Written procedures versus daily practice: what an audit sees

Warehouse rules exist on paper: the procedure for receiving, putting away, issuing and counting. But step into a shift and you see the work going differently: receiving is put off until the evening, goods lie "temporarily" somewhere, and the table is filled in from the employee's own list. This is rarely ill will, just a way of speeding things up. Yet shortages and errors arise precisely from this gap. How does an auditor find it?

Start with the document, but do not stop there

First the auditor reads the written rules: receiving, putting away, picking, dispatch, returns and the counting procedure. The aim is to learn how things "should be". At the same time the document itself is checked:

• whether its date and approver are shown;
• whether it says who is responsible for each process;
• whether exceptional cases are covered (an item cannot be found, a document is late);
• where a new employee can get it and read it.

In many warehouses the rules were written years ago and the warehouse has changed: new products, locations and staff. Document and reality drift apart.

Observing the shift

Next the auditor goes into the warehouse and watches: asks nothing, disturbs no one. Staff are told beforehand why the auditor is there: to check the process, not the person. An hour or two at receiving, an hour or two at picking. What the auditor notices:

• whether the document is completed together with the goods or later;
• whether goods go to their assigned place or "wherever there is room";
• signs of a "second set of books" outside the system: hand-made spreadsheets, notes on the wall, phone messages;
• who takes the decision: the person responsible under the rules or the most experienced one.

Repeat the observation on other shifts and busy days: on the quietest day everyone follows the rules, while the real picture shows up in a rush.

Questions: let them show, not tell

Ask the worker to show, not to tell. Not "How do you do receiving?" but "Show me how you receive this truck." The person who does the job knows the truth better than the manager. Useful questions:

• Where is this rule written, and when did you last read it?
• Why do you do it this way?
• What takes up most of your time at work?
• What do you do when a document is late?
• Whom do you turn to when an item cannot be found?

A question should not sound like an accusation: not "why are you breaking the rule?" but "what difficulty makes you do it this way?"

The path of one item: a hypothetical example

The auditor picks one item and follows its whole journey: receipt document, receiving, put-away, book location, picking, dispatch document. A hypothetical example: the procedure says "received goods are entered into the system within two hours". On observation it turns out that documents are entered at day's end, eight trucks at once. So during the day the book balance lags behind the real one, and the picker, guided by the system, cannot find the goods. The procedure exists, the practice is different, and the result is search time and errors. It is handy to write the findings in three columns: procedure, practice, risk.

• Procedure: receipts are entered within two hours. Practice: at the end of the day. Risk: the balance is wrong during the day.
• Procedure: goods go to the assigned bin. Practice: wherever there is room. Risk: search time and lost goods.
• Procedure: a difference is reported to the responsible person at once. Practice: at month's end. Risk: the cause can no longer be found.

What to do with the gap

It is easy to conclude that an employee "broke the rule", but useless. One of two paths follows: change the rule or change the practice. If the rule does not fit reality (say, too few people for a two-hour limit), make it realistic. If the rule is right, train staff, redistribute tasks or add a supporting tool to the process. In the report each gap gets four entries: what the rule says, what happens in practice, what risk this creates, and a recommendation. It can also work the other way: sometimes practice is better than the rule, and then the rule should be rewritten to match it.

Conclusion

A gap between procedure and practice is more often a sign of an outdated rule than of a bad employee. In a warehouse audit, Inventory analyses processes, finds the causes of losses and gives recommendations for improving efficiency.