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Fiona McGuinness14-Apr-2021 09:33:056 min read

How to Effectively Audit Your Supply Chain

With unprecedented disruption in the form of COVID-19 and Brexit, never before has the health and robustness of your supply chain been so critical. But what is the best approach when it comes to maintaining supply chain performance? And how can you sure-up your supply ecosystem in the wake of such pervasive disorder?

In this guide, we’re taking a look at one of the most effective strategies for strengthening supply chains: auditing. Covering what to consider and the benefits you can expect, this resource can show you how to effectively audit your supply chain.

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Why Should You Audit Your Supply Chain?

Typically, businesses conduct audits as a means of assessing the effectiveness of current processes, workflows and strategies. They’re a way to discover what’s working, what isn’t and where improvements can be made.

Auditing is most prevalent in areas where accuracy, efficiency and compliance are of the essence – think finance, HR and inventory management. But they can also be highly effective when leveraged in other areas, not least as part of your internal supply chain.

Supply chain auditing may sound like a complex and time-intensive task, and it can be. But the insights and benefits it affords far outweigh the resource expenditure required.


technician working on laptop in warehouse


Implementing a supply chain audit is advantageous for the following reasons:

  • Highlights gaps and bottlenecks – an audit is a means of discovering problems that may have otherwise gone undetected. It shines a light on pinch points and holdups, so you can plan reliable solutions.
  • Creates opportunities – at the same time as highlighting problems, auditing also brings opportunities into focus. Whether that’s reducing lead times or introducing new policies and controls, an audit enables you to take stock and secure your supply chain.
  • Safeguards compliance – supply chains in every industry are subject to regulation, the goalposts of which often change. Regular supply chain auditing ensures that your operations continue to adhere to rules and regulations, so you can stay up to date with the latest compliance recommendations and changes.
  • Strengthens security – supply chains are vulnerable to a wealth of physical and cyber security threats, so this should be a key area of focus as part of your audit. Consider potential weaknesses in your supply chain and how these can be resolved.
  • Cost reduction and improved ROI – whether by creating efficiencies or deploying new processes, a supply chain audit can lead to cost reductions, improving ROI at every touchpoint of your inventory chain.
  • Future-proofing – auditing allows you to stay abreast of your supply chain, so you can update and manage individual components as and when they begin to fall behind. This is a sound method for future-proofing your business, making sure you have up-to-date measures in place to keep your supply chain competitive.

But what do these benefits look like in practice? And what is a good example of when such an audit should be carried out?

Supply chain auditing is most effective when implemented in relation to major moves in your industry. When you have an idea of how your supply chain may be affected by outside forces, this can help steer and bring purpose to your audit.


engineers looking at laptop discussing plans


Take Brexit for example. Businesses understood that this would create change, allowing them to audit their supply chains to better weather the unique challenges it would pose.

Of course, it’s not always possible to pre-plan for challenging circumstances. The COVID-19 pandemic certainly caught businesses off guard, leaving many on the back foot and scrambling to restore their supply chains.

This reiterates the need for regular supply chain auditing. By frequently assessing your supply infrastructure and inventory, you stand a better chance of weathering market disruption – whether you can see it coming or not.


Key Considerations Before You Begin a Supply Chain Audit

As touched on earlier, auditing an internal supply chain can be a complex undertaking. To make things simpler, a little preparation can help structure your audit and keep the project on track.

Here, we look at four things to consider before launching into a supply chain audit. Consider it a framework through which all auditing tasks should be managed.

  • Audit planning statement – draw up a plan detailing the parts of your supply chain which require auditing, and the work involved. This should also list the personnel responsible for the audit.
  • Create an audit criterion – what should auditors look for? Are you looking to improve the supply chain’s security, or simply keen to improve efficiency by removing bottlenecks? And how can you guarantee positive outcomes? An audit criterion will provide a consistent list of requirements against which all audit work can be assessed.
  • Reporting – how will you report on the results of your supply chain audit? Does your auditing software offer a reporting function – presenting the findings in a consumable manner for stakeholders?
  • Action and follow up – what actions are required off the back of the audit? Who will be responsible for actioning the changes? Will it impact your business software? And how will you ascertain that problems have been rectified? Outline your follow up plans to ensure that the appropriate actions have been taken.


worker showing something to manager on laptop


Six Main Areas of Focus for Your Supply Chain Audit

Devising an actionable auditing framework is the first step in putting your supply chain assessment into action. But the question remains: what are the main areas of focus for your supply chain audit?

To ensure a robust, efficient and high-performing supply chain, we recommend focusing on six key areas: strategies, processes, data, performance, organisation and risk. This allows you to consider the effectiveness of your supply chain from strategic viewpoints, “success factors” which can show you what’s working and what isn’t.

Let’s take closer look at these areas and why they’re fundamental to supply chain success.

  • Strategies – what strategies are currently in place along your supply chain? Are they working? How could the business improve its current strategies with regards to supply chain management to better serve customers, partners and stakeholders?
  • Processes – are current workflows delivering to the standard you might expect? How could processes be improved and refined to boost efficiency and reduce lead times? Is the business leveraging the appropriate technologies needed to automate and enhance internal processes?
  • Data – are data sets complete, accurate and free from errors and duplication? How are they currently siloed and who has access to them? Is data secure and protected, and do methods of data capture align with current regulatory compliance measures?
  • Performance – is the technology your supply chain relies on up to date and performing at peak level? Could the business improve supply chain performance by investing in new, innovative technologies? Is your ERP system adequately dialled into the needs of your inventory management team?
  • Organisation – how is your supply chain currently organised? Does it adequately meet the needs of the end-user in terms of lead times and requirements? What enhancements could be made to future-proof processes and ensure better organisation?
  • Risk management – what short and long-term risks are most likely to cause problems for your supply chain? How might the current system cope with such threats, and what measures may be needed to mitigate negative outcomes? This is an opportunity to account for major disruptive forces in your market, like Brexit.


small business owner


Auditing your supply chain may not be priority number one for your business. But the long-term benefits of assessing your systems, processes, performance and data make it an invaluable undertaking.


If you need help refining and elevating your supply chain management, the Intact team can help. Our future fit, industry-specific ERP software solutions can help you scale, extend and enhance your operations, whether you’re looking to sure-up your supply chain or plan an expansion. For more information or to speak to a member of our experienced team, visit the homepage or get in touch.


Fiona McGuinness

I've been part of the Intact family for 16 rewarding years. After completing my Business Studies degree, I knew Marketing was a field I wanted to pursue. Prior to joining Intact, I primarily worked in the financial sector, focusing on marketing for credit unions. When I started at Intact, I handled all the marketing tasks by myself. Over time, as our team expanded, so did my role. Now, I specialise in crafting compelling content across various platforms, from blogs to video scripts. No two days are the same, and I thrive on the dynamic nature of my role. Whether it's diving into customer case studies or lead campaigns, I'm driven by the positive impact our solutions bring to businesses. In an age where AI plays a significant role, I remain a firm believer in the power of authentic content. When I'm not working, you'll find me enjoying quality time with my family, sewing, or watercolor paintings.