Solving Business Problems with SIPOC and the Cause and Effect Diagram

Getting an overview of your operations in their current state can be a challenge, especially in a more complex organization that has multiple layers in its work. This is where tools like SIPOC and the cause and effect diagram come into play, and understanding their applications is critical for any leader who wants to drive their company towards constant improvement rather than eventually finding it stuck in a rut.

What is SIPOC?

SIPOC stands for Supplier, Input, Process, Output, Customers, and it’s a tool that can display various data points about your organization in a tabular manner, allowing you to see exactly where things stand in each of those areas of your operations. This might sound like something straightforward that can possibly be investigated in other manners too, but the thing about SIPOC is that it allows you to align those different data points in a way that gives you a full overview of the current situation.

The way the tool works is implied in its name the table produced from its application contains five columns, one for each of the five elements being studied. A great benefit of its proper application is that it allows people to get involved in a new concept without actually having a deep understanding of it. SIPOC gives them an overview that’s easy to follow, even for those without any direct experience in this part of the organization’s work. It can also be useful in cases where a certain system has already been discussed in the past, but due to the length of time that’s passed since then, most people have forgotten the important details at this point.

What is a Cause and Effect Diagram?

The cause and effect diagram is another commonly used tool in managing larger organizations, and it’s great for visualizing various concepts. Its main use is to present the root cause of a specific issue in a visual manner, allowing even people without much experience in that field to get an idea for what might have gone wrong. At the same time, it’s a relatively simple to use tool that can be implemented into the work of most organizations very easily and without any extra hassle.

Considering the critical importance of identifying root causes in certain situations, using the cause and effect diagram effectively can lead to great improvements in your workflow if you implement it properly. The one thing that’s important to remember here is that it’s not a universal solution to every problem, and in some cases, you’ll need to visualize the root cause of a certain issue in an alternative manner.

Putting the Two to Work Together

Both tools are used for visualizing certain data points but in slightly different ways. SIPOC relies more on organizing data in a tabular structure with pre-defined columns for each type of data point being entered, while a cause and effect diagram is more concerned with delivering a concise visual overview of the problem, indicating the directions of the influence of different points along the diagram.

Combining the two can be great for cases where a problem needs to be analyzed from more than one perspective, but their combination is also not something that you’ll need to do at every point of your operations. A situation that would call for such an approach is, for example, one where you need to explain the root cause of a problem to a large group of people of diverse backgrounds, and not all of them are already on board the current project. Combined with a severe lack of specific domain knowledge, this can be a messy situation that can be very difficult to get through for all parties involved. However, by introducing a SIPOC table to list all the core components of the system, things can be made to work much more smoothly.

Conclusion

You can easily address many problems of your organization by clever application of SIPOC and cause and effect diagrams, but it requires careful study of both methods, and developing enough intuition for how each of them works. It’s also important to understand that not every situation calls for the use of this combination, and in some cases you’d be better off focusing on either of the two.