Why Is SIPOC Important for Business Analysis?

When performing any process discovery or improvement activity, one first needs to know about the big picture and understand how it fits into the business. In this regard, SIPOC provides a simple framework. It provides structure for my notes from requirement gathering sessions. In the Six Sigma world, this is also known as Value Stream Mapping.

What is SIPOC anyway?

Business meetingSIPOC is a high-level view of the “as is” state of a process under investigation. Typically, a simple data collection template is used that helps facilitate the gathering of the relevant information (Suppliers, Inputs, Processes, Outputs and Customers) about a process. One may want to use it prior to constructing the actual process (BPMN/Flowcharts) but the value is in visually presenting and organizing the analysis data.

SIPOC is an abbreviation of: Suppliers – Inputs – Process – Outputs – Customer, which is also known as COPIS.

At the most basic level, the acronym’s components stand for:

  • Supplier: Internal / external suppliers to the process.
    Inputs: Inputs to the process. This can include information, forms, materials, etc.
    Process: The means that convert the inputs into outputs in order fulfill your customer’s needs.
    Outputs: Internal / external customers to the process.

When to Use It

One should use SIPOC when process management or improvement activity is underway, since it’s important to get a high-level understanding of the process’s scope first. The benefits happen when a team:

  • Needs to understand the basics that make up the process.
  • Needs to record knowledge about a process in an easy-to-view format.
  • Needs to make concise communication to others about a process.

If you’re familiar with Six Sigma, this is typically employed at the Measure phase of the DMAIC methodology.

Why to Use It

SIPOC helps provide a natural but structured way to discuss a process and get consensus on what it involves before rushing off and drawing process maps. It’s really useful when any of these points aren’t clear:

  • Who supplies inputs to the process?
  • What specifications are placed on the inputs?
  • Who are the true customers of the process?
  • What are the requirements of the customers?

Summary of Benefits

  • SIPOC is a template for defining a process, before you begin to map, measure or improve it.
  • It helps define the boundary of the problem being analyzed.
  • It’s a structured way to discuss the process and get consensus during a meeting/session.
  • It can help provide a structure when facilitating meetings.
  • It provides a visual representation of the problem.

SIPOC’s Limitations

Since SIPOC’s only a high-level view, there’s still a need to do detailed process mapping. It’s also important to understand the processes that feed into it.

How to Use SIPOC

The tool is best used by a team. First, list the categories in order (Suppliers, Inputs, Process, Outputs and Customers) across the top of a piece of paper or whiteboard. Then, fill in the diagram like this:

Processes: Begin with the Process column and number the highest level steps. Try to keep the list to only four or five.

Use a Verb + Noun format for the process steps. Such as “Recruit Staff” or “Acquire Cookie.”

Outputs: For each process step identify and document the outputs under the Outputs column. These are the tangible things that the process produces:

  • A report or letter.
  • Goods and services your customers buy.

Not every process will have an output.

Customers: For each output, document the customers who will receive or benefit in the Customers column. Every output should have at least one Customer.

Inputs: Identify inputs the process requires to produce the outputs. Capture these under the Inputs column. Inputs are things that trigger the process. They’re often tangible.

  • Customer Orders
  • Delivery Demand
  • Bill

Suppliers: Document the suppliers of each input under the Suppliers column.
Identify the suppliers of the inputs; these are the people (roles) who supply the inputs that are required by the process.

Requirements (Optional): If you chose to include a sixth column for requirements, then identify the high level preliminary requirements that each customer has for the process under consideration. Think about why the process exists and what customer need is being fulfilled.

These requirements will help you to understand:

  • Your customer requirements.
  • Are you fulfilling those requirements?
  • Your supplier requirements.
  • Are your suppliers meeting your requirements?

Finally, you should identify the process owner – the person responsible for the end-to-end process. Then, review your results with the project sponsor, champion and any other stakeholders to verify their requirements are being met.

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