A one-week warehouse audit programme, day by day

An audit of a mid-size warehouse usually takes a few days, but without a plan it stretches to two or three weeks: a new question appears every day, documents arrive late, and staff do not understand why the auditors have come. With a clear timetable from Monday to Friday the work runs in good order and the final report is ready on time. Below is a sample timetable that you can adapt to your own warehouse.

What should be ready before the start

So that the auditor's first day is not lost waiting for documents, have the following ready by Monday:

• the current balance list and a log of stock movements for the last 3–6 months;
• a plan of the warehouse and the addresses of storage locations;
• internal rules, job descriptions and working-procedure documents;
• a pass for the warehouse and one contact person, usually the warehouse manager.

A hypothetical example: a warehouse with 6,000 items working two shifts with 20 staff. The timetable is built for that size; in a larger warehouse the work is spread over more days.

Usually one or two auditors take part, together with the warehouse manager and three or four staff set aside for talks; management joins the meetings on Monday and Friday.

What the audit covers

A one-week audit is not a recount of the whole warehouse. A count checks balances; an audit checks processes: receiving, storage, picking, returns, issues and paperwork. That is why the timetable has sample checks but no full count. The correctness of the accounts, tax matters and employment questions fall outside it and are agreed separately with an accountant or lawyer. It helps to write down at the first meeting which three or four processes the audit will cover, so that new demands do not appear midweek.

Day by day

Monday: the start

A short notice to the team helps: who is coming, why and what they will ask. At the opening meeting management and the warehouse manager hear the purpose, limits and timetable of the audit. Then comes a walk round the warehouse, documents and data are collected and times are set for talks with staff. It must be said on day one that the aim is not to find someone to blame but to understand the process. Outcome: agreed limits, a timetable and a set of documents.

Tuesday: receiving and putaway

Follow 15–20 sample receipts from document to shelf: does the stock match the document, how long passes between receiving and entry in the system, how many days goods sit in the temporary zone. Outcome: a list of the strengths and weaknesses of receiving.

Wednesday: storage

Storage locations are checked by sample (150–200 items in the example): does the address in the system match the address on the rack, how are expiry dates and first-in-first-out handled, what shape are the damaged-goods zone and general order in. Outcome: results of the sample check of addresses and expiry dates.

Thursday: picking, dispatch and issues

Picking and dispatch documents are compared with real movement, and returns and the write-off process are reviewed: who approves a document, how soon is it entered, where do delays pile up. Outcome: a map of delays between document and real movement.

Friday: analysis and preliminary findings

Observations are set against the movement log, preliminary findings are written and the facts are checked in a meeting with the warehouse manager. The date of the final report is named. Outcome: preliminary findings and the report date.

A short meeting at the end of each day

Hold a 20-minute meeting at the end of each day: what was seen, what questions arose, what is planned for tomorrow. That way nothing comes as a surprise to the warehouse manager, and if facts have been misunderstood they are corrected the same day.

The report and next steps

When the week ends the auditor pulls the observations together into a final report, which usually takes another day or two. The report contains findings, their causes, recommendations on processes and their order of importance. After that you decide which recommendation is carried out, by whom and when. Do not try to fix everything in the first week: pick the two or three most important and do the rest gradually.

Inventory carries out warehouse audits as an analysis of processes, a search for the causes of losses and recommendations for improving efficiency; the number of days and the order of work are agreed according to the size of the site.