When we talk about an audit, we generally
assume that it is about financial controls and transactions. Apart from
finances, there is an important area that needs your special consideration and
has audit needs – the supply chain process. Supply chain audits are becoming
quite popular, especially among the businesses in the food industry.
Supply chain audits are helping business
owners have more control over their supply chain organization and make sure
everything is running smoothly. Supply chain audits are vital if you want to
control costs and identify potential risk areas that may end up costing you a
lot of money.
Why You Need Supply Chain Audit
for Your Business
Supply chain audits help business owners with
supply chain management and have better control of their supplies to keep
everything in check. Here are some of the reasons why you need a supply chain
audit for your business now!
Helps
Choose Good Vendors
A supply chain audit will help you choose
vendors and suppliers that offer quality materials at competitive prices.
Without an audit, you will never know if the supplier is the best in the
industry or if his prices are competitive. This way you might be spending a lot
of money on services that you can get for a lot cheaper in other areas.
During the supply chain audit, a top audit firm
in Dubai will visit all your vendors and suppliers to ensure that you
are supplied with quality products that meet all technical and safety
standards. The auditor will also compare the prices of your supplier with
others in the market to make sure your vendor is charging you competitive
prices.
Contract
Management
How long has it been since you have revised
your supplier’s contracts since the establishment of your business? Probably
never since the start of your business! This is another area where a supply
chain audit can help you determine ownership and contractual details.
During the supply chain audit, the auditor
will not only physically visit all your suppliers and vendors but also review
their contracts to make sure everything is in order. The auditor will also help
you manage the contracts and monitor the supplier’s performance and identify
areas that are lacking and can be improved.
Inventory
Management
For an asset-heavy business operating in
multiple areas, supply chain management and audit is crucial. Why? Because a
supply chain audit can help manage inventory and warehouse and also identify
possible risk areas. A supply chain audit will ensure that your inventory is
up-to-date, and there are no deadweight assets that are better to be disposed
of than stored in a warehouse to make more space.
If your business deals with the food retail or
food industry in general, you must regularly conduct a supply chain audit. It
is crucial for business owners to know the quality of their supplies and how
they are transported and stored over time. It is also essential to ensure that
the goods are weighed and processed thoroughly.
Common
Challenges of Supply Chain Audits
Supply chain audits have become very important
for small businesses, but auditing them is a challenge, especially if you DIY.
Why? Because first, there are a number of processes involved within the supply
chain process, including supplier contract management to physical inventory and
warehouse.
Supply chain audits typically require the
auditor to visit all the suppliers, factories, and warehouses to physically
check the processes and inventory to make sure the supplier business exists,
and there is no room for fraud. It is vital for businesses because it poses
multiple legal and financial threats.
Due to time and budget constraints, internal
auditors might only focus on one segment of your company’s supply chain, which makes
it challenging for business owners. As supply chain processes are interrelated
with one another so, do consider consulting top audit firms in Dubai to perform
a holistic supply chain audit to identify the root cause of the problem.
Ultimate
Supply Chain Audit Checklist
A supply chain audit should include all the important
business segments and areas to make sure everything is covered and nothing is
left. Only that way, can you identify possible risks and mitigate them. Here is
an ultimate supply chain audit checklist for your business:
1.
Human resources
2.
Production process
3.
Purchasing process
4.
Product safety, health, and
environment
5.
Product testing
6.
On-time delivery
7.
Risk management
8.
Supplier’s contracts
9.
Supplier’s prices in the industry
Ready
to Upgrade your Supply Chain!
Supply chain audits require auditors to
physically check the inventory and visit vendors, warehouses, and factories;
that is why these are highly essential for businesses to keep their supply
chain up-to-date. A supply chain audit can help business owners understand
their business environment and help identify potential supply chain risks to
develop mitigating responses immediately.
Having a regular supply chain audit can help
you increase the overall ROI of your business and eliminate room for fraud. So,
protect your business through a supply chain audit.
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