SIPOC analysis

Starting a new project means bringing many threads together at the same time. Customer requirements must be understood, materials procured, development steps coordinated, and it must be clearly documented how results are to be delivered to the customer. But it is often precisely at these interfaces that problems arise, for example when it remains unclear who is providing which information or what results are actually expected. Anyone who has ever managed a project is familiar with this situation: The team is motivated, but different ideas about responsibilities, interfaces, or expected results lead to misunderstandings. This is exactly where SIPOC analysis helps. It offers a structured approach to clearly capture and visualise the relevant elements of a process – from the supplier to the inputs and the actual process to the result and the customer.

SIPOC analysis is a way of visualising business processes. It is used to systematically record, analyse and clearly present processes. The aim is to present the entire process in a clear structure so that the effects on upstream and downstream processes can be understood.
The term SIPOC is an acronym that stands for ‘Supplier’, ‘Input’, ‘Process’, ‘Output’ and ‘Customer’.
The analysis can be used at various points within a project, for example at the beginning to record and visualise processes, or later in the project if existing processes are not functioning as planned. It is particularly useful when certain points in the process under consideration are unclear.

The results of a SIPOC analysis can be presented in the form of a diagram or table. This allows even complex processes to be clearly described and analysed. The visualisation makes it possible to see at a glance which steps a process begins and ends with.
The analysis can be carried out by a single person, such as a project manager, but it is usually more effective when carried out as a team. Collaboration brings in more perspectives and reduces the risk of overlooking important information.
The process begins with a description of the problem. Five to seven process steps (P) are then listed. These remain deliberately superficial, as the aim is to provide an overview rather than an in-depth detailed analysis. A table with the five SIPOC categories is then created and filled with the relevant content. The information is systematically collected using the following steps. The order is not binding. 
 
1. Supplier (S)

This section is used to document the materials, services or information that originate from which suppliers. A distinction should be made between internal and external suppliers. Internal suppliers include employees who, for example, provide information in the form of reports. External suppliers are, for example, other companies that supply materials or provide services. In addition, it should be checked whether upstream processes or supply chains are relevant, for example, where a supplier obtains its materials.

2. Input (I)

The resources required for the individual process steps are recorded here. This refers to materials, machines, or information. 

3. Output (O)

This describes the results for each process step. This also includes the recording of intermediate products, end results, and information or materials. The relevance of these results for subsequent processes or end customers is noted. Once the process steps have been created, it makes sense to work on the output next in order to find out which materials are required.

4. Customers (C)

Under this point, it must be noted whether the customers are internal or external. Internal customers are other departments within the organisation. External customers are those to whom products or services are sold. The requirements, expectations, and benefit claims of each of these customers must be documented. The focus is not on functions or features, but on the actual added value for the customers.

SIPOC analysis is easy to implement and requires little effort. It allows the current state to be clearly presented and compared with the target state. This reveals deviations and allows necessary process adjustments to be identified. Potential changes and challenges can be identified and prioritised. The clear presentation creates a common understanding of the process among all participants, which improves cooperation. Unclear sub-processes stand out clearly and can be clarified in a targeted manner. Based on this information, the planned state of the process can be created by displaying changes or improvements, for example in the input or with suppliers. Nevertheless, the analysis offers only a low level of detail, which must be achieved using other methods. If upstream processes are also to be reviewed, these interfaces are difficult to represent visually, as the analysis assumes a linear sequence of steps. Therefore, these interfaces, as well as the interpretation of the processes and various interactions, must be captured using other methods.

Before getting down to the detailed work, the SIPOC analysis provides a clearly structured and simple framework for an initial snapshot. This allows all participants to develop a common understanding of the project and drive it forward. For this reason, it is particularly helpful to use the analysis at the start of the project to review the current situation. Once further details are required, more in-depth methods can be used, but a solid foundation has already been laid.