An efficient supply chain is key to maximizing business success, whether a small or large company. When businesses manage their supply chain effectively, they are increasingly likely to boost customer satisfaction, reduce operating costs, and increase sales and profitability.1
By conducting a warehouse audit, a company can likely add efficiency to its supply chain. Regularly assessing your warehouse operations can reveal inefficiencies, help establish sustainable standards, and prevent issues from developing into full-fledged problems.2 Read on to learn how to conduct a warehouse audit, so you can catch problems in their initial stages and optimize for future improvements.3
“By conducting a warehouse audit, a company can likely add efficiency to its supply chain.”
Configuring a Warehouse Evaluation Process
A warehouse audit can be conducted by an internal or external auditor, or by the department itself. Most importantly, the individuals handling the examination must be objective when analyzing past performance and possible improvements.4
When conducting a warehouse assessment, start by collecting both quantitative and qualitative data from key stakeholders in the warehouse, as well as other departments, such as customer service and IT. Be sure to not silo other departments, as they all provide valuable insight and can benefit from understanding the audit results.
After gathering the data, a thorough analysis of data is required to evaluate whether there are any existing inefficiencies or risks. From there, the audit team will produce a warehouse audit report that provides recommendations, risk assessments, and next steps.5
The Warehouse Audit Checklist
It’s important to note that warehouse audits can vary in depth from business to business depending on the extent of operations and the available resources. While it’s beneficial to establish a process that models the aforementioned one, a business with less resources or one that is new to auditing, can benefit by assessing some of the basic items included in this checklist:6
Determine whether storage space is used effectively and that space used for non-storage activities is kept to a minimum.
Ensure that all equipment is in good operating condition and that routine inspections take place. Additionally, evaluate whether equipment is being used to its maximum potential and is not interfering with other operations.
Make sure there are safety and accident prevention policies in place, and that employees and supervisors have a clear understanding of prevention methods.
Check that general maintenance is performed, so that all areas, both internally and externally, are kept tidy and sanitary.
Evaluate the overall efficiency of warehouse operations. Then provide recommendations and actionable next steps.
Another benefit of conducting a warehouse audit is the ability to use the data gathered to create benchmarks to measure against. One of the most critical benchmarks is cycle time, i.e. the time it takes to process an order from start to finish. A warehouse audit should ideally reveal inefficiencies, errors and waste, all of which can reduce cycle time.7
A warehouse audit provides your business with a quantitative and qualitative understanding of the productivity and service levels of warehouse operations. By conducting warehouse assessments, you can identify business progress levels across a wide range of benchmarks, and ultimately help your business to grow and succeed.8