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SIMSA Audit Software

About

SIMSA is an integrated Audit Management Platform based on the PDCA (Plan-Do-Check-Act) framework of operational excellence. It cuts out the bureaucratic layers of reviewers & approvers, therefore quick to deploy and intuitive to use. Its simplicity and mobility feature is the key factor for the buy-in from the operational staff. It can be used for self-assessments and tracking of corrective actions.

Tag: Audit

Warehouse Gemba Walk

Warehouse Gemba Walk: Unlocking the Power of Excellence

The Gemba Walk is crucial for achieving warehouse excellence and optimizing operations. In this all-encompassing guide, we will delve into the pivotal role of the Gemba Walk in warehouse operations. We will provide a step-by-step approach to its effective implementation covering all aspects:

  • Its benefits in keeping warehouse operations in good health
  • Identify the suitable candidates to conduct it
  • Its frequency and time spent
  • What to do with its findings

Introduction to Gemba Walk

  • What is a Gemba Walk?

Gemba is a Japanese term that translates to “the real place.” In the context of warehouse operations, the Gemba refers to the actual location where work is being done. A Gemba Walk involves observing and understanding the processes, systems, and interactions within the warehouse by physically visiting the Gemba.

  • Importance of Gemba Walk in Warehouse Operations

The Gemba Walk provides an opportunity for managers, supervisors, and frontline employees to gain first-hand knowledge of the operations, identify improvement opportunities, and foster a culture of continuous improvement and warehouse excellence. It allows for direct observation of processes, equipment, layout, inventory, and the overall working environment.

Understanding the Purpose of Gemba Walk

The Gemba Walk serves several key purposes that are essential for optimizing warehouse operations.

  • Identifying Inefficiencies and Bottlenecks

By being physically present on the Gemba, managers and employees can observe the processes and identify bottlenecks or areas of inefficiency. This allows for a deeper understanding of the root causes behind these issues and enables teams to develop effective solutions.

  • Improving Communication and Collaboration

The Gemba Walk promotes open communication and collaboration among employees. It provides an opportunity for team members to interact, exchange ideas, and share valuable insights. By engaging in conversations during the Gemba Walk, employees can voice their concerns, suggestions, and potential improvements, leading to a more collaborative and productive work environment.

  • Enhancing Operational Efficiency

The Gemba Walk enables a thorough examination of processes, equipment, and layout, with the goal of identifying opportunities to enhance operational efficiency. By closely observing workflows and identifying any unnecessary steps or waste, teams can implement changes that streamline operations, reduce costs, and improve overall productivity.

How to Effectively Implement Gemba Walk in Warehouse Operations

To ensure the successful implementation of Gemba Walk in warehouse operations, follow these step-by-step guidelines:

  • Step 1: Define the Objectives and Scope

Clearly define the objectives and scope of the Gemba Walk. Determine the specific areas or processes that will be observed during each walk. This ensures that the focus remains on the most critical aspects of warehouse operations.

  • Step 2: Plan the Walk

Create a schedule for the Gemba Walks, considering factors such as operational hours, peak times, and availability of key personnel. Develop a checklist (download a sample checklist) of key areas to observe and questions to ask during the walk. This helps to maintain structure and ensure thorough coverage.

  • Step 3: Choose the Right Participants

Select participants who have direct involvement in warehouse operations. This may include managers, supervisors, and frontline employees. Including individuals from different departments or teams can provide a holistic perspective and facilitate cross-functional collaboration.

  • Step 4: Conduct the Gemba Walk

During the walk, encourage participants to actively observe processes, interactions, and the overall work environment. Engage in conversations with employees, asking open-ended questions to gather valuable insights. Take detailed notes and capture visual evidence, such as photographs or videos, to support the findings.

  • Step 5: Document and Analyze the Findings

After each Gemba Walk, document the observations, insights, and identified areas for improvement. Analyze the findings to identify patterns, recurring issues, or opportunities for optimization. This analysis will serve as a foundation for developing actionable strategies.

  • Step 6: Implement Corrective Actions

Based on the findings from the Gemba Walk, develop and implement corrective actions. Assign responsibilities, set timelines, and communicate the changes to all relevant stakeholders. Monitor the progress and evaluate the effectiveness of the implemented actions.

Benefits of Gemba Walk in Warehouse Operations

The Gemba Walk offers a range of benefits that significantly impact warehouse operations.

  • Real-Time Problem Identification and Resolution

By physically observing the Gemba, issues and inefficiencies can be identified in real time. This allows for immediate problem-solving and prevents potential disruptions or delays in operations.

  • Employee Empowerment and Engagement

Engaging employees in the Gemba Walk demonstrates the value placed on their expertise and insights. This empowerment leads to increased engagement, motivation, and ownership over their work, fostering a positive and productive work culture.

  • Continuous Improvement Culture

The Gemba Walk promotes a culture of continuous improvement by encouraging employees to seek out opportunities for enhancement. This continuous drive for progress ensures that warehouse operations remain efficient, effective, and adaptable to changing needs.

  • Enhanced Operational Performance

Implementing the improvements identified through the Gemba Walk leads to enhanced operational performance. By eliminating waste, streamlining processes, and improving communication, warehouses can achieve higher productivity, accuracy, and customer satisfaction.

Who Should Conduct Gemba Walks in Warehouse Operations

Gemba Walks should be conducted by a diverse group of individuals, including:

  • Management and Supervisors

Managers and supervisors play a crucial role in leading and facilitating Gemba Walks. Their participation demonstrates the organization’s commitment to continuous improvement and sets the example for others to follow.

  • Frontline Employees

Frontline employees possess valuable insights into the day-to day operations and are directly involved in executing tasks within the warehouse. Their participation in Gemba Walks provides a frontline perspective and allows for the identification of operational challenges and potential improvements.

  • Cross-Functional Teams

Including representatives from different departments or teams fosters collaboration and a holistic understanding of warehouse operations. Cross-functional teams bring diverse expertise and viewpoints, leading to more comprehensive problem-solving and improvement strategies.

Frequency and Duration of Gemba Walks

Determining the frequency and duration of Gemba Walks depends on various factors, including the size of the warehouse, the complexity of operations, and available resources. Here are some considerations:

  • Determining the Frequency

Gemba Walks should be conducted regularly to ensure continuous improvement. For smaller warehouses or operations with fewer complexities, conducting Gemba Walks on a weekly or bi-weekly basis may be sufficient. Larger warehouses or operations with more complexities may benefit from conducting Gemba Walks on a monthly or quarterly basis.

  • Time Allocation for Each Walk

The duration of a Gemba Walk depends on the size of the warehouse and the number of areas to be observed. Typically, a walk can range from one to three hours. It’s important to allocate enough time to thoroughly observe and engage with employees, while also being mindful of operational demands.

Utilizing Findings from Gemba Walk

The findings from Gemba Walks serve as a foundation for driving meaningful changes and improvements within warehouse operations. Here are some steps to utilize the findings effectively:

  • Communicating and Sharing Findings

Share the findings with all relevant stakeholders, including managers, supervisors, and employees. Use clear and concise communication channels to ensure understanding and alignment on identified issues and improvement opportunities.

  • Prioritizing and Implementing Changes

Prioritize the identified issues based on their impact and feasibility. Develop action plans to address these issues, assigning responsibilities and establishing timelines. Regularly monitor the progress of implementation and provide necessary support and resources.

  • Monitoring and Evaluating Progress

Continuously monitor and evaluate the progress of the implemented changes. Track key performance indicators (KPIs) related to operational efficiency, employee engagement, and customer satisfaction. Use this data to assess the effectiveness of the Gemba Walk process and make further adjustments as needed.

SIMSA Operational Audits

Conclusion

The Gemba Walk is a powerful tool for optimizing warehouse operations. By physically observing the Gemba and engaging with employees, businesses can identify inefficiencies, foster collaboration, and drive continuous improvement. When implemented effectively, the Gemba Walk leads to enhanced operational efficiency, empowered employees, and a culture of continuous improvement. By prioritizing regular Gemba Walks and utilizing the findings to drive meaningful changes, warehouses can achieve higher levels of performance and success.

Sales Channel Audit – Key to Customer Success

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Sales Channel Audit - Key to Customer Success

The network of sales channel partners not only provides a conduit for the flow of products to the end customers but also enables implementation of various sales programs. Imagine if the conduit is leaky or damaged, do you think your end customers would be satisfied? Which option is better - repair the reported leakages or proactively prevent the leakages?

Often the channel partners are treated as the money making machine. The sales is pushed through the network, irrespective of its capacity and capability. Sooner or later the cracks in the channel network start to appear resulting in leakage of revenue, efficiency and even compliance risks in many cases. A company needs to pay as much attention to the health of the sales channel as to its own business.

Role of Sales Channel Audit

A well structured sales channel audit provides a basis for the health check of the channel. It functions as a documented record of all your sales channels processes, operations, assets and compliances. It helps to identify the bottlenecks and roadblocks for increasing your sales, improving efficiencies and maximising the ROI for the channel partners. The channel audit highlights what you do well and areas where you can improve. By focusing on those areas of improvement, you gain a significant advantage over your competitors.

The key benefit of the sales channel audits are:

  • Growing your market by identifying unaddressed geographies & segments
  • Benchmarking your sales processes, programs and strategies with competitors
  • Improving the processes & capabilities of the channel partners to grow the sales faster
  • Ensuring compliances to the regulatory requirements and company's policies
  • Providing a better ROI to the channel partners as compared to the competitors
Approach and Scope of Sales Channels Audit

It is very important to define the scope of sales channel audit. There are various approaches for defining the scope:

  1. Comprehensive: This approach requires covering all processes and operations of the channel partners. It provides a thorough and in depth understanding of the effectiveness of the process, gaps and potential improvements. However, these audits are resource and time intensive. It may also lead to interruptions in the operations impacting the sales. This approach is useful if a company does the channel audit first time or once in 2-3 years.
  2. Risk-based: This approach priorities the processes based on the risk assessment or based on the reported issues from the sales team or customers. It helps to focus on the areas that are of prime concern to the company and therefore has a better return on the investment in resources used for the audit. It also allows to conduct the audit more frequently and better attention from all the stakeholders for taking the corrective actions.
  3. Differentiated Approach: This approach requires segmenting your channel partners based on the value or geography. Each segment of channel partners may have a different set of processes and therefore the risks involved. A differentiated approach leads to even sharper focus and better insights.

The right approach would depend on the maturity level of a company in the channel partners management. At the low level of maturity, a comprehensive approach is preferred and as the understanding of the channel improves, one can move to the risk-based or differentiated approach.

Operational Audit Software

The next most important aspect of the channel audit is to identify the scope, based on the approach adopted. Typically, the areas that are included are:

  1. Market Coverage and Service: A channel partner who is interested in short term profit may not focus on the markets or customers that are growing but not yet profitable, leaving gaps for the competitors. Also, ensuring the complete assortment and placement of the products on the retail shelf may not adhere to the laid down norms or policies. The common gaps observed in this area are:
    • Missing out certain outlets or visit beats to the outlets
    • Improper placement of the products on the shelves
    • Not having assortment according to the norms for a category of outlet
    • Out of Stock products ordered by the retailers
    • Product damages in the outlet
    • Poor merchandising
  2. Incentives, Rebates and Claims: Lot of leakage and abuse of money budgeted for incentives & rebated may happen if proper controls are not in place. The key control gaps observed in this area are:
    • Claims and payments made on sales to ineligible end-customers
    • Products procured from unauthorised sources
    • Products claimed ineligible for volume rebates
    • Claims on products subsequently returned
    • Product claimed across multiple programs
    • Inappropriate use of Market Development Fund
    • Duplicate claims
  3. Internal Processes: The effectiveness of internal processes of the channel partners has a direct impact on the outcomes. However, the channel partners may not have the skilled resources, a great infrastructure to ensure or technology to enforce process and quality standards. It results in inefficiencies, wastage and losses, which in turn leads to lower ROI for the channel partner and bottlenecks for the sales growth. The common control gaps observed in this are:
    • Obsolete or expired stocks due to lack of adherence to FIFO or FEFO policies
    • Inventory losses on account of lack of cycle counting process
    • Poor hygiene and upkeep within the premises and surroundings
    • Poor handling and Product damages
    • Inadequate storage infrastructure
    • Inadequate record keeping, checks & controls
    • Lack of system for handling customer complaints
    • Improper record keeping, documentation and MIS
  4. Compliances: There are whole of compliances that are required for doing business in a country or a region. The compliances include the legality of place from which the channel partner is operating from, tax compliances, human resource compliances, storage compliances, regulatory compliances with respect to the specific products e.g. pharmaceuticals, food, hazardous goods etc. The problem is that many channel partners are either not aware or not updated on various compliances. It could not only have an impact on the continuity of the business of the channel partner but also the company's image & business continuity.
  5. People / Sales Force Management: A sales business is as successful as the quality of its sales resources. Due to various constrains, most channel partners don't have the most skilled resources. Also, the employee churn is also high leading to gaps created due to learning curve. Most channel partners do not have structured training programs or modules that can help to bridge these gaps. The key areas to be checked for people management are:
    • Process for selecting, onboarding and training new employees
    • Standard Training modules for training on product knowledge, systems & processes, selling skills, communication skills, IT skills etc.
    • Employee welfare and engagement programs
    • Handling of employee grievances & complaints
Structuring an Effective Channel Audit Program

Structuring a channel audit program requires strategising, planning and execution capabilities. A well thought through program delivers better outcomes as compared to the ad-hoc audits. It should not be merely a paper exercise. The key steps are:

  1. Classify your channel partners based on the revenue, sales region and product portfolio.
  2. Map the risk profile for each category of the channel partners.
  3. Based on the risk profile decide the scope and frequency of audits. Prepare a calendar of various audits.
  4. Communicate the audit plan with the stakeholders.
  5. Identify the audit resources required for conducting the audit and determine whether these have to be outsourced.
  6. Prepare checklists covering the specific areas as determined in the scope of each audit. Remember, each checklist has to be tailored to the risks identified for each category of channel partner.
  7. Get the channel partners' buy-in and integrate them in the audit program.
  8. Have a robust mechanism for planning corrective actions for the gaps identified in the audit and tracking of the deadlines for each action point.
  9. Use a technology platform to manage the end to end audit workflow and provide complete visibility on the gaps and corrective actions to both you as a customer and the suppliers. The technology helps you to save time, efforts in putting together and tracking the information and it at the same time it ensures consistency throughout.
  10. As the improvements are realised, review the audit program i.e. frequency, checklists etc.
SIMSA Operational Audits
Conclusion:

The channel partners' audit is a mean to de-bottleneck sales processes and prevent leakages of revenue & efficiency. A differentiated and risk based approach should be adopted for a sharp focus and targeted improvement. A structured process should be instituted for sustainable and continuous improvements. The use of modern technologies to automate the workflow along with analytics is highly recommended.

How Safe & Secure are your Warehouse Operations?

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Warehouses are no longer old dilapidated buildings in dingy lanes, conventionally used for the storage purpose. Warehouse Operations today are part of optimal flow of goods, have increasing levels of complexity & automation, and play a strategic role in fulfilment of customer demand. Increasingly, warehousing operation is encompassing activities like postponement, packing, light manufacturing, sortation, cross-docking , reverse logistics, after sales service, orders fulfilment etc. Also, with use of information technology and automation, the need for the skilled manpower has gone up, which is not easy to find.

The increased level of warehouse complexity and activity also means more exposure to various kinds of risks. Though there are no statistics available for country-wide warehouse incidents but one could assess the gravity of the situation from news reports, while a majority of incidents are not reported. Unfortunately, barring few industries that are quite sensitive to risks across supply chain, most of the companies leave the risks management to their 3PL or don't bother at all. Few 3PLs put in place some common and basic safety & security procedures in place but is it what is needed for effective risks management?

Warehouse Safety

Image: Fire incident in a warehouse in Delhi on Oct 6, 2020 (Image Source: ANI)

Let's first understand what risks warehouses are exposed to. The risks span from Safety, Security, Quality, Service, Regulatory, Legal, Financial, Environmental etc. The risk profile of a warehouse is determined by 3 major factors:

  1. Selection and location of a Warehouse: The risks associated with quality of building construction and quality of construction material used, cannot be easily identified and mitigated. The flooding of the surrounding area and seepage of water from the walls, flooring are the most commonly found issues in a warehouse. The problems get compounded with extreme weather events & intensity of rainfall. What was built for normal weather may not sustain under extreme weather events. The water drainage from roof gutters or stormwater drain may lead to water flooding & seepage. The warehouse situated in the cyclone prone area should have cyclone resistant design & construction. The same holds true for the strength, joints & quality of flooring, quality of electrical wiring & fixtures, fire control system etc. From the location perspective one needs to assess legal & regulatory compliance, potential of political interference, security environment, proximity from the fire station & hospital etc. Once a warehouse facility is decided, the associated risks are fixed during the period of occupancy, which are hard to mitigate. Therefore, a thorough due diligence and SIMSA automated audit workflowusing an exhaustive & standard checklist is a must before zeroing on the location & type of facility.
  2.  Warehouse Layout, Fixtures & Equipment: Starting with the external flow of vehicles in the warehouse, space for parking of vehicles, designing of internal flow of people & equipment, providing enough space for various activities to prevent crowding go a long way in preventing major accidents. Putting up the right fixtures and using MHE based on the load requirement, built-in safety features and their regular maintenance determine the levels of risks. The warehouse layout & design would not only determine the safety, security hazards but also the productivity & turnaround time. If you are going for ready to use warehouse facility, it makes sense to use a checklist based assessment to compare various options.
  3.  Warehouse Operations: The third category of risks emanate from how the warehouse operations are organised and managed. While organising the warehouse operations, one must take into account the risks carried forward from the first two categories i.e. the location & facility selection and layout, fixture & equipment. The risks associated with the warehouse operations are:
    • Health & Safety
    • Security
    • Financial
    • Regulatory Compliance
    • Quality & Service
    • Environment

With most of the warehousing operations being outsourced, the companies have a little visibility & control over the operations. Many companies have basic Standard Operating Procedures documents, which most of the time never referred to or updates. Some of these documents are so textual that it makes a good bed-time reading. Most of the supervisors and other people managing the operations may not have even seen these documents ever. Moreover, every site may have different risk profiles. How can one standard document serve the purpose of each site?

So people take short-cuts, especially during month-ends pressure and then slowly it creeps as the bad practice until it snowballs into a big incident. Until then, it is optimism bias that prevails, "it won't happen to us".

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Optimism bias, "it won't happen to us" and leaving risks management to your 3rd party logistics provider or contract manufacturers are the biggest risks to your operations. The risks management should start on the day, you decide to build or outsource a warehouse.

Approach to handle Warehouse Risks

Risks management is a three level approach i.e. Strategic, Tactical and Operational.

  1. Strategic Level: Whether it's a green field or a brown field project, detailed risks assessment has to be an integral part of the project. To re-emphasise, the risks accepted at this stage cannot be mitigated easily. It requires a team of people from engineering, operations IT, legal compliance to visit sites to assess risks from various angles. This could be a burden on the company's resources and also many companies many not have that expertise in-house. A better alternative is to take the services of experts in this field. It should not be seen as a cost but an investment to prevent any unforeseen risk that may cost multiple times the fees of hiring the expert.
  2. Tactical Level: Before start of any operations, a thorough risk assessment must be done and corresponding internal controls should be implemented. For example, a company instituted a procedure for authorisation by the warehouse manager, if any operator has to work at more than 6 feet from the ground level. The authorisation is nothing but a checklist of do's & don'ts to be explained to the operator before starting the work.

    But then how do you ensure whether the controls are effective and are being implemented in spirit and not just on papers. Internal audit is one of the most tested techniques in proactively identifying the gaps in controls. The audits are effective if:

    • Aligned to the risks identified for a site and operation.
    • Done periodically, rather than just once a year activity. The practice of monthly self-audits on high risk areas, followed by the quarterly more detailed audits by a 3rd party covering all the risk areas.
    • Corrective and Preventive action planning, with accountability, visibility and tracking of the closure in a time-bound manner.

    It may appear an additional work, but not investing time and resources on this aspect of risk management may cost dearly. It's easier to cure a cancer if identified much early, through periodic check-up. It may also sound daunting to manage the entire planning and managing the data as well as tracking corrective actions.

    A platform like SIMSA, that is based on the operational excellence framework of Plan, Do, Check & Act, not only automates entire audit workflow but also ensures complete visibility & control over risks & corrective actions.

  3.  Operational Level: It is at this level at which the controls are executed on day to day basis. It is best to automate the controls and workflows, so that the dependence on the people is minimised. As the technology is becoming affordable, the use IoT and Cameras with Analytics could be the of immense use not only to identify risks on real time basis but also help in predicting future risks. Instead of asking the warehouse manager to report a small fire incident, it may be automated using the sensors. Even in the absence of the advanced technology, simple workflow tools can be used to facilitate the implementation of checklists & reporting of events, instead of using excel sheets or emails.
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SIMSA Operational Audits
Conclusion

Warehouses will increasingly play a much larger, complex and strategic roles in the supply chain. Therefore, the risks associated will also be much higher. The risks have to be managed at Strategic, Tactical and Operational levels. Use of information technology can facilitate the effective management of the warehousing risks. It's high time that companies start thinking in this direction and shed the optimism bias or dependence on 3PLs for risks management.

Supply Chain is a Risky Business

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Optimism Bias towards Risks

Humans, by nature (at least a large percentage) are optimistic about future. But this optimism becomes dangerous when it leads to the belief that "it won't happen to me". That's why many people are under-insured, overspeed on the roads or walk freely without masks & precautions during Covid pandemic.

The same optimism bias translates into the approach towards managing risks in the business. Which parts of the business have the maximum exposure to the risks? No points for guessing right - Supply Chain and Finance. While a structured framework of identifying and controlling Financial risks exists in every business, the Supply Chain risks are left to the fait accompli. The reason is the optimism bias, "It never happened to us, why should we even bother", until one day it happens. The "long term" risks management loses the battle to the "short term" costs savings, when it comes to choosing one over another.

Why Supply Chain is a major source of business risks?

What percentage of end to end supply chain is controlled by one company? Hardly much!

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With increasing outsourcing of Supply Chain including the manufacturing operations, the extent of direct control of the focused firms is continuously reducing. There have been number of instances of violation of compliances and norms by the contract manufacturers and outsourcing partners, leading to both loss of business and reputation.

The reasons why Supply Chain is becoming a major source of business risks, are:

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According to a study done by Supply Chain Insights LLC, the factors contributing to the. supply chain risks have changed over last 5 years. According to the study, in 2013, 80% of the supply chain leaders accepted to have been impacted by, on an average, 3 material disruptions. The source of most critical risks in the near future will be from Operations Complexity, Regulatory Compliance and Geo-politics events.

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How should one prepare for disruptions?

1. Shed Optimism Bias: This step requires a "foresight" into the changing environment and its potential impact on the entire value chain. The value chain includes your tier 2, tier 3 suppliers if these can't be easily and quickly switched-over to the alternative sources. These risks may have profound impact on the strategic supply chain decisions e.g. how many and which suppliers, logistics partners you will have for a category, the design of distribution network, location of the supply chain facilities, the inventory holding etc.

2. Identify Risks in Operations: Map the processes so that you have visibility of what happens in your operations. Process mapping is a useful tool for risk assessment and continued risk management by enabling business owners to better understand the processes and controls associated with identified risks. Once the processes have been mapped, then assess what may go wrong, what could be impact on the business and what controls exist to prevent the short-cuts & leakages. Prepare a Risk Register and update it periodically.

3. Structure Audit Programs to check the effectiveness of Process Controls: Operational audit or Internal audit has been effective and a tested technique to test the effectiveness of the process controls and risks management. Higher the perceived risk, higher is the periodicity of audits required. However, most of the companies have a very rudimentary system of conducting the audits, using pen & paper or excel sheets that do not provide end to end visibility into the audit management program. Also, few companies use an integrated audit management system that assesses the gaps and tracks the linked corrective & preventive action plans to plug the gaps. Implementing such an integrated system may not cost much but may give multiple times ROI in preventing the process control failures.

Operational or Internal Audits in most of the companies are  riddled with long established manual processes, which results into high audit cost of in-house resource, lack of end-to-end audit visibility, and gaps in compliance.

Another gap in the audit process is that it is mostly focused on the internal operations. In the areas of outsourced logistics and sales channels, the audit means only inventory counting, as-if that is one and only risk that exist in the logistics operations. There are whole lot of risks in the categories of safety, security, legal and regulatory compliances, product quality, process adherence that are mostly ignored. What about the supplier audits? How many key suppliers are audited for a comprehensive risks assessment? A structured and automated audit workflow management e.g. SIMSA, based on the framework of operational excellence (Plan, Do, Check and Act) is a best practice to identify and mitigate risks in the operations.

4. Constitute a Risks Management Committee: A committee of senior management as well as independent board members should look into the overall effectiveness of the risks management, assess the risks associated with the gaps observed in various audits and monitor whether the gaps are being closed in a time bound manner. The committee also sets the risks management guidelines, policies, define the roles and responsibilities of the frontline and supporting roles in risks management and approves major decisions involved in the risks mitigation.

5. Build Agility and Resilience in Supply Chain: Despite taking all the possible measures internally, the external disruptions cannot be ruled out. Agility is about how quickly you can shift gears to counter the impact of any disruption. Resilience is the ability to bounce back to business as normal after encountering the disruptive event. Building agility and resilience requires proactive planning involving "what-if" scenarios and preparing a response for each scenario. Systemic use of predictive analytics and market intelligence involving weather data, port & transportation strikes, geo-political situation & impact on trade-policies / duties etc. go a long way in minimising the "time to recover" in the event of disruption.

Given that the frequency and impact of supply chain risks is increasing by the day, the risk management should be one of the top 3 priorities for any company. A structured risk management and business continuity planning is not just an option but a business imperative to survive and become more resilient to the shocks of disruptions.