Audit by Kyiv Logistics School
All over the world, it is considered normal to use external expertise for assessing the operational efficiency of the company. It does not negate the presence of quality management departments and an operational performance management department.
Experts highlight issues that the company’s employees might not have noticed. Each company has growth zones. There isn’t a company with a perfectly functioning business.
It’s great when the company’s owners understand the importance of conducting regular audits to adhere to the path of sustainable development and continuous improvement. Experts notice the smallest details and elementary chronophages which unfortunately are not in plain view.
It’s great if the company knows how to maintain the achieved results and tries to do something for the development progress daily. At that point, it is important to manage all business processes for overall coherent functioning and being a single mechanism.
While holding positions it is necessary to conduct regular sets of performance indicators for each division, to analyze the gaps forming as a result of daily work, to work them out with the further elimination of the problem source.
The best method for conducting a set of indicators is comparing an existing company’s success with a benchmark – the world’s best practices. Benchmarking will be most effective in a way of comparing similar companies or enterprises of the same business area.
Besides, for conducting a high-quality set of indicators it is necessary to have a metrics catalog which will be useful for effective tracking of each division in all business processes. Using metrics an enterprise can control the customer service quality, the profitability level, the warehouse, the transport department functioning, manufacturing.
Metrics can be useful for business owners intending to monitor their team’s functioning. This relates to any department because each has its own KPIs set and performance indicators. Metrics is a highly adaptive means and may be established based on the specificities of a particular company.
What is the meaning of consulting and auditing for a company
An integrated strategy is a choice of two optimization issues at once by Kyiv Logistics School. Consulting and auditing are better functioning in the complex because an initial audit may help to identify needs, weaknesses, bottlenecks. Then, subsequent consulting gives an ability to reduce them and further eliminate the sources of the issue.
Is it possible to do without it and manage everything in-house? Maybe yes.
But absolutely any company eventually reaches a level when it seems everything is perfectly functioning but still somewhere there are flaws hidden deeply in the analytics depths. It is these shortcomings that form unnecessary costs, employee overtime, loss of margin as a result. All this can be avoided by regularly auditing the business processes of the enterprise and making a set of performance indicators for each department.
Each company varies in its frequency of the audit. For some of them it is important to get in touch with experts at least once every six months, for others – once a year. It all depends on the company’s size and goals. If the company is in the active restructuring phase, creating new business processes and optimization of its activities, it is better to conduct an audit every 3-6 months. Such frequency is due to the importance of controlling the restructuring effectiveness to better notice potholes, prevent possible mistakes, also save time and money.
Particularly stable companies that have been on the market for a long time and know their goals for the year may easily get in touch with experts only once a year for validating the quality of business functioning, taking into account all performance indicators and consulting on existing activities optimization.
Any optimization is an economy and economy is an additional profit for the entire company. For example, well-functioning logistics may help to save up to 10% of a company’s net profit. It is difficult to imagine a sufficient number of orders that need to be managed by a large company to earn an additional 10% of net profit. Therefore, insignificant spending on audit and consulting may cause much more benefits than it seems at first.