This warehouse management article helps you understand practical advice for any business that is involved in running warehousing operations.
Warehouse Audit: Why You Need One and a Sample Checklist
Any business that stores and distributes products should have a warehouse audit process. It is a type of preventative measure that helps avoid costly issues, but also a great tool to correct operational problems in a warehouse. But what exactly is a warehouse audit and how do you perform one?
In this article, you will learn the answer to this question and the means to perform one yourself. In addition, we have provided an example checklist containing samples warehouse audit points to help you get started on developing your own proper warehouse audit.
What is a warehouse audit?
A warehouse audit is a comprehensive assessment of the operations, processes, and inventory management at a warehouse. It is designed to help identify areas for improvement within the warehouse that can increase efficiency, reduce operational costs, and improve customer service. During an audit, a team of professionals inspects the facility for potential safety concerns, verifies employee qualifications for handling tasks, and reviews the warehouse inventory data for accuracy.
Warehouse audits can be used to assess compliance with safety regulations, measure productivity levels, and ensure accurate record-keeping. They are also useful for identifying money-saving opportunities through improved efficiency or better use of resources. By conducting regular audits, businesses help ensure their warehouses remain safe and efficient while providing maximum value to their customers.
3 Main Reasons to Conduct a Warehouse Audit
We break down the main reasons for conducting a warehouse audit into 3 main categories. While there may be plenty of other reasons do conduct one, these are our 3 reasons:
When to Conduct Warehouse Audits
Warehouse audits should be conducted at least annually, but can be more frequent if necessary. The reason why this is necessary is that a warehouse audit is such a vital part of the “continual improvement” (LEAN) process. The frequency can largely depend on the size and complexity of the warehouse operations. At the very least, every warehouse should have a scheduled audit and regular intervals of some sort.
It is also important to conduct an audit after any major changes or updates that could affect how the warehouse operates, such as new equipment, changes in personnel, or reorganization of inventory. Smaller “sub” audits can occur more frequently such as inventory audits every quarter.
Who should conduct a warehouse audit?
A warehouse audit should be conducted by an experienced team of professionals, such as a certified auditor or an outside consulting firm. These professionals have the experience and knowledge to properly assess the operations and processes of a warehouse. It’s also helpful to have an auditing group from outside your organization because they will look at your operations with fresh eyes. This may allow them to notice problems more readily than a person inside the organization. An outside auditing firm also tends to be less biased toward potential problems.
However, a warehouse audit does not have to be performed by an external team. It can be an internal team devoted to the task as well. They must simply be able to provide objective feedback and guidance on how to improve efficiency, reduce costs, and increase customer satisfaction. The team should include members with different backgrounds and experience, such as operations management, warehouse safety, and inventory control. This way, all aspects of the audit can be covered properly.
What are the benefits of a warehouse audit?
The benefits of a warehouse audit are numerous. A warehouse audit can help identify areas in need of improvement, such as increasing efficiency or reducing operational costs. By conducting regular audits, businesses can improve their safety practices, measure productivity levels and accuracy of record-keeping, and identify opportunities for money-saving measures.
Audits also help to ensure compliance with safety regulations, which can reduce potential liabilities. Finally, an audit can ensure that customer service is up to par and help the organization stay ahead of its competition. All of these benefits contribute to a more efficient warehouse operation and increased profitability for the business.
How is a warehouse audit report graded?
Warehouse audit reports are typically graded on a point ranking system. This usually breaks each item on the checklist down to either “below average”, “average”, or “above average”. However, the report is not only a point system but coexists with a detailed analysis or reason for the rating.
The report should illustrate what is good and what areas need improvement. It doesn’t matter if you only audit warehouse inventory or a broader full warehouse audit. This audit helps formulate substantial feedback on root causes and how problem areas can improve.
How to Use Warehouse Audit Reports
Once a warehouse audit has been completed, its results should be presented in a formal report. This report serves as a tool for management to evaluate their warehouse operations, identify areas of improvement, and make strategic decisions. It should provide an objective analysis of the current state of the warehouse and actionable recommendations on what needs to be done to improve operations.
The report should document all areas that were inspected and include any observations or recommendations made by the auditing team. It should also clearly state the objectives of the audit, evaluate overall performance, and recommend solutions for areas needing improvement. Finally, it should guide how to implement the recommended solutions to achieve optimal performance from the warehouse operations.
The report should be used to track progress and measure the effectiveness of improvements made. Its contents should be reviewed closely by upper management, and any decisions or actions taken as a result of the audit should also be documented for future reference. By following up with the audit results, businesses can ensure that their warehouse operations are safe, efficient, and cost-effective.
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Step-by-step Warehouse Audit Process
Here is a general step-by-step process that you can use to get started with auditing in your warehouse:
1. Determine What You are Auditing
Before you can begin a warehouse audit, you need to identify what type of warehouse you are operating. For example, the audit process for an e-commerce warehouse will look quite different than a cross-docking warehouse.
2. Observe Relevant Warehouse Operations
Once you determine the specifics of what you are auditing, then you need to observe your warehouse operations. You have to make sure everything in the warehouse is safe and working correctly. Look at how things are stored, how people work, and all the equipment like forklifts, pallet jacks, and racking. You should be sure to evaluate not only the functionality and efficiency of these elements but more importantly their safety.
3. Interview Key Staff Members
The people who work in the warehouse know better than anyone else what is wrong. Ask them questions to find out how the warehouse can be improved. Find out which rules are not being followed and get other helpful information. Make sure to include a broad spectrum of warehouse employees in your interviews.
4. Evaluate Results
After you have the audit data, it’s time to analyze which processes or policies need revision in your warehouse. Along with warehouse managers, use the audit data to make suggestions that will enhance productivity and safety. You should also include upper management stakeholders about any critical findings and for help with recommendations.
5. Develop and Implement Adjustments for Improvement
An audit process is useless unless it has some sort of implementation to make changes for improvements. You may need to prioritize which issues are most important, which should involve managers or key stakeholders as necessary.
6. Repeat Regularly
As mentioned earlier in this article, a warehouse audit process should be a regularly scheduled event. This helps ensure that potential problems are caught before they become bigger problems, but also continuous improvement occurs in the warehouse space.
Example Warehouse Audit Checklist Points
A warehouse audit checklist should include elements such as safety inspections, equipment evaluations, staff interviews, performance evaluations, and recommendations for improvement. The following sample list of warehouse audit checklist points can serve as a basic example for your checklist:
Warehouse Audit Sample Checklist:
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Getting Started With Your Warehouse Audit
Now that you know about warehouse audits, you can start the process of integrating one into your business. Doing so will help you maintain a lean warehouse with continuous improvement. Start by including your warehouse management teams, and determine what kind of warehouse audit you need. Then follow a regularly scheduled plan for future audits and implementation of improvements.
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