The initial step of a Six Sigma implementation project is making a decision whether the process being examined is a right fit for the tools utilized in the methodology. As a matter of fact, there exists a method to help establish what process can be adapted for the Six Sigma method. This tool, known as SIPOC, is essential especially for a company carrying out a Six Sigma project for the first time.
SIPOC is an acronym for Suppliers, Inputs, Process, Outputs and Customers. This methodology makes use of information from each of these areas to create an overall map of a process and provide a high-level view of the entire Six Sigma project.
In the end, the SIPOC methodology is an approach that guides an organization toward the achievement of less wasteful and more efficient business processes.
Importance of the SIPOC Diagram
The SIPOC diagram is considered a type of process mapping. This term is used to describe how a project’s goals are put together and, in certain cases, outlines the steps through which the goals should be accomplished. Despite its inherent simplicity, it is a highly effective way to ensure that every member of the project team – and the executives of an organization – stay on the same page.
SIPOC provides the Six Sigma team with a high-level map of the process, in order to enable leadership to explain the project quickly and to offer a common point of reference for all members of the team. A SIPOC diagram also helps in the identification of problems and isolation of areas which are unnecessary or offer little useful value.
Analysis of a SIPOC Diagram
The SIPOC methodology can be best accomplished through brainstorming sessions and teamwork. In these sessions, the members of the team come up with the variables which are relevant to a business process. However, in analyzing a SIPOC diagram, it is vital to first establish what is required for business inputs and outputs. For our breakdown of the SIPOC diagram, we will use the example of a baking process:
In a bakery business, the inputs are raw materials which are used, and form the major components of the output. With regard to the baking process, the requirements for inputs are:
- The raw materials must be fresh
- They need to be reasonably priced
- The inputs should be readily available
The outputs are the products resulting from the baking process. Outputs are also the final products which will be sold to the customer. The outputs produced should always be a mirror of the company’s positioning and goals in the market. A few possible requirements for the outputs of the process include:
- Great taste and presentation
- Accessibility by consumers
Once the inputs and outputs have been described, the methodology then looks at whether the suppliers address the input requirements. It also examines if the products offered are in line with the needs of the customer.
Suppliers need to provide inputs that meet business needs and unique specifications. Among the questions that should be asked to help determine whether a bakery has the right suppliers include:
- Are they able to meet demand for inputs?
- Do they provide inputs of sufficient quality?
- Are their prices reasonable?
- Is there a backup plan if the main supplier is unable to deliver?
- Is it advantageous, financially and reputation-wide, to be associated with the supplier?
The customers are the end users of the baked products and are the people who pay for what the bakery offers. Through the use of Voice of Customer (VOC), here are some questions which can guide the business to identify what the customer wants or needs:
- What quality of bread do you need?
- How much money are you willing to spend on a loaf of bread or a birthday cake?
- Where do you purchase your bread?
- Do you buy pastries often?
Employing SIPOC to improve established processes is not unusual, especially if turnout on output or sales are low, or if the ratio of expenses to income is unusually high. The methodology helps to determine if a particular process still works in favor of the business. It provides a clearer picture of whether more resources should be dedicated or a process streamlined to provide higher efficiency.