A warehouse audit should answer the questions “Do our procedures meet current operating requirements?” and “What can we improve?” The key feature of an audit is that it be an unbiased examination and evaluation that objectively analyzes past performance and possible improvements. The warehouse audit can be performed by the department itself, an internal auditor, or an external auditor. It should result in a warehouse audit report that details strengths and weaknesses and suggests improvements.
Benefits of a Warehouse Audit
Whether performed by an internal agency or an outside entity, there are many benefits from conducting a warehouse audit. These include establishing consistently sustainable standards and supplying constant access to reliable data. An audit will also help inform strategic and managerial decisions as well as identify where you can improve and where you can eliminate inefficiencies. A professional audit should result in a warehouse audit report with suggestions for improving efficiency and sustainability.
A warehouse audit will invariably begin with the gathering of data – both quantitative and qualitative – from key stakeholders. This data will then be analyzed and interpreted. The main department involved in data collection and interviews will be the warehouse, however, other departments may also be involved, including purchasing, customer service, production, and IT. Each of these departments can provide valuable insight into any issues and can also benefit from the outcome of the audit.
All gathered and analyzed information can be turned into an as-is process, with documents and flow maps to supply a clear understanding of the entire process. They can be used to help evaluate the process so that inefficiencies, waste, and bottlenecks can be identified. The audit team will then offer recommendations, risk assessments, and action items on a warehouse audit report. The data gathered during the warehouse audit is also analyzed and used as benchmarks to back up the findings as well as quantify costs and potential savings.
Warehouse Audit Checklist and Report
A properly completed warehouse audit report will give you a complete set of data analyses that can be used to measure continuous improvement. This includes order profiles, productivity profiles, inventory profiles, and other operating ratios. The audit covers each functional area, from receiving through shipping and including inventory control. Below is a warehouse audit checklist that demonstrates what the audit should include.
- Facility current and optimum capacity and throughput
- Logistical layout and material flow
- Safety, security, and housekeeping
- Systems functional capabilities and performance
- Customer service performance metrics
- Productivity analyses
- Storage and handling equipment
- Inventory accuracy
- Identification of opportunities for improvement
- Comprehensive warehouse audit report with recommendations
In a nutshell, a warehouse audit identifies good working practices and improvement or optimization opportunities inside the warehouse through data benchmarking and an objective assessment. It also supplies a roadmap to qualitative warehouse improvement, savings and cost avoidance, and improved efficiency.