The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

A framework for systematizing your business

A detailed account of a Fastlane process...

I Am I Said

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Sep 14, 2017
126
149
Canada
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.

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.

SIPOC-example.jpg
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
D

Deleted50669

Guest
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.

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.

View attachment 16642

One of the fundamental six sigma tools, and arguably among the most valuable.
 

RogueInnovation

Gold Contributor
Speedway Pass
User Power
Value/Post Ratio
170%
Jul 28, 2013
1,278
2,177
Great stuff
I thought in terms of how a website has certain inputs which you get from different places
From the pictures you use, the text, design
Proceedures such as editing, achiving/navigation, and organising crosslinks etc
Output such the style you are going for
And customer avatars and how each bit is designed for who
I also thought in terms of a physical business I was considering for a while, alibaba suppliers, input such as rubber and wood
Proceedures such as assembly, quality checking, and shipping labels, logs
Output, how many, where
Cutomers by region etc

I mean its not 100% what you meant but I had to bend it to fit I guess.
Makes sense though
Helps pull together the idea a bit
 
Last edited:

I Am I Said

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Sep 14, 2017
126
149
Canada
One of the fundamental six sigma tools, and arguably among the most valuable.

Yes, exactly. However, I'm not sold on Six Sigma or Lean Six Sigma as valid for quickly-growing businesses (IE >25% pa.). Where I work we have sustained high growth for 10 years in domestic manufacturing, despite the GFC in 2008, and we have several green belts on staff, but a faster approach than true DMAIC is needed.

LSS appeals to me and I have run many projects, but we have to be fast and agile. So, we just decide on a monthly basis what needs fixing, and on a quarterly basis what needs building. Then we hold each other accountable for results. With practice, our ability to pick the right projects improves. I need to do the same with myself, but that's a bit off-topic!
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

I Am I Said

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Sep 14, 2017
126
149
Canada
I mean its not 100% what you meant but I had to bend it to fit I guess.

Actually, yeah, that's pretty much exactly how you could apply it to web design.

Microsoft also has some really good material - maybe on their channel 9 site? - on using a Kanban process to manage development, which can complement a SIPOC approach. For a while I managed my day-to-day existence with a whiteboard / sticky-note version of Trello.
 
D

Deleted50669

Guest
Yes, exactly. However, I'm not sold on Six Sigma or Lean Six Sigma as valid for quickly-growing businesses (IE >25% pa.). Where I work we have sustained high growth for 10 years in domestic manufacturing, despite the GFC in 2008, and we have several green belts on staff, but a faster approach than true DMAIC is needed.

LSS appeals to me and I have run many projects, but we have to be fast and agile. So, we just decide on a monthly basis what needs fixing, and on a quarterly basis what needs building. Then we hold each other accountable for results. With practice, our ability to pick the right projects improves. I need to do the same with myself, but that's a bit off-topic!

Agreed, I think it's intended more for risk-mitigation scenarios if you're going to run through the full DMAIC dogma. And specifically risk associated with variance in quality of products / services.

For a young process that needs crazy amounts of flexibility, improv > LSS. Kaizen and other 'emergency' war-room type tools can be helpful too. I've mostly used LSS in manufacturing and healthcare environments, where the strategy was carved in stone decades ago, and their current issues are more cultural than anything else.
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top