SIPOC is an ugly sounding acronym, but it is a useful way to think through problems. Clients often present consultants with complex processes that seemingly don’t have a start or a finish. They go on-and-on. They are inter-related processes and it feels like an ugly excel formula full of nested if / then statements. The more you dig, the more you uncover.
Structured thinking. Sometimes, the best thing is to stop digging. Take a step back and think through the problem. Untangle the problem in a more structured way. Figure out what sits outside the process. What is the client really asking for? What comes before the process (#1) and what comes after the process (#3).
Supplier, Input, Process, Output, Customer (SIPOC): Building on that example, a SIPOC diagram can be drawn out from left-to-right; suppliers provide inputs to a process, which in turn, provides outputs to customers. It is a simple daisy-chain of activities and the real scope of the project is the area shown in red. The process in the middle is what you are after. The stuff on the left (suppliers, inputs) and the right (outputs, customers) are not really under your control, or potentially out of scope. Focus on the red part.
- Business-to-consumer (B2C): Cleaning products
- Business-to-business (B2B): Apple Airbook
- Internal product design: Airbus engines
- Sales support: Allstate insurance policies
#1. Use SIPOC to control scope. Clients often ask for additional work or small favors, under the same contracted fee. The consultant might say yes a few times, but eventually there is a danger that the consultant is over-promising. SIPOC is one of the tools to guard against scope creep and better define scope of the process improvement project.
#2. Use SIPOC to rule out hypotheses. In the example above, if SC Johnson was having process issues, one hypothesis might be related to their supplier’s chemicals.
- If the chemicals are the problem, you are well on your way to solving the problem
- If the chemicals are not the problem, you strike it off the list of hypotheses, and move on to other potential hypotheses “suspects”
Process improvement projects are common. There is a bit of a myth that management consultants spend a lot of their time on strategy and marketing projects. In reality, a lot of project work is very operationally-focused. As you can imagine, Fortune 1000 companies have lots of processes (across geography, across business units, across functions) that are generally going haywire and need re-wiring. Also, ops projects tend to have a more measurable return on investment (ROI) and lower risk of implementation.
Even the big 3 strategy firms do plenty of process-improvement projects. A few case studies where I am sure the teams benefited from some type of SIPOC analysis.