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Lean Six Sigma Green Belt: Why Are Costs Excluded from a SIPOC Diagram in Six Sigma?

What Are the Five Core Components of a SIPOC Process Map?

Understand the five key elements of a SIPOC diagram—Suppliers, Inputs, Process, Outputs, and Customers. Learn why financial details like costs are not included in this high-level Six Sigma process mapping tool used in the DMAIC Define phase.

Question

Which aspect is NOT part of a SIPOC diagram?

A. Suppliers
B. Inputs
C. Customers
D. Costs

Answer

D. Costs

Explanation

SIPOC focuses on process flow, not financials.

The Purpose of a SIPOC Diagram

A SIPOC diagram is a high-level process mapping tool used during the Define phase of a Six Sigma project. Its primary function is to provide a simple, visual overview of a process from beginning to end. The framework is intentionally limited to identify the scope and boundaries of a project, ensuring all stakeholders share a common understanding of the key elements involved before a deep dive analysis begins. It focuses strictly on the flow of work and materials, not on detailed financial metrics.​

The Five Components of SIPOC

The acronym SIPOC represents the five distinct components that constitute the diagram. Any element falling outside of these five categories is not part of a standard SIPOC analysis.

  • Suppliers: The people, departments, or organizations that provide the inputs needed for the process.
  • Inputs: The materials, information, or other resources that are transformed by the process.
  • Process: A high-level view of the key steps (typically 4-7 steps) that convert the inputs into outputs.
  • Outputs: The final products, services, or information that result from the process.
  • Customers: The individuals, groups, or other processes that receive the outputs.

Why Costs Are Excluded

Financial metrics such as costs, revenue, or budget are not included in a SIPOC diagram because the tool’s purpose is to define process boundaries, not to conduct a financial analysis. While cost is a critical factor in any business project, it is addressed in other Six Sigma documents. The financial justification for a project is established in the Business Case section of the Project Charter, which is also created during the Define phase. Detailed cost analysis may also be performed later in the Analyze or Improve phases to quantify the impact of process problems and the benefits of proposed solutions.​

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