May 11, 2010
Auditing for improvement
If you are looking for ways to improve your business, and that is what this blog is about after all, auditing might be just what you need. When most people think about auditing they start to get concerned, they think that someone is going to come in and try to find things they are doing wrong, but this is just a misconception. Auditing isn’t about finding out what an individual person is doing wrong, its about finding weaknesses in your business system so you can improve them. I encourage anyone who is looking to improve their business to go through an internal audit.
Internal audits are great, they are relatively low cost because you are using your own people and they serve the dual purpose of cross training employees. Ideally in an internal audit each area of the business will be audited by someone who doesn’t typically work in that area. This does two things, first it brings a new set of eyes to the area which can provide a fresh perspective on how that part of the business is running. Second, and perhaps more importantly, it gives employees a better understanding how the business runs outside of their particular area.
So what should you expect from your internal audit? First you should expect to find out how well your documents match up with the reality of your business. If you find that they don’t match up well it could point to one of two problems. The first thing it could indicate is that you are failing to keep up to date documents. This means that as things are changing in the way you do business the changes aren’t getting added into your documentation. Alternatively it could point to a failure in your training methods, meaning that your documentation is correct but for some reason the employees on the floor haven’t been properly trained to follow the documentation. Either way this could present significant challenges for training new employees and controlling important factors of your business.
The second thing you should hope to get out of your internal audit process is greater cross unit functionality that will lead to better work flow. By giving employees the opportunity to learn how the business groups that surround them operate, they will naturally have a better understanding of how their work fits into the larger puzzle of the business. When employees have a greater understanding of how their work affects other areas of the business they can start looking for ways to improve the usability of their product for internal customers. For example you might find that by having someone from your sales department audit the assembly line, they find out that before a job can be started all of the information they take from the customer has to be transposed onto a work traveler for the assembly line. This takes time away from the line employees and generally slows down production, so the sales staff, instead of recording the information in their own method, starts recording it directly onto the traveler, allowing the production staff to focus on production.Without the internal audit, the sales staff may never have realized that the method of recording customer information they were using was actually creating more work then necessary for the production staff.
The final thing you can expect from you internal audit process is increased employee participation in improvement efforts. Your own employees may be your greatest untapped resource for improvement ideas, they just aren’t being encouraged to share them. By asking employees to get involved in an internal audit with the goal of improving the business it shows them that management values their opinions and wants their help to make the business better. You might be amazed at some of the great ideas your employees have for improving your business that they have just been sitting on because they figured no one cared.
The list of benefits you can get from an internal audit extends well beyond the three examples I have given here, but even if these are the only benefits you see, it will still be a great step towards improving your business. The best part is that all it takes is a little training and a day away from their usual work for your staff. This is why, for my money, internal auditing is one of the best ways to find business improvements.
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