A few times on these pages I have seen discussions of businesses that are systematized being worth more and easier to sell.
I couldn't agree more. Any business that operates as a well-oiled-machine is much easier to transfer to new people, whether you're selling up or onboarding human resources.
A few years ago I wrote about my experience with the SIPOC concept, things I learned from a fellow student when I attended supplier training at Chrysler. On the surface it would seem to apply more to a big HR system than a Fastlane business; but I have organized everything I do this way for years, even my one-man-band activities, and it helps me get more done more consistently.
Back then this helped a few SBOs and production managers; hopefully it'll have some value for you too.
If you’re a small business owner or manager and have got there through persistence, dedication and hard work, this process-management tool may be the “Swiss Army Knife” that you need to get to the next level.
If you work in automotive or any kind of Engineering environment, this article will seem too elementary. You’re used to a highly structured environment. But I would say it’s good to get back to basics, and small businesses are rarely set up to be process-driven.
Businesses start off driven by the owner, then by the people. As they grow, they start to be driven by processes, and finally, they find themselves driven by their culture, for better or worse.
Either way, all your work happens in a process, whether it is stable and documented or not. All improvement to your company comes from improving a process; again, whether you realize there is one, or not. If you haven’t already, it’s time to start understanding what that can do for you.
Learning to see work as the output of a process can help you take in your company as a whole or the details of one job using the same language and framework. It is the first step to developing the systems that define what you do, and good systems are what make small businesses viable and – if necessary – salable.
The work to be done
I use a simple tool called “SIPOC” as a starting point for improvement. Often enough, a conversation around a SIPOC diagram produces enough clarity to move forward with changes.
SIPOC simply asks you to define, for any work to be done:
S – the Supplier
I – the Inputs
P – the Procedure
O – the Outputs
C – the Customer
One of the biggest challenges in today’s workplaces is communication. Just going through the motions of identifying the SIPOC for the work being done, with the stakeholders of that work around the whiteboard, can release an incredible amount of clarity about what’s really supposed to be happening.
Let’s take a look at what each element gives you.
Define the Supplier
Where does the raw material for a job come from? Where does the signal to produce work come from? Who provides it to the person or organization doing the work?
Getting this defined helps to avoid misunderstandings, errors and time wasted trying to decide what to do.
Define the Inputs
Working in a process means you are taking something and adding value to it, whether you’re using timber to build a house or using a blank form to create, well, a completed form.
Counting on “Good People” to know when the input is correct may work for a while, but defining a specification will save you trouble in the long run. Avoid errors by making sure that people can tell when their raw material is correct, their instructions up-to-date, their work orders are approved.
The most important part about defining the Input is that somehow, somewhere, you need an agreement between the “Supplier” and the person working, that the Input will be as expected; and just what “as expected” means.
Define the Procedure
The Procedure is HOW you work. What are the steps you wish to follow? Defining these provide you with two main benefits.
First, if you follow procedural steps you can evaluate and improve your process. Or if it’s working, you can “Save Those Settings!” and stay consistent.
Second, defining the procedure to follow means you can scale up whatever you’re doing. Obviously, training and specialization will always be needed for new employees, but having clear and documented procedures allow you to pass one person’s knowledge on to another.
Define the Output
Your output is the work that is produced. No matter how simple a job is, decide what matters about it. This could be compliance with a dimensional drawing or simply the statement, “Not Broken!”, or anything in between.
This is important because just like the Input needs to be agreed on between the person working and their Supplier, the Output must meet the need of the Customer. Determining what matters to the Customer allows you to streamline and cut costs without failing to meet those needs.
What does the Customer need?
The Customer consumes your work. Ultimately all work is done to satisfy someone’s needs. In a business or in a job, failure to define the customer leads to trying to please too many people and never getting any one of them what they really need.
Determining who your Customer is and is not is important because it allows you to focus. Whether your Customer is The Client, or the next person in an assembly line, providing exactly what they need is the key to success.
An example
Here’s the SIPOC for a typical production process. It gives you an overview of the things that matter. More importantly, it gives you a framework where you can implement control steps for quality and efficiency, allowing you to specify the order of operations. Depending on the task at hand and the literacy of your workforce, this could be used as-is or drive the creation of a visual work instruction.
I couldn't agree more. Any business that operates as a well-oiled-machine is much easier to transfer to new people, whether you're selling up or onboarding human resources.
A few years ago I wrote about my experience with the SIPOC concept, things I learned from a fellow student when I attended supplier training at Chrysler. On the surface it would seem to apply more to a big HR system than a Fastlane business; but I have organized everything I do this way for years, even my one-man-band activities, and it helps me get more done more consistently.
Back then this helped a few SBOs and production managers; hopefully it'll have some value for you too.
HTML:
<hr>If you’re a small business owner or manager and have got there through persistence, dedication and hard work, this process-management tool may be the “Swiss Army Knife” that you need to get to the next level.
If you work in automotive or any kind of Engineering environment, this article will seem too elementary. You’re used to a highly structured environment. But I would say it’s good to get back to basics, and small businesses are rarely set up to be process-driven.
Businesses start off driven by the owner, then by the people. As they grow, they start to be driven by processes, and finally, they find themselves driven by their culture, for better or worse.
Either way, all your work happens in a process, whether it is stable and documented or not. All improvement to your company comes from improving a process; again, whether you realize there is one, or not. If you haven’t already, it’s time to start understanding what that can do for you.
Learning to see work as the output of a process can help you take in your company as a whole or the details of one job using the same language and framework. It is the first step to developing the systems that define what you do, and good systems are what make small businesses viable and – if necessary – salable.
The work to be done
I use a simple tool called “SIPOC” as a starting point for improvement. Often enough, a conversation around a SIPOC diagram produces enough clarity to move forward with changes.
SIPOC simply asks you to define, for any work to be done:
S – the Supplier
I – the Inputs
P – the Procedure
O – the Outputs
C – the Customer
One of the biggest challenges in today’s workplaces is communication. Just going through the motions of identifying the SIPOC for the work being done, with the stakeholders of that work around the whiteboard, can release an incredible amount of clarity about what’s really supposed to be happening.
Let’s take a look at what each element gives you.
Define the Supplier
Where does the raw material for a job come from? Where does the signal to produce work come from? Who provides it to the person or organization doing the work?
Getting this defined helps to avoid misunderstandings, errors and time wasted trying to decide what to do.
Define the Inputs
Working in a process means you are taking something and adding value to it, whether you’re using timber to build a house or using a blank form to create, well, a completed form.
Counting on “Good People” to know when the input is correct may work for a while, but defining a specification will save you trouble in the long run. Avoid errors by making sure that people can tell when their raw material is correct, their instructions up-to-date, their work orders are approved.
The most important part about defining the Input is that somehow, somewhere, you need an agreement between the “Supplier” and the person working, that the Input will be as expected; and just what “as expected” means.
Define the Procedure
The Procedure is HOW you work. What are the steps you wish to follow? Defining these provide you with two main benefits.
First, if you follow procedural steps you can evaluate and improve your process. Or if it’s working, you can “Save Those Settings!” and stay consistent.
Second, defining the procedure to follow means you can scale up whatever you’re doing. Obviously, training and specialization will always be needed for new employees, but having clear and documented procedures allow you to pass one person’s knowledge on to another.
Define the Output
Your output is the work that is produced. No matter how simple a job is, decide what matters about it. This could be compliance with a dimensional drawing or simply the statement, “Not Broken!”, or anything in between.
This is important because just like the Input needs to be agreed on between the person working and their Supplier, the Output must meet the need of the Customer. Determining what matters to the Customer allows you to streamline and cut costs without failing to meet those needs.
What does the Customer need?
The Customer consumes your work. Ultimately all work is done to satisfy someone’s needs. In a business or in a job, failure to define the customer leads to trying to please too many people and never getting any one of them what they really need.
Determining who your Customer is and is not is important because it allows you to focus. Whether your Customer is The Client, or the next person in an assembly line, providing exactly what they need is the key to success.
An example
Here’s the SIPOC for a typical production process. It gives you an overview of the things that matter. More importantly, it gives you a framework where you can implement control steps for quality and efficiency, allowing you to specify the order of operations. Depending on the task at hand and the literacy of your workforce, this could be used as-is or drive the creation of a visual work instruction.
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