7.6 Tools: Identifying the Customer—The SIPOC

A crucial step during the Define phase and development of the project charter is identifying the process’s customer. They are any persons, groups, or things that receive any inputs from the process of interest. This step will help you make intelligent decisions about how your team can collect customer data and identify its specific CTQ requirements.

The SIPOC (Suppliers, Inputs, Process, Outputs, Customers) diagram is a tool that helps you identify the customers of the project’s process. It also allows you to understand the project boundaries and scope. Suppliers are the people, processes, or organizations that provide inputs to your process. At the same time, the customers are the people, processes, or organizations that use your process’s outputs. The process is the series of steps that converts inputs into outputs.

Brainstorming sessions are very helpful in performing many aspects of the DMAIC process, including developing the SIPOC. You and your team can develop a SIPOC diagram in a single brainstorming meeting. However, it will help if you invite process owners and one or more subject matter experts familiar with the process to review the exercise’s outcomes. A subject matter expert is someone that is closely associated with or familiar with a process.

Creating a SIPOC Diagram

Step 1: Create Swim Lanes

Swim lanes allow you to display how cross-functional activities and resources relate to your process. The SIPOC diagram contains five lanes, one for each of the elements described above. The image below shows a basic SIPOC, the swim lanes, and its elements:

Step 2: Set Boundaries and Create a Process Name

Establish a definition for where your process or responsibility begins and ends before you start developing the SIPOC. This procedure will assist you in creating a helpful diagram for your project. Develop a good descriptive name for your process that captures it accurately. Such will help the team establish some scope limitations and will help focus the discussions. The idea is that anyone with reasonable knowledge can readily understand what the process is about.

Step 3: Complete Swim Lanes

You can complete the SIPOC swim lanes in any order, but it can help start with the process lane. Keep in mind that this diagram is a high-level map. You will have the opportunity to develop more detailed maps in later phases. So, for instance, in the process lane, you can enter the process name or list some of the high-level steps required for the process. Listing top-level steps is helpful, as they provide insights about how the process link to other elements.

Answer the following questions to fill up the remaining lanes:

• From where do information and material come?

• Who are the suppliers?

• What do suppliers give to the process?

• What effects do the inputs have on the process and the CTQs?

• What products or services does the process make?

• What are the outputs that are critical to the customer?

• Who are the customers?

Step 4: Validate the Information

After developing the initial SIPOC, the team needs to ascertain that the high-level understanding of the process they produced is valid and accurate. You can achieve that by validating the information with other process owners, subject matter experts, and senior leaders. You can invite them to review the diagram briefly with the team and provide feedback.

SIPOC Diagram Example

Let's take a look at an example. The procurement office of an organization wanted to examine its travel settlement process. The procedure used by the organization consisted of having employees submit their travel expense forms and receipts to their department travel coordinator. The coordinator would enter the local system's data, check designated accounts for correction, sign-off, and forward the request to the centralized procurement office.

At the appropriate area within the procurement office, the documents were processed, checked for errors and conformance, and uploaded to the applicable system. The office would then issue a reimbursement check or electronic funds transfer to the employee. The concern was that the travel process was fragmented within the organization, somewhat lengthy, and did not allow for volume consolidation to negotiate better fees with common suppliers of air tickets.

Of course, some of the details described here came to light during the data collection process and later improvement stages over the course of the project. At any rate, two documents produced during the Define phase were the project charter (a sanitized version appeared in Figure 7.2 earlier in the topic) and the SIPOC diagram seen in Figure 7.3.

The suppliers of inputs to this travel settlement process are the travelers and the travel coordinators, so you enter them in the Suppliers’ lane. They submit forms (travel authorization and settlement) and receipts. These items are inputs to the settlement process, and you enter them in the Inputs lane. At the end of the process, the procurement office issues financial control documents and payment. Those items are the outputs from the process, and you register them in the Outputs lane. Finally, you enter in the Customers lane the recipients of those items.

Note that the Process Flow lane shows a top-level view of the specific process you will evaluate, in this example the settlement process at the organization. Again, in later phases, you and your team will create more fine-grained process maps. In the Define stage, your goal is to develop an initial understanding of the operations. The high-level process map and SIPOC help you build that understanding and identify the broad scope of the process you plan to improve.

The 30,000-foot view of the process provides you with an essential reference for discussing specific project objectives, calculations of project deliverables, and the definition of crucial stakeholder segments. In the Measure phase, you will create a more detailed map using appropriate metrics of process tasks and decisions.