Operational Audits - Tool for Continuous Improvement

 

Strategy is sexy, execution is sweat and blood. The great strategy and execution divide has been a topic of discussion and one of the greatest challenges for the CEOs. Effective execution is quite complex and subjected to complex variables and dynamic environment. When there are time and cost pressures, people make exceptions and take short-cuts. In no time, exceptions become the rules and short-cuts become new norms. End result is failure of compliances, quality, accidents and so on.

How do you insulate your business from such risks? The challenge is that these violations are not visible and stay under the surface at the execution level until these explode like a volcano. Periodic Operational Audits is one of the proven techniques to proactively unearth and mitigate such risks, so that the operations stay on the right track.

𝟱 𝗥𝗲𝗮𝘀𝗼𝗻𝘀 𝗳𝗼𝗿 𝗣𝗲𝗿𝗶𝗼𝗱𝗶𝗰 𝗔𝘂𝗱𝗶𝘁𝘀 𝗼𝗳 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀

While operational metrics and KPIs have a key role in improving the performance, these may not point to the root cause of the gaps. The reasons why you need to do periodic audits are:

1️⃣ 𝘼𝙪𝙙𝙞𝙩𝙨 & 𝙄𝙣𝙨𝙥𝙚𝙘𝙩𝙞𝙤𝙣𝙨 𝙖𝙧𝙚 𝙋𝙧𝙤𝙖𝙘𝙩𝙞𝙫𝙚 𝙖𝙣𝙙 𝙋𝙧𝙚𝙫𝙚𝙣𝙩𝙞𝙫𝙚. Audits help you to catch the underlying gaps & risks that have still not surfaced in the form of a big problem.

2️⃣ 𝙂𝙤𝙤𝙙 𝙆𝙋𝙄𝙨 𝙥𝙚𝙧𝙛𝙤𝙧𝙢𝙖𝙣𝙘𝙚 𝙙𝙤𝙚𝙨𝙣’𝙩 𝙢𝙚𝙖𝙣 𝙖𝙡𝙡 𝙞𝙨 𝙬𝙚𝙡𝙡. It is possible to make the KPIs look good in the short term, while causing a damage in the long term. Periodic audits help to prevent gaming of the KPIs by presenting true picture on the ground.

3️⃣ 𝘼𝙪𝙙𝙞𝙩 𝙝𝙖𝙫𝙚 𝙩𝙤 𝙗𝙚 𝘾𝙮𝙘𝙡𝙞𝙘. 𝙊𝙣𝙘𝙚 𝙖 𝙮𝙚𝙖𝙧 𝘼𝙪𝙙𝙞𝙩𝙨 𝙙𝙤 𝙣𝙤𝙩 𝙨𝙚𝙧𝙫𝙚 𝙥𝙪𝙧𝙥𝙤𝙨𝙚. We are living in a VUCA world. The situations & environment change month to month. The frequency of audit cycles should depend on the nature of business & the risks involved. Certain audits have to be done more frequently than others.

4️⃣ 𝘼𝙪𝙙𝙞𝙩𝙨 𝙝𝙚𝙡𝙥 𝙮𝙤𝙪 𝙩𝙤 𝙞𝙙𝙚𝙣𝙩𝙞𝙛𝙮 𝙩𝙝𝙚 𝙧𝙤𝙤𝙩 𝙘𝙖𝙪𝙨𝙚𝙨 𝙤𝙛 𝙩𝙝𝙚 𝙥𝙧𝙤𝙗𝙡𝙚𝙢𝙨. Through well-structured audit program, it is easier to pin-point which process, activity or transactions are contributing to the problem.

5️⃣ 𝘼𝙪𝙙𝙞𝙩𝙨 𝙘𝙖𝙣 𝙗𝙚 𝙖𝙪𝙩𝙤𝙢𝙖𝙩𝙚𝙙. Audits are not supposed to create additional workload so that people can focus on risk mitigation & improvements. Therefore, the manual activities should be automated using technology platform.

Automating operational audit is the best way for the sustainable improvement management. However, the audit automation tool must have the following features to provide real benefits:

𝟭𝟬 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗙𝗲𝗮𝘁𝘂𝗿𝗲𝘀 𝗳𝗼𝗿 𝘆𝗼𝘂𝗿 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗔𝘂𝗱𝗶𝘁 𝗦𝗼𝗳𝘁𝘄𝗮𝗿𝗲
1️⃣ 𝙎𝙘𝙝𝙚𝙙𝙪𝙡𝙞𝙣𝙜 𝙍𝙚𝙘𝙪𝙧𝙧𝙞𝙣𝙜 𝘼𝙪𝙙𝙞𝙩𝙨: Operational audits should be done at a regular frequency or cycle. What if you can schedule recurring audit at any frequency required, like scheduling recurring meetings in calendar?

2️⃣ 𝘼𝙡𝙡𝙤𝙬𝙨 𝙗𝙧𝙚𝙖𝙠𝙞𝙣𝙜 𝙩𝙝𝙚 𝙨𝙞𝙩𝙚 𝙞𝙣𝙩𝙤 𝘼𝙧𝙚𝙖𝙨: A site has multiple areas e.g. a warehouse site may have security, parking, utility, docks, storage, packing, office areas. Shouldn’t the checkpoints be specific to each area? Does your audit software allow that?

3️⃣ 𝙎𝙚𝙦𝙪𝙚𝙣𝙘𝙞𝙣𝙜 𝙩𝙝𝙚 𝘼𝙧𝙚𝙖𝙨 𝙞𝙣 𝙖 𝙇𝙤𝙜𝙞𝙘𝙖𝙡 𝙊𝙧𝙙𝙚𝙧: Imagine the auditor moving back & forth in different areas as the check points may be listed randomly. With sequencing of areas, the check points will be presented to the auditors in a logical order, saving time and avoiding any confusion.

4️⃣ 𝘾𝙤𝙣𝙩𝙧𝙤𝙡 𝙤𝙣 𝘾𝙝𝙚𝙘𝙠𝙡𝙞𝙨𝙩 & 𝙫𝙚𝙧𝙨𝙞𝙤𝙣𝙨: If you follow any QMS, you will know the importance of standardization and control of documents.

5️⃣ 𝘾𝙤𝙣𝙙𝙪𝙘𝙩𝙞𝙣𝙜 𝘼𝙪𝙙𝙞𝙩 𝙞𝙣 𝙈𝙤𝙗𝙞𝙡𝙚, 𝙚𝙫𝙚𝙣 𝙞𝙣 𝙊𝙛𝙛𝙡𝙞𝙣𝙚 𝙈𝙤𝙙𝙚: Many sites like warehouses, depots, fulfillment centers are located in remote areas with poor data connectivity. Also, in the cold room there may not be good data connectivity. If you don’t have an offline mode, you cannot use mobile device to conduct audits.

6️⃣ 𝘼𝙘𝙘𝙚𝙨𝙨 𝙩𝙤 𝙎𝙩𝙖𝙣𝙙𝙖𝙧𝙙𝙨 𝙤𝙣 𝙩𝙝𝙚 𝙜𝙤 𝙬𝙝𝙞𝙡𝙚 𝘾𝙤𝙣𝙙𝙪𝙘𝙩𝙞𝙣𝙜 𝘼𝙪𝙙𝙞𝙩: What if auditors can access the relevant standard for each check point as they are conducting the audit, without going thru the pain of checking soft or hard copies?

7️⃣ 𝘼𝙪𝙩𝙤𝙢𝙖𝙩𝙚𝙙 𝙍𝙚𝙥𝙤𝙧𝙩𝙞𝙣𝙜: In the age of social media, people don’t want to read manually written long reports. Does your software provide automated report that includes all details but yet to the point?

8️⃣ 𝙎𝙡𝙞𝙘𝙞𝙣𝙜 & 𝘿𝙞𝙘𝙞𝙣𝙜 𝙤𝙛 𝙋𝙚𝙧𝙛𝙤𝙧𝙢𝙖𝙣𝙘𝙚: Does your software allow you the slice & dice the performance by Areas, Categories, Sub-Categories, Risks or a combination of that, so that you know where the problem is?

9️⃣ 𝘼𝙨𝙨𝙞𝙜𝙣𝙢𝙚𝙣𝙩 & 𝙏𝙧𝙖𝙘𝙠𝙞𝙣𝙜 𝙤𝙛 𝘾𝙤𝙧𝙧𝙚𝙘𝙩𝙞𝙫𝙚 𝘼𝙘𝙩𝙞𝙤𝙣𝙨: What is the point of conducting audit if it doesn’t lead to timely corrective actions? Does your software allows assigning actions with timeline and then track, sends auto reminders for follow-ups?

🔟 𝙂𝙖𝙢𝙞𝙛𝙞𝙘𝙖𝙩𝙞𝙤𝙣: What if your audit software gives coins or badges based on the scores & actions taken? Wouldn’t that motivate people to go for higher standards & ratings?

SIMSA (Sustainable Improvement Management by Systematic Audits) is one of the latest best in class tool that has all of above features and it can save 70% of your time in managing operational audits. You can do audits as frequently as required without worrying about manual interventions, as SIMSA takes care of that. So, if you find a merit in making your operations risk free and best-in-class, request for a demo of SIMSA today.