The Supplier, Input, Process, Output and Customer (SIPOC) Matrix is one of the most important tools that must be used at the beginning of any six sigma project. It is common practice amongst lower level management to view SIPOC as another template to be filled for the execution of a Six Sigma Project. However, people who truly know about what SIPOC is vouch for its usefulness. Some of the premier usages of SIPOC have been written as follows:
Levels of Process: Using the SIPOC Chart at the beginning of a six sigma project ensures that there is unanimity about the process being discovered. Any student of Business Process Management would know that Processes do operate at various levels. It can become difficult if people within the project team have different ideas with regards to the level of the process that is being worked upon. SIPOC comes to the rescue here and anyone who has doubt or confusion can look at the SIPOC chart to clarify.
Scope of Project: Processes tend to be continuous. In fact when one ends, the other one must start immediately. Since the whole organization is a link between the input and output stages, it can be a subjective matter as to where a process really begins or ends. For instance some might say that the recruitment process begins at the stage when advertisements are placed in the newspapers, while others may say that it begins after the candidate has walked in for an interview. Both may be correct and present their case convincingly. However this needs to be done before the project has started. Ambiguity in the middle of a six sigma execution can spell disaster for the people involved. SIPOC helps ensure that the scope of the project is known crystal clear. Participants will know exactly where the process starts where it ends and what it is supposed to do.
Value Stream Maps: The SIPOC chart comes in as a handy tool while creating Value Stream Maps. This is because the SIPOC Matrix ensures that the flow of material and information has been traced step by step and recorded. This information can be used in the value stream map to generate an as-is process, based on which further improvements are sought and a to-be process is generated.
Customer as a Supplier: The SIPOC is also essential in understanding information loops. In many cases, the customer himself/herself is the supplier. This is because the customer supplies vital information in the form of requirements. In such cases a method must be obtained to ensure that correct and material information is collected from the customers.
Entities Can be Suppliers or Customers: In many cases, suppliers can be customers too. For instance when you have to place an order with your supplier, you provide the outputs to them. Hence your suppliers are customers in that process.
Such reversal of roles is common in the case of processes. A SIPOC helps structure the process in such a way that it is easy to understand for all the people involved with minimal ambiguity.