A comprehensive guide to creating your first SIPOC diagram
January 05, 2022
Every task is made up of actions — whether it’s something small, like tweeting, or something big, like transporting a thousand tacos.
When it comes to delivering projects (tweets, tacos, or otherwise), there are steps in place to make sure it goes off without a hitch. Establishing workflows and milestones, setting up meetings, organizing supplies, and managing deadlines are all important parts of project management.
Yet, it’s easy to get so caught up in the delivery stage that you overlook the processes that lead up to it. Inefficiencies fly under the radar simply because everyone is too busy to stop and reassess. It’s the way you’ve always done things, so why change it?
The thing is, it’s really important to re-evaluate from time to time. Changes in your business, staff, resources, customer needs, and industry can all facilitate the need to rethink your operations.
Enter: the SIPOC diagram.
A brief history of the SIPOC diagram
SIPOC diagrams are a lean tool used to visualize a process. They’re helpful for identifying areas in the value chain that increase or decrease value. After all, when you’re running a business, you don’t want to waste money on tasks that don’t really benefit you or the customer.
SIPOC stands for Suppliers, Inputs, Processes, Outputs and Customers.
Six Sigma practitioners popularized the SIPOC diagram, which originated from the Total Quality Management movement in the 1980s.
The idea was to have a diagram to identify all of the stakeholders in an organization and map their interactions with each other. SIPOC breaks down which steps are being done by whom, helping to identify unseen problems within business processes.
What is a SIPOC diagram, though?
The SIPOC diagram is made up of five sections. The first — suppliers — is a list of all the contributors involved in your product or service workflow. This helps to identify where each component, subcomponent, and material comes from.
The second section — inputs — is a list of what you receive from your suppliers. This is often more than one item, which is an indicator of multiple supplier relationships.
The third section — process — defines how inputs are transformed into outputs by specifying key steps and tools used in producing the output(s) identified in the next section.
The fourth section — outputs — lists all of the components, assemblies, services, and other outcomes for a given process.
The last section — customer — specifies the different groups of people who receive the outputs. This could be internal (your own employees) or external (clients who buy your products). If you have more than one group, don’t worry; SIPOC doesn’t ask for specific numbers. Rather than a census, it’s a description of what your processes do and how they do it.
If everything sounds like nonsense to you at this point, think back to your high school physics class when you learned about Newton’s laws of motion. “An object in motion tends to stay in motion unless acted on by an unbalanced force.” That was essentially an eloquent way of defining inputs, outputs, and customers without all the verbiage.
SIPOC in the real world
SIPOC is not about how your organization does business; it’s about what you do and who benefits from it. If you’re having trouble getting clear on this, picture the last corporate board meeting you attended.
In most cases, the person hosting the meeting will talk about inputs — components that come to the project from outside the performing organization. Typical inputs could include a client’s requirements, funding for implementation, or an internal business case for complying with the provided requirements. Outputs are what the project produces — products, information, services, etc. Customers are all the people who benefit from whatever outputs your project provides.
Another real-world example of this would be an order fulfillment process at Amazon. Once the customer places an order, Amazon fulfills it by receiving inventory from a supplier, sending the data to a fulfillment center, picking out the correct item, packaging it, and shipping it to the customer.
SIPOC is just one way to define an objective. It’s certainly not the only way, but it does offer some benefits that might make it worth your while to adopt this model as part of your vocabulary.
Who should use SIPOC?
The SIPOC model can be used in any process or project that creates a product for consumption. This would include activities such as developing new products, services, or events; starting a blog; writing an article; buying groceries; developing an app; even cooking a meal. The goal is to identify organizational strategies to meet specific requirements (customers) based on quality-management inputs (suppliers).
Project managers should use SIPOC diagrams to control the project. SIPOC helps to clearly define project goals, creating a shared understanding among all team members and acting as an effective communication tool.
The diagram also provides information about deliverables, processes required to achieve them, and suppliers. As a result, it’s beneficial for both customer and provider to use the visualization together. This makes it easier to reach agreements on what needs to be done throughout the project’s lifecycle.
What are the advantages of using SIPOC?
A SIPOC diagram is an excellent way for customers and providers to define what they expect from each other in order for business transactions to take place. This is achieved by identifying inputs delivered by suppliers, processes required to create these inputs, outputs that result from this process, and finally, customers who will receive these deliverables. As such, they can be used at any time during a project, but are particularly useful during the planning phase.
Better team collaboration
The SIPOC model provides a way for project managers to effectively communicate with the entire team involved in the project. Meanwhile, team members may find it easier to think about what they need to do if requirements are presented as shorter phases of work, instead of one large deliverable. This makes it possible to provide feedback at any point throughout the lifecycle of a project, so your team can make changes accordingly.
Staying on track
Project managers can also use a SIPOC model to make sure the team is on task and project milestones are met along the way. This helps you understand a critical part of a project plan: how will you know when you’re finished? Using the SIPOC model, you can determine what must happen at each stage of your project.
How to create a SIPOC diagram in 5 easy steps
Here’s what you need to do.
1. Identify your customer(s) and stakeholder(s)
The first step is to list the various stakeholders involved in your project. Who is affected by your success or has some interest in the outcome of your project?
Then, pull together your strategy ideas. What steps do you plan on taking to meet each stakeholder’s needs? To begin your SIPOC diagram, simply list your project stakeholders on one side of the page under “customers.” You could also outline the strategies used to meet their needs, such as providing on-time delivery or fixing manufacturing defects.
2. List your outputs and show how you’re going to measure them
Outputs should all bring value to the customer, and they’ll typically include things like products, activities, or services. Think of the resources you’ll need, such as time or money, to carry out these outputs. List them on one side of the page under “outputs,” and explain how you’ll acquire them during the course of the project. You can also list costs associated with each output, in terms of prioritization or resources, for added clarity.
3. Map out your process
List the high-level steps that go into creating your outputs. These are the requirements for making your product. In most cases, you’ll have one output per process; but sometimes, it’s necessary to split up a process into several columns.
To do so, list the steps it takes to complete a particular process. If the process step is “obtain final design,” you’ll need to create a separate column labeled “Process Step” and then define each step in order to meet customer needs. Once you’ve listed all your steps, connect them by drawing lines between columns.
Don’t forget to add your milestones. Note any gaps or problems that could arise before you begin work on a project phase, and try to address them. Keep it top-level. You risk complicating things and decreasing clarity if you add more than 10 processes.
4. Add your inputs
Inputs are components that go into creating your output. This could be raw materials or information — anything essential for the business to generate the finished product. Talk to team members and stakeholders to make sure your list is as comprehensive as possible.
5. List your suppliers
Suppliers are where you source the items listed above. Focus on suppliers that only have a direct impact on the process outputs. For example, if a process uses a raw material from a supplier that doesn’t affect other products in the supply chain, you don’t have to list them.
SIPOC best practices
- Review your diagram with someone who either works for or has worked for one of your customers — ideally the customer who is the source of highest user demand or revenue stream. Make sure that person can share their experiences with you, including what they like (and don’t like) about working with you and suggestions on how to improve in future. This way, you’ll have constructive feedback from someone who understands your audience.
- Make sure you have at least one person responsible for each step in the process. You want communication to flow naturally while still having an organized way to keep track of progress and deadlines.
- Come up with an appropriate project goal that addresses all the client’s needs and concerns, as well as what the customer is looking for in a finished product or service. This might be a high-level statement, such as “Our company wants to double profits by offering cleaner, more efficient power-generating equipment.” Or it could be something more specific like, “Lower our development costs for X app updates by 15 percent within three months.”
- Continually review your SIPOC chart to ensure everything listed makes sense and works together to achieve the stated goal of the project. You may need to go back and tweak some things.
- Use project management software to streamline your processes. Life is easier when you have tools that help everyone stay on track.
With Backlog, our own project management tool, you can manage workflows, assign tasks, create Kanban boards, and communicate with stakeholders and team members — all in real-time. Plus, thanks to real-time notifications, nothing slips through the cracks, no matter how hectic your project gets.