SIPOC Diagram: How to bring Suppliers and Customers together

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Have you ever wondered why a business process even exists?

Well the best way to answer that question in ULTRA QUICK time.

Is to identify exactly who is the recipient of the output of that process.

Or put simply: WHO receives the goods that comes out of a task?

And how do I know whether the person even wants to receive the goods of a process?

Well that’s PRECISELY what I’m going to show you now.

It’s one of my favourite process modelling techniques.

But can also be done in tabular format – Yes, In Excel.

It's The SIPOC Process Diagram!

SIPOC stands for Suppliers, Input, Process, Output, Customers. It’s a type of process flow which helps identify the key people assets and activities of a business process. It lays the foundations for asking the right people the right questions right throughout your project.

I’ll tell you which questions you should be asking for achieving ALL the information you need to create a SIPOC.

AND I’ll show you EXACTLY how to draw a SIPOC.

What’s more I’m telling you HOW to use the SIPOC to undertake a thorough investigation in UTRA-QUICK time.

SIPOC Template Visio

Here's an opportunity to save yourself some time and get a FULL SIPOC Diagram template.

Just click the Visio Download button to get it

SIPOC Template Excel

Or if you'd prefer it in tabular format in Excel. I.e. if you're not presenting?

Just click the Visio Download button to get it

Before we dive in, let me give you a real life example once told to me about SIPOC.

My friends business had to supply external auditors with the correct financial information every month.

Because if they didn’t, they could lose their license to sell.

And there were multiple processes spanning multiple teams just to complete ONE financial report.

So by conducting a SIPOC analysis, the Business Analysts were able to identify EVERY customer of EVERY process.

THEN they could ask questions of the recipients such as:

When do you need the info?

Why do you need it?

What format do you need it in?

But get this…

ONE person right at the end of the process answered:

“I need the info so I can supply the auditors”

But the person at the start of the process didn’t even know that their info was going to the auditors so submitted it late every month, without batting an eyelid (i.e. worrying about it).

So as you can see.

It doesn’t take long to identify the importance of a process and who needs the output.

BUT it also wouldn’t take long to see that a process simply isn’t needed anymore!

By getting everyone involved in the processes to answer a few simple questions, the Business Analysts realized how close the business came to losing their license.

And were able to promote the importance of the process VERY easily.

When to Create a SIPOC Analysis Diagram

My view:

Start drawing a SIPOC at the VERY start of the project.

After you’ve agreed the Terms of Reference

Then evolve it as you obtain more detail.

It’s a great tool to use alongside your Power/Interest Grid for Stakeholder Management.

Gathering the information for a SIPOC

The first thing you MUST do is decide which process(es) you are going to investigate.

Once done.

There are many ways you can gather the information.

Here’s 38 ways for eliciting requirements – use these when you need to obtain info!

But you need to do it quickly for a SIPOC so carefully pick your technique!

So here I’m going to focus on the questions you should be asking

It don’t matter which elicitation technique you use…

Q‘s for identifying Suppliers

    Who is in charge of doing the first task in the process?

    Who helps out to complete the first task?

    Are there any other teams/colleagues who supply data to the process?

    Who gives you the information (or parts to be able to do your job)?

Q‘s for identifying Inputs

    What documents do you require to be able to complete the process?

    What format do you need the parts or documents to be in for the process to succeed?

    What systems are used to provide data to the process?

    What data is required?

Q‘s for identifying Process

    What are the 7 main steps of the process?

    How often do you complete the process?

    How long does it take from start to finish?

    What is the FTE requirement for this process? Word this one carefully

    What in your opinion are the current issues with the process?

Q’s for identifying the Output

    What KPIs are currently reported?

    What are outputs of the process i.e. report, journal, email, payment?

    Which systems are updated as a result of the process?

Q’s for identifying Customers

    Who receives the outputs?

    Who do you deliver the goods to?

    Does anyone receive the output but not actually use it?

How to Daw a SIPOC Diagram for Effective Analysis

Now you’ve DECIDED on the process

AND you’ve GATHERED all the required info for your diagram.

You’re ready to begin drawing.

First: Open MS VISIO

Or whichever process mapping tool you use.

1. Draw the Layout

The layout is the foundation of your document

And it looks like this:

SIPOC Diagram Layout

2. Draw the Suppliers

Use people icons to show an individual or whole teams

TIP: To find these in Visio go to:

Shapes >> More Shapes >> Work Flow Objects

They look like this:

SIPOC Diagram Supplier

3. Draw the Input(s)

It’s pretty simple.

Make sure you represent different types of inputs with different shapes

AND be sure to LINK the suppliers to the relevant inputs

There’s no hard and fast rule on which shapes to use.

But here’s an example:

SIPOC Diagram Inputs

4. Map the Process

Don't go into too much detail.

A SIPOC process map should have about 7 steps. So it's quite high level.

See my Process Mapping article for the GOLDEN rules when mapping a process

But here are some examples of the shapes to use:

SIPOC Diagram Process

5. Draw the Outputs

The outputs are displayed exactly the same as the inputs

So when you’re done.

Your diagram will look a bit like this:

SIPOC Diagram Outputs

6. Finally the Customers

Here you should use the same shapes as the Suppliers

These don't need much explaining.

As long as you've done all the up front work I explained earlier.

So just do exactly the same as you did for the Suppliers but for the Customers

As so...

SIPOC Diagram Customer

After you’ve drawn your SIPOC

Like with EVERY diagram I ever discuss…

Just drawing a SIPOC isn’t enough.

You MUST analyse and USE the SIPOC to your max advantage.

But how is that done?

Well know this:

One of the most important parts of Business Improvement is to understand the WHAT the customers want and WHY they want it

So the first thing is to find a way of contact every customer

WHEN you’ve done that.

Get answers to the following questions

- What sort of quality are you looking for in the output?

- How fast do you expect it to be delivered?

- How accurate do you need it to be?

- What would you expect to pay (if they are paying)?

- What communications do you expect?

There are a number of ways you can do this depending on who and where the customers are.

Here are a few examples:

  • Focus groups
  • Surveys
  • Interviews
  • Calls
  • Existing surveys / information
  • Customer observation

· Walk the process as a customer / user

· Draw on other’s experience of being a customer

  • Listen to customer complaints
  • Obtain VOE feedback

So there you have it…

As I mentioned above. The SIPOC is only the start.

But it opens up sooo many opportunities for identifying improvements in ultra quick time!

Let me know if this post helped in the comments below

AND let me know your experiences of using SIPOC diagrams.

Anyone’s welcome!

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