIPOC diagram later.
As you can see, it covers suppliers, inputs, process, outputs and customers.
Each column of the table focuses on a different category.
You can see where the acronym comes from.
So, whatās the purpose of SIPOC?
Itās used by businesses to identify the different elements of a process improvement project.
Essentially, it helps define the scope and the stakeholders of a process.
Itās also been used to:
Give unfamiliar employees an understanding of the process
Help people define a new process
Itās best known for its use in Six Sigma methodology.
This is an approach that encourages businesses to improve their processes with strategies such as āDMAICā.
SIPOC is used during the ādefineā or āmeasureā phase of DMAIC.
This new acronym means ādefine, measure, analyse, improve and controlā.
SIPOC has even been used during Kaizen events.
Read More
Kaizen - Channel your Inner Zen
Sounds pretty straightforward, right?
Well, there are a few things that often get forgotten:
Some stakeholders, like suppliers or customers, might be internal or external to the business executing the process
Inputs and outputs could be materials, information or services
Itās not about recording the steps of the process - itās about capturing the inputs and outputs
Next, we have to define SIPOCās relationship with process mapping.
Itās a complex one.
Some people think SIPOC is a high level process map.
It just shows a few steps of the process, customer needs and outputs.
Some people think itās a pre-process map stage.
It is used before an in-depth process map, like a value stream map.
Hereās an example:
Two years ago, we started working with a vegan catering company in Surrey.
They were trying to streamline processes by focusing on their company culture.
1 out of 4 employees believes their employers take their feedback and suggestions into account.
Joanna Grimbley-Smith - Business Automation Expert
Source: TINYpulse
āWeāve got the technology.
We just need the mindset to match.ā
We introduced them to Six Sigma and explained how to use DMAIC to improve their business.
We recommended process maps to kickstart this shift.
But before that, we showed them how to complete SIPOC maps.
Why?
Because it applies boundaries to a process and establishes the level of detail required to map the process.
So, you know what SIPOC is.
(And what it isnāt.)
But where does it come from?
Lean thinking and Six Sigma have their own diverse histories.
SIPOC comes from Total Quality Management programmes:
These were business-wide efforts to "install and make permanent climate where employees continuously improve their ability to provide on-demand products and services that customers will find of particular value."
- Dan Ciampa, 1992
TQM was kickstarted in the US and Europe as a result of Japanās surge in competitive advantage in the 1970s and 80s.
This was due to the emergence of Kaizen in Japanese industry.
It made costs lower, efficiency higher and eliminated waste continuously.
So, European and American companies looked into the quality control measures taken by the Japanese and took direct inspiration from it.
The most famous example of this was with the US Navy in 1984.
They followed William Demingās (a leader in Kaizen) approach to improve their operational effectiveness.
These ideas would later penetrate the US government and branches of the armed forces through the decade.
And it was in the 1980s that SIPOC, one of its core tools, gained fame.
Today, itās a staple of Six Sigma and lean manufacturing.
But why was it quite so famous?
And why is it so important for a business to use?
There are a few reasons Iāll explain in more depth later.
For now, Iāll whet your appetiteā¦
Theyāre a useful precursor to process mapping.
They offer a simple overview of a project anyone can understand.
They help identify or isolate problems in processes.
Chapter 2
Iāve already explained that SIPOC comes from Six Sigma.
But if you donāt know what Six Sigma really is, thatās not helpful, is it?
So, Iām here to give you a whistle-stop tour of the go-to business methodology.
Iām going to take you through:
What Six Sigma is
Its principles
Its benefits
What is Six Sigma?
It is a set of methods and tools used to improve business processes and product quality by finding and correcting defects.
It looks for problems, identifies their cause and emphasises repeatability and accuracy.
The idea is when efficiency rises and defects fall, the quality and timeliness of products improves - along with employee satisfaction.
One of the most popular methods or roadmaps is DMAIC.
(Remember?)
Six Sigma focuses on measuring a process in order to improve it.
What are the principles of Six Sigma?
There are quite a few.
But letās just cut to the chase and go through the most important ones.
Efforts to improve business processes should be continuous.
All processes can be defined and analysed - and therefore, improved.
Continual improvement is essential as it identifies what goes right or wrong at that moment.
Getting rid of variation can save money and prevent defects.
What are the benefits of Six Sigma?
Thereās a reason Six Sigma is so popular among businessesā¦
It reduces waste.
It improves time management.
It increases customer satisfaction and loyalty.
It boosts employee morale.
It increases revenue and lowers costs.
78% of workers claim they need to prioritise communication in their workplace.
Joanna Grimbley-Smith - Business Automation Expert
Source: Dynamic Signal
Sounds awesome, right?
Well, SIPOC naturally imports some of these benefits over to the businesses that utilise it.
In fact, we always advise our clients adopt its principles when they first consider SIPOC.
But you donāt need to fully submit to Six Sigma to successfully implement this tool.
Chapter 3
Itās all well and good for me to gush about SIPOC.
Iāve seen it in action.
I know what it can do!
But if youāre looking for a new business tool, you wanna be sure you arenāt wasting your time.
I get that.
Iām here to quash your concerns.
Iām here to answer your queries.
Iām here to prove SIPOC is essential to streamlining your business processes.
Weāre going to go through when you should consider SIPOC, and if your processes are eligible.
That way you can be sure how it will work for you.
This is always the biggest concern of our new clients.
In the first few months of 2021, we engaged in talks with a marketing agency based in the States.
They were in the middle of a crisis:
They had just lost two big clients because of a simple, avoidable error:
A confusing email chain.
Weāve all been there.
They managed client projects via eclectic communications.
You know, emails, Slack messages and phone calls.
An important message was just waiting to be missed!
Deadlines werenāt picked up on.
Updated ideas were ignored.
It was bound to go wrong.
Multitasking can reduce your productivity by 40%.
Joanna Grimbley-Smith - Business Automation Expert
Source: Time Doctor
We introduced them to Six Sigma to help them identify the issue and correct it.
But theyād just lost a major source of their income.
If it didnāt work, theyād lose even more money!
So, we took the time to walk them through the processes up ahead.
Once weād matched specific processes to SIPOC, they could be sure it was the best course of action.
Now itās time to do the same for you!
Firstly, letās go through why you should do SIPOC.
SIPOC is considered useful for several reasons:
To determine who supplies inputs to processes
To determine specifications placed on inputs
To determine the customers of a process
To determine the requirements of customers
If you want to work out any of these things, you know where to turn.
Next, you need to calculate if your processes suit it.
Six Sigma started with manufacturing firms.
But these days, any business can use it.
In fact, a vast range of executives implement DMAIC into their operations everyday.
Amazon, Boeing, and Motorola are just a handful of Six Sigmaās biggest fans.
Okay, okay.
Iāve regurgitated everything I know about SIPOC.
And itās a lot.
But now itās time to uncover how to actually do a SIPOC map.
Donāt worry, itās really straightforward.
But to make things even easier, Iāll take you through each step.
You canāt go wrong!
First, letās look at the template of a SIPOC diagram.
Itās pretty simple to understand, isnāt it?
For example, in the āsuppliersā column you list all the stakeholders who provide inputsā¦
You get the picture.
All you have to do is:
Brainstorm the elements with your team
Fill out the template
Letās go through the different elements in more detail.
Suppliers
Suppliers are the stakeholders who supply the inputs.
They can be internal or external to an organisation.
Hereās an example:
Letās say you run a software company.
Not bad.
The software developers are the suppliers.
The managers that oversee development are the suppliers.
But do you know who else fits into this category?
The customer!
Thatās because they give a request and requirements for the software which is an input into the process.
If the example was a shop on the high street, the customer wouldnāt be a supplier.
Why?
Because they donāt influence the inputs as much as a client asking for a custom-made product.
91% of employees claim they would be more efficient if the workspace was better organised.
Joanna Grimbley-Smith - Business Automation Expert
Source: Accenture
Inputs
Inputs are things provided by suppliers that are required for a process.
This includes services, products, information and skills.
Letās say you own an accounting firm.
Busy, arenāt you?
Your inputs could be:
Customer requirements for individual businesses.
Specific accounting knowledge.
And accounting software and tools.
Process
This is the easiest step.
All you have to do here is provide the steps that turn the inputs into the outputs.
Just break down the process into 5-7 chunks.
We recommend each chunk/step is titled with a āverb + nounā.
For example, āwireframe softwareā or ādesign formā.
Outputs
These are the results of the process.
Each output must be based on the requirements already laid out.
Even the products or services used in the later steps of the process qualifies as an output.
Imagine you owned a graphic design company.
The outputs could extend to:
A completed website project.
The design documents and diagrams.
Documentation for the website programming.
And a happy customer.
Customers
(I donāt need to tell you who they are.)
But you do need to know that they can be internal or external.
Letās go back to the graphic design example.
The customers would include:
The company you produced the shiny new website for.
And the people that would go on to use the website - aka the end-users.
But it could also include your own employees!
āWait - how does that work?ā
The outputs arenāt intended solely for your customers.
One of the outputs could be for use in the process.
Therefore a customer of one of the outputs would be your team.
Chapter 5
No decision would be complete without weighing up the good and the bad.
SIPOC might sound good on paperā¦
(Or computer screen, I guess?)
...But can it really benefit your business?
Take it from the expert.
And by that I mean me.
Letās go through the advantages and disadvantages of high level mapping!
The Pros
It provides an overview of a process before you deep-dive for process mapping.
SIPOC ensures no stone goes unturned or input goes missed.
It gives your team a chance to gather your thoughts and put them into practice.
If youāre just starting process mapping, your documentation might be limited.
SIPOC can correct this.
It updates team members on operational changes.
Lean thinking and Six Sigma always emphasise team work.
And not just amongst the executives.
Improvement starts at an employee level.
SIPOC provides effective documentation that everyone can contribute to and understand.
This is turn encourages the principles of continuous improvement.
And who doesnāt want that?
It simplifies the definition of a process.
Process mapping aināt easy.
But SIPOC provides for the next step by:
Outlining the scope
Defining inputs
Determining outputs
It kickstarts not just mapping but process optimisation, too.
It can identify liabilities in your business.
Hefty fines.
Angry letters.
The occasional hurried phone call.
When you get caught out for breaching one of those pesky regulations, it can have damning effects on your business.
To prevent this from happening, you need to know what your business is doing at all times.
You need clear documentation that is frequently updated to catch out problems or liabilities.
SIPOC provides the broad scope you need to keep an eye on your operations.
It maximises your business process efficiency.
SIPOC exposes your operations.
Unnecessary input?
Spotted.
Outdated process?
Noted.
Customers not satisfied?
Got it.
Six Sigma emphasises cutting waste out of a business.
And using fewer resources for higher output is the epitome of efficiency.
Stress-related illnesses cost businesses $300 billion as a result of lost productivity.
Joanna Grimbley-Smith - Business Automation Expert
Source: Health Advocate
The Cons
It only provides limited detail.
SIPOC is known for providing a broad scope.
It sets the boundaries of a process.
It doesnāt map it.
Therefore, it should never be completed without a follow-up process map.
It is just a starting point for process mapping.
SIPOC gets a lot of flack for not going far enough.
Itās considered merely a stepping stone for process mapping and process optimisation.
But itās an important stepping stone.
Without it, youād be a bit lost.
And your process mapping might skip over a few details.
Chapter 6
Let me guess:
Iāve done a pretty good job of convincing you to try SIPOC.
Youāre welcome.
But Iām not done just yet!
Yes, Iāve shown you a few templatesā¦
And yep, Iāve walked you through the elementsā¦
I want to make things even easier.
Time for some inspiration!
Remember that process map I told showed you early on in this article?
Now you understand how they work, it should make a lot more sense.
Hereās an example of a completed SIPOC map for a complaint procedure in a manufacturing company:
21% of UK employees believe they are fully productive for an entire workday.
Joanna Grimbley-Smith - Business Automation Expert
Source: Go Remotely
Conclusion
Are you ready to get your SIPOC on?
Well, you should know enough to kickstart the process.
By now you should know:
What they are
How to apply Six Sigma principles to your business
And how to complete one
So, what are you waiting for?
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