SIMSA Audit Software


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: Risk Management

Layered Process Audit

Guide to Layered Process Audits (LPA)

Introduction to Layered Process Audit

Layered process audits (LPAs) are the ones that are conducted across multiple levels of the organization to provide layers of protection against rework, product recalls, and compliance failures.  Going by the definition, two key factors distinguish the layered process audits from the other types of audits. These are:

  1.  Audits focus on how the processes are carried out and not just the outcome of the  process,
  2.  The same audits are conducted by different levels in an organization involving frontline staff, middle management & top management.

The purpose of the LPA is to ensure that the high-risk steps ( which can cause costly mistakes), comply with the laid down quality standards or procedures.  A Layered Process Audit places people at multiple levels of the organization “where the work is being done”. By doing so, the process gaps are proactively identified and plugged before they can cause significant harm to the business. In a nutshell, it is a preventive approach to quality management as against the corrective approach.

Benefits of Layered Process Audits

The key benefits of following LPA are:

  1.  Identifying Process Weakness: One of the primary benefits of LPAs lies in their capacity to uncover hidden process weaknesses. By subjecting each layer of the production process to scrutiny, businesses can pinpoint vulnerabilities and potential points of failure, allowing for proactive rectification.
  2.  Risk Mitigation: No process is 100% risk-free. Even conducting periodic audits based on sampling leaves a scope for residual risks. I am sure you would have heard or read about the automotive OEMs recalling vehicles due to quality issues. LPA, if implemented correctly, could significantly reduce the residual risks and thereby instances of recall & reworks.
  3.  Reduction in Cost of Poor Quality: It is a well-known fact that as the detection of poor quality moves up in the value chain, its cost increases. In other words, the poor quality detected early on is less expensive to rectify as compared to the one detected later. The LPA focuses on detecting poor quality early in the process before more value is added to it.
  4.  Cultivating the Culture of Improvement: The involvement of employees in assuring compliance & taking proactive steps fosters a culture of excellence. As a result, the employees at all levels are involved in process improvements & implementing preventive controls.
  5.  Increased Discipline: By involvement in the LPA, the frontline operators are more cautious and sensitive towards the quality standards. It makes them more disciplined in following the right steps and not taking shortcuts.
  6.  Increased Interaction between Plant Management & Line Operators: Since all the levels are following the same audit checks, it ensures better communication & constructive interactions.

Steps involved in implementing Layered Process Audits

Implementing Layered Process Audits (LPAs) requires a thoughtful and strategic approach. The effectiveness of Layered Process Audits hinges on meticulous planning. Optimal planning is achieved through a multidisciplinary approach, incorporating active management participation. Six crucial factors merit consideration in this planning process:

  1.  Identify the Processes for the LPA: A cross-functional team identifies existing key process steps to audit. These are selected based on risk to product quality including safety, criticality of process step, or product characteristic. Layered Process Audit items can also include past non-conformances, past customer returns, and past customer complaints
  2.  Assemble a Team of Auditors: Identify the stakeholders including the workers, supervisors, and manager accountable for a given process. Train them on the audit procedure using standardized procedures and tools. Assign them clear roles & responsibilities for the LPA program. These “auditors” do not need Quality Management System auditor training since they are not Quality Management System auditors.
  3. Develop a Checklist for each process and layer, based on key performance indicators and high-risk areas. In developing an Audit check sheet, remember that it should include specific, critical items that can be verified quickly. Therefore, the more focused the Audit check-sheet, the more effective. A Layered Process Audit should not be a laundry list of all requirements within a production cell or department.
  4. Determine Audit Cadence: Define the audit frequency and schedule for each layer. Ensure that audits are conducted at different times and by different people, as per the LPA plan. The closer the auditor is to the level of the area being audited, the more frequently that auditor will conduct the Audit. For example, a line supervisor may conduct the Audit daily, while the plant manager may conduct the Audit once per month. Customer specifics may require particular audit frequencies.
  5.  Select the Appropriate Technology:  Select & implement a tool e.g. SIMSA to manage the audit process. Ensure that the tool covers all the steps of the PDCA cycle and automates the manual tasks related to the audits. It should have features for auto-scheduling the audits based on the defined frequency, recoding and assigning the corrective actions, and auto-reminders for the followups.
  6.  Set up LPA Governance Process: It is the upper management team’s responsibility to assess and improve the effectiveness of the LPA process. Operations managers must ensure the following:
    • Layered Process Audits are conducted on time,
    • Layered Process Audits are conducted by the designated team members,
    • The results are recorded and reviewed regularly,
    • Resources are available and focused on corrective actions for the non-conformances identified.

What Layered Process Audits are NOT?

  1.  A quality audit owned by the Quality Department.
  2. Measurement of parts or part characteristics using instrumentation.
  3. A long “laundry list” of items that include items not contributing to customer satisfaction.
  4.  Allowed to be delegated to other persons.
  5.  Conducted as & when time permits.
  6.  Done in the office or away from the place of action.
  7.  Audits in which the corrective actions are taken with a time lag.
  8.  A method to police or penalize the employees.
  9.  A replacement for Quality Management System audits.

Critical Success Factors for the LPAs

  1.  Discipline: Management must instill discipline early in the process to ensure the timely completion of Audits. Consistency fosters discipline within the organization and serves as a demonstration of management’s commitment to Layered Process Audits.
  2.  Quick and Manageable: The audits should be short and should not take too long, as well as take away focus from the critical areas.
  3.  Recording Outcomes: The outcomes of every Layered Process Audit must be documented and preserved. While the primary aim of these audits is to guarantee ongoing adherence to the process, they also serve as a valuable tool for fostering continuous improvement. This is achieved by implementing corrective actions aligned with non-conformances identified during Layered Process Audits.
  4.  Continuous Improvement: Each non-conformance found should be considered as an opportunity for improvement. The improvements should be taken up on an immediate basis as any delay may cost the business and expose to various risks.

Audit Software


Layered Process Audits prove highly effective in upholding process enhancements and embedding critical process steps into the organizational fabric. This efficacy stems from the comprehensive participation across all organizational levels, spanning from operators to senior managers. The dynamic interaction between managers and operators during these audits becomes a valuable learning opportunity. Managers gain insights into manufacturing processes from operators, while operators glean essential knowledge about factors crucial for customer satisfaction from managers. Layered Process Audits facilitate this bidirectional communication.

Numerous organizations grapple with challenges related to 1) communication, 2) consistent adherence to standardized process steps, 3) sustaining and embedding corrective actions, and 4) disseminating customer satisfaction requirements throughout all organizational tiers. The implementation of Layered Process Audits, as outlined in this guideline, effectively addresses these multifaceted issues.

Food Supply Chain

Secrets of Food & Beverages Supply Chain Safety

In today’s fast-paced world, where our plates are filled with an array of flavors, the importance of food & beverages safety has never been more crucial. With the global food supply chain becoming increasingly intricate due to increasing variety & number of manufacturers, ensuring what we eat, or drink is safe has become a shared responsibility. From farm to table, the journey of our food & beverages involves various stages, making it essential to prioritize safety measures. Now, more than ever, as we navigate a dynamic and interconnected world, understanding and implementing effective food & beverages safety practices is not just about health; it’s a commitment to fostering a secure and trustworthy culinary experience for everyone.

Reasons for Food & Beverages Safety Concerns

There are several pressing concerns in the current times that highlight the importance of ensuring safety at every step. Some of the key drivers of the increased safety concern are:

1. Complex Supply Chain Networks: The extensive and global nature of modern supply chains introduces complexities, increasing the risk of contamination or mishandling of products as well as spoilage in the supply chain.

2. Diverse Regulatory Standards: Different regions and countries have varying regulatory standards, that are becoming stringent by the day. Navigating this diversity requires meticulous attention to compliance to ensure uniform safety measures.

3. Rising Consumer Expectations: With a growing awareness of health and wellness, consumers now demand higher standards for the safety and quality of the products they consume, adding pressure on the supply chain.

4. Vulnerability to Contamination: From production facilities to transportation, every touchpoint presents an opportunity for contamination, emphasizing the need for stringent preventive measures.

5. Globalization Challenges: The globalization of the supply chain exposes products to diverse environments and climates, increasing the likelihood of unforeseen challenges affecting safety.

6. Technology Integration Risks: While technology brings efficiency, it also introduces risks such as cyber threats and data breaches, compromising the safety of information critical to the supply chain.

7. Supply Chain Disruptions: Natural disasters, geopolitical tensions, or unexpected events can disrupt the supply chain, potentially compromising the safety and quality of food and beverages.

8. Increasing Complexity of Ingredients: As new ingredients and processes are introduced, the complexity of the supply chain grows, necessitating heightened vigilance to ensure the safety of both traditional and innovative products.

9. Need for Transparency: Modern consumers demand transparency regarding the origins and production processes of their food and beverages, requiring supply chain actors to be more open and accountable.

10. Climate Change Impact: Climate-related challenges, such as extreme weather events, can affect the availability and safety of ingredients, posing additional risks to the supply chain.

Food Safety Iceberg

Strategic Risk Management: Beyond the Obvious

While conventional risk management primarily focuses on identifying and mitigating immediate and tangible risks, strategic risk management takes a broader perspective. It is proactive rather than reactive, encompassing a holistic view of the supply chain and anticipating potential disruptions before they occur. Strategic risk management acknowledges that risks are not isolated incidents but interconnected events that can have cascading effects on the entire chain.

Components of Strategic Risk Management in Food & Beverages Supply Chain are:

1. Risk Identification and Assessment: Strategic risk management begins with a meticulous identification and assessment of risks. This involves not only recognizing immediate threats but also understanding the interdependencies and potential long-term consequences of these risks on the supply chain. This comprehensive approach allows businesses to prioritize and allocate resources effectively. Risks are like icebergs – more risks are hidden than visible.

2. Scenario Planning: Unlike conventional risk management, which often deals with known risks, strategic risk management involves scenario planning for unforeseen events. By envisioning different scenarios and their potential impacts, organizations can develop flexible strategies that can be adapted in real-time, minimizing the effects of unexpected disruptions.

3. Supply Chain Mapping: Strategic risk management involves mapping the entire supply chain to identify vulnerabilities and potential points of failure. This includes not only internal processes but also external factors such as geopolitical events, regulatory changes, and market fluctuations. By understanding the full scope of the supply chain, businesses can make informed decisions to enhance resilience.

4. Suppliers Selection Strategy: Careful vetting and selection of suppliers are crucial steps in mitigating risks associated with ingredient quality, compliance, and ethical sourcing. A well-defined strategy that evaluates suppliers based on stringent safety standards, certifications and compliance management not only safeguards the integrity of the products but also enhances the overall resilience of the supply chain. By prioritizing suppliers with a commitment to safety and transparency, businesses establish a foundation for a secure and reliable food and beverages supply chain.

5. Collaborative Risk Management: Strategic risk management emphasizes collaboration across the supply chain. This involves building strong relationships with suppliers, distributors, logistics service providers and other stakeholders. By fostering open communication and information sharing, organizations can collectively address risks and develop joint strategies to mitigate potential disruptions.

6. Audits and Governance: Rigorous & periodic audits serve as a mechanism for evaluating the effectiveness of risk management processes and ensuring compliance with industry standards and regulations. These assessments go beyond the conventional financial audits, encompassing areas such as supply chain transparency, quality control, compliances and ethical practices. Additionally, a robust governance structure establishes clear lines of responsibility and accountability, providing the framework within which risk management strategies can be executed. By integrating audits and governance into the components of strategic risk management, organizations can not only identify and rectify vulnerabilities but also foster a culture of transparency and ethical conduct throughout the supply chain.

Approach to Food & Beverages Supply Chain Risk Management

1. Risk Culture: Embedding a risk-aware culture within the organization is fundamental to strategic risk management. This involves ensuring that all employees understand the importance of identifying and addressing risks in their daily activities. A proactive and informed workforce is a key asset in mitigating risks effectively.

2. Good Manufacturing & Distribution Practices: GMP sets rigorous standards for the production process, guaranteeing the quality, safety, and consistency of products. Similarly, Distribution Practices focus on maintaining these standards during transportation and storage, ensuring that products reach consumers in optimal condition. By adhering to these best practices, businesses contribute significantly to the overall safety and integrity of the food and beverages supply chain.

3. Traceability & Transparency:  Through traceability, businesses can meticulously track the journey of products from production to distribution, swiftly identifying and addressing any potential contamination or quality issues. Transparency fosters trust among consumers, as it allows them to access detailed information about the sourcing, production processes, and ingredients, empowering informed choices and ensuring accountability across the entire supply chain.

4. Continuous Monitoring and Adaptation: Strategic risk management is an ongoing process that requires continuous monitoring of the business environment. By staying attuned to changes in market conditions, technology, and regulations, organizations can adapt their strategies in real-time. This flexibility is crucial for responding to emerging risks and maintaining a competitive edge.

5. Investment in Technology: Leveraging advanced technologies, such as predictive analytics and artificial intelligence, traceability is integral to strategic risk management. These tools can provide valuable insights into potential risks, allowing organizations to make data-driven decisions and enhance their ability to predict and mitigate disruptions.

6. Integration of Sustainability Practices: Embedding sustainability practices within the strategic risk management approach is essential in the food and beverages industry. This includes assessing environmental and social risks, such as climate change impacts, resource scarcity, and labor practices. By incorporating sustainability into risk management, organizations can align their strategies with evolving consumer expectations and regulatory trends, ensuring long-term viability.

7. Crisis Communication Planning: An integral aspect of strategic risk management is the development of crisis communication plans. In the event of a disruption, clear and timely communication with stakeholders is crucial for mitigating reputational damage and maintaining trust. By proactively establishing communication protocols, organizations can respond effectively to crises, providing accurate information and minimizing the impact on brand reputation.

8. Employee Training and Empowerment: Employees are frontline contributors to risk management. Investing in training programs that enhance their risk awareness and response capabilities is a key aspect of the strategic approach. Empowering employees to identify and report potential risks fosters a culture of collective responsibility, where every team member becomes a proactive participant in the risk mitigation process.

9. Regular Review and Updating of Strategies: Strategic risk management is not a one-time endeavor but a continuous cycle of review and adaptation. Regularly revisiting risk management strategies in light of emerging trends, technological advancements, and industry changes ensures that organizations remain agile and responsive to evolving risks. This iterative approach allows for the refinement and optimization of risk management strategies over time.

SIMSA Operational Audits


In the increasingly complex & uncertain landscape of the food and beverages supply chain, strategic risk management emerges as a vital framework for ensuring resilience and sustainability. By adopting a holistic & strategic approach, organizations can proactively identify and address potential risks, paving the way for a more agile and adaptive supply chain. Beyond the obvious risks lie opportunities for growth and innovation, and strategic risk management is the key to unlocking these possibilities in the dynamic world of food and beverages.

Sales Channel Audit – Key to Customer Success


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

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.